Eurozone

Debate between Sajid Javid and George Osborne

Monday 10th October 2011 Commons Chamber

[Mr Osborne]

We are not arguing for an increase in IMF resources as part of the Greek programme, but I did make reference to the broader resourcing of the IMF. That is increasingly an issue because of its flexible credit lines to Poland and Mexico—neither country is in the eurozone, of course. The truth is that after taking into account the IMF’s existing commitments and the buffers it needs to maintain in order to operate as an institution, it does not have a huge amount of resources—although by most people’s standards it does have a huge amount, of course. Its resources amount to about €400 billion, but that is not as large as some people imagine. There is therefore a debate about whether to try to increase the IMF’s resources, but we are not discussing a possible increase of resources in the IMF programme to Greece.

[Sajid Javid (Bromsgrove) (Con)]

During the 2008 crisis, it turned out that credit default swap spreads were a better indicator of the financial health of a borrower than credit ratings. Over the last 18 months our credit default swap spread has fallen dramatically, and in the last few weeks it has, for the first time, been lower than that of France and Germany. Does the Chancellor have a reason why that might have happened?

[Mr Osborne]

I think it is a reflection of the fact that people around the world believe that we have “a credible plan”—those were the words used by the Governor of the Bank of England last week—to repay our debts. Let us remember that we have the largest budget deficit of any forecast for the G20. That is the situation we inherited and we are trying to bring that deficit down. Other countries with much lower deficits have got into trouble because they have not had credible plans, presented by a united Government and implemented with a good majority in their Parliament. We have those things and we are going to keep them.

Independent Banking Commission Report

Debate between Sajid Javid and George Osborne

Monday 12th September 2011 Commons Chamber

[Sajid Javid (Bromsgrove) (Con)]

The ICB’s ring-fencing proposals are not so very different from the Glass–Steagall provisions that existed in the United States. I worked for a United States bank under Glass–Steagall. I was also there when Glass–Steagall was abolished in 1999, and witnessed the adverse change in behaviour. On the basis of my experience at the coalface, may I reassure the Chancellor that he is right to welcome the proposals?

[Mr Osborne]

My hon. Friend—who wrote what I thought was a very good piece for The Times, published on 9 September—has made a point based on his personal experience. I may or may not offend someone when I say that he is probably the most senior former investment banker in the House of Commons.

Oral Answers to Questions

Debate between Sajid Javid and George Osborne

Tuesday 21st June 2011 Commons Chamber

[Mr Osborne]

I am certainly aware that the Treasury Committee and the Office for Budget Responsibility are in discussions over privatisation receipts and other asset sales, but I do not think that it would be right for me to intrude in that discussion. I can give my hon. Friend the commitment that we will certainly provide the OBR with any information it asks for.

[Sajid Javid (Bromsgrove) (Con)]

Has the Chancellor considered what would happen to our growth rate if we followed the advice of the shadow Chancellor, which is opportunistically to oppose every spending cut and every tax increase proposed by the Government?

[Mr Osborne]

rose—

Bank Bonuses

Debate between Sajid Javid and George Osborne

Tuesday 11th January 2011 Commons Chamber

[Mr Osborne]

As I said, we are looking for greater disclosure. We are also seeking agreement at European level, because this is an international industry. These are perfectly sensible steps to take, and we have introduced in this country the toughest financial code on bonuses of any financial centre of any size anywhere in the world.

[Sajid Javid (Bromsgrove) (Con)]

The UK financial industry will pay £54 billion in taxes this year—more than any other industry—and its 1 million employees will pay a further £25 billion in income tax. Does the Chancellor agree that those tax revenues will help to pay for our schools and hospitals, and to cut the record budget deficit left by the Labour party?

[Mr Osborne]

It is, of course, important—I said this in my statement—that we have a successful but properly regulated financial services industry, which employs hundreds of thousands of people, including thousands of people in many constituencies represented in the Chamber. It used to be the case—although perhaps it is not the case any more—that senior Labour politicians would at least acknowledge that. That is why I would much rather reach a settlement with the banks, and that is what we are seeking to do. We want a successful industry that pays a proper contribution to the Exchequer and lends more to British business, and that is my objective.

Oral Answers to Questions

Debate between Sajid Javid and George Osborne

Tuesday 21st December 2010 Commons Chamber

[Sajid Javid (Bromsgrove) (Con)]

The Prime Minister of Luxembourg recently proposed that the EU should start issuing common EU bonds, jointly and severally guaranteed by all member states. Although the eurozone countries can do what they want on bond issuance, will the Chancellor reassure the House that Britain will play no role in an EU common bond?

[Mr Osborne]

I can indeed give my hon. Friend that assurance. This is an issue that the eurozone is publicly considering, as well as other potential routes forward for the eurozone. My efforts are concentrated on getting our gilt auctions away, and I can reassure him that, thanks to the measures we have taken, that is going well at the moment.

Comprehensive Spending Review

Debate between Sajid Javid and George Osborne

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

What I would say to the hon. Gentleman is that, again, we have to take a realistic decision about investment in our railways. We are going to invest £14 billion in them and we also want to invest in new rolling stock, on which I was asked a question by the hon. Member for Sedgefield (Phil Wilson), who has now left his place. That has required a tough decision on rail fares, but I hope that passengers will at least understand that if we want investment in rail stock we have to be able to afford it, and the people who use the rail stock should make a contribution to that.

[Sajid Javid (Bromsgrove) (Con)]

I welcome the bold and powerful statement that my right hon. Friend has made today and, in particular, the efforts to protect the most vulnerable. Does he agree that the biggest risk to our economy would have been to have done nothing at all, as advocated by most Labour Members, and that the action that he has taken today will do the most to restore economic confidence to our economy?

[Mr Osborne]

I agree with my hon. Friend. Whoever won the general election—whoever formed the Government—was going to have to come to the House of Commons to set out a plan for reducing the highest budget deficit in our peacetime history; the deficit is considerably higher than it was when Denis Healey had to go to the International Monetary Fund. We have set out those proposals, and I believe that they will deliver certainty and stability going forward. The market interest rates for British businesses and British families are already lower as a result of the decisions that we have taken since coming into office. As for the decisions that we have announced today, I have noted that not a single Labour Member has asked me about the increase in the child tax credit, which will help 4 million families.

Proposed Public Expenditure Cuts

Debate between Sajid Javid and George Osborne

Monday 13th September 2010 Commons Chamber

[Mr Osborne]

Let me say this to the hon. Gentleman: he sat on the Government Benches year after year while the budget deficit racked up; he allowed this country to have the largest budget deficit in the developed world. We are now seeking to reduce that budget deficit. The previous Government pencilled in but never identified £44 billion of public expenditure savings. If he wants to make a serious contribution to the debate, I suggest that he propose some specific measures to deliver the plans on which he stood at the last general election.

[Sajid Javid (Bromsgrove) (Con)]

Does my right hon. Friend have a view on why Labour Members continue to treat the entire British public like children? They spend, spend, spend, bringing our country to the verge of bankruptcy—

Financial Services Regulation

Debate between Sajid Javid and George Osborne

Wednesday 16th June 2010 Commons Chamber

[Mr Osborne]

The hon. Gentleman is right to draw attention to the role of the credit rating agencies. Of course, all sorts of organisations and products received triple A ratings that they should never have received. That triple A wrapper basically made them immune to investigation by the firms that were buying those products. Certainly, we need to improve the regulation in the domestic sense—here in Britain—but that is also the subject of decision at a European level, and the la Rosière proposals on European supervisory agencies will consider in particular the role and regulation of credit rating agencies.

[Sajid Javid (Bromsgrove) (Con)]

Will my right hon. Friend commit to ensuring far greater scrutiny of EU regulation concerning financial matters than the previous Administration ever did, to make sure that it helps, rather than hinders, our banking system?

[Mr Osborne]

My hon. Friend makes a very good point that we must get the European regulation right, and the United Kingdom has a particular role as the location of most of the wholesale financial services in Europe. We therefore bring some insights to the table, which not all other members of the European Union can do. I am clear that we must do that. It will be under discussion at the European Council later this week and, I suspect, in pretty much every ECOFIN meeting for the rest of the year.

Office for Budget Responsibility

Debate between Sajid Javid and George Osborne

Monday 14th June 2010 Commons Chamber

[Mr Osborne]

Before I answer the hon. Gentleman, I, too, should welcome you to the Chair, Mr Deputy Speaker. [Hon. Members: “Hear, hear!”] My several visits to Chorley during the general election seem only to have helped you to return to this place. It is good to see you here in the Chair.

In answer to the hon. Member for Luton North (Kelvin Hopkins), of course I want the elected British Government and the elected House of Commons to have complete control over the tax and spending decisions that affect our country. One way of doing that is to ensure that we never give rise to market concerns about our ability as a country to live within our means. That is the way to retain national sovereignty. We have seen what happens when other countries lose that sovereignty to the markets.

The hon. Gentleman asked specifically about the European Union, and I shall make two observations about that. First, the Budget this year and in all future years will of course be presented first to the House of Commons before being presented to anyone else. Secondly, I know that he will be interested in this and, before those in my party who are interested in these subjects get hold of this fact, I should let the House know that, under the deal negotiated by the right hon. Member for Kirkcaldy and Cowdenbeath and the other former Prime Minister, Tony Blair, the British contributions to the EU budget are set to rise from £3 billion in 2008 to £10.3 billion in 2014.

[Sajid Javid (Bromsgrove) (Con)]

My constituents, like millions of people up and down the country, are very concerned about the direction of mortgage interest rates. Does my right hon. Friend agree that unprecedented transparency in our national finances of this kind will increase our credibility in the global financial markets and help to keep interest rates lower for longer?

[Mr Osborne]

My hon. Friend is absolutely right, and it is worth reminding ourselves that the OBR June 2010 pre-Budget report is based not only on the previous Government’s tax and spending measures and decisions, but partly on the lower interest rates earned by the current Government in the decisions and announcements we have made over the previous month or so. That is why Sir Alan says in his forward that

“the fiscal path assumed”

by the previous Government

“would lead to higher interest rates and so lower economic activity ”.