Mark Hoban
Main Page: Mark Hoban (Conservative - Fareham)Department Debates - View all Mark Hoban's debates with the HM Treasury
(14 years ago)
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Phil Wilson (Sedgefield) (Lab)
7. What recent steps he has taken to reduce bonuses paid by banks to their staff.
The Financial Secretary to the Treasury (Mr Mark Hoban)
The Government have taken decisive action to tackle unacceptable bank bonuses. The Financial Services Authority has revised its remuneration code and new rules will be in place by 1 January 2011. In addition, the Government have introduced a levy that incentivises less risky banking activities, and we will continue to investigate the cost and benefits of a financial activities tax. In combination, those and other measures will ensure that remuneration is consistent with effective risk management.
Phil Wilson
The Minister will be aware that the Business Secretary has said that a big argument is going on in Government about the banks. He says that he wants a very tough approach but
“our Conservative friends don’t want to do that”.
Is the Business Secretary right?
Jesse Norman (Hereford and South Herefordshire) (Con)
May I remind the House that no hospital PFI contract was signed under the—[Interruption.]
Richard Fuller (Bedford) (Con)
While the Minister reviews the undoubtedly well-stuffed stockings of certain bankers to determine whether they have been naughty or nice, will he acknowledge the significant amount of tax that they pay, and the institutions that choose London as their domain? Will he recognise that, as far as their choice of domain is concerned, the airports of this country will not always be closed?
Mr Hoban
My hon. Friend makes an important point. At the time of the spending review the Chancellor made it very clear that we want banks to pay the maximum sustainable tax. That is why on 1 January we will introduce a bank levy, which the Opposition rejected when they were in government. That levy will raise £2.5 billion more than the net amount raised by their bonus tax.
Ms Angela Eagle (Wallasey) (Lab)
Will the Minister now admit that the more noise the Government make about this issue, the less action they appear willing to take? Will he confirm today that amidst all the PR and bluster, the Chancellor has decided not to go ahead with Labour’s requirement that all bankers’ bonuses over £1 million be published? He may be willing to ignore the Business Secretary’s nuclear option, but the millions of Britons who are paying the real price of his austerity measures will never forgive him if he lets his friends in the banks off scot-free.
Mr Hoban
I am not going to be lectured by the hon. Lady about attitudes towards banks. Labour is the party that gave Fred Goodwin his knighthood, so I will not take any lessons from Labour politicians. They talk tough, but they did nothing when they were in government. This Government are taking real concrete measures to tackle bankers’ pay and to introduce the bank levy, which they refused to introduce. In Europe there will be a most stringent application of the Financial Stability Board principles on bankers’ remuneration.
Roger Williams (Brecon and Radnorshire) (LD)
8. What recent discussions he has had on the introduction of a Government-backed sovereign sukuk.
The Financial Secretary to the Treasury (Mr Mark Hoban)
As chairman of the all-party group on Islamic finance and diversity in financial markets, my hon. Friend is well known for his close interest in Islamic finance. The Government believe that sovereign sukuk issuance would not offer value for money at the present time, but the situation remains under review.
Roger Williams
I thank the Minister for that reply. A sovereign sukuk issued by the Government might lead to two benefits: first, providing funding for the Government’s borrowing requirement, and secondly, giving readier access to liquidity for the growing number of Islamic banks that operate in this country. Will he agree to meet a small group from the all-party group on Islamic finance and diversity in financial markets to discuss this matter in more detail?
Mr Hoban
My hon. Friend makes an important point. We recognise the benefits that a sovereign sukuk could bring to improving liquidity in the sector, but significant costs would arise from sovereign sukuk issuance. However, I am sure that my noble Friend Lord Sassoon, who leads on this matter, will happily meet him and his colleagues.
Barbara Keeley (Worsley and Eccles South) (Lab)
9. What assessment his Department has made of the effects of the outcome of the comprehensive spending review on the provision of local services in deprived areas.
Stephen Timms (East Ham) (Lab)
10. What recent discussions he has had with his Irish counterpart on measures to reduce budget deficits.
The Financial Secretary to the Treasury (Mr Mark Hoban)
The Government welcome Ireland’s effort to bring its fiscal deficit under control, and support the international assistance package currently being agreed to deliver stability.
Stephen Timms
The Chancellor used to speak of the Irish miracle as a shining example of economic policy making. Are there not, though, important lessons to learn from the misery that we are seeing in Ireland today? Is it not clear that simply increasing VAT, making large-scale public sector redundancies and cutting welfare does not add up to a successful path out of the global crisis?
Mr Hoban
Let me remind the right hon. Gentleman what he said about Ireland on 8 May 2007:
“The Irish economy has enjoyed a good deal of success over the past few years. The corporation tax regime has contributed to that, but there have been a number of other factors”.––[Official Report, Finance Public Bill Committee, 8 May 2007; c. 19.]
The truth is that the Irish economy, like our economy under the previous Government, had a banking sector that was poorly regulated and out of control. It is because we have tackled the legacy of the Labour Government that we are in a position to help Ireland.
Mr Edward Leigh (Gainsborough) (Con)
Given the misery that economies on the periphery of Europe, such as Ireland, are suffering from the imposition of a single currency throughout Europe, will my hon. Friend advise his European partners that any future plan should be motivated by what the markets demand, and not what grandiose politicians want?
Mr Hoban
My hon. Friend makes an important point. He may have read the shadow Chancellor’s remarkable statement last week, that the euro had had no impact on the problems in Ireland. It is important that the right mechanisms are in place to tackle the problems in the eurozone, and that those solutions are owned by the eurozone. That is why the permanent mechanism that will replace the financial stability facility will be a eurozone-only body.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
17. What plans his Department has to ensure greater transparency in remuneration in the financial services sector.
The Financial Secretary to the Treasury (Mr Mark Hoban)
The Financial Services Authority has revised its remuneration code for disclosure rules to incorporate provisions in the EU capital requirements directive, CRD3, which comes into force on 1 January 2011. The directive requires firms to make narrative and quantitative disclosures on pay policy and practices. Those requirements are at the forefront of global practice and will help ensure greater transparency in remuneration in the financial services sector.
Gregg McClymont
In reply to my hon. Friend the Member for Sedgefield (Phil Wilson), the Financial Secretary suggested that the Government were united in their approach to banking reform. Am I to conclude from that that the Business Secretary speaks for the Government when he says that the Conservative party is a roadblock to banking reform?
Mr Hoban
I hardly think that a Government who have embarked on a programme of radical regulatory reform of the financial services sector, introduced the bank levy, and set up the independent banking commission to consider the structure of banking in the UK could be viewed by anybody other than the Labour party as a roadblock to reform.
Henry Smith (Crawley) (Con)
18. What estimate he made of the effect on public finances of the introduction of a graduate tax.
Stuart Andrew (Pudsey) (Con)
20. What discussions he has had with his international counterparts since the G20 Seoul summit on co-ordination of efforts to reduce Government deficits.
The Financial Secretary to the Treasury (Mr Mark Hoban)
At the G20 summit in Seoul in November, advanced countries committed to developing plans, which reflected their situations, to tackle their deficits and promote growth. The Chancellor has been actively involved in discussions with international and European counterparts since the Seoul summit. As was the case with previous Administrations, it is not the Government’s practice to provide details of all such discussions.
Stuart Andrew
Has my hon. Friend discussed with his counterparts the fact that the key to securing low interests rates for the long term is to take effective and decisive action on Government deficits?
Mr Hoban
My hon. Friend is absolutely right. We are very fortunate in this country. Because the Government took difficult decisions to tackle the deficit when we came into office, we are in a much stronger place now—consider the turbulence in the eurozone. The difficult decisions that we took ensured that we stepped back from the brink of bankruptcy.
Alison McGovern (Wirral South) (Lab)
Global action on regulating the financial services sector through groups such as the G20 is vital. The House of Lords Economic Affairs Committee recommended a pre-funded deposit insurance scheme. It said:
“The Government should move towards pre-funding of the Financial Services Compensation Scheme as soon as”
possible. Why has the Treasury turned its back on that important measure?
Mr Hoban
If the hon. Lady speaks to building societies, which are finding it difficult to lend at the moment, she will hear their concern about the amount that they pay towards the financial services compensation scheme. Contributing to a pre-funded scheme would add to that burden and reduce the ability of banks and building societies to lend to support the recovery.
Mr Peter Bone (Wellingborough) (Con)
Government Members, including me, believe that the Chancellor and his team are doing an exceptionally good job for the country. May I suggest another policy to reduce the deficit in this country? A freeze on our contributions to the EU would save us £22 billion over the next five years, which should be given back in tax cuts.
Kate Green (Stretford and Urmston) (Lab)
22. What his estimate is of the number of single-income families which will be affected by the decision to end child benefit for households with a higher-rate taxpayer.
Damian Hinds (East Hampshire) (Con)
T2. The anticipated provident societies and credit unions legislative reform order will bring great advantages to credit unions, including the ability to pay fixed interest on savings and to offer services to community groups, social enterprises and companies, but it has been rather a long time in coming. Will my hon. Friend update the House on the expected arrival date of that LRO?
The Financial Secretary to the Treasury (Mr Mark Hoban)
My hon. Friend takes a close interest in that matter as chairman of the all-party group on credit unions, a position he took over from the hon. Member for Bristol East (Kerry McCarthy). He is right that that LRO will bring significant benefits to credit unions. Following comments by the relevant parliamentary Committees that scrutinised the draft laid by the previous Government, amendments need to be made, and I hope to lay the amended regulations in late January or early February.
Chris Bryant (Rhondda) (Lab)
T4. The Chancellor of the Exchequer seems to take a particular delight in playing the role of Baron Hardup. May I say to him, in the nicest, most Christmassy way possible, that all his austerity talk provokes real anxiety in many of my constituents, who worry about their winter fuel allowance, the VAT increases in January and the major losses in construction jobs in the new year? May I encourage him to play, just sometimes, Prince Charming instead?
Jo Swinson (East Dunbartonshire) (LD)
While travelling on a gap year in New Zealand, one of my constituents had a nightmare experience when she was left with no access to money after her bank cancelled her card, despite her having informed it that she would be abroad. In an increasingly globalised world, will the Government consider whether banks can be made to offer a better service for UK customers living, working or studying abroad to avoid problems such as that faced by my constituent?
Mr Hoban
The hon. Lady makes an important point, and I am sorry to hear about the situation that her constituent experienced. It is important that banks ensure a good service for those travelling abroad, and I would encourage her to suggest to her constituent that she writes to the Financial Ombudsman Service to raise a complaint. However, I am sure that the banks will have heard what she said and take heed of her comments.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
What specific equality impact assessment did the Treasury carry out on the potential effects on women of the two-thirds reduction in Warm Front scheme funding next year announced in the comprehensive spending review?