Category: Debates

Mr John Redwood (Wokingham) (Con): If such (electric) cars are popular, surely the private sector will provide charging points anyway. We do not have municipal petrol stations, so what is the problem?

Bob Blackman (Harrow East) (Con): The thrust of the amendments is to require public authorities to provide charging points; the thrust of the Bill is to allow them to provide charging points if they so wish. That is why I am urging my hon. Friend the Member for Christchurch not to press his amendments.

Mr John Redwood (Wokingham) (Con): I am glad that my hon. Friend is moving on, because what worries me is our attacks on people’s energy bills—the poorest suffer most—and on British industry, because we have such penal energy policies. Tony Abbott recently won an important election victory in Australia saying that for him it was a referendum on the carbon tax, because he simply rejected dear energy for Australia. He was right about that for Australia, and should we not be doing the same here?

David T. C. Davies (Monmouth) (Con): I hope that a certain other Australian who works closely with our leader (Mr Lynton Crosby) is taking note.

I have tabled a lot of questions to the Minister on the issue. In reply to one, he has said that by 2020 around 23% of household electricity bills will be as a result of climate change policy. I have also tabled questions to find out, thus far without success, how much of the NHS electricity bill goes to support wind and solar farms. Another of his answers, which I do not have to hand, suggests that every person in the country will be paying between £4,700 and £5,300 a year towards the Government’s climate change policies. We have embarked on a hugely expensive course of action, which no other country in the world shows any signs of following.

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Mr Redwood: Does the hon. Gentleman agree that before industrialisation, there was a lot of global warming and then global cooling? Can he tell us what caused the global warming before man generated CO2?

Barry Gardiner (Brent North) (Lab):I will not respond to the right hon. Gentleman’s question simply because of lack of time, but I assure him that there was of course global warming and global cooling. We are looking at anthropogenic global warming, which is what we must be concerned about. He will accept that if we go over that 2° threshold, it will have damaging repercussions for all of us.

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Mr Redwood: Does my right hon. Friend agree with the point that I was trying to make earlier to the hon. Member for Brent North (Barry Gardiner), who seemed to be unwilling to consider it? If one wishes to establish the impact of human CO2, one needs to understand all the other factors driving climate change, which might be up or down, and be able to quantify them. Otherwise, one cannot calculate the human effect.

Mr Peter Lilley (Hitchin and Harpenden) (Con): Absolutely. When people say that there is a scientific consensus that all or the majority of heating that has occurred over the recent decades is due to man-made emissions, there is in fact no such consensus. If one drills down into the questions people ask, one will see that the questions in the first study included, “Do you believe that man-made emissions contribute to warming?” Yes, I do. “Do you believe that that is largely due to CO2?” Yes, I do. However, that does not make me an alarmist, and it does not justify anyone else pretending that every scientist is an alarmist—they are not.

The Act is not just the most expensive, impractically ambitious and uncertainly based piece of legislation that I have ever known; it is unique in being legally binding and unilateral. No other country has followed us down that route. Since we went down that route, Canada and Japan have resiled from Kyoto, and Australia has just abandoned its carbon tax. It is time we looked critically at the Act, repealed or revised it, and do not allow ourselves to be slavishly, legally bound to continue doing something that no longer accords with the evidence or goes along with what the rest of the world is doing.

Mr John Redwood (Wokingham) (Con): Has the hon. Gentleman discussed his proposals with leading national charities, because they might not wish to have to register their people, who are legitimately campaigning for their charitable purpose?

Jon Trickett (Hemsworth) (Lab): I have—but I do not know whether the right hon. Gentleman has done so. He might be well advised to meet with them first, before asking a question like that. Yes, I have met with the leading charities. I have also met with representative organisations of the leading charities, and I have made two things clear to them. First, if they employ lobbyists according to the definition that we want to introduce, they will have to be registered. Even the large representative organisations say that that is the right thing to do. We are talking about professional lobbyists. Throughout the country, in every neighbourhood and constituency, there is much excellent community and charitable work that is undertaken voluntarily, and that is not professional lobbying. We do not expect people who lobby us at our surgeries with a particular problem in their neighbourhood to have to register. However, if a large organisation such as a charity—I can think of some that spend £300 million a year; that is their turnover—has parliamentary consultants working for them or for third-party organisations that are lobbying Parliament in the material interests of that charity, that should be registered. The register will take only a few moments to fill in—it is not a particularly arduous task—and it is right that anyone who lobbies Parliament should be on it.

Mr John Redwood (Wokingham) (Con): I read reports that the Prime Minister had a very welcome meeting with the German Chancellor to discuss member states of the EU having more control over economic migration and benefit systems. Is this true, and is there any news about the timetable for this welcome work?

The Prime Minister (Mr David Cameron): I have many discussions with Angela Merkel, the German Chancellor. At the G20, most of our discussions were about Syria rather than about reform of the European Union, but we have had good discussions about the reform of the European Union. The stance that the German Government have taken is very helpful and I will continue to discuss that with her.

Mr John Redwood (Wokingham) (Con): Does the right hon. Lady not understand that if she backs the most expensive and least rewarding forms of energy investment, to the tune of £110 billion—which is what she wishes to do—profits of less than £4 billion a year will not pay for all that?

Caroline Flint (Don Valley) (Lab): The choice that we face is between moving to the energy market that is best suited to the future and continuing to incur the additional costs of the past. The Energy and Climate Change Committee has produced information about the cost of decarbonising our power sector, but has also drawn attention to the cost of not doing anything. I believe that the cost of staying stuck in the past would far exceed the cost of investing the amount that we need to invest in renewable and low-carbon energy for the future.

Mr John Redwood (Wokingham) (Con): I am glad that the hon. Lady is highlighting this issue. She is right that in the last couple of years under Labour there was a huge reduction in living standards, and the coalition Government have not yet reversed it. Does she now think that her party was wrong to implement policies of very high and rising energy and fuel prices, which are one of the main reasons people are in this bind?

Rachel Reeves (Leeds West) (Lab): I thank the right hon. Gentleman for that intervention. We have said that we would abolish Ofgem and create a new energy watchdog with real teeth to force energy companies to pass on price cuts when the cost of wholesale energy falls. Meanwhile, under this Prime Minister’s watch, energy giants are enjoying a £3.3 billion windfall. That shows the warped priorities of this out-of-touch Government. Rail fares are another example, increasing by up to 9% a year. We would apply strict caps. We have said that we would introduce a new legal right for passengers to be entitled to the cheapest ticket for their journey; this Government are giving powers back to train operating companies to increase some fares by up to another 5% beyond the cap. Again, that shows the warped priorities of this out-of-touch Government.

On housing, there are now 3.8 million households in the private rented sector, including more than 1 million with children. Research shows that many are being ripped off through hidden fees and charges costing tenants £76 million a year.
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Mr Redwood: I am glad that the Minister has said that we share Labour’s ambition for more people to have better paid jobs. Of course we want people to be better paid, but is not the best way for people to get a better paid job to start with a low-paid job and work their way up and get mentored and trained in the workplace?

The Financial Secretary to the Treasury (Greg Clark): My right hon. Friend makes a powerful point. Opposition Members should not be so disparaging about the chances that are being given to millions of people to find work, make progress, learn skills and acquire the necessary experience.
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Mr Redwood: Does the Minister agree that President Obama’s economic policy, which has been much misrepresented and much praised by the Labour party, has included a far bigger budget deficit reduction, through spending cuts and tax rises, than anything done here, and that the American economy is growing faster for longer?

Greg Clark: My right hon. Friend is right that there is a global consensus, if I could put it that way, that responsibility in fiscal matters is the necessary condition to revive the economy. The only exception to that consensus continues to be Opposition Front Benchers.

We have cut our structural deficit by more than any G7 country. The deficit is forecast to fall this year, next year and the year after that. We have record low interest rates. We are investing more in infrastructure during this Parliament than the previous Parliament.

It is still a world of economic turbulence—let us be clear about that—but the evidence throughout the past few months is that Britain is on the mend. National income has grown for two successive quarters.

Mr John Redwood (Wokingham) (Con): I would like to thank the Minister for a very visible improvement in the performance of the Border Agency over the last year or so, and urge him to work with his staff to ensure that ever-higher standards are achieved by promptly and courteously allowing the legal people in and by ensuring that we find all the illegals at the first point of entry.

The Minister for Immigration (Mr Mark Harper): I am grateful to my right hon. Friend. I know from a conversation we had that he has seen the work that our border officers do in our juxtaposed controls, where attempted illegal entries are prevented from even getting to the United Kingdom. He makes a good point, too, about the rest of the UK Border Agency after the agency’s split into the two component parts of UK visas and immigration and immigration enforcement. It is doing exactly what my right hon. Friend said, which is to welcome those who come to Britain to contribute—skilled workers and students, for example—while deterring those who do not and ensuring that those who overstay their welcome are removed from the country.

Mr John Redwood (Wokingham) (Con): I warmly welcome the Government’s policy of not intervening militarily in Syria, but may I seek assurances from the Secretary of State that every action will be taken by the Government and by friendly Governments around the world to make sure that perpetrators of atrocities in Syria are outlawed, and that should they seek to leave their country they will stand trial and any wealth and money they have forfeited?

The Secretary of State for Defence (Mr Philip Hammond): Our position remains that there needs to be a robust response to the illegal use of chemical weapons. The House of Commons has ruled out military participation in any such response, but we will pursue every diplomatic, political and other channel to continue to deliver the robust message that my right hon. Friend calls for.

Mr John Redwood (Wokingham) (Con): Does my hon. Friend agree that it is even more important that Parliament should have its say and a vote before any such thing was considered (arming the rebels) because the British people are uneasy about the interventions made in their name in other places in the last decade?

Bill Wiggin (North Herefordshire) (Con): As always, I have no difficulty in agreeing with my right hon. Friend.

Mr John Redwood (Wokingham) (Con): I remind the House that I provide investment advice on world markets and world economies, but I am pleased to say that it has nothing to do with banking credit or banking leverage, so I feel quite entitled to comment in this important debate.

I welcome what I hope is a probing new clause from the Opposition. It allows us to discuss something that is at the heart of what regulators need to do to have a strong banking sector and economy and to have the comfort at night of knowing that we will not live through another dreadful crisis like the credit crunch of the previous decade. The new clause goes to the heart of the issue: what action should the Government and regulators take to try to ensure that large banks and other institutions advancing credit that can be a risk to the whole system are kept under sensible control, so that we can be pretty confident that, if something goes wrong or the world economy dips, they have the necessary money to pay the bills and deal with any losses that might arise?

If we look at the tragic history of the previous decade, we can see that the then banking regulator in the United Kingdom—I think that it has now admitted this—got it wrong both ways. It wanted the banks to have too little capital, cash and protection, and in the run-up to the credit crisis in 2008 it allowed the most enormous expansion of leverage, which previous generations of regulators had not permitted. Then, in the ensuing panic, when interest rates had to rise to tackle the problem of inflation, it lurched to wanting very high amounts of capital, but at the time the banks could not generate profit and so found that very difficult.

That resulted in the previous Government’s decision, in two of the worst cases, that capital should be forthcoming from the state and taxpayers themselves. I think that we all agree that we do not want to go back around that course or to get to the position again where some Members of this House feel that the only option is for the state to provide taxpayer support for organisations that have been too leveraged.

New clause 9 suggests that it is possible to set a leverage ratio for the system as a whole, and it might be, and that might be desirable, and I look forward to the Minister’s response. Of course, the regulator already does that in a way because it sets individual target ratios or capital requirements for all the major banks in the system, so if we aggregate those we get to its view of the aggregate amount of leverage. As the hon. Member for Nottingham East (Chris Leslie) has rightly said, if that overall leverage were to be set for the system as a whole, the regulator would still need to interpret that bank by bank. Some banks would be super-prudent and some would be straining at the other end of the spectrum and might be under special measures with the regulator to try to get their balance sheets into shape.

My particular worry at the moment is that it is never easy managing the transition. We would all be delighted to wake up tomorrow and discover that all the banks are super-safe, but if the price of getting to that stage too quickly is no growth in the economy or, worse still, the onset of another recession because the banks cannot finance the recovery, that would be a bad idea. Many of us would like to see the banks get to better ratios by writing more profitable business and generating more legitimate and sensible levels of profit, rather than having the regulator run the risk of moving too quickly to demand that they have much better ratios. The banks would then have to achieve those better ratios by not writing any new business and by trying to get old loans back ever more quickly from businesses that might find it difficult to repay them. Some of those banks, not being very profitable, could not trade themselves out of the difficulties that they found themselves in.

We also need to be conscious of what is happening globally, because although we should not chase the rest of the world if it has a group of regulators that are being far too generous and wish to re-enact the boom-type crisis of the previous decade—I do not think that we are in that position any more; I think that the regulators of the world are all generally trying to be more cautious—we need to ensure that we do not do anything in Britain that is particularly penal. What we need in order to have a prosperous economy is banks with sufficient profit, reserves and capital to be able to finance a normal recovery. It is very unpopular in this country to speak up for banks making profits at the moment, or indeed at any time, but it is important that they generate reasonable working profits, because that is the best way to make them more solvent.

Mr David Ruffley (Bury St Edmunds) (Con): Is my right hon. Friend as unconvinced as I am by the relatively arbitrary figure of 4% being preferable to 3% for the leverage ratio? Like him, I believe that, if there is going to be any tightening on capital adequacy or leverage, it should be done when the recovery is more surely under way, and 3% is preferable to the 4% recommended by the Vickers commission and the parliamentary commission.

Mr Redwood: I think that I agree with my hon. Friend. What I am suggesting is that I would like to get closer to 4% and further away from 3% by growth, and I think that that could be inferred in Labour’s new clause, because I noticed that the hon. Member for Nottingham East (Mr Chris Leslie) wisely did not pledge himself firmly to 4%. Although he might secretly want 4%, like the rest of us he is probably wise enough to know that, although it might be nice to have 4% in due course, to lurch straight to a target that some big banks could not meet might be very damaging to the economy.

Neil Parish (Tiverton and Honiton) (Con): One of the problems at the moment, as I know from my constituency, is that some companies are still finding it difficult to get money from banks, so the higher the leverage requirement, the more the banks will say that they have to keep the capital and cannot lend it. I agree with my right hon. Friend entirely that we have to be very careful about how we move from 3% to 4%, because otherwise it is companies and growth that will suffer.

Mr Redwood: I think that we have wonderful agreement across the Chamber on this, which might hearten the Minister (Mr Greg Clark). We would be happier with 4% than with 3% in general terms, but we do not want to get there too quickly if that means a further jolt to expectations and confidence and further actions by banks to pull back loans, rather than financing the recovery that we clearly need from them.

Mr Andrew Love (Edmonton) (Lab/Co-op): One of the banking commission’s recommendations was that that should be devolved to the regulator to decide and that we should not set a target or a figure. The Government seem to be resisting that, and for the reasons that have been outlined in relation to growth and living standards. What does the right hon. Gentleman think about the proposal to give that to the regulator earlier than the Government suggest?

Mr Redwood: I think that a Government have to take responsibility for the big calls on economic policy. They can take very good advice from independent regulators and the Bank of England, and sensible Chancellors take good advice, but ultimately it is the Chancellor of the Exchequer and the Prime Minister of the day who have their names on all that, and the electorate will expect them to be responsible. I think that people believe in independent central banks and independent regulators up to the point where they get it wrong, and then they look to politicians to take the blame. We have just been through a period when the banking regulator, by its own admission, got it very visibly wrong.

Mr Love: The Government are suggesting that the regulators will get it wrong in 2018, and the commissions say that they will get it wrong a little sooner. Is this not an argument about timing and when the economy will be out of its current difficulties?

Mr Redwood: It is important that we should have proper discussion and informed debate, taking the best advice, so that we can try to get things right for a change. We owe it to all our electors and the economy generally to try to get the matter right.

Time is not generous, so I will be brief. My worry is that, under the previous Labour Government and in the early days of the coalition, we were running a strange policy in which, on the one hand, the Bank of England was trying to depress the vehicle’s accelerator by creating a lot of extra money and saying, “We really need to get some of this money out there to do some good in the economy.” On the other hand, the banking regulator was depressing the vehicle’s brake, saying, “No, you can’t possibly spend that money to create more credit and do more things. The priority is for the banks to sit on the money to have better cash and capital ratios. They probably need to wind down their loan books, which we think are too big.” My observation is that if we try to drive a vehicle with one foot on the accelerator and one on the brake, the brake normally wins.

Mr Ruffley: As has been mentioned already, some in the Bank, including Sir Mervyn King, argued that insufficient lending is a consequence of insufficient capital. I put that to Mr Bailey a few days ago in the Treasury Committee. I asked him about the net new lending level now compared with when funding for lending began last August, and he said that it was flat. Is that not evidence for his proposition that we cannot have tighter adequacy requirements on capital and lots more new lending? The figures show that lending is flat.

Mr Redwood: Indeed. That point also shows that we need banks to be profitable—particularly RBS, which is still largely state owned. Until the bank is making profits, its capital ratios will not improve quickly enough and it will then not be in a position to lend the money that the Government would like it to. The taxpayer would be grateful if it could be more profitable, because our shares would be worth more, which would be in the general interest.

I conclude by making the same point to the Minister. Yes, I want us to get to stronger banks with tighter ratios, but I want us to get there through growth and growth in bank profits—particularly for HBOS and RBS, in which we have a large state stake and whose results have been disappointing for a number of years. If we can get to that happy position, we can have a bit of growth and some more profitability and then the regulator will have to have a sensible conversation with the banks; it will say that some of the money has to be put into cash and capital so that they are stronger. We will be the better for that.