LIBOR (FSA Investigation)

Stuart Bell Excerpts

Thursday 28th June 2012 Commons Chamber

[Mr Osborne]

I completely agree. One of the things that has shocked the entire country in the aftermath of the financial crisis is how little people appeared to know about what was going on in their banks. That is why it is very important that Mr Diamond accounts for himself and his management and explains what they knew and when they knew it.

[Sir Stuart Bell (Middlesbrough) (Lab)]

May I build on the question put by my right hon. Friend the former Chancellor of the Exchequer about the independence of LIBOR? The Chancellor has not referred to the British Bankers Association, which was involved in 1984 in putting the rate together. Is it appropriate to talk again to the association to see if we can get a true, independent LIBOR?

[Mr Osborne]

The BBA is concerned about what has happened and has already instituted a review into the operation of LIBOR. I should like to hear its thoughts on that, but we need to look at the regulation of the rate and its independence. LIBOR is a very important rate that is used to set mortgage and loan rates for pretty much everyone in the country, so we want to make sure that what happened never happens again.

Business and the Economy

Stuart Bell Excerpts

Monday 14th May 2012 Commons Chamber

[Sir Stuart Bell (Middlesbrough) (Lab)]

I am grateful, Madam Deputy Speaker, to be able to speak on the Gracious Speech and to follow the hon. Member for Rugby (Mark Pawsey), who made great play about private sector workers, as opposed to public sector workers. The public sector worker, of course, contributes to our society as a consumer and facilitates the private sector. I have never understood why Government Members make a distinction between those who work in the public and private sectors.

[Mark Pawsey]

I was not referring to workers. I was talking about the sectors in the economy as a whole and the need to rebalance the public and private sectors. I made no comment about public sector workers.

[Sir Stuart Bell]

I am grateful to the hon. Gentleman. It would be a fine thing if someone working in the public sector was able to move out of it into the private sector. Unfortunately, under the Government’s policies towards the public sector, 500,000 people will be made unemployed and put on the dole.

The right hon. Member for Mid Sussex (Nicholas Soames) wished to see an intellectual technology hub in the south-east. My right hon. Friend the Member for Birkenhead (Mr Field) wanted the same in the north-west. Middlesbrough has a leading business driver, DigitalCity Tees Valley, in the heart of the town. It has a games company, a web design company and a digital education company. Young people have embarked on such digital careers enthusiastically. Many of those young people are from far away places such as Canada and France, but some were home educated at Teesside university. That is a great credit to our university. Those people are creating one of the United Kingdom’s most vibrant digital hubs, which includes digital media, digital technology and creative businesses. I, along with others, will do all that I can to encourage and facilitate DigitalCity Business to ensure that it remains a success.

The hon. Member for Stroud (Neil Carmichael) referred to the business community. Middlesbrough is working to create a business improvement district in the heart of the town, following another 126 other towns and cities that have opted for such a district. We need the votes of the business community. If those votes come, they will provide the town with a stronger retail centre, and with a more vibrant and exciting centre that will attract people from outside the area.

Two weeks ago, the £35-million radiotherapy unit at the James Cook university hospital was opened by Princess Alexandra. The hospital is now described as one of the finest in Europe and is among Europe’s premier cancer treatment institutions.

I am glad to see the hon. Member for Redcar (Ian Swales) in his place because, as he will know, the first vessel has now been loaded up with steel from SSI UK’s Redcar plant for shipment to Thailand, a month after the blast furnace was reopened. The first shipment from Teesside consisted of 48,000 tonnes of steel slabs with a value of £18.5 million.

I am also glad to see my hon. Friend the Member for Hartlepool (Mr Wright) in his place, because Tata Steel has been awarded a major contract worth more than £100 million for its 42-inch mill, to provide gas pipelines for the gulf of Mexico. The pipelines will be manufactured and delivered in the second half of the year. Tata Steel employs more than 700 people in Hartlepool and across Teesside it has about 1,500 employees. My hon. Friend the Member for Llanelli (Nia Griffith) referred to what Tata is doing in her constituency. The company has invested £13 million in its Teesside site this year.

I will move on to the points in the Gracious Speech that relate to the European Union and the eurozone. The right hon. Member for Wokingham (Mr Redwood) made an eloquent and passionate speech on the future of the European Union, the eurozone and the euro, which seems like it was a long time ago. I was reminded of a phrase in the play “Julius Caesar”:

“men may construe things after their fashion,

Clean from the purpose of the things themselves.”

With all the dire talk today about the European Union, the eurozone and Greece, we will have to see what happens. The right hon. Gentleman put forward the novel view that a Minister—in this case the Secretary of State for Business, Innovation and Skills—can say something privately that he will not say publicly. I doubt whether that is the case with the Secretary of State or with any Minister.

The hon. Members for Solihull (Lorely Burt), for Stone (Mr Cash), and for Stroud and my hon. Friend the Member for Blyth Valley (Mr Campbell), who is no longer in his place, but who entertained the House and will entertain in tomorrow’s Hansard with his language from the north-east, talked about the European Union. The challenge for the European Union is how it can reduce deficits, create growth, and carry democracy with it. Those three elements are extraordinarily difficult.

I raised with the Prime Minister the other day the fact that on 23 May there will be a conference of all the European Union leaders. On the table at that informal conference will be a growth compact to go alongside the fiscal compact. It will be interesting to see whether the Prime Minister signs up to the growth compact, having not signed up to the fiscal compact.

The new President of France, who will be put into his new job tomorrow, talks of job creation and won his election on a programme of growth rather than austerity. It is an interesting thesis, and we will see how it develops in our own country. The EU is based on the stability and growth pact, and there will be a growth compact to go along with the fiscal compact. My prediction is that the EU and the eurozone will survive. The Greeks must make up their own minds—the sphinx must solve its own riddle, and so must the Greeks.

Finance (No. 4) Bill

Stuart Bell Excerpts

Monday 16th April 2012 Commons Chamber

[Sir Stuart Bell (Middlesbrough) (Lab)]

It is a pleasure to follow the hon. Member for Macclesfield (David Rutley), who made a number of important points. The first of those was that the recovery being sought by the Government is a private sector-led recovery. We would all say amen to that, but what concerns us on the Opposition Benches is the imbalance being created between a private sector-led recovery and the social model that we have espoused and continue to espouse. The Government are somewhat unbalanced when they attack the welfare state while at the same time seeking the recovery.

The hon. Gentleman said that Opposition Members have not referred to corporation tax. Actually, I referred to it when the Chief Secretary to the Treasury wound up the Budget debate, because he omitted to say that the reduction in corporation tax to 22% would not come into effect until 2014. He amended that today and stated that that is the case. The Opposition welcome that, but we wonder whether the benefit of the corporation tax reduction will go into shareholder dividends rather than into growth. Although growth is a major topic in this debate, the Government have yet to say how a measure that will come into effect in 2014, which by my reckoning is two years off, will help growth.

We have heard a lot about growth and, in particular, about national insurance holidays, which were mentioned by my hon. Friend the Member for Leeds West (RachelReeves). I will come back to that later. The hon. Member for Macclesfield mentioned business investment, which is important. The £20 billion scheme introduced by the Government is very welcome. I will also come to that later.

The hon. Gentleman also mentioned Ronald Reagan. That was the second mention of him today. The hon. Gentleman talked about him in relation to alligators and cleaning the swamp. Earlier, my hon. Friend the Member for Leeds West referred to the Laffer curve, which was written on a napkin. It suggests that if one reduces taxation, one will get growth. It was pointed out on the Floor of the House that that does not really happen. Nevertheless, it is one of those myths that are in the system and that will stay there.

The hon. Gentleman mentioned cutting the regulatory burden. I agree with that. When I was in opposition before, a Minister came to a meeting and showed us the regulations that the former Government had introduced and those that the Conservative Government of the time had introduced. The second pile was twice as high. A great amount of what the Government do increases red tape and the regulatory burden. We are therefore happy that there is an attack on red tape.

The hon. Gentleman also mentioned Winston Churchill. This has been a day of famous names being thrown around the House. I will entertain the hon. Gentleman by telling him something that I imagine he does not know. The allowance that the Government are abolishing with their granny tax was brought in by Winston Churchill in 1925. That fact is little known, but my mind is full of useless and irrelevant information that I wish to share with the House. When Churchill made his Budget speech on that day, he used a whisky flask to replenish himself and, as he pointed out, to replenish the Treasury. The hon. Gentleman is therefore in good company in discussing these matters.

The hon. Member for Christchurch (Mr Chope), who is still in the Chamber and following the debate with great interest, made a number of important and significant points. He contradicted the hon. Member for Cities of London and Westminster (Mark Field) on the issue of child benefit. The hon. Member for North East Somerset (Jacob Rees-Mogg) also spoke about universal benefits. The hon. Member for Christchurch, who describes himself as a humble Back Bencher, although we would not necessarily agree with that term, said that there is a debate to be had about universal benefits. He mentioned fairness and asked where the fairness is in the system. People who have children receive child benefit and those who do not have children do not. The word “fairness” is in vogue; it is the great word. It is used by Opposition Members and by Government Members. However, unless fairness is linked to values, we have no idea what it means and what it should come to. There is no great appetite among Opposition Members for attacking universal benefits.

I congratulate the hon. Member for Christchurch because for a short while he was Chancellor of the Exchequer—not for a day, not for a week, but for the few minutes in which he made his speech and gave his own proposals. I predict that over the years, universal benefits will be whittled away. We are already seeing it. They will become lower and lower. As I tell taxi drivers when I talk to them about child benefit, free television licences for the over-75s and the winter fuel payment, in the years to come people will look at us in amazement and say, “Did you really have those benefits in the past?” That is the way things are going.

My hon. Friend the Member for Leeds West talked about VAT and my hon. Friend the Member for Dumfries and Galloway (Mr Brown) talked about the VAT on caravans. I would like to talk about the sad event of the 5% VAT rate on church repairs ending. The Chancellor called it an anomaly. When I was the Second Church Estates Commissioner, the Church of England worked long and hard to persuade the then Chancellor, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), on this matter. The former Archbishop of Canterbury took him across to Lambeth palace and offered him a cup of tea or coffee—not the celebrated whisky of Winston Churchill. On the back of that, the then Chancellor understood the importance of the heritage and fabric of our churches, and agreed effectively to reduce the rate of VAT to 5% for three years. When he became Prime Minister, he made the change for the duration of his Government. It is a matter of regret to the Church that the rate has now been called an anomaly and will no longer exist. That is a great pity for the Church and will create problems in maintaining its fabric.

My hon. Friend the Member for Leeds West made a very fine speech. When she was taking interventions, which she handled with great capacity and knowledge, there was confusion among Conservative Members about tax avoidance and tax evasion. Tax avoidance is legal, whereas tax evasion is not. I had the feeling that there was obfuscation among Conservative Members about the taxation regime for contributions to charity. The clear view is developing that the Chancellor will consider that matter again, which we respect and welcome. I will give my age away when I say that in the first Finance Bill on which I sat, which was in 1983, there was a measure that would have liquidated the co-operative insurance company. It would have wiped it out. We took the matter to Lord Lawson, who considered it and removed the measure from the Bill. We welcome the fact that the Government are looking at this issue and I am sure that they will take into account, among other representations, the statement made by the Archbishop of Canterbury.

My hon. Friend the Member for Leeds West talked about the Ernst and Young ITEM Club and mentioned a number of facts from its report today. My hon. Friend the Member for Dumfries and Galloway and the hon. Members for Cities of London and Westminster and for Macclesfield also mentioned it. Its spring forecast makes it clear that this year we can expect 0.4% growth:

“ITEM says that what the economy needs now is for UK companies to invest their substantial cash reserves. The strong recovery in the UK is partly due to buoyant business spending, whereas in the UK investment has fallen to 12% below its 2008 level”.

That is important and serious. There is a lack of investment and companies prefer to hold their money under the bed because of the Bank of England’s concepts of moral hazard and too big to fail, and because of the Basel accords, which have a higher capital requirement. The banks are therefore reluctant to lend and, of course, companies are reluctant to borrow. That is an important and significant fact that we have to deal with.

Ernst and Young also states:

“Ernst & Young’s Eurozone Forecast, Spring edition suggests after a fall of 0.4% in 2012, Eurozone GDP is expected to grow by about 1% in 2013 and some 2% a year in 2015-16. This year, economic conditions will test policy-makers’ commitment and ability to preserve the Eurozone in its current form, with large amounts of public and private sector debt to be re-financed, tighter credit conditions, job losses and further fiscal austerity.”

In these debates, we have been spared an attack on the eurozone and a declaration that the eurozone is responsible for our low growth. The eurozone sorted itself out in December.

[Mr Gauke]

indicated dissent.

[Sir Stuart Bell]

The Minister shakes his head, but Italy and Spain were able to raise finance on the markets at a reasonable rate. Since then, a firewall of something like £720 billion has been put in place. Does the Minister really want the eurozone and the euro economies to fail, given that 60% of our trade is with Europe? He is still shaking his head, so I invite him to intervene.

[Mr Gauke]

I do not want the eurozone to fail, but this is not the week for us to be complacent.

[Sir Stuart Bell]

I was able to drink my glass of water during that intervention, so it was appropriately timed.

I presume that the Minister is referring to Spain, where the yields have reached 6% on the open market. That is not the yield that investors are asking for on new issues, so he should settle down a bit—there is no crisis in the eurozone and the euro this week.

A lot has been said about growth in the small and medium-sized enterprise community. My hon. Friend the Member for Leeds West, the hon. Member for Cities of London and Westminster, my hon. Friend the Member for Dumfries and Galloway and the hon. Member for Macclesfield all referred to it. We, and the SME community, welcome the credit easing scheme that the Chancellor has introduced, which will enable the Government to help the banks lend it a further £20 million at 1% less interest than usual bank loans.

I note that although the hon. Member for Chichester (Mr Tyrie) welcomed that credit easing in his contribution to the Budget debate, he feared that the money would not go beyond the banks’ balance sheets. My concern is that it will not go up to the Tees valley and other local economies. It has always been a matter of regret to those of us in the north-east that when the Government came into office, they chose to treat all regions equally, failing to understand the vast discrepancy between the south-east and the old industrial heartlands of the north-east.

The hon. Member for Macclesfield referred to the investment in Jaguar. I congratulate the Prime Minister on announcing when he was in Tokyo that a new Nissan model would be manufactured in Sunderland, which followed a similar announcement about another model. Yesterday, we saw the unique event of a blast furnace that had closed two years ago, which everybody said could not be reignited, being reignited under the auspices of a new Thai investor who put £4 billion into buying the plant and £2 billion into getting the furnace going. What does it tell us about the global economy that a Thai investor can come over and invest that money in the north-east, and that steel slabs will be put on ships and sent right across the world to Thailand? We ought to remember that when we criticise the global economy and its impact on our own economy.

As a consequence of the Budget, the local enterprise partnerships in the north-east will receive £10 million of additional funding for the Growing Places fund, to unblock local projects. The hon. Member for Cities of London and Westminster mentioned that investment. We in the north-east, and certainly on Teesside, also welcome the manner in which our local enterprise zone has developed and is succeeding, which is a great tribute to our local community’s belief that there is a future for us.

I have no interest in being negative about the north-east and manufacturing, but as the Business Secretary has said, manufacturing has dropped from 18% to 10% as a share of our economy. He has also declared that he is a social democrat, and we welcome him to the fold. He must be disappointed, as we are, that the Budget does not go far enough or fast enough to increase jobs and growth and offset the pace of the Chancellor’s deficit reduction. The hon. Member for Cities of London and Westminster made that point ably.

I turn to the essence of the debate and of the Government’s proposals, which my hon. Friend the Member for Dumfries and Galloway and the hon. Member for Cities of London and Westminster touched upon—how to achieve growth at a time of steep deficit reduction. The Government could not even carry through their own deficit reduction programme for 2015, and they have had to extend it to 2017. My hon. Friend the Member for Leeds West made the point, which the hon. Member for Cities of London and Westminster took up, that public expenditure is still rising. That cannot be gainsaid.

The hon. Member for Cities of London and Westminster said that we could not live beyond our means. That reminded me of Oscar Wilde, who said when he was in Paris:

“I am dying beyond my means.”

Let us hope that the Budget will prove to be more on the upturn than the Oscar Wilde downturn.

The Opposition welcome any measure that helps manufacturing, reduces red tape and gives our people optimism and confidence. That word was used in an intervention earlier, and we want confidence, but we are not entirely convinced that this Budget will give it.

Amendment of the Law

Stuart Bell Excerpts

Monday 26th March 2012 Commons Chamber

[Sir Stuart Bell (Middlesbrough) (Lab)]

Given the shortage of time and the fact that some of my colleagues wish to contribute, I will confine my remarks to my constituency interests.

It was good to hear in Budget week that an outsourcing company that had shed 170 Barclaycard staff on Teesside last year would be taking on 580 new workers, and would be recruiting both at Fountain Court in Middlesbrough and at the bank’s contact centre in nearby Thornaby.

The Chancellor mentioned local enterprise partnerships in his speech. That theme has been taken up throughout the Budget debate, notably by the hon. Member for Great Yarmouth (Brandon Lewis), and tonight by my hon. Friends the Member for Wirral South (Alison McGovern), and for Blyth Valley (Mr Campbell).

We in the north-east regret the passing of the regional development agency. My hon. Friend the Member for Gateshead (Ian Mearns) made a powerful speech on the subject, with which I fully associate myself. However, it has been said of Michelangelo “Had he worked with clay and not marble, who would remember him?” We must work with what we have, and we in the Tees valley must work with our local enterprise partnership and regional growth fund. Tees Valley Unlimited has worked with business to deliver projects that have created and safeguarded more than 1,800 jobs, securing private investment of £138 million. My hon. Friend the Member for Rochdale (Simon Danczuk) spoke of difficulties in the distribution of the regional growth fund, but Tees Valley Unlimited secured more than £68 million for Tees valley companies in rounds 1 and 2 of the fund, and will be hosting a series of business engagement events to promote the fund locally and support company applications. The first will take place in Middlesbrough next month.

In his speech, the Chancellor declared that the country must confront the lack of airport capacity in the south-east of England. Those in my area are concerned about the future of Durham Tees Valley airport. I was glad to hear my hon. Friend the Member for Sedgefield (Phil Wilson) tell the House that he had arranged a meeting between the Minister responsible for aviation—the right hon. Member for Chipping Barnet (Mrs Villiers)—and all Tees valley Members of Parliament to discuss how the future of the airport could be assured.

In his speech last week, my hon. Friend the Member for Hartlepool (Mr Wright) pointed out that the Chancellor was favouring Mayfair over Middlesbrough. It was nice to be mentioned in dispatches, but I can only buttress my hon. Friend’s point by saying that the Budget should have focused more on growth, long-term business support, and a modern industrial partnership between business and industry.

This Budget does not cast a broad light across the economy; it casts a deeper shadow. In a year’s time, all the confidence that is emanating from the other side of the House will be seen to have been misplaced, and we will suffer accordingly.

--- Later in debate ---

[Danny Alexander]

I can certainly confirm that, as a result of the measures in this Budget and the measures that we announced in earlier Budgets, we will have not only the lowest corporation tax rate in the G7, but one of the lowest rates of tax in the G20. That will make a fundamental difference to this country’s attractiveness to investment from overseas.

[Sir Stuart Bell]

rose—

[Danny Alexander]

I will give way to the hon. Gentleman in a moment, but first I wish to mention some of the other contributions. My hon. Friend the Member for Montgomeryshire (Glyn Davies) talked about the benefits of the Budget for rural areas. A number of Labour Members representing Scottish constituencies rightly referred to the absence of a contribution from the Scottish National party and to the damaging policies of the SNP Government in Scotland for the economy. [Interruption.] The hon. Member for Dundee East (Stewart Hosie) has just come in now, for the very closing speeches. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), who represents Plaid Cymru, did make a speech, and I will refer to some of the points he raised.

[Sir Stuart Bell]

Does the right hon. Gentleman believe the corporation tax reduction will lead to growth or to shareholder dividends? Will he confirm that we actually get to that rate in 2014?

[Danny Alexander]

We have confirmed that we will get to that rate by 2014. The hon. Gentleman should know, as I am sure he has closely studied the Office for Budget Responsibility’s report published alongside the Budget, that the OBR assesses that the cut in corporation tax announced in this Budget will, in fact, lead to an increase in business investment in this country—that is something the OBR has confirmed.

This debate has mainly been significant for the astonishing omissions in speeches from Labour Members. There were no references, except in a few cases, to this country’s fiscal position, to the huge deficit that Labour left us or to the huge debts that this country has accumulated thanks to Labour’s profligacy in office. There was no reference at all to the scale of the mess that the Labour party left this country, far less an apology from any Labour Member to the people of this country for the mess they left this country in. The right hon. Member for South Shields (David Miliband), in an otherwise interesting speech, used the phrase “dangerously complacent”. I think that refers to the opinions of the Labour party in relation to this party’s fiscal position.

Banking Commission Report

Stuart Bell Excerpts

Monday 19th December 2011 Commons Chamber

[Mr Speaker]

Order. If I am to accommodate the level of interest in the statement, I will from now on require brevity, the textbook for which can be written by Sir Stuart Bell.

[Sir Stuart Bell (Middlesbrough) (Lab)]

Building on my right hon. Friend the shadow Chancellor’s statement on bank lending to the small and medium-sized enterprise sector, has the Chancellor made any study at all of the impact of what he calls bigger cushions—raising capital requirements from 7% to 9%—on bank lending to that sector? Can he offer the House a guarantee that he will consider that as part of his consultation leading to his White Paper in the spring?

[Mr Osborne]

It is precisely to avoid a procyclical impact that the backstop for capital requirements is 2019, so there is quite a long timetable, which is consistent with the Basel agreement, but the hon. Gentleman is of course right to point out—indeed, the shadow Chancellor made this point—that the current situation in the eurozone is causing a stress on bank funding around the world. It was good to hear the shadow Chancellor acknowledge at the end of his remarks that the biggest single threat to British businesses, as I think he put it, is the current eurozone crisis, which is an analysis we share.

Autumn Statement

Stuart Bell Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

Despite the deterioration in the borrowing forecast, the debt interest payments that we are making are £24 billion less than forecast. That is the burden of the debt, and it would be billions more if the shadow Chancellor ever got his hands on the British economy again.

[Sir Stuart Bell (Middlesbrough) (Lab)]

I welcome the Chancellor’s statement on the 100% capital allowances for the enterprise zones in the Tees valley. I refer him to his statement that he will target £20 billion from pension funds for infrastructure investment. May I draw his attention to the fact that the industry has something like £80 billion in its kitty? I invite him to go back and raise more money for more investment in the same project.

[Mr Osborne]

I would certainly like to see even more money coming from British pension funds, but £20 billion is an ambitious target. It is a shame that we have not been able to mobilise private sector resources from the pension funds in the past decade in the way that we should. The Government are making a determined effort to change that, and I hope that the memorandum of understanding that we signed with two groups of pension funds will lead to more infrastructure investment in the Tees valley and elsewhere.

Jobs and Growth

Stuart Bell Excerpts

Wednesday 12th October 2011 Commons Chamber

[Sir Stuart Bell (Middlesbrough) (Lab)]

I am grateful for the opportunity to follow the hon. Member for Bromsgrove (Sajid Javid), who has real knowledge and experience of the bond markets, as he has revealed today. He obviously knows a lot about the ratings agencies and he has a Bill before the House on debt ceilings. He is also an expert on credit default swaps. I share his great enthusiasm for that, but he will have to explain, on the basis of what he has said and what the Government’s policy is, why, if this is about deficit reduction and debt reduction, £46 billion more is going to have to be borrowed and spent in the next few years to cover their policies.

I want to mention Teesside because we have had the good news in the past few days that the insurance company, AXA, proposes to create 450 jobs in Middlesbrough, adding to the 300 staff it employs at Teesdale in Stockton. A great deal of comment—indeed, criticism, I would say—has come from my hon. Friends the Members for Leeds East (Mr Mudie) and for Gateshead (Ian Mearns) about the creation of enterprise zones and about the regional growth fund. In all my years in the House of Commons, I have had to deal with the Government of the day and although we might have liked to keep the regional development agencies, the reality is that we now have enterprise zones and the regional growth fund. We on Teesside have benefited from the regional growth fund and we also have an enterprise zone that we worked very hard to achieve—and now we will work very hard with the Government. There is also the good news that 1,000 staff are being taken on at the former Teesside Cast Products plant, with 100 already beginning the induction programme.

The Prime Minister, in Question Time today, ventured to say, in his feisty exchange with the Leader of the Opposition, that 300,000 new apprenticeships had been created in our country. I visited Carillion in my constituency last week to see the sterling work that it does in training apprentices in the real-life work of bricklaying, concrete mixing, pneumatic drilling, and other such skilled tasks. That is the kind of work that we see being done across the land on rainy and windy days—precisely the conditions under which those young men were working. Those young apprentices are a credit to themselves and to their future. I welcome the Prime Minister’s comments on the apprenticeship scheme.

If we take an overall look at what the Government are doing, we find the law of unforeseen consequences. There is a lack of compatibility in their objectives. Unemployment rises, so benefits have to rise. Benefits have gone up by £12 billion. We have heard a lot about the Welfare Reform Bill; the Prime Minister referred at Question Time to universal credit, and the Chancellor referred to the Bill today; he said that our amendments to it would add to the deficit. Of course, amendments can be reasoned, substantive or probing. Until we see them when they come before the House and know how we will vote, they have no great significance.

We see in our country, and we saw in Greece, that a too-rapid deficit reduction will lead to reduced growth. The classic example of Greece, to which my right hon. Friend the Member for Edinburgh South West (Mr Darling) referred, shows that if deficit reduction is too steep, there will be zero growth. That is the situation in our country: we have been reducing far too quickly. We talk as though my right hon. Friend never had a deficit reduction programme. We had one: we would have reduced the deficit by half over four years—a policy that even Mervyn King supported before the Government changed; then he changed to a different policy.

We were compared with Greece, which I always find very offensive to the Greeks, never mind to ourselves. The fifth largest economy in the world was being compared with a nation state of 12 million people in the Mediterranean—a state that cheated on its accounts with the European Union. Not only was that comparison offensive, but it distorted our country’s entire policy on deficit reduction.

[Kwasi Kwarteng]

Will the hon. Gentleman give way?

[Sir Stuart Bell]

I am not giving way; it is too late in the day. The unforeseen consequence of a too-rapid reduction in the deficit and no growth is that confidence has gone from our system. The hon. Member for Sevenoaks (Michael Fallon) referred to that. We have lost confidence. We say that we have the confidence of the markets, and of course we do; why would we not? We do not have the confidence of the people—of those trying to find jobs, of the young who have lost their jobs, and of other unemployed people. We do not have the confidence of the ordinary person in the street, who looks at the Government and sees the failure of their policies, so I would be cautious if I were a Government Member.

I come back to a statement made by my right hon. Friend the Member for Edinburgh South West, and I invite the House to remember it. There will be a change in policy. It will not be plan B or plan C. It will come in the autumn statement or the next Budget. The policy needs to change if we are to get growth. There is no future in a steep deficit reduction that will never lead to growth—not now, and not in the future.

[Several hon. Members]

rose—

Eurozone

Stuart Bell Excerpts

Monday 10th October 2011 Commons Chamber

[Mr Osborne]

I am very clear that the resources we provide to the European Union should be well spent. Indeed, there is a whole separate agenda that we have not touched on today of getting the European Union better focused on trying to encourage growth and competitiveness across the entire continent. Like, I suspect, my hon. Friend, I also share the frustration about the application of European law that means that we have to end up paying benefits to people who are not in this country. That is one of the frustrations that Governments in the past have had to deal with, and we are looking at whether there are potential avenues around it.

[Sir Stuart Bell (Middlesbrough) (Lab)]

It was no doubt an oversight that the Chancellor did not mention the conference at the weekend between President Sarkozy and Angela Merkel where they called for a rapid and global response that had to be in place by the time of the G20 meeting in November. The Prime Minister responded by saying that he did not want to put a single euro into saving the euro after 2013. He said that he did not want the involvement of the investment bank and that all he wanted was participation through the IMF—which, incidentally, I did not vote against earlier in the year. Is this what we call being at the heart of Europe and punching above our weight, or are we moving towards a two-speed Europe?

Independent Banking Commission Report

Stuart Bell Excerpts

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

That is because they leave the House of Commons and go to work for investment banks.

My hon. Friend's experience was that an investment bank had many incentives to use retail deposits to subsidise its activity. That was not always right, and Glass–Steagall helped to stop it. We are not reintroducing Glass–Steagall, or introducing it in the United Kingdom; we have a different set of proposals which John Vickers has spent time developing, and I think that they meet the challenge that my hon. Friend set out in his article.

[Sir Stuart Bell (Middlesbrough) (Lab)]

The House will certainly have welcomed the statement that retail banks are likely in the future to funnel their deposits into domestic lending rather than the vast maw of the money markets. The Chancellor has said that there ought to be 10% capital for the retail banks. Presumably that is high-quality equity, and it is reported that a further 10% of non-equity may be required. May I ask the Chancellor to ensure that the capital requirements are no greater than those of Basel III? Too tall a requirement might cut across growth, and cut across lending to the small and medium-sized business sector.

[Mr]

Osborne: The 10% capital requirement against risk-weighted assets is based on the same definition as, and goes a bit beyond, the Basel rules, which recommend 7%. At present, however, the Financial Stability Board is developing proposals to add 2.5% for large, systemically important banks such as RBS and Barclays. The difference will be between 9.5% and 10%, which is quite close, for the retail ring-fenced side. On the investment side, as I have said, the commission does not recommend going beyond the international rules in order to keep London competitive.

Oral Answers to Questions

Stuart Bell Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr Osborne]

I do not think that it would be appropriate for me to comment directly on the value of the euro, but I would observe that we have a weak US dollar and that that may have had an impact on the value of the euro. As I said just now, it is important for us to focus on the task in hand, which is implementing the agreement most recently signed on 21 July by the eurozone. Of course we can and should have a discussion about the future of the euro and its governance arrangements—and that is important—but the euro is here to stay and we have to ensure that it works for Europe. I do not want Britain to be part of the euro, and there is no prospect of that happening—[Interruption.] Labour Members seem to forget that they are still committed in principle to joining the euro. This Government will not join the euro, but it is in our interests that the euro works.

[Sir Stuart Bell (Middlesbrough) (Lab)]

Is the Chancellor aware that, with the exception of Portugal, growth among member states of the eurozone is higher than ours? If fiscal union is to take place, and there is to be a common euro bond, in which order does he think they should come?

[Mr Osborne]

As I have been saying in recent weeks, we need to follow the remorseless logic of monetary union. That was one of the reasons I was against Britain joining the euro—I thought it would lead to greater fiscal integration and common budget policies. There is obviously an active debate about what that might mean, and I would suggest that the first thing that the eurozone countries need to do is to implement the package agreed on 21 July.

May I correct the hon. Gentleman? It is not the case—sadly—that Britain has the slowest growth in Europe. Actually, the problem is that German growth in the last quarter was 0.1% and French growth for Q2 was zero. That is the challenge—a eurozone where growth is faltering, and the situation in the United States. We have to deal with these international problems as well as addressing the very serious problems that we inherited.