Tuesday Volume 507 16 March 2010 No. 58 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Tuesday 16 March 2010 £5·00 © Parliamentary Copyright House of Commons 2010 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 707 16 MARCH 2010 708 feel that, as the Government have a stake in a number of House of Commons such institutions, perhaps they should have taken a lot more action to curtail the amount that bankers are still Tuesday 16 March 2010 being paid. Ian Pearson: The whole House will have had The House met at half-past Two o’clock representations from constituents on the issue of bankers’ bonuses. My hon. Friend will be aware that UKFI PRAYERS manages the Government’s interests in RBS, Lloyds Banking Group, Northern Rock and Bradford & Bingley on an arm’s length basis. It is not in the interests of [MR.SPEAKER in the Chair] shareholders, including the taxpayer, for banks to lose key profit-making staff, but we have to ensure an appropriate balance. As she will be aware, RBS made a commitment to pay the minimum possible, to protect the banking Oral Answers to Questions franchise, and it is in investment banking where that issue is most apparent. On behalf of the Government, UKFI took independent analysis and looked at sector TREASURY averages in coming to its conclusions, and it was entirely appropriate that it showed that due diligence. The Chancellor of the Exchequer was asked— Sir Peter Tapsell (Louth and Horncastle) (Con): On lending banking, has the Chancellor yet modified his Government Holdings opposition to Mr. Paul Volcker’s view, which is strongly supported by President Obama, that it is a mistake for 1. Malcolm Bruce (Gordon) (LD): What recent commercial banks to allow their depositors to run the discussions he has had with United Kingdom Financial risk of their money being handled by investment banks? Investments Ltd on its management of Government holdings in lending banks. [322185] Ian Pearson: No, I do not think that the Chancellor has changed his views on that. Indeed, he has clearly The Economic Secretary to the Treasury (Ian Pearson): expressed the view to the House on a number of occasions As you will be aware, Mr. Speaker, the Chancellor of that he does not believe the causes of the current the Exchequer is at a meeting of European Finance financial crisis to have been brought about as a result of Ministers in Brussels today. However, he and the Treasury a failure to implement Glass-Steagall and split investment hold frequent discussions with United Kingdom Financial banking from ordinary commercial banking. Both types Investments Ltd on a range of topics related to the of banks have got into difficulty over the past couple of Government’s holdings in financial institutions, in line years. What is important is that we pay due attention to with the UK Financial Investment’s framework document ensuring the effective regulation of the banks. That is and investment mandate. the approach that we have adopted, which is why we have introduced recovery and resolution plans, for instance, Malcolm Bruce: Given that the Government have as part of our new legislative programme. reduced competition among high street banks, does the Minister not recognise that many small and medium-sized Budget 2009 businesses will be frustrated by an economic recovery, because they will be unable to access finance on the 2. Chris McCafferty (Calder Valley) (Lab): What terms that they need for expansion and recovery? Is it recent assessment he has made of the effect on the not the Government’s responsibility to ensure that they economy of his Department’s policies introduced in can do that, so will he do something about it rather than Budget 2009. [322186] being passive on the sidelines? The Chief Secretary to the Treasury (Mr. Liam Byrne): Ian Pearson: We are certainly not being passive on the Since the Budget more than 3.5 million people have sidelines. As the House is well aware, the Government been helped off jobseeker’s allowance— have negotiated binding commitments with RBS and Lloyds Banking Group on lending to businesses, as well Mr. Speaker: Order. I think that the Chief Secretary as mortgage lending. We have taken further actions to was seeking to group this question with Question 12. help small, growing companies, through the enterprise finance guarantee, which has been a big success in Mr. Byrne: Yes,Iwas. lending to small businesses, and through intermediate lending by the European Investment Bank. We have 12. Derek Twigg (Halton) (Lab): What recent also seen EIB loans at cheap rates to help companies assessment he has made of the effect on the economy through the recovery, which is what we all want to see. of his Department’s policies introduced in Budget 2009. [322196] Miss Anne Begg (Aberdeen, South) (Lab): Like many hon. Members, I have probably spoken to more constituents Mr. Byrne: In the past year more than 3.5 million over recent months than I would normally, and there is people have been helped off benefits and back into still a huge amount of anger among my constituents—and, work, while more than 300,000 people have been helped I suspect, many others—about bankers’ bonuses. They to stay in their homes and more than 160,000 businesses 709 Oral Answers16 MARCH 2010 Oral Answers 710 have been helped to defer more than £5 billion in taxes. Ms Sally Keeble (Northampton, North) (Lab): Does Together, those measures have helped our economy my right hon. Friend share my concern about the impact return to growth. of continuing low interest rates on people who rely on savings income, especially pensioners? What measures Chris McCafferty: Will my right hon. Friend join me to support that group were taken in the last Budget? in congratulating the partnership of Yorkshire Forward, the local authority, West Yorkshire MPs and local Mr. Byrne: Over the past year, steps have been taken businesses, which has been so successful in saving the not only to increase the basic state pension, but to Halifax brand, as well as the maximum number of jobs increase the support available through pension credit. in my constituency? Can he also tell the House what We have increased the disregard in the pensions system further he can do to support jobs in my constituency? to put more money into pensioners’ pockets, and they will also have benefited from VAT cuts over the past Mr. Byrne: I am pleased that because of the measures year which have put about £1 billion into the pockets of that we have taken over the past year, unemployment in consumers throughout the country. my hon. Friend’s constituency is not only lower than the UK average, but lower than the average for Yorkshire Mr. Philip Hammond (Runnymede and Weybridge) and the Humber. Thanks to the Government help that (Con): At a time when economic confidence is crucial to has been put in place, the partnerships to which she Britain’s recovery, the assessment of the policies in the referred have now delivered more than 350 jobs to the 2009 Budget that matters is not the Chief Secretary’s local community. We have no plans to take away that assessment or mine, but that of the international investors support, which is helping to get people back into work. who have to buy our debt and the business men who will We still provide the young person’s guarantee which invest in that recovery. Their verdict is clear, and it is helps young people to obtain jobs when they have been getting louder. It is summarised very neatly by the out of work for six months, and extra help is also European Commission’s view that the Government’s available to those aged over 25 who are in that position. plans are “not sufficiently ambitious”and that “additional fiscal tightening” is necessary. Is not the simple fact that Derek Twigg: May I stress the importance of capital the Government’s deficit reduction plan is not designed expenditure to the Merseyside and Cheshire area, and, to restore confidence in markets, not designed to kick-start in that context, the importance of a decision on the business investment and not designed in the long-term proposed Mersey gateway bridge, which will create hundreds interests in the British economy, but designed to postpone of construction jobs and many thousands of jobs thereafter? the tough decisions until the other side of a general Will my right hon. Friend talk to his colleagues in the election? Department for Transport about the need for an early decision? Mr. Byrne: The argument that the shadow Chief Secretary seeks to advance is one that he has rehearsed Mr. Byrne: I congratulate my hon. Friend on the over the past year. In his opinion, it would be right to consistency with which he has championed that project start to cut public spending now, before the recovery is over the past few years. It will make a great deal of locked in. If he is so interested in the views of business difference to the local economy: I understand that it is leaders and others, let me quote a couple. Richard worth 4,000 or 5,000 jobs to his area. As he will know, Lambert has said: the Government have brought forward some £3 billion “I think the Government is right to say that it would be a bad of capital expenditure to help fight the effects of the idea to slam on the brakes right now because the economy’s recession.