Budget Leak Inquiry

Richard Graham Excerpts

Thursday 22nd March 2012 Commons Chamber

[Mr Gauke]

That is clearly not an issue for the Treasury. The Government will respond to the points that the hon. Gentleman has raised in due course.

[Richard Graham (Gloucester) (Con)]

I would not dream of accusing anybody on the Opposition Benches of hypocrisy, but the last time I saw more assembled piety than there is on those Benches today was when I visited a Catholic convent in the southern Philippines in 1985. Has it occurred to the Minister, as it has occurred to me, that this urgent question is simply a distraction from the debate on a Budget for jobs and growth that helps working people? That is what my constituents in Gloucester want to hear us debate today.

[Mr Gauke]

I understand concerns about there being a debate before the Budget, but now Opposition Members do not seem to want a debate on Government measures after the Budget. I think we should have that debate.

Banking (Responsibility and Reform)

Richard Graham Excerpts

Tuesday 7th February 2012 Commons Chamber

[Rachel Reeves]

I am disappointed that the Chief Secretary to the Treasury has not been willing to explain the Government’s failure to follow through on the Walker review’s recommendations on transparency and high pay. I am disappointed that the Chancellor has not been willing to explain why they oppose the inclusion of ordinary workers on remuneration committees. I am also disappointed that no Cabinet Minister has been willing to come to the House to defend the tax cut that this Government are giving to banks this year.

People up and down the country are amazed when they read about individuals receiving bonuses in a single year that amount to more money than most people will see in their entire working life, especially at a time when families are struggling to make ends meet, when small businesses are finding it hard to access finance, when people are finding it hard to get a job, and when many young people are struggling to get their first job.

The “Oxford English Dictionary” tells us that a bonus is

“a sum of money added to a person’s wages as a reward for good performance”.

It goes on to say that a bonus is

“an extra and unexpected advantage”.

It is clear, however, that for a few, bonuses have come to be expected, an automatic part of their pay. Whatever their performance or that of their businesses, bonuses can be cashed, year in and year out. That seems to be the case even when the share price is falling, even when thousands of jobs are being lost and even when lending targets to small businesses are not being met. And this is happening in an industry that is significantly supported by us, the taxpayers, and that risks rapidly losing the trust and confidence of those it is supposed to serve, because of the actions of a few at the top.

Let me speak plainly. Labour Members recognise the importance of the financial services sector to our economy. A high proportion of jobs in my constituency are directly or indirectly dependent on the continued success of Leeds as a financial hub. Private sector employers whom I meet tell me time after time of the critical importance of bank finance to their ability to grow and employ more people.

The financial services industry is, and must remain, a strong part of the British economy. It offers an opportunity for Britain to play a positive role in the global economy and it plays a critical part in supporting the small businesses that could be and should be the driving force of our economic recovery. That makes it all the more important that Members are not afraid to approach the banking sector as a critical friend—not afraid to deliver home truths or the views and perspectives of the people we represent.

In expressing public concerns about excessive bonuses, we must remember that the vast majority of people who work in banks earn modest salaries. Those I know in Leeds are on salaries of £20,000 or £30,000 a year, and they find these six or seven-figure bonuses as shocking and alien as the rest of us do—especially a few years after failures in the banking sector brought the global economy to its knees.

These are the concerns we have heard in contributions to today’s debate. It must be a matter of regret that throughout this afternoon, save for the Education Secretary, no Cabinet member has been here to hear them. It is a shame that no Cabinet members were present to hear the passionate speeches by, for example, my hon. Friend the Member for Scunthorpe (Nic Dakin), whose constituents are fearful this evening for their jobs. It is a shame that no Cabinet Minister is going to respond to the concerns expressed in the passionate speeches of my hon. Friends the Members for East Kilbride, Strathaven and Lesmahagow (Mr McCann), for Edinburgh East (Sheila Gilmore) and for Bolton South East (Yasmin Qureshi) or of the hon. Member for Brighton, Pavilion (Caroline Lucas). Those Members spoke about the increasing disconnection between a small number of people at the top of the banking sector and the experiences and values of the rest of the country. This disconnect must be repaired if we are to strengthen the national purpose and shared interest that we need to get through these tough economic times.

It is a shame, too, that no Cabinet member will respond to the contributions about struggling businesses—especially to the thoughtful contributions of my hon. Friend the Member for West Bromwich West (Mr Bailey), who spoke about the dysfunctional relationship between banks and industry, which grossly impedes our ability to grow out of the recession, and of my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), who forcefully rebutted an intervention suggesting that the banks are lending. That suggestion was totally out of touch with the experience of small businesses in all our constituencies. The reality is that many businesses are being refused the loans they need to tide them over or to keep people in work. We all need a banking sector that lends, supports small businesses and acts as a sector that we can trust and rely on.

We also heard contributions from the hon. Members for Halesowen and Rowley Regis (James Morris) and for Bristol West (Stephen Williams), which I thought added important dimensions to today’s debate. I want to pick up on the contribution by the hon. Member for Nuneaton (Mr Jones), as he would not let me intervene when I tried to do so earlier. Both he and the hon. Member for Stourbridge (Margot James) seem to disagree with the decision of the RBS chief executive to hand back his bonus, when I had thought that every Member of every party would welcome that. The fact is that the chief executive of RBS earns a salary in excess of £1 million a year—46 times more than the average worker. That should be reward enough for doing his job; he should not be getting a bonus of £963,000 on top of that when few others could expect to earn that sort of salary in a lifetime.

[Richard Graham (Gloucester) (Con)]

Will the hon. Lady explain the Opposition’s policy on creating growth in the financial sector? We have heard a great deal of criticism about everything, about how dreadful bonuses are and all the rest of it. That is fine, but what is Labour’s policy for growth, for being creative and for going forward?

[Rachel Reeves]

We have argued a five-point plan for jobs and growth—to put money in the pockets of ordinary families with a VAT cut and a national insurance holiday for small businesses that are struggling to take on new workers. Those are the sort of policies that will get the economy moving again and will protect jobs in all our constituencies.

We should welcome the RBS chief executive’s decision to hand back his bonus. The reality is that, over the last year, the RBS share price has fallen, it failed to meet its lending targets and it laid off workers. As I said, I would have thought a salary in excess of £1 million reward enough.

Today’s debate, however, is not about one man or one bonus or one bank; it is about the need for an overhaul of the way in which bonuses and pay are structured. As my hon. Friend the shadow Business Secretary has spelled out and as many contributions have highlighted, issues of pay and performance—of individuals and of the banking industry as a whole—cannot be separated.

Banks need to show that they recognise the need to change, the need to reform their business models, the need to rebuild their relationships with small businesses and customers and, most of all, the need to restore public trust. The British people deserve a banking system that they can believe in and respect—a banking system that inspires trust and is seen as a responsible custodian of our earnings, our savings, and our pensions. I know that the majority of people who work in banks at all levels also want to feel proud of the job they do, so today’s debate is about beginning to restore that trust and integrity.

Opposition Members have set out clear, constructive proposals in three key areas: transparency, accountability and fairness. [Interruption.]On transparency, the Labour Government legislated for the implementation of David Walker’s recommendations on high pay, including for rules to disclose the numbers of employees paid over £1million a year. [Interruption.]

Youth Unemployment and Bank Bonuses

Richard Graham Excerpts

Monday 23rd January 2012 Commons Chamber

[Richard Graham (Gloucester) (Con)]

It gives me huge pleasure to join this debate in which we can all surely agree with the hon. Member for Leeds West (Rachel Reeves) that youth unemployment is too high and must be reduced. As many hon. Members have said, none of us is complacent on this issue, so what to do? The hon. Lady had three main suggestions: spend more, lower VAT, and bash the bankers. There was also a possible fourth suggestion of bringing back the future jobs fund or, as she put it, creating 100,000 jobs. The first of those suggestions has been utterly discredited and the second did not work. On the third suggestion, no Government except those of the ex-USSR and the current Democratic People’s Republic of Korea create jobs. We must be clear that the business of government is about setting the conditions in which businesses can create jobs. It simply does not work when Governments try to create jobs.

On the future jobs fund, the evidence we looked at in the Select Committee on Work and Pensions was absolutely clear: it was expensive and public sector-dominated. It was useful and it did give experience, but no future jobs came from it.

[Mel Stride (Central Devon) (Con)]

My hon. Friend makes a powerful point about the future jobs fund—that it was basically about short-term jobs that did not last. Does he agree that this Government’s approach to apprenticeships and investing in young people and skills will give us sustainable, long-term jobs for the future?

[Richard Graham]

My hon. Friend is entirely right and brilliantly anticipates the thread of my argument.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

If the future jobs fund was not a success, why have the Government introduced the youth contract, and is it not simply a watered-down future jobs fund?

[Richard Graham]

Let me be clear that I was not writing off the future jobs fund—I did say that it was useful. However, there are better ways of dealing with these issues, which the Government have identified and are going ahead with.

I was coming to a point that will answer the hon. Gentleman’s query about our alternatives to the hon. Lady’s four main ideas about how the problem of youth unemployment can be solved. I believe that we need a mixture of different things. We need to allow manufacturers to thrive again by reducing corporate tax and the bureaucracy that surrounds their activities. We need to encourage their entrepreneurial spirit. Happily, and by chance, I can show hon. Members an excellent packet of tea that is made in Gloucester and exported to China. I also have in my pocket an aluminium pedal made on the Bristol road in Gloucester and exported to Australia. These examples show that the entrepreneurial spirit is alive and kicking in my constituency and I hope that all Members’ constituencies have similar companies doing great things. Both the companies I have mentioned are looking to take on apprenticeships this year. That speaks to the point made by my hon. Friend the Member for Central Devon (Mel Stride) about the heavy support and increased numbers of apprenticeships that the Government are delivering.

We also need incentives for small and medium-sized enterprises and I am very grateful that the debate I led in Westminster Hall last year, in which many hon. Members spoke up in favour of SMEs, was heard by the Government, who have introduced those incentives so that SMEs can take on apprentices. If every member of the Federation of Small Businesses in the land took on one apprentice, the largest part of the problem of youth unemployment would be solved. Similarly, we can all lead by example by taking on our own apprentice. I wonder how many Members from the Labour party have taken on an apprentice. We can also encourage businesses in our communities to take on apprentices and we can create apprenticeship fairs and job fairs. I am delighted to be welcoming the employment Minister to the skillsfest in Gloucester on 9 February, when he will see what we are doing to promote all aspects of the Government’s programme and will be quizzed by businesses on what more he can do to help them to grow.

The motion mixes an unacceptable fact—high youth unemployment—with an unpopular sector: banking. It is my strong belief that hammering our financial services sector, which is vital to this country, and destroying jobs in it will not help to create jobs elsewhere, so I propose, as an alternative, an idea that I believe would resonate across the land. It came to me when opening a regenerated bank branch in Gloucester two months ago. It would enable banks to reconnect with their customers and grow cost-efficiently, and it would support our communities by reducing youth unemployment. The idea is simple: every bank in the land should take on one apprentice in each of its branches. That would include the Co-operative Bank, which is shortly, I hope, to take over the Cheltenham & Gloucester branches from Lloyds. If the financial sector pursued that idea, Members in all parts of the House, instead of haranguing bankers, would be able to praise them for their role in solving the problem of youth unemployment. Some talks have already taken place; I hope that there will be more. I commend that policy, rather than the motion before us, to the Minister.

Autumn Statement

Richard Graham Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

We are uprating the child care element of child tax credit, along with other elements of child tax credit, in line with September CPI inflation, so it is not true to say that we are not uprating child tax credit. We had to make a difficult decision on working tax credit, but we think that one of the best ways of supporting low-income working people is to take them out of the tax system altogether.

[Richard Graham (Gloucester) (Con)]

Last week I met members of the committee of the Federation of Small Businesses in my constituency to hear about their principal difficulties, one of which was gaining access to affordable finance. Today I believe that both they and manufacturers in Gloucester will be especially pleased to hear about the Chancellor’s creation of a national loan guarantee scheme to provide more and affordable finance. As he said, that will be the best key to increasing growth and the number of apprenticeships and reducing unemployment in our city and elsewhere. When does he expect the scheme to be open for business?

[Mr Osborne]

We hope to get it up and running in the next couple of months. We must clear the state aid hurdles—I am afraid that that is a fact of life—but we have been making good progress, and we hope that following the European Investment Bank scheme that already exists will make the process relatively simple. We are open to other credit-easing programmes such as partnership schemes, which some people have suggested, and we want to work with the Federation of Small Businesses and others to ensure that small businesses receive their money in the form of reduced rates for those who participate in the scheme.

I said explicitly in my statement that we would not make the best the enemy of the good. We must get the scheme up and running as quickly as possible in order to help companies in Gloucester and elsewhere that have found it difficult to gain access to finance over the last three or four years.

Public Service Pensions

Richard Graham Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

We have taken that on board through the proposals for a tiered increase in contributions. The hon. Lady will be aware that 80% of the public sector workers who earn less than £15,000 a year and will not have any contribution rate at all are women.

[Richard Graham (Gloucester) (Con)]

Some months ago, when the Minister for the Cabinet Office and Paymaster General told the House that one of his key negotiating goals was to protect, if not improve, the pensions of lower and middle-earning public sector workers, not all my constituents were convinced. Today, he and the Chief Secretary have delivered on that promise, and hard-working nurses at the Gloucestershire royal hospital and teachers in Gloucester will welcome the news that many of them will have better pensions than at present. However, does the Chief Secretary share my disappointment that the Opposition Front-Bench team has been unable to welcome today’s news, especially as workers in businesses such as Wall’s in my constituency have recently seen their own pensions significantly watered down?

[Danny Alexander]

I agree. My hon. Friend is right to draw attention to the important role played by the Minister for the Cabinet Office and Paymaster General. If I may say so, we make a good team in these negotiations. These are very generous pension schemes, particularly for low and middle-income earners, and rightly so. We must make sure the funding of them is sustainable in both the short term and the long term. That is one of the reasons why I find the Opposition’s lack of welcome for the announcement so frustrating.

Jobs and Growth

Richard Graham Excerpts

Wednesday 12th October 2011 Commons Chamber

[Mr Darling]

I have always made my position clear. One of the big achievements of April’s G20 meeting, led by the then Prime Minister my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), was to get countries to sign up to an increase in IMF funding. That has always been my position, and I am not going to depart from it because I believe that the IMF has a central role to play. With respect to the hon. Gentleman, his intervention does not get him off the central point of this debate, which is what is different now from the position when we left office. My deficit reduction plan was on the back of an economy that had started to grow, so my right hon. Friend the shadow Chancellor is quite right to ask himself what we need to do now, 16 months later, when economic growth has stalled, and what other measures are necessary to get the economy going.

My right hon. Friend is also quite right to say that, although a few months ago very few people were talking about the need to reduce taxes, bring forward capital spending or take measures to help businesses, that has now become common currency among many commentators. It is only the present Government who simply do not accept that the plan they announced 16 months ago is not working. As my right hon. Friend said, the Chancellor has had to downgrade his growth forecast four times. I remember his having great fun at my expense when saying that my growth forecasts were wrong. Actually, mine lasted a lot longer than his. He should reflect on that and on the fact that he is having to borrow more.

I raised another point about quantitative easing with the Chancellor on Monday and I hope we will hear more about it. If that money does not leave the vaults of the banks and get out on to the high streets, it will have failed. I know that the Chancellor has had exactly the same trouble with the Bank of England as I had. I could not persuade it to buy corporate assets; he has obviously failed as well, which is why he has had to think up his own scheme. We really need to get that money out on to the high streets; if it is not manifested in the form of loans to businesses, it will simply not work.

I note that the hon. Member for West Suffolk (Matthew Hancock) is no longer in his place. He said that quantitative easing works only when there is a credible policy. Given that the Bank of England has said that it worked, we must have had a credible policy at the time. I am sorry that the hon. Gentleman is not here to hear that; he might want to ponder it when he reads Hansard tomorrow morning, as I am sure he will. The Chancellor needs to ensure that the money gets out on to the high street; otherwise, it will fail. It is remarkable that the Bank of England is almost now doing what the Government should be doing. It recognises that the policy is not working, which is why it has embarked on another round of quantitative easing.

The Chancellor is fond of saying that all our problems are on account of the eurozone. That, too, is remarkable. When he came into office, the Tory story, backed by the Liberal Democrats, was that it was all the fault of the last Labour Government. All was fine with the rest of the world, so it was just Labour’s overspending that was responsible. Incidentally, the Chancellor supported it right up to the end of 2008 and the Liberal Democrats supported it until the day after the general election, so it could not have all have been wrong at that stage. Now they are saying that the problem is not domestic at all; that it is all to do with what is happening in the eurozone.

Of course the eurozone is a major problem and it is becoming a bigger one by the day. I hope the Chancellor was right when he said at the beginning of the week that wiser counsels are prevailing in Europe, but I am not so sure. We should remember this: although people talk about the fact that the German Parliament ratified the deal a couple of weeks ago—and Slovakia will probably put it through later this week—it was in fact agreed in July, and it is blindingly obvious that it is now out of date. At that time no one would talk about Greek default, whereas now everyone knows that Greece will default, and the only question is whether it will be done in a managed way or become a disorderly breakdown.

Another thing that is obvious—the Chancellor acknowledged this on Monday—is that the austerity measures being imposed on Greece simply are not working. Greece is reaching a point at which it is unlikely to be able to repay the interest on its borrowing, let alone reduce its borrowing and debt. The policy of austerity endorsed by far too many European countries over the last 16 months or so worked at first, but it is not working now, and Greece is living proof of that.

I hope that something compelling and convincing will be agreed at the G20 in a couple of weeks’ time, but I have my doubts. The trouble with the eurozone countries is that they are still fighting as though nothing has changed since the early summer, which has been their position since the early part of 2009. If we have any influence I hope that we will bring it to bear. If we do not, there is a risk, as the Chancellor himself recognises, that if things go wrong in the eurozone they will affect this country. While I agree with the Chancellor that we should certainly should not contribute to the bailing out of the eurozone, he is also right to say that a break-up of the euro at the present time is the last thing that the world economy needs, ourselves included.

That brings me to our policies back at home. I have always believed that reducing public expenditure at such a rate, in a climate in which the private sector is not taking its place, risks crashing the economy. I reached that view when my party was in office, and I still hold it today. The evidence seems to suggest that that is precisely what is happening now, and that is why it is so damaging.

[Richard Graham (Gloucester) (Con)]

Will the right hon. Gentleman give way?

[Mr Darling]

I will not, because it will count against me if I give way again.

I hope that the Chancellor will produce measures to deal with the situation. He may wish to embark on infrastructure projects, although in my experience that is much easier said than done, and the interval between making a plan and putting a shovel into the ground can be a long one. Some of the road schemes that the Chancellor mentioned were planned by the Labour Government—one of them back in the 1970s—so we should not get too carried away about them. However, he should certainly introduce the tax reductions and other measures to help businesses to which my right hon. Friend the Member for Morley and Outwood (Ed Balls) ascribed such importance.

It is clear to me that we cannot resign ourselves to circumstances in which people feel that nothing can be done, that it is all inevitable, and that nature must take its course. Governments can make a difference—they made a difference two years ago at the G20 in 2009—but we currently have no international leadership, and we have precious little leadership from our own Government when it comes to what we should be doing in this country. There is, and there must be, an urgency attached to getting these things right, but that means a change of policy here at home as well.

--- Later in debate ---

[Stewart Hosie (Dundee East) (SNP)]

This Government’s refusal thus far to countenance a plan B will come back to haunt the Chancellor, the Chief Secretary and the Prime Minister. The current plan to remove the entire structural deficit in the fixed time scale of a single Parliament was incredibly risky to start with, and now appears almost impossible. It was dependent on export growth from a strong eurozone, which is not there. To be fair, the overall trade figures are a little better this year: the balance of trade is £9 billion in the red for the first quarter, but in the second quarter it stood at £24 billion in the red, and the aggregate for the first two quarters is almost as much as last year’s catastrophic £99 billion deficit in the trade in goods out-turn.

The Government’s plan depended on business investment growth of a rather heroic 8% to 11% each and every year, but that is not there either. Indeed, the gross fixed capital investment figures for this year show that investment fell by 2% in the first quarter and is lower than in the same quarter in 2010. Growth is now effectively flatlining, and although borrowing was down between April and August, it is up between August this year and August last year and is forecast to be as much as £46 billion greater. Therefore, something needs to change, not least because according to the National Institute of Economic and Social Research it is likely that the entire consolidation plan will cut almost an entire percentage point off GDP growth this year. It has said that

“it remains our view that in the short term fiscal policy is too tight, and a modest loosening would improve prospects for output and employment with little or no negative effect on fiscal credibility.”

If the Government are concerned, as they would be right to be, about the credibility of their plan and if others are saying that a modest loosening, which would help growth, would have no impact on the credibility of the plan, they should listen, not least because if they do not, the entire deficit reduction strategy is at risk, as the NIESR suggests.

On 2 August, the NIESR said that if things go on as they are:

“The Chancellor will miss his primary target of balancing the cyclically adjusted current budget by…around 1 per cent of GDP.”

Perhaps the Chancellor has listened and perhaps that is what he was alluding to in his statement on 11 August when he said that we should be “realistic” about the dangers in the global economy and “set our expectations accordingly.” I pressed him at the time on that and he was not very forthcoming. If he is to change his expectations, he is, as the previous Chancellor said, going to have to change his policy as well.

[Richard Graham]

The Opposition motion, which the hon. Gentleman presumably supports, focuses very much on a plan for jobs and growth. I would like to share with him some statistics that I found with the help of the Library. They show that between 1997 and 2010, when the shadow Chancellor was the previous Government’s chief economic adviser, the number of jobs in business in my constituency shrank by 5,600, or by 13% of the employment work force in the entire constituency. From what I have heard today, plan B really amounts to adding more mortgage costs for families and doing nothing for growth of jobs in the business sector. This Government are doing a lot to help that with structural change. Does he agree?

[Stewart Hosie]

We believe that there has to be a change because this plan is not working. That will involve: direct capital investment, which we know does work, and I shall come on to that; consumer confidence, which is vital; and access to bank finance. The Labour Opposition’s motion is a good tactic to debate this matter and we will back it, because in principle we want to see something done. However, if the hon. Gentleman does not mind, I will concentrate on my proposals.

I have said that there are problems with the Government’s plans. This has not just been about the absence of a strong eurozone to export to or of heroic rates of business investment; it has been about the fact that the forecast rates of growth for this and the next years of 2.3%, 2.8%, 2.9%, 2.7% and 2.7%, as set out in the 2010 Budget, will not be achieved. Indeed, Robert Chote, the head of the independent Office for Budget Responsibility, said that even to achieve a 1.7% growth rate now would require

“quarter-on-quarter growth rates of 1%...and there aren’t many people out there expecting that.”

I suspect that there are no people in here expecting that.

So the Chancellor needs to stimulate now, and the best way of doing so is through direct capital investment. As we know, the OBR has said that the impact multiplier for this is 1:1. It is the most effective form of stimulus that the Government have and they should use it. It is also the area where the Government can make the most damaging cut. I know that he wants to tell me that they are keeping £2 billion more in direct capital investment than Labour planned, but very large cuts are still being made. It was not just the OBR saying this, as the British Private Equity and Venture Capital Association was doing so too. On 23 September, it cited the OBR’s view that

“boosting capital spending is a far more effective way of boosting GDP than cutting VAT, tweaking welfare entitlements or increasing current spending. In fact, the OBR’s multiplier on capital spending is one-for-one…This means that the Government could increase capital spending and still deliver the planned reduction in net debt as a share of GDP.”

So again, there is no lack of credibility in changing policy and there is no impact in the planned reduction of net debt as a share of GDP in changing the policy.

The BVCA goes on to say:

“There are other good reasons for targeting infrastructure. The dramatic cuts to the investment budget that were pushed through last year will weigh substantially on private sector productivity in the years ahead. Capital spending is due to be cut by about a third in cash terms between FY09/10 and FY15/16, implying an even larger real decline.”

So if the UK Government really are serious about private sector growth in the medium and long term, they should be very concerned that a body such as the BVCA is prepared to say that cuts now will weigh substantially on private sector productivity in the years ahead. Of course, its key point is not even that. It states that

“in order to have an immediate impact on activity, the Government would need to start spending money straight away. That could mean dusting off some previously shelved plans, as there is no point in waiting 12 months”—

I think it is right—

“for any boost to be felt.”

That is good advice and I hope the Chancellor is listening.

The Chancellor does not need to focus only on capital investment. He needs to ensure proper access to business finance and that the £75 billion of quantitative and credit easing hits the real economy. Evidence from Japan suggests that bank lending fell during the whole quantitative easing exercise, and evidence here shows that between February 2009 and January 2010, when £200 billion of QE was issued, bank lending fell month on month and has remained below the starting point in every month since. That is extremely damaging. This time, the Chancellor must ensure that that money does not go through a pipe to the banks to pack balance sheets but touches the edges and hits the real economy.

Eurozone

Richard Graham Excerpts

Monday 10th October 2011 Commons Chamber

[Mr Osborne]

Of course, we make contingencies for all possible outcomes—and people should not take that either way because we plan for all situations. I do not want to comment specifically on the issue that my hon. Friend raises about Greece, but I have made it very clear that the situation in Greece needs to be resolved. It needs to come to a decision and stick to it, and it needs to get the debt dynamics in that country right.

[Richard Graham (Gloucester) (Con)]

Given the close correlation between my right hon. Friend’s disciplined approach to spending, the ratings of our sovereign debt and the low interest rates from which our constituents benefit, has the Treasury been able to calculate the likely impact on our interest rates of the shadow Chancellor’s higher spending policies so that we can calculate the true cost on the average family’s mortgage of the widely discredited plan B that he advocates?

[Mr Osborne]

We have not done that calculation, but my hon. Friend has given me a very good idea for Wednesday’s debate. We know, because we have all experienced it, what Labour policies lead to: a completely uncontrollable budget deficit; a negative outlook for our nation’s credit rating; and interest rates that were tracking Spain’s. We have been there under the Labour party, and it is remarkable that when it cleared out the shadow Treasury team, it did not clear out the man most responsible in this Parliament for getting Britain into this economic mess.

Oral Answers to Questions

Richard Graham Excerpts

Tuesday 6th September 2011 Commons Chamber

[Justine Greening]

We have already taken action in previous Budgets, not least by taking people out of paying income tax altogether by raising the personal allowance. As we have heard, we reduced fuel duty, in contrast to the previous Government’s plans to increase it. More than that, we are making sure that we target help at vulnerable people through the Warm Homes discount and next year, of course, we will introduce the green deal to help everybody to make their homes more energy-efficient.

[Richard Graham (Gloucester) (Con)]

Does the Minister agree that although policies to help people out of income tax at the bottom level will show positive results, it is important to maintain the pressure to provide new apprenticeships so that high-value exporting manufacturers, such as Severn Glocon in my constituency, can continue to generate significant foreign exchange benefits.

[Justine Greening]

rose—

Summer Adjournment

Richard Graham Excerpts

Tuesday 19th July 2011 Commons Chamber

[Richard Graham (Gloucester) (Con)]

I am delighted to participate in today’s debate. I want to talk about the recent National Audit Office report on fire control centres and the lessons learned. The FiReControl project was introduced to replace 46 local control rooms around the country with a network of nine purpose-built regional control centres using a national computer system. In many ways, on the face of it, Members might have thought that that was a good idea, but the NAO’s report describes the plan as “flawed from the outset”, with “unrealistic estimates of costs”, an under-appreciation of the complexity of IT involved, hurriedly implemented and “poorly managed”, and concluded that at least £469 million will have been wasted.

As many Members will know, the project was doomed to failure but was sadly continued with for a very long time. It is of particular sadness to the people of Gloucester, my constituency, that the tri-service centre—a centre combining police, fire and rescue and ambulance services, which was a model of its kind when it was created only a few years ago and which performed strikingly well during the 2007 floods—was to be replaced by a regionalised fire control centre at Taunton. Despite that sadness and the irony of the then Minister with responsibility for fire services having been my predecessor, I want to discuss the lessons that can be learned from that botched project. There are four particular aspects that I would like the Minister to consider.

The first lesson concerns the plan for regionalisation. Over the past 13 years, we have seen a series of attempts to regionalise our country. That was particularly the case in my constituency with the attempt to regionalise the Gloucestershire constabulary and then the fire control centres. I hope this Government will never again try to regionalise services that are best delivered locally through the long-established shires, cities and districts of our nation.

The second lesson concerns large IT projects, a lesson that has surely been learned time and again by Governments, at least over the past quarter of a century. When IT projects are large and complex, they tend to be beyond the hopes and expectations of Ministers, Departments and the companies implementing them. I hope that our Government will look closely at the issue as we take forward important new projects, such as the single universal benefit.

The third lesson that the Government will want to study concerns project management, which bedevilled the previous Government in relation to Building Schools for the Future, the rising costs of architects’ and consultants’ fees, and the unnecessarily complex procurement mechanisms and processes. In the case of the regional fire control centres, project management was a skill sadly lacking at the top of Government. Again, as this Government look at reducing costs, taking out waste and making government more efficient, I hope we will focus on the most effective project management skills available.

The final lesson in this unhappy saga comes from the role of the Select Committees. It is still not clear to me whether the Communities and Local Government Committee of that time, over the 10 years of the project, firmly identified to Government the error of their ways by pointing out the likely problems at the beginning, where—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

The Economy

Richard Graham Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Mr Wright]

My hon. Friend represents a seat in the north-east, as I do, and he knows full well that our region has borne the brunt of this recession, like we bore the brunt of the 1980s recession. It does not have to be like this. We have got enormous economic potential in our region that can really contribute to wealth creation in our country, but that is simply not happening.

[Richard Graham (Gloucester) (Con)]

Will the hon. Gentleman give way?

[Mr Wright]

No, I am not going to give way, because I do not have long left.

There is an acute need for a more balanced economic policy, focusing not merely on deficit reduction, but on incorporating job and wealth creation measures, on weeding out inefficiencies—that is true—on raising our productivity, on improving our infrastructure and on rewarding enterprise and ambition. In fact, a more balanced view would help to reduce the deficit faster. An emphasis on growth and jobs would increase output, raise tax receipts and reduce benefit bills, thereby helping to cut the debt. Given the lack of growth in the economy and persistent uncertainties about inflation, economic activity and net exports, for the good of our country and economy, will the Chancellor concede that he might—just might—be wrong?

--- Later in debate ---

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

This is a timely economic debate, and I am pleased that the Opposition have tabled this motion for a whole-day debate at this crucial time. We are one year in, and we can now begin to form a view of whether the Government’s policies are working. It is always difficult for the Opposition, particularly on issues such as employment and the impact of economic policies on the well-being of our country and our constituents, when they have to come out and be negative about what is being achieved. Inevitably, and much to the resentment of Opposition Members, that leads to a chorus of unjustified remarks from across the Chamber that we want to talk the economy down or that we do not want good news. In the name of our constituents, we are desperate for good news. We want good news on employment, for example.

[Richard Graham]

The hon. Gentleman said that his constituents were desperate for good news. May I refer him to the very useful economic indicators update provided by the Library? It shows that consumer confidence rose by 10% in May, that manufacturers’ output expectations have risen by 13%, and that the EU economic sentiment indicators for Britain are up by 2.6 points. Does he not agree that those are all positive indicators? I would welcome him sharing them with his constituents and all his colleagues on the Opposition Benches.

[Mr Robinson]

All we know at the moment is what has happened and many forward-looking forecasts are no better than those of the OBR, which was set up by the Government to provide a so-called independent forecast. Let us be clear that we welcomed and accepted that. All we can look at is what has been achieved; we will come on to the forecasts in a few moments. If we show a moment’s hesitation or doubt about them, I hope that Government Members will understand why. I followed the first 10 years of the Labour Government very closely, and I do not think that we ever had to revise any forecast three times in a matter of six months. If we do not listen to the forecasts and do not treat them as if they had already been achieved, I hope that the hon. Gentleman will understand why.

There are some things we can welcome. We can welcome the good effort in job creation in the private sector. According to the Chancellor this afternoon, that means 520,000 jobs, so let us welcome that. The trouble is, however, that the OBR says—this is the bible we have to go by—that before the end of this Parliament, 200,000 more people are going to be unemployed than it originally thought. We have 520,000 on the one hand and 200,000 more on the other. There is always a negative balancing out the positive in all these areas. If we take inflation, for example, it has gone through the roof at 4.5%. Manufacturing output has been a good effort up until the last quarter, but it is now down again. It is not surprising that an intake of jobs in the private manufacturing sector has supported that output, built on the back of the previous Government’s policies. [Interruption.] No, they do not like to hear it, but it is a fact. Why did more than two thirds of the private sector increase in employment take place before the spending round announcement? It happened on the back of the reflationary policies of the previous Labour Government.

--- Later in debate ---

[Richard Graham (Gloucester) (Con)]

It is a pleasure to follow the hon. Member for Chesterfield (Toby Perkins). He, I and all of us in the House agree that the goal now is to increase growth in the country. The challenges are, first, the revisionist history we have heard today, and secondly the road through which we achieve that growth.

Today’s debate started with the shadow Chancellor talking about the lessons of history and highlighting the need for an economic plan that works. Let me begin with a quick analysis of recent history, because we know that those who do not learn from their errors and from history are destined only to repeat them. The shadow Chancellor was the man who, with his then boss, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), had the clear economic goal of abolishing boom and bust. Thirteen years later and after the worst bust of all time, the right hon. Member for South Shields (David Miliband), as the Chancellor mentioned today, rightly came to the conclusion that it was wrong ever to pretend in a capitalist country that anyone could abolish the economic cycle.

It was a pity that the right hon. Gentleman did not arrive at that conclusion many years earlier, but he has learned an important lesson from recent history. Have the shadow Chancellor and other Labour Members done the same? Have they accepted that the heart of the shadow Chancellor’s last great plan was rotten to the core, was mission impossible, and so ended inevitably in tears? I do not think that Labour Members understand that they and their economic spokesmen will simply not be credible until they accept that key fact.

[Alison McGovern]

If the hon. Gentleman thinks that the previous Government’s economic policy over a decade lacked credibility, why have the current Government accepted, though amended, the golden rule on investment over the economic cycle?

[Richard Graham]

First, the hon. Lady is inaccurate, and secondly no Government Member believes that we can abolish boom and bust.

The details of the shadow Chancellor’s plan were no more successful than his goal. The golden rule on Government spending to which the hon. Lady referred was continually fudged under the previous Government, most spectacularly through the £300 billion of off-balance sheet financing—private finance initiatives—which was almost as bad as anything done by the investment banks. Does the shadow Chancellor accept the accusation by the right hon. Member for South Shields that this was a fundamentally dishonest way of measuring the golden rule? Even the right hon. Member for Kirkcaldy and Cowdenbeath has recognised that the tripartite system of regulating finance did not work. Does the shadow Chancellor accept that too?

These dry details, on things such as PFI and the tripartite system of regulation, do not resonate with our constituents, but their consequences will—the hospitals that have to cut services to patients because of the interest being paid on their PFI financing, and banks not lending enough to individuals and businesses in our constituencies because of bad decision making by themselves, inept regulation and inadequate Government oversight. The consequences of living beyond our means are the essential link between the shadow Chancellor’s policies, and our inheritance and this Government’s efforts to forge a better economic future.

We come to the crucial part of today’s motion: how are we doing, one year on? Opposition Members have piled in like a choir singing the hymn “Abide With Me”—“Gloom and despair in all around I see”. They all seem to have enormous confidence that the economy is failing, that the coalition will not plan, and that the coalition plan would not and could not work anyway, leaving them to talk down our country and their own constituencies. I wonder whether any of them are doing anything to help. Where were they, for example, when I led a debate on apprenticeships and small businesses two weeks ago? Not a single Opposition Member was there. We all need to do our bit to support business growth in our constituencies. We know today that not everything is perfect, but the evidence suggests the following facts. Unemployment is down slightly on a year ago. The savings ratio has improved and business growth—

[Thomas Docherty]

On a point of order, Mr Deputy Speaker. Could you clarify whether I could find out from Hansard whether a Member had actually turned up for their own debate?

[Mr Deputy Speaker (Mr Nigel Evans)]

That is certainly something that you could find out from Hansard, but it is not something that you can find out from me.

[Richard Graham]

I am glad to see that Opposition Members are focused on the topic of today’s debate.

As I was saying, the manufacturing recovery has softened slightly over the last month or two, but it is still strongly up on where it was a year ago. There is a lot to be done, but I would like now to highlight a few things that this Government have done in my constituency, and on which I am working with my constituents.

[Lilian Greenwood]

Will the hon. Gentleman give way?

[Richard Graham]

No, we have had enough of the hon. Lady’s discussion of the past.

I welcome this Government’s commitment to redouble the Swindon-to-Kemble line, which will be an important infrastructure improvement for our railways. I welcome the transfer of assets from the former regional development agency to our city, which will make a difference to our regeneration. I also welcome the funding that the Secretary of State for Education has given for a new-build Gloucester academy, which will help some of our young in their education. I am proud to have worked with my constituents to organise the Gloucestershire apprenticeship fair, the women for engineering seminar and, last week, the Barton jobs fair, alongside Linking Communities and Black South West Network, from which some of our young unemployed black and minority ethnic constituents have found new jobs. There are jobs available if only we can help our constituents to find them. All of us in this fragile situation have options.

[Mrs Jenny Chapman (Darlington) (Lab)]

rose—

[Richard Graham]

All of us including the hon. Lady. We can do nothing, we can say, “It won’t work,” and we can let our constituents down; or, we can get stuck in and work with our businesses to help our constituents back into work. These things have other fruits as well, such as the prizes that I gave at the Gloucestershire Wildlife Trust half an hour ago to those companies that are supporting environmental good causes.

I agree that we need to do more to boost growth. I have been asking the Government to do more to help small businesses take up apprenticeships. I believe that the return of business rates to councils will incentivise them to drive up support for our businesses. I believe strongly in enterprise zones, and I hope that the Government will look carefully at the enterprise zone for my constituency.

I also believe that the Treasury is correct to sort out the banks and manage the risks to the taxpayer. However, today’s Opposition plan is not a plan at all; it is simply an unfunded, undiscussed and unsupported VAT cut. It would simply increase spending, push up debt and lead to higher interest rates, with more to be paid every month on mortgages by our constituents. It is not so much jam tomorrow as enormous pain tomorrow and for many years, which is why I will have no hesitation in rejecting the motion.