Oral Answers to Questions

Lord Cameron of Chipping Norton Excerpts

Wednesday 4th July 2012 Commons Chamber

[Fiona O'Donnell (East Lothian) (Lab)]

Q1. If he will list his official engagements for Wednesday 4 July.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to the three British servicemen who were killed in Afghanistan in the appalling incident on Sunday, Guardsman Apete Tuisovurua and Guardsman Craig Roderick of 1st Battalion Welsh Guards and Warrant Officer Class 2 Leonard Thomas of the Royal Corps of Signals. We send our heartfelt condolences to the families of the servicemen who were killed in that tragic incident. They will never be forgotten by our nation.

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.

[Fiona O'Donnell]

I am sure that the whole House will want to associate itself with the Prime Minister’s remarks and to send our deepest condolences to the families of the crew from RAF Lossiemouth who were lost earlier this week.

Food prices rose by 4.6% between March last year and this year. I understand why, so will the Prime Minister spare me the lecture and tell the House what he is doing about food inflation?

[The Prime Minister]

First, I join the hon. Lady in what she said about the Tornado aircraft accident at RAF Lossiemouth. She is right that our thoughts should be with the friends, families and colleagues of those involved. The circumstances remain uncertain, but it was clearly a serious incident. The investigation is ongoing and more details will be released by the RAF in due course. It is a reminder of the risks that our service personnel take, not only when they are on active service, but when they are undergoing vital training for that service.

On food inflation, I would first make the point that inflation is now falling in our country, which is extremely good news. It is vital that the food prices in our shops are not too hard on people’s budgets, but the way to keep inflation down is to have a responsible monetary policy, which is what we have in our country.

[Nicholas Soames (Mid Sussex) (Con)]

Does my right hon. Friend agree that although the serious banking difficulties must be dealt with, it is vital that we retain the central importance of the City of London, and that any reforms must be proportionate and not damage such a brilliant asset for our country?

[The Prime Minister]

My right hon. Friend makes an important point. We have to get to the bottom of what has happened and we have to do so quickly. In doing that, we should bear in mind the remarks of Richard Lambert, who ran the CBI very successfully for many years, who carried out an investigation for the Labour party and whom I respect a great deal:

“the Libor scandal means that the required changes have to be tougher…that is the argument for a short, sharp inquiry. Going back to square one would, to put it mildly, be a serious mistake. The economy cannot recover in the absence of a stable banking system: nothing can be more urgent than that.”

That is not the only consideration. We must get to the truth, but we should listen to such expert opinions as well.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to Guardsman Apete Tuisovurua, Guardsman Craig Roderick of 1st Battalion Welsh Guards and Warrant Officer Class 2 Leonard Thomas of the Royal Corps of Signals, who died in the most tragic of circumstances. Our hearts go out to their families and friends. I also join the Prime Minister in his remarks about the incident at RAF Lossiemouth.

The banking scandals of the last week have revealed traders cheating and the mis-selling of insurance products to small businesses, and come on top of other scandals in the banking system and the continuing multi-million-pound bonus merry-go-round. How can the Prime Minister convince people that a parliamentary inquiry is a better way of restoring people’s confidence than a full, independent, forensic and open judge-led inquiry?

[The Prime Minister]

On the substance of the issue, there is no disagreement between us. This banking scandal is appalling. It is outrageous, frankly, that home owners may have paid higher mortgage rates and small businesses may have paid higher interest rates because of spivvy and probably illegal activity in the City. People want to know that crime in our banks and financial services will be pursued and punished like crimes on our streets. As well as people being held accountable, the public want rapid action to make sure that this cannot happen again.

In my view, the most important thing about an inquiry is that it is swift and decisive, is set up as fast as possible, gets going as fast as possible, reports as fast as possible and is transparent and open at every stage. That is why I favour a public parliamentary inquiry rather than a judge-led inquiry. I want us to legislate on this, starting next year.

[Edward Miliband]

I do understand the Prime Minister’s concerns about speed, but there are concerns also that the inquiry that has been talked about is far too narrow, focused solely on the scandal of LIBOR when we know that the problems go much wider, to the culture and practices in the City. I believe, however, that there is a way forward that we could agree upon—that we have a two-part, judge-led inquiry that is instructed to report by Christmas on the scandal surrounding LIBOR, which is his timetable. The second part of the inquiry should look, over 12 months, at the much wider area of the culture and practices of the industry. That would satisfy his requirement of speed but also the necessary requirement to look at the wider culture and practices in the City. Will he agree to my proposal?

[The Prime Minister]

I always listen carefully to proposals from all parts of the House. Let me make three points in response. First, on the structure and future of banking, we set up the Vickers inquiry. It reported, and we are going to implement that inquiry, which will for the first time separate investment banking from retail banking. That is a major step forward. Secondly, the parliamentary inquiry that we are proposing is wider than the right hon. Gentleman says. It will look at the culture of banking, as my hon. Friend the Member for Chichester (Mr Tyrie) confirmed this morning.

My third point—all these points need to be considered—is that the Serious Fraud Office is still considering whether to launch a criminal investigation. While that is happening, there are dangers in opting for a judge-led inquiry, which might not be able to get under way. If we want to do this as fast as possible and get action as fast as possible, I think the way we have suggested is right. There was a vote last night in which the House of Lords voted against a public inquiry, and we have made time available on Thursday—this has not happened before—for an Opposition motion and a Government motion to be debated and voted on. Frankly, what matters more than the process is the substance and getting on with it. I hope we can accept the results on Thursday.

[Edward Miliband]

We were in exactly the same position a year ago, when the Prime Minister initially rejected the idea of a judge-led inquiry into the press scandal and then rightly changed his mind. In justifying that decision, he said:

“I don’t believe there is any better process than an inquiry led by a judge”.

He said that would happen with

“the whole thing…pursued…by a team of barristers who are expert at finding out the facts”.—[Official Report, 30 April 2012; Vol. 543, c. 1251.]

Why is it right to have that judge-led approach to the scandal in the press but wrong for the scandal in the banks?

[The Prime Minister]

I think there is a very profound difference between the circumstances of the Leveson inquiry and the circumstances of this inquiry, because of course the Leveson inquiry followed a whole series of unsuccessful and failed inquiries. On this occasion we have had a very successful inquiry by the Department of Justice in America and the Financial Services Authority, which has uncovered the wrongdoing. Now what is required is swift inquiry, swift action and swift legislation. That is what you will get from this Government.

[Edward Miliband]

I do not think the Prime Minister has understood the depths of public concern and the depths of the lack of confidence. He says both that the inquiry that he proposes can be completed within essentially four months and that it can go as wide as it likes. That is simply not realistic. I have listened to his concerns and proposed a way forward. I ask him again for a two-part inquiry, with a judge, to complete the part on LIBOR on the Chancellor’s timetable—by Christmas—and then to look at the wider issues about the culture and practices of the City, of which there are many.

[The Prime Minister]

I understand the public concern about this issue, which is why I want us to get on with it. Frankly, it is this Government who are legislating to split the banks, as Vickers suggested; who are scrapping the tripartite agreement that failed so badly under the last Government; who have introduced the bank levy so that the banks pay their taxes properly; and who have introduced the most transparent regime for pay and bonuses in any financial centre anywhere in the world. As evidence that the House of Commons is getting on with it, we are going to see Bob Diamond questioned upstairs by the Treasury Select Committee this afternoon. I say to the right hon. Gentleman that we are having a vote in the House of Commons tomorrow—a vote on his motion and a vote on the Government motion. Clearly, if the Opposition motion wins, there will be a full independent public inquiry. I urge him to say now that if the Government motion is carried, he will co-operate with a full parliamentary inquiry.

[Edward Miliband]

I do not think the Prime Minister gets it about the depth of public concern. I hope that he will reconsider his position. He says that the Government are implementing the Vickers inquiry. On a very important issue that has come out in the past two weeks—high street banks selling dodgy products to small businesses—the Vickers commission said that it should never be allowed to happen again, yet after lobbying by the banks the Government rejected this basic recommendation of Vickers. In the light of the recent scandal, with small businesses damaged, will he now U-turn and implement the Vickers recommendations in full?

[The Prime Minister]

First, I will not take a lecture on getting it from a party that was in office for 13 years when all these things took place. On his specific question about the Vickers inquiry, let me repeat that it was set up by this Government and will be implemented by this Government—something that had not happened before. Under the inquiry, complex derivatives will be included in the investment bank ring fence, not in the retail banks, which we want to make safer. But let me just say this to the right hon. Gentleman: if he wants a quick resolution, he must accept the outcome of a vote in the House of Commons. I am prepared to do that. Why is he not?

[Edward Miliband]

Mr Speaker—[Interruption.]

[Edward Miliband]

If the Prime Minister wants a history lesson, let me repeat what he told the City of London on 28 March 2008:

“As a free-marketeer by conviction, it will not surprise you to hear me say that”

the problem “of the past decade” is “too much regulation”.

Does that not say it all about the double standards of this Prime Minister? Whenever these scandals happen, he is slow to act and he stands up for the wrong people. The question people are asking is, “Who will act in the national interest, rather than the party interest?” His is a party bankrolled by the banks. If he fails to order a judge-led inquiry, people will come to one conclusion: he simply cannot act in the national interest.

[The Prime Minister]

Everybody can see what is happening here. [Interruption.]

[Mr Speaker]

Order. Members must calm down. I said it to Government Back Benchers and I am now saying it to Opposition Back Benchers: let the answer be heard.

[The Prime Minister]

The party opposite want to talk about absolutely everything apart from their record of 13 years in government. I have to say that we may have found the Higgs boson particle, but Labour has not found a sense of shame.

[Esther McVey (Wirral West) (Con)]

Today is a hugely significant day for British scientists with the announcement of the Higgs boson discovery. Some 6,000 scientists worked on it worldwide—700 from the UK—and there was a major contribution from the north-west. A constituent of mine, Professor Phil Allport, head of particle physics at Liverpool university, led the ATLAS experiment. Will the Prime Minister confirm this Government’s commitment to science and to institutes in the north-west?

[The Prime Minister]

My hon. Friend is absolutely right to raise this issue, the immense British contribution there has been to this extraordinary breakthrough—not least that of Higgs himself—and the extraordinary work that, as she says, is done in the north-west of England. It is a very big step forward and we should congratulate everyone involved. This Government’s commitment to the science budget is without any doubt, not least because although we have had to make difficult cuts, we have preserved the science budget.

[Jim Shannon (Strangford) (DUP)]

Q2. The last 15 days have witnessed absolute chaos in the Ulster bank. Direct debits continue to be removed and wages have not been put into accounts. Ulster bank is owned by RBS. We, the people, have an 82% share in RBS, so the Government have a major say in what happens in the Ulster bank in Northern Ireland. Will the Prime Minister give an assurance to the 100,000 Ulster bank customers that the Prime Minister and the Government will have a direct input in addressing this issue, and that normal banking will resume immediately?

[The Prime Minister]

I can quite understand why the hon. Gentleman raises this on behalf of his constituents. What happened is not acceptable. Clearly, it is an operational matter for the bank, but the Financial Services Authority has been monitoring this very closely. My right hon. Friend the Secretary of State for Northern Ireland spoke yesterday to the chairman of RBS. The lessons must be learned, but I can tell the hon. Gentleman that RBS has said that it will reimburse any customer for penalty charges or overdraft fees—anything that is incurred because of these difficulties.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

Q3. To be blunt, my constituents and businesses are losing faith in their banks. What they need from the Prime Minister is a reassurance that there will be no more political skeletons in the cupboard left by the Labour party.

[The Prime Minister]

What matters for my hon. Friend’s constituents and, frankly, for everyone in this House is that we get to the bottom of what happened as quickly as possible. We have had a vote in the House of Lords; we will have a vote in the House of Commons; and then we need to get on with it. We are sent to this House to hold these inquiries, to find these facts, to pass these laws. Let us get on with it.

[Mr David Hanson (Delyn) (Lab)]

Q4. Yesterday, 117 manufacturing jobs were lost in my constituency on a rising trend of unemployment in north Wales. Will the Prime Minister confirm to the House that last week’s GDP figures showed that his Government’s performance was worse than he expected and requires change, and that the cause is his Government’s policies?

[The Prime Minister]

I very much regret any loss of jobs, including in the right hon. Gentleman’s constituency, particularly as, since the election, we have seen 800,000 extra jobs in the private sector. I am very concerned about the economic performance in Wales, which over the last decade or more has actually fallen further behind the rest of the United Kingdom. We need to work very hard with the Welsh Assembly Government to try to make sure that we are making Wales more competitive.

[Stephen Lloyd (Eastbourne) (LD)]

A key part of the Health and Social Care Act 2012 is that clinical change must be led by clinicians and patients. In my own hospital, the Eastbourne district general hospital, the majority of consultants have said that they have no confidence in the trust’s proposed clinical change, and the vast majority of the public in Eastbourne share that lack of confidence. Will the Prime Minister confirm that the local trust has to listen to the Act, the clinicians and local people in Eastbourne?

[The Prime Minister]

I can absolutely confirm that. Clearly, changes should not go ahead unless there is proper listening to local clinicians and local people. That is how our health service should operate. My right hon. Friend the Health Secretary will be making an announcement shortly. The good news is that across the health service in-patient and out-patient waiting times are down, and we have the best ever performance for patients waiting for longer than 18 weeks to be treated. Added to that, the number of mixed-sex wards is down and rates of infection are down; the health service is doing well.

[Anas Sarwar (Glasgow Central) (Lab)]

Q5. The Prime Minister will be aware that the Crown Office in Scotland has confirmed that it has been carrying out an investigation, led by the serious crime division, into allegations that several banks, including state-owned RBS, have provided false information to financial markets. Does the Prime Minister back that investigation? Given the scale of the crisis and the scale of public anger, will he back a full, independent, judge-led inquiry and, crucially, will he give us a free vote in the House tomorrow?

[The Prime Minister]

There are two important things here. First, we should allow all the investigative authorities to carry out their investigations and take them wherever the evidence leads them. That is true for the Serious Fraud Office, and it is true for the Financial Services Authority—we need to ensure that they have the resources necessary to do that. Then we have to consider the nature of the inquiry. The problem with the suggestion the hon. Gentleman makes is that as these investigations are ongoing, it is actually easier to hold a rapid investigation within Parliament than to set up an investigation outside Parliament.

[James Wharton (Stockton South) (Con)]

Q6. What message would the Prime Minister send to the emergency services, local authorities and communities across the north-east, which swung into action so effectively when the region was hit by flooding last week?

[The Prime Minister]

The first thing I would say is huge congratulations and thank you to the emergency services. I saw for myself—not in my hon. Friend’s constituency, but when I was in West Yorkshire—the incredible work that was done. The other thing to note is that whenever these things happen, there is an incredible coming together of community and social action to help people who have been flooded out of their homes. I am sure that everyone, in all parts of the House, will want to thank people for what they have done on others’ behalf.

[Ian Lucas (Wrexham) (Lab)]

Q7. On the question of a European referendum, is it the policy of the Prime Minister to be indecisive, or is he not sure?

[The Prime Minister]

I wonder how long in front of the bathroom mirror that one took. The point is this. There are two things that would not be right: the first would be to hold an in/out referendum now—I do not think that is the right approach—and the second would be to rule it out for all time. I have no idea what the hon. Gentleman’s party’s policy is.

[Mr Julian Brazier (Canterbury) (Con)]

Does my right hon. Friend agree that central to any reforms of banking must be, from the point of view of ordinary punters, two things: first, the proposals which we are already working up to ensure that people can move their accounts quickly, cheaply and easily; and secondly, an absolute guarantee that Governments will never again bail out banks?

[The Prime Minister]

My hon. Friend makes two very important points. On the first point, about people being able to move their bank accounts, that will be in place later this year. On the issue of bailing out banks, we need to put in place mechanisms so that banks can fail without calling on taxpayers to support them. That resolution regime, which for 13 years was left untouched by Labour, has been dealt with by this Government.

[Graham Stringer (Blackley and Broughton) (Lab)]

Q8. The euro now has a solid record of destroying jobs and democracy throughout Europe. The Prime Minister is failing to repatriate any powers or resources to this country. When is he going to stop dithering and allow the electorate in this country to have a referendum on the European Union to decide whether to stay in or get out of that mess?

[The Prime Minister]

We have repatriated one power, which is that we have got out of the bail-out that the last Government put us into, and that is saving us billions of pounds. If the hon. Gentleman takes that view, he should be sitting on this side of the House rather than that side.

[David Morris (Morecambe and Lunesdale) (Con)]

I want to draw my right hon. Friend’s attention away from banking for one moment—[Interruption]—and the Opposition’s attention—to more important matters: children’s lives in my constituency. Five children in my constituency have been involved in an accident on a crossing outside St Peter’s school in Heysham. I know this is a county council matter, but I would like the Prime Minister to assist me in trying to get a crossing outside St Peter’s school.

[The Prime Minister]

My hon. Friend is entirely right to raise a constituency case such as this, where so many people have lost their lives and where there is such a threat to safety. I will certainly look at what he says. As he says, it is a matter for the county council, but if I can help him to put his case, I will be pleased to do so.

[Jonathan Ashworth (Leicester South) (Lab)]

Q9. Leicester is bearing the brunt of the Prime Minister’s double-dip recession, with the sad news today that yet another business is going under, resulting in the loss of local jobs. In that context, was he as disappointed as I was at the figures released last month showing that lending to small businesses was down by £1.7 billion? Is it not clear that the Chancellor’s credit easing policies are not working?

[The Prime Minister]

The credit easing policy—the national loan guarantee scheme—is going to make available £20 billion of extra loans; some of that money is already available. The Merlin scheme saw lending to small businesses go up in 2011. It is difficult when the banks are nervous about the economic situation, but the Treasury and the Bank of England are doing all that they can, including through the Merlin agreement, to get money out of the banks and into hard-pressed businesses.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

If, as a result of this shameful banking crisis, bank executives are dismissed or forced to resign, and the boards of their banks fail to act appropriately, will the Government do their best to ensure that the delinquents are not able to walk away with their bonuses and severance payments?

[The Prime Minister]

The Father of the House makes an extremely good point. It would be completely wrong if people who were leaving in those circumstances were given some vast pay-off. It would be completely inexplicable to the British public, and it would not be right. I very much hope that it does not happen. In terms of what the Government can do, we are going to legislate so that all pay deals are put to shareholders with a binding vote, and those deals should include any severance payments. The party opposite had 13 years to do that; we are going to do it in two.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

Q10. Given that the richest 1,000 persons in Britain made gains of £155 billion in the past three years of austerity, why will the Government not charge those gains at the capital gains tax rate, which would bring in about £40 billion? That would be enough, without any increase in public borrowing, to generate 1 million or more jobs. It would be far better to cut the deficit in that way—through growth, rather than through the Chancellor’s failed slump.

[The Prime Minister]

I hate to remind the right hon. Gentleman, but he was a Minister in the Government whose capital gains tax rules meant that people in the City were paying less in tax than their cleaners were paying. We have lifted the rate of capital gains tax to 28% so that we have a fairer system.

[Duncan Hames (Chippenham) (LD)]

Q11. The pupils I met recently at Corsham primary school told me, in their own creative ways, that they liked to learn together. They know, however, that many children in other countries never get that chance. How will the Prime Minister, as chair of the United Nations high-level panel on the millennium development goals, restart efforts to ensure that all girls and boys around the world go to school?

[The Prime Minister]

My hon. Friend raises an important point. Many of us will have seen the “Send my Friend to School” campaign in our own constituencies; it is a brilliant way of teaching young people the importance of showing responsibility for those on the other side of the world who do not have the advantages that they do. Our aid is currently supporting 5.3 million children in primary education, and we hope to up that to 9 million people by 2014, so the Government are playing their part, but we want all of civil society—schools, parents and teachers—to join in that magnificent effort.

[Mr Nigel Dodds (Belfast North) (DUP)]

In addition to what the Prime Minister said earlier about the Ulster bank crisis in Northern Ireland, in which households, individuals and businesses are being denied even basic banking facilities, will he and the Chancellor talk to Her Majesty’s Revenue and Customs to ensure that some flexibility will be shown towards the liabilities of those households, individuals and businesses so that they can be helped through the cash-flow problems that are the result of problems that they did not create?

[The Prime Minister]

I will certainly look at what the right hon. Gentleman says. As I said, RBS has said that it will ensure that people do not lose out through banking charges, but I will discuss his point about HMRC with the Chancellor.

[Margot James (Stourbridge) (Con)]

Q12. I welcome the Government’s commitment to women and girls at the heart of their development policy. As this weekend’s Tokyo conference on the future of Afghanistan approaches, will the Prime Minister consider making aid to Afghanistan conditional on the protection of the hard-won rights of women and girls, which, as he knows, are under attack?

[The Prime Minister]

My hon. Friend makes a very important point. Whereas in 2001 fewer than 1 million children—and, of course, no girls—were attending school in Afghanistan, today 6 million children regularly attend school and 2 million of them are girls. I will reflect carefully on what she says about our aid programme and discuss it with the Secretary of State. It is important that we attach conditions and have real transparency and proper results from our aid. I think that is the only way we can take people with us as we continue to expand our aid budget at a time of economic difficulty at home. My hon. Friend is absolutely right to raise this issue because if we want a stable and prosperous as well as a safe Afghanistan, we need an Afghanistan where the role of women is properly respected.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

Q13. May I give the Prime Minister the opportunity to answer the question put to him a few moments ago by my hon. Friend the Member for Glasgow Central (Anas Sarwar)? If the Prime Minister believes in the sovereignty of Parliament, will he confirm that there will be a free vote across the House tomorrow?

[The Prime Minister]

There was a vote last night in the House of Lords when Labour peers were heavily whipped to vote for the Labour position. I have a clear view, the Government have a clear view and the whole of the coalition Government have a clear view about the right way ahead. There will be a motion for the Labour party, which they can vote for, and a motion for us, which we can vote for. Let me put this one more time to the Leader of the Opposition: I will be bound by a vote for a full public inquiry; will he be bound if the House votes for a parliamentary inquiry? If he cannot answer that question, people will take a very dim view of an Opposition party that stands in the way of an inquiry because they do not want their dirty washing done in public.

[Andrew Stephenson (Pendle) (Con)]

Q14. The Olympics provide a great opportunity to bring our nation together. Does the Prime Minister therefore share my dismay at the plans of some union leaders to disrupt this summer’s events?

[The Prime Minister]

My hon. Friend makes an important point. The Unite union is encouraging strikes on our buses in London. The Leader of the Opposition likes to talk about standing up to vested interests, but what have we heard from him on the trade union movement? Absolutely nothing, and the whole country will be listening to that. We want a strike-free Olympics, and Labour should talk to its paymasters about it.

[Pat Glass (North West Durham) (Lab)]

Q15. We all witnessed last week’s storms across the country. My own village of Lanchester hit the headlines because of the floods. We are all grateful to the police, the fire brigade, Durham county council and the Weardale mountain rescue service, but will the Prime Minister confirm that the Government will be there with real money to support these people and these agencies, and not offer just nice warm words?

[The Prime Minister]

Of course we will be there to do that. We are investing around £2 billion in future flood defences. Of course, all the emergency services have done an excellent job, and they remain ready to carry out further work if necessary. I also think the Government should lend a very sympathetic ear to the local councils and local organisations that are setting up hardship funds to help families, perhaps those that do not have insurance or cannot afford the excess when it comes to dealing with their problems. I have said to the Department for Communities and Local Government that we should be generous in helping people to get their lives back together again.

[George Freeman (Mid Norfolk) (Con)]

Will the Prime Minister join me in welcoming the news that over £1 billion has been raised in the last six months for start-ups in our life science sector—more than in the last three years combined? Does he agree that this is a massive statement of confidence in our innovation economy and in our policies to make Britain a place to do business?

[The Prime Minister]

My hon. Friend has a close interest in life sciences and pharmaceutical industries, and knows a lot about what he says. One of the successes with part of the EU patent court coming to London is that the patents that cover life sciences, pharmaceuticals and similar industries will be in London as well. That means many, many jobs and tens of millions of pounds of investment in this industry and in our capital city.