Banking (Responsibility and Reform)

Debate between Tom Blenkinsop and Mark Hoban

Tuesday 7th February 2012 Commons Chamber

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Yesterday, Ernst and Young said UK bank lending will shrink for the first time since 2009. It has predicted lending will shrink by 2.2%, with further shrinkage in 2013. Given that, does the Minister think Project Merlin has been a resounding success, or will he choose not to continue with it next year?

[Mr Hoban]

Project Merlin set lending targets for banks. At the point of the third quarter, the targets for lending to all business had been achieved and those for lending to small and medium-sized enterprises had just been missed. Project Merlin therefore has certainly achieved in respect of its goal of getting credit flowing to the economy. I agree that businesses face challenges in borrowing money. They need to have a viable plan, and we need to work more closely with businesses to ensure that the support is in place to enable them to make successful applications for bank funding.

Northern Rock

Debate between Tom Blenkinsop and Mark Hoban

Monday 21st November 2011 Commons Chamber

[Mr Hoban]

My right hon. Friend makes an important point. As someone who was born and brought up in the north-east, I understand how important Northern Rock is to the fabric of the region, and how important it is as an employer and as a sign of prosperity. That is why I was keen to ensure that we got a good deal, not only for the taxpayer but for Northern Rock and the north-east. I am disappointed that so few voices from the Labour Benches have spoken up in support of what is a good deal for Northern Rock and its employees.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

It is amazing that the Government find the ability to mutualise public services but not to remutualise a former mutual. Will the Minister put evidence in the House Library over the next 25 months proving that this was, indeed, a good deal for the taxpayer now?

[Mr Hoban]

I have made it very clear that we acted on the advice that we had received from our independent advisers. They put forward the case that it was better for Northern Rock to be sold to Virgin Money than for us to sit on it or have it remutualised in one form or another, and I think that that is the best outcome for Northern Rock and its employees. I also think that Labour Members should recognise their role in the circumstances that led up to the failure of Northern Rock and show some contrition about the regulatory system that they left behind.

Eurozone (Contingency Plans)

Debate between Tom Blenkinsop and Mark Hoban

Monday 20th June 2011 Commons Chamber

[Mr Hoban]

My hon. Friend is absolutely spot on in his analysis. I believe that the 10-year gilt rates fell to 3.2% at the end of last week, which reflects the markets’ vote of confidence in the UK economy and particularly the fact that we took the difficult decisions that the Labour party shied away from when they were in government. We took those decisions, which is why the market rates are similar to those in Germany, yet our deficit is more in line with that of Portugal.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Can the Minister give an assessment of what effect a Greek default will have on the German and French economies, which are more exposed to such a default, and in turn on UK manufacturing?

[Mr Hoban]

The hon. Gentleman is right to say that German and French banks have a greater exposure to the Greek sovereign debt than the UK banks do. The French exposure is, I think, four times that of the UK, while the German banking sector’s exposure is about five times ours. That is why it is important that, as we go through the process of stress testing European banks, we look very carefully at the level of capital that our banks hold to ensure that they are in a position to withstand shocks and thus to support and sustain the economy.