Browse content similar to 19/04/2016. Check below for episodes and series from the same categories and more!
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that as a price worth paying which is a respectable argument but not | :00:00. | :00:00. | |
one I agree with. We must now move on. Statement the Secretary of State | :00:07. | :00:12. | |
for Foreign and Commonwealth Office. Secretary Philip Hammond. With | :00:13. | :00:19. | |
permission I would like to update the House on the current situation | :00:20. | :00:23. | |
in Libya and what the Government is doing to support the new Libyan | :00:24. | :00:28. | |
Government of National accord. Yesterday I visited Tripoli, the | :00:29. | :00:31. | |
first time that a British Foreign Secretary has done so since 2011. | :00:32. | :00:36. | |
The fact that this visit was able to take places positive sign of the | :00:37. | :00:40. | |
progress that has been made in recent weeks including the security | :00:41. | :00:46. | |
situation in and around the capital. During my visit I met Prime Minister | :00:47. | :00:49. | |
Suraj Randiv manages -- members of the privacy counsel in the naval | :00:50. | :00:52. | |
base which has become the headquarters of the GNA. I welcomed | :00:53. | :01:00. | |
their commitment to represent all the Libyan people and the progress | :01:01. | :01:04. | |
that they have made in establishing the Government of national accord as | :01:05. | :01:08. | |
a Government of the whole of Libya. I underline the UK is a balk at the | :01:09. | :01:14. | |
GNA as the only legitimate Government of Libya. It has the | :01:15. | :01:19. | |
endorsement of the Libyan political dialogue and the majority of members | :01:20. | :01:23. | |
of the House of Representatives. I believe the Libyan people want it to | :01:24. | :01:28. | |
succeed. We look forward to the House of Representatives completing | :01:29. | :01:32. | |
its formal vote of endorsement in line with its obligations under the | :01:33. | :01:36. | |
Libyan political agreement. I was encouraged to hear from the Prime | :01:37. | :01:41. | |
Minister and his ministers about the steps they are taking to assume | :01:42. | :01:45. | |
control of Government ministries in Tripoli. After five years of | :01:46. | :01:49. | |
conflict following the overthrow of Gaddafi, the Libyan people are wary | :01:50. | :01:53. | |
of fighting and eager for peace. They want a Government which will | :01:54. | :01:58. | |
start to address the many challenges Libya faces. It is important that | :01:59. | :02:02. | |
the international community works in partnership with the GNA as they | :02:03. | :02:06. | |
continue to consolidate their position and take forward their work | :02:07. | :02:10. | |
to meet the needs of Libyan citizens across the country. In my meetings I | :02:11. | :02:16. | |
emphasised the need to keep the momentum on the political process | :02:17. | :02:20. | |
and to deliver practical progress on the ground. I was encouraged to hear | :02:21. | :02:25. | |
that a clear plan is being developed to address some of the immediate | :02:26. | :02:31. | |
challenges delivering security, tackling Di macro and restoring | :02:32. | :02:35. | |
public services, countering people trafficking and restarting the | :02:36. | :02:43. | |
economy. We agreed that delivering security is fundamental to improving | :02:44. | :02:48. | |
the day-to-day lives of the Libyan people and creating an environment | :02:49. | :02:53. | |
that economic reactivation. The security agenda must be owned and | :02:54. | :03:01. | |
led by the GNA. The UK, along with other European nations, stands ready | :03:02. | :03:05. | |
to respond to requests from the Libyan Government for assistance in | :03:06. | :03:10. | |
training the Libyan Armed Forces to improve their effectiveness in | :03:11. | :03:13. | |
providing security and in the fight against Di macro. We agreed that we | :03:14. | :03:19. | |
should continue to work closely to establish what those training and | :03:20. | :03:24. | |
technical support requirements are and what if any role the | :03:25. | :03:27. | |
international community can play in helping to meet them. A number of | :03:28. | :03:33. | |
honourable and right Honourable members have speculated in recent | :03:34. | :03:37. | |
days that the Government might be on the cusp of committing British | :03:38. | :03:42. | |
troops to Libya in a combat or combat support role. I am pleased to | :03:43. | :03:47. | |
have the obscenity to clarify the situation. I am clear that there is | :03:48. | :03:51. | |
no appetite in Libya for foreign combat troops on the ground. We do | :03:52. | :03:56. | |
not anticipate any requests from the GNA the ground combat forces to take | :03:57. | :04:03. | |
on Daesh or any armed groups and we have no plans to deploy troops in | :04:04. | :04:09. | |
such a role. I will keep the House informed of any plans we develop in | :04:10. | :04:14. | |
the future in response to requests from the Libyan Government. The type | :04:15. | :04:17. | |
of mission that we currently envisage would be focused on | :04:18. | :04:22. | |
providing training and technical support away from any front-line | :04:23. | :04:28. | |
operations. The Libyan economy is suffering from the effects of years | :04:29. | :04:33. | |
of conflict and the impact of lower oil prices. It is clear that the | :04:34. | :04:37. | |
presidency council is focused on the immediate need to alleviate the | :04:38. | :04:41. | |
pressure is on ordinary Libyans including those arising from the | :04:42. | :04:44. | |
current squeeze on liquidity in the banking system, the shortfall in | :04:45. | :04:50. | |
power generation and the shortage of basic commodities. As well as the | :04:51. | :04:54. | |
longer term challenges of ensuring the effective functioning of the key | :04:55. | :04:59. | |
state financial institutions, the central bank of Libya, the national | :05:00. | :05:03. | |
oil comp oration and Libyan investment authority. Also the | :05:04. | :05:07. | |
challenge of rebuilding oil production and export capacity. As I | :05:08. | :05:12. | |
said the President, the UK stands ready to provide whatever assistance | :05:13. | :05:19. | |
it came with these issues, all of them areas where British companies | :05:20. | :05:22. | |
have relevant experience and expertise to share. Turning to the | :05:23. | :05:28. | |
migration of threat, there is clearly an urgent need to tackle the | :05:29. | :05:32. | |
challenges arising from a regular migration and the criminal networks | :05:33. | :05:42. | |
that facilitates much of it. I highlighted our desire to work in | :05:43. | :05:44. | |
close partnership with the GNA to make progress on this issue | :05:45. | :05:49. | |
including on tackling the people smugglers and traffickers. As part | :05:50. | :05:52. | |
of this initiative we should look at creating a package of support that | :05:53. | :05:56. | |
could include extending the EU's current naval operation and building | :05:57. | :06:02. | |
the capacity of the Libyan coast guard to support and eventually take | :06:03. | :06:08. | |
over that operation. Clearly such a package would only be implemented at | :06:09. | :06:11. | |
the invitation of the Libyan Government. Mr Speaker, guest today | :06:12. | :06:18. | |
I announced Britain would be allocating ?10 million for technical | :06:19. | :06:23. | |
support to be GNA in this financial year to be delivered through the | :06:24. | :06:26. | |
conflict security and stability fund. This package will support | :06:27. | :06:30. | |
strengthening political participation, economic development | :06:31. | :06:36. | |
and the delivery of capacity in security, justice and defence. We | :06:37. | :06:39. | |
will work closely with the GNA to ensure that this support is | :06:40. | :06:43. | |
channelled to the areas where it can have most effect. After years of | :06:44. | :06:50. | |
conflict in Libya, the formation of the Government of national accord | :06:51. | :06:54. | |
and its arrival in Tripoli have the potential to be a real turning point | :06:55. | :07:00. | |
in Libya's fortunes. The challenges facing the GNA should not be | :07:01. | :07:05. | |
underestimated and delivering the security and economic development | :07:06. | :07:09. | |
that will allow the Libyan people to realise their country's huge | :07:10. | :07:12. | |
potential will not be an easy task to fulfil. Big UK, together with | :07:13. | :07:19. | |
many of our international partners, stands ready to assist. It is in all | :07:20. | :07:24. | |
our interests that the Prime Minister and his Government are able | :07:25. | :07:29. | |
to re-establish security and reactivate the economy and defeat | :07:30. | :07:33. | |
Leave in Libya as quickly as possible. I commend this statement | :07:34. | :07:42. | |
to the House. Can I begin by thanking the Foreign Secretary for | :07:43. | :07:44. | |
advanced sight of his statement. The situation in Libya has been | :07:45. | :07:52. | |
bloody and dangerous. And it is important to recall that it was | :07:53. | :07:57. | |
Colonel Gaddafi's brutal response to the protests that eresulted early in | :07:58. | :08:06. | |
-- erupted in 2011 that triggered a civil war and UN Security Council | :08:07. | :08:11. | |
resolution that authorised a no-fly zone. This house voted to support | :08:12. | :08:21. | |
that action, but since Gaddafi's fall Libya has become awash with | :08:22. | :08:25. | |
rival militias, the presence of Daesh and insecurity and questions | :08:26. | :08:30. | |
have been raised about the government and the international | :08:31. | :08:33. | |
community's focus on what followed. I join the Foreign Secretary in | :08:34. | :08:39. | |
praising the efforts by Libyan politicians, the UN, and special | :08:40. | :08:49. | |
representative Martin Cop ra to reconcile the competing institutions | :08:50. | :08:52. | |
and encourage them to follow a single Government and support the UN | :08:53. | :08:57. | |
solution recognising the progress and calling on member states to | :08:58. | :09:00. | |
provide support to the new government. On this side, we welcome | :09:01. | :09:08. | |
the establishment of the Libyan Government of national accord. As | :09:09. | :09:14. | |
the Foreign Secretary said, it faces a formidable task in restoring | :09:15. | :09:19. | |
public services, building up the economy and tackling Daesh. Does the | :09:20. | :09:22. | |
Foreign Secretary agree its ability to do so will be determined by the | :09:23. | :09:27. | |
extent to which the new government is able to gain support and consent | :09:28. | :09:34. | |
right across Libya, as it faces the task of re-establishing government | :09:35. | :09:37. | |
and governance in all parts of country? Can the Foreign Secretary | :09:38. | :09:43. | |
set out what assessment he has made of its capacity to do so, particular | :09:44. | :09:48. | |
in respect of the rival militias. Can he say more about the | :09:49. | :09:57. | |
conversations he is having with our allies about what steps can be taken | :09:58. | :10:02. | |
and does he expect there to be a further UN Security Council | :10:03. | :10:06. | |
resolution? The Government has indicated that it was not | :10:07. | :10:10. | |
contemplating a British combat Nish in Libya. -- mission in Libya. Given | :10:11. | :10:14. | |
the circumstances there, I think this is the right approach to take | :10:15. | :10:19. | |
and I'm grateful to the honourable gentleman for confirming again today | :10:20. | :10:24. | |
that the Government has no plans to deploy British troops in such a | :10:25. | :10:28. | |
role. Can the Foreign Secretary therefore give the House a | :10:29. | :10:34. | |
categorical assurance that were this view to change, any proposal to | :10:35. | :10:40. | |
deploy forces would come before this House for a vote? He has however | :10:41. | :10:46. | |
spoken about possibly providing training for the Libyan military, | :10:47. | :10:53. | |
did the Prime Minister ask for specific types of support? Does he | :10:54. | :10:58. | |
envisage any such deployment would take place in Libya or might it | :10:59. | :11:02. | |
involve providing training in a neighbouring country? Will he give | :11:03. | :11:06. | |
the House an undertaken he will come to the House before any such | :11:07. | :11:12. | |
deployment takes place and seek approval as appropriate? On economic | :11:13. | :11:16. | |
development, we support all efforts to assist the new government in | :11:17. | :11:22. | |
eme-- improving the lives of people and getting the economy moving | :11:23. | :11:28. | |
again. On migration is further support being requested by the new | :11:29. | :11:31. | |
Prime Minister, or is it being considered through the EU naval | :11:32. | :11:38. | |
force to enhance Libya's ability to disrupt criminal human smuggling and | :11:39. | :11:45. | |
people trafficking? The people of Libya have suffered a great deal and | :11:46. | :11:50. | |
this moment is important for their future. It is the responsibility of | :11:51. | :11:55. | |
the world community to do all that it can to help the new government to | :11:56. | :12:04. | |
succeed. May I thank the honourable gentleman for his response and in | :12:05. | :12:11. | |
particular let me join with him, it is remiss of me, should have said in | :12:12. | :12:22. | |
praising the UN Special Envoy. He has been shuttling between the | :12:23. | :12:27. | |
groups in Libya and it is due to his energy and his effort that we have | :12:28. | :12:33. | |
got where we are today. This is a Government of national unity, but we | :12:34. | :12:37. | |
should be clear about the historical context of Libya. It is a country | :12:38. | :12:43. | |
that traditionally has had a very high degree of devolution in its | :12:44. | :12:49. | |
Government, held together often by a strong man at the centre. We need to | :12:50. | :12:54. | |
find a new model, where Government of National Accord is going to be a | :12:55. | :13:00. | |
national umbrella organisation, but the Prime Minister made clear this | :13:01. | :13:06. | |
will only work if municipalities are empowered and are prepared to take | :13:07. | :13:09. | |
on a significant degree of devolution. A devolved model is the | :13:10. | :13:17. | |
only model that will work in Syria. And I think I need to make sure | :13:18. | :13:25. | |
clear that the Government is at an early stage of its operation. The | :13:26. | :13:28. | |
Prime Minister and his ministers are sitting in a naval base, physically | :13:29. | :13:33. | |
separated from the civil servants who could support them. Yesterday | :13:34. | :13:38. | |
they retook control of three ministries. It will only be as they | :13:39. | :13:45. | |
are able to re-enter the ministries and regain working contact with the | :13:46. | :13:48. | |
civil servants that they can start to do some of the detailed work and | :13:49. | :13:54. | |
I think that... Underpins and shapes the answers to some of the questions | :13:55. | :13:59. | |
that I will now give him. He is right, of course the GNA can only | :14:00. | :14:04. | |
succeed with the support and concept of the factions in Libya. Let me say | :14:05. | :14:14. | |
one thing, when I went to Tripoli, I was expecting to find the Government | :14:15. | :14:20. | |
in a heavily fortified base. Defending all Kommers. That is not | :14:21. | :14:24. | |
the situation. The base is lightly defended and it was clear that the | :14:25. | :14:29. | |
Prime Minister's ability to operate there is based on the consent of the | :14:30. | :14:36. | |
militias operating in that part of the capital. So I think he is | :14:37. | :14:41. | |
conscious of the need to build a bottom up consensus around his | :14:42. | :14:46. | |
activities. He asked me about the European Union, there was, I | :14:47. | :14:52. | |
returned from Tripoli to Luxembourg, where there was a discussion at 28 | :14:53. | :14:57. | |
about future support to Libya, including defence minister | :14:58. | :15:03. | |
colleagues and looking at the possibility of extending operation | :15:04. | :15:07. | |
Sophia. No decisions were taken, but this is very high on the the | :15:08. | :15:12. | |
European Union's agenda. The key will be to develop a package that | :15:13. | :15:19. | |
addresses Libyan priorities. The Libyans are focussed on migration, | :15:20. | :15:23. | |
but it is not their top priority I have to say. We have to create an | :15:24. | :15:29. | |
environment where delivering on Europe's top priorities also | :15:30. | :15:33. | |
addresses the Libyan people's top priorities. He asked about a UN | :15:34. | :15:39. | |
security resolution I don't see and haven't heard anything suggest there | :15:40. | :15:44. | |
is a need for a further resolution. I think the next moves at the UN | :15:45. | :15:50. | |
will be the granting of exemptions to the arms embargo and the | :15:51. | :15:57. | |
unfreezing of assets to allow the Government to function properly. The | :15:58. | :16:04. | |
house will of course be consulted were the Government to decide at any | :16:05. | :16:10. | |
point that it wanted to insert ground forces or any forces in a | :16:11. | :16:18. | |
combat role into Libya. We do not envisage that happening in the | :16:19. | :16:22. | |
current sishs. He asked about the situation where a training | :16:23. | :16:25. | |
deployment is contemplated and if I quote the honourable gentleman he | :16:26. | :16:30. | |
asked, if we would seek the House's approval for a training deployment. | :16:31. | :16:33. | |
I should be clear about this, it is not a question of approval, it is a | :16:34. | :16:37. | |
question of consulting the House and allowing the House to express an | :16:38. | :16:43. | |
opinion through a vote. Which the history over the last three years | :16:44. | :16:48. | |
has shown clearly the Government will take great notice of. But this | :16:49. | :16:53. | |
would not be the case in the event of a training deployment. We have | :16:54. | :16:56. | |
training deployments around the world. In fact my MoD colleagues | :16:57. | :17:05. | |
informed we we have 16 per Nantes training -- permanent training | :17:06. | :17:09. | |
deployment. It is not appropriate that the House is consulted on such | :17:10. | :17:14. | |
deployment as if it were a combat deployment. Did the Prime Minister | :17:15. | :17:20. | |
ask for training support? Not explicitly, but he did intd Kate as | :17:21. | :17:24. | |
the -- indicate as the Government develops it may ask the | :17:25. | :17:27. | |
international community for some support. I gained the personal | :17:28. | :17:33. | |
impression that his instinct is very much at the lighter end of the | :17:34. | :17:38. | |
scale. He does not want to be seen to be dependent on foreign support. | :17:39. | :17:46. | |
He wants to do as much as possible internally, using Libyan | :17:47. | :17:48. | |
capabilities and of course if there is any question of training, we | :17:49. | :17:53. | |
would want to look at the options for training outside Libya as well | :17:54. | :17:58. | |
as the permissiveness of the situation to allow training inside | :17:59. | :18:05. | |
Libya. I think I have covered all the honourable gentleman's | :18:06. | :18:10. | |
questions. Can I welcome the Foreign Secretary's statement and last | :18:11. | :18:14. | |
night's European council conclusions. The sanctioning of the | :18:15. | :18:18. | |
speaker of the the House of Representatives is welcome as he has | :18:19. | :18:22. | |
been an obstacle to formation of GNA. As it welcomed the commitment | :18:23. | :18:32. | |
that the E. And I assume the British contribution bill the co-ordinated | :18:33. | :18:37. | |
with other support. A coherent British contribution will be easier | :18:38. | :18:42. | |
with the consent and understanding of this House. It might need to | :18:43. | :18:49. | |
include air strikes on Daesh targets and the training mission he alluded | :18:50. | :19:00. | |
to. He is on thin ground in differentiating between a training | :19:01. | :19:03. | |
mission and a combat zone and not seeking to carry the House. I notice | :19:04. | :19:07. | |
the language he used talks about being away from the front line of | :19:08. | :19:11. | |
operations. I wonder if there is anything more he can say about that? | :19:12. | :19:16. | |
I urge him to try to continue to carry this House with him. I am | :19:17. | :19:21. | |
grateful to my honourable friend. He is right that any kind of | :19:22. | :19:26. | |
international support will be more effective if it is properly | :19:27. | :19:35. | |
co-ordinated and the work of the mission and the planning cell that | :19:36. | :19:42. | |
is in operation should be and will be co-ordinated together. Let me be | :19:43. | :19:48. | |
clear, any proposal to carry out air strikes in support of a counter | :19:49. | :19:53. | |
Daesh operation would trigger the convention that the Government would | :19:54. | :19:57. | |
come to the House, consult the House, and allow a vote by which the | :19:58. | :20:01. | |
House could express its view on the the proposed intervention. I | :20:02. | :20:05. | |
understand his concern, he has expressed it several times in this | :20:06. | :20:10. | |
House and in newspapers, that the, in a context of a situation like | :20:11. | :20:16. | |
Libya, the lines between what is a combat mission and a training | :20:17. | :20:20. | |
mission could be blurred. We are clear that we can make that | :20:21. | :20:27. | |
distinction. I would draw his attention to Afghanistan, a kin | :20:28. | :20:32. | |
nettic theatre, but we have a training mission there which has | :20:33. | :20:35. | |
been successfully conducted for the last 15 months with great effect. | :20:36. | :20:41. | |
And in Iraq, where we carry out training activities in what is an | :20:42. | :20:49. | |
active war zone. There is a big difference between training and | :20:50. | :20:55. | |
advising troops and getting engaged in combat activities and the | :20:56. | :20:58. | |
Government is mindful of that distinction and of the obligations | :20:59. | :21:05. | |
it has entered into in respect of consulting the House. Can I add my | :21:06. | :21:14. | |
praise to the work of Martin Cobbler and the British ambassador to Libya, | :21:15. | :21:18. | |
who has been making the best of a difficult job. Libya has been an | :21:19. | :21:23. | |
unmitigated disaster for this government, where we have a sitting | :21:24. | :21:28. | |
president criticising a sitting UK Prime Minister and a humanitarian | :21:29. | :21:36. | |
side where a UN official described UK efforts as paltry bone-throwing. | :21:37. | :21:41. | |
We do not have a good record on Libya. Can I ask these questions | :21:42. | :21:46. | |
after the questions asked by the member for Leeds central and the | :21:47. | :21:50. | |
chair of the committee, can he tell us how much of the mission does he | :21:51. | :21:56. | |
envisage taking place on Libyan soil. In terms of a training | :21:57. | :22:02. | |
mission, will any deployment of UK troops to Libyan soil be brought | :22:03. | :22:06. | |
here and how does he distinguish between a training mission in Libya | :22:07. | :22:11. | |
take bg place now, giving you can only have meetings in the naval base | :22:12. | :22:16. | |
and finally does he commend the US president's candour that this has | :22:17. | :22:20. | |
been his worse mistake and will he tell the House what does he think | :22:21. | :22:25. | |
the Prime Minister's worst foreign policy mistake has been? Well it is | :22:26. | :22:32. | |
easy to sit there hurling stones. The world is not a neat and tidy | :22:33. | :22:38. | |
place and we have to deal with the situations that present themselves | :22:39. | :22:42. | |
and he talks about humanitarian, I would remind him that when we | :22:43. | :22:48. | |
intervened in 2011, it was to prevent an imminent genocide in | :22:49. | :22:54. | |
Benghazi. That was a successful intervention that saved thousands of | :22:55. | :22:58. | |
lives. And Libya is a rich country, we shouldn't forget that, there are | :22:59. | :23:06. | |
70 billion dollars worth of Libyan assets frozen by UN security consill | :23:07. | :23:10. | |
resolution. So this is about getting the Government in place and then | :23:11. | :23:15. | |
releasing those assets so that the Government can function. Libya is | :23:16. | :23:19. | |
not a country that needs humanitarian asis tans in the | :23:20. | :23:23. | |
convention sense, but it needs technical support and help to get | :23:24. | :23:26. | |
into a position where we can release its own assets to it, to enable it | :23:27. | :23:29. | |
to function. He mention the British bass tab. He | :23:30. | :23:45. | |
came with me to Tripoli and it is his desire and mine as well that we | :23:46. | :23:51. | |
reopen the British Embassy in Tripoli just as soon as we are able | :23:52. | :23:55. | |
to do so. -- he mentioned the British ambassador. I cannot promise | :23:56. | :24:03. | |
that it would be eminent works -- but we will keep it under constant | :24:04. | :24:07. | |
review and do it as soon as we can. He asks me whether any training | :24:08. | :24:12. | |
mission to Libya would take place on Libyan soil. Yet again there is no | :24:13. | :24:17. | |
training mission, there is no putative training mission. There has | :24:18. | :24:19. | |
been no request for a training mission. Clearly if there is a | :24:20. | :24:29. | |
request for such a mission, there -- the military will want to make sure | :24:30. | :24:34. | |
it is undertaken with the minimum risk it possible to UK personnel. | :24:35. | :24:38. | |
Their first preference would be to do it here and then next preference | :24:39. | :24:41. | |
would be to do it somewhere else in the region and the third preference | :24:42. | :24:45. | |
will be to do it in Libya if it is safe to do so. I can assure him that | :24:46. | :24:51. | |
we will spare no effort in trying to ensure that any support we do give | :24:52. | :24:54. | |
the Libyans would be delivered in a way that represents the least | :24:55. | :24:58. | |
possible risk to the British forces delivering support. There can be no | :24:59. | :25:06. | |
doubt that I intervention in Libya in 2011 are some in this house | :25:07. | :25:10. | |
suggested has been an unmitigated disaster resulting in many thousands | :25:11. | :25:17. | |
of casualties. It is a vicious civil war. Looking forward, given that | :25:18. | :25:21. | |
this country is at a tipping point in his involvement in Libya, what | :25:22. | :25:33. | |
lessons can we learn? The honourable gentleman asserts a fact that there | :25:34. | :25:39. | |
can be no doubt which is deeply contentious. The situation in Libya | :25:40. | :25:48. | |
is very difficult. The situation post 2011 was very messy. Countries | :25:49. | :25:52. | |
in many parts of the world do not function like Britain or Switzerland | :25:53. | :25:57. | |
and we have to deal with the real situation on the ground. I think we | :25:58. | :26:02. | |
should look to the future and be positive about this potentially | :26:03. | :26:07. | |
affluent country regaining stability and being able once again to | :26:08. | :26:12. | |
function as an effective state, allowing the Libyan people to get on | :26:13. | :26:16. | |
with their business. There is a weariness after five years and there | :26:17. | :26:21. | |
is a growing sense that if a properly devolved form of Government | :26:22. | :26:27. | |
can be established, that the various militias and regional groupings can | :26:28. | :26:34. | |
work. Can I ask the Foreign Secretary what assessment is made up | :26:35. | :26:40. | |
the size of the Daesh Libya and what their capability is? Are they going | :26:41. | :26:47. | |
to sit tight or expand into the rest of Libya? I think our current | :26:48. | :26:53. | |
assessment is that there are probably up to about 3000 Daesh | :26:54. | :26:58. | |
fighters in Libya of whom are significant number would be foreign | :26:59. | :27:04. | |
fighters. There is a generally accepted view that what Daesh are | :27:05. | :27:11. | |
doing a Libya is a holding operation seeking to hold an area of ground | :27:12. | :27:16. | |
possibly as a bolt hole if they find that their freedom of manoeuvre and | :27:17. | :27:22. | |
freedom to operate is coming under intolerable pressure in Syria. I | :27:23. | :27:26. | |
think there are many pointers to the facts that now is the time to move | :27:27. | :27:32. | |
against them in Libya while they are still relatively thin on the ground | :27:33. | :27:37. | |
and a their operation is in a holding phase. One of the measures | :27:38. | :27:43. | |
of success of the Libyan Government will be the creation of a | :27:44. | :27:49. | |
functioning economy and as a step towards that a functioning central | :27:50. | :27:53. | |
bank. Is there any role that Britain can play in helping them achieve | :27:54. | :28:01. | |
this? I offered the Prime Minister technical support in relation to the | :28:02. | :28:06. | |
central bank, the national oil company and the Libyan investment | :28:07. | :28:11. | |
authority. It is a tribute to Libyan resilience and ingenuity that | :28:12. | :28:15. | |
international partners recognise the figures that have continued to run | :28:16. | :28:19. | |
these institutions through this period of chaos over the last few | :28:20. | :28:25. | |
years as technically competent and well motivated. They have been doing | :28:26. | :28:30. | |
a good job. What the Prime Minister has now done is brought the | :28:31. | :28:36. | |
competing appointees the eastern and western chairman of each of these | :28:37. | :28:41. | |
institutions together to work together and to seek to forge a | :28:42. | :28:44. | |
consensus around how the institutions can go forward as truly | :28:45. | :28:49. | |
national is Jewish and is on a collaborative basis. I was | :28:50. | :28:55. | |
interested in what the Foreign Secretary had to say about the | :28:56. | :28:59. | |
current state of Daesh and the need that they need to be contained now. | :29:00. | :29:05. | |
We're talking to other allies such as Jordan to work on training | :29:06. | :29:10. | |
deployments and training up troops because if we don't contain Daesh | :29:11. | :29:14. | |
now in North Africa it will be an expanding problem? We are talking to | :29:15. | :29:23. | |
other partners like Jordan about how we can provide support to the Libyan | :29:24. | :29:30. | |
Government. There are other actors who are acting independently. Egypt | :29:31. | :29:38. | |
has a recognised vital interest because it has a long land border | :29:39. | :29:43. | |
with Libya and some of the problems that Egypt has been facing in the | :29:44. | :29:48. | |
Western desert are attributable to penetration from Libya. The House | :29:49. | :29:53. | |
will recall that there is they continuing issue of general -- of | :29:54. | :29:59. | |
the general, the commander of the Libyan RB who is an important figure | :30:00. | :30:02. | |
in command significant military forces in the East but is | :30:03. | :30:09. | |
unacceptable as a command figure to many who are supporting the new | :30:10. | :30:13. | |
Government. That is one of the big challenges the Prime Minister is | :30:14. | :30:18. | |
facing. I welcome the Foreign Secretary's statement and in | :30:19. | :30:21. | |
particular the reassurances about the use of British troops in | :30:22. | :30:29. | |
training and mentoring if that becomes necessary. Does he recall | :30:30. | :30:33. | |
the disaster that was the training of Libyans in the UK and will he | :30:34. | :30:41. | |
assure the House that those mistakes have been noted and if you does | :30:42. | :30:47. | |
intend to train Libyans in the UK, that we will not make those mistakes | :30:48. | :30:54. | |
again? We are not the only ones who had a poor experience with seeking | :30:55. | :31:01. | |
to train Libyans outside Libya. The Italians, the Bulgarians also had | :31:02. | :31:05. | |
similar experiences. The Prime Minister referred to this yesterday | :31:06. | :31:08. | |
and is conscious of what was not a very glorious episode in living | :31:09. | :31:16. | |
history. The situation on the ground has changed but we would look the | :31:17. | :31:21. | |
most effective location for any training that was done. It is | :31:22. | :31:25. | |
probably the case that it would not be in the UK. For climatic reasons | :31:26. | :31:31. | |
as much as anything else we need to train people in an environment as | :31:32. | :31:34. | |
close as possible to the environment in which they will be operating. | :31:35. | :31:39. | |
There has been no request and there is as yet no plan. I can't impart to | :31:40. | :31:49. | |
the House any more information. Camera welcome the progress made but | :31:50. | :31:54. | |
say that I am disappointed that more has not been offered to deal with | :31:55. | :31:59. | |
the migration crisis. There has been an 80% increase in crossings between | :32:00. | :32:03. | |
Libya and Italy. This time last year half a million people were waiting | :32:04. | :32:12. | |
in Libya to get to Italy and the EU is offering Turkey 3 billion euros | :32:13. | :32:16. | |
to deal with the migration crisis and offering Libya nothing. What we | :32:17. | :32:23. | |
need is permission to enter Libyan coastal waters in order to stop the | :32:24. | :32:27. | |
people traffickers. Did he ask that permission and when can we have that | :32:28. | :32:31. | |
permission so we can deal with people traffic and in a robust way? | :32:32. | :32:40. | |
Can I say that he is approaching this in exactly the wrong way. Going | :32:41. | :32:47. | |
to Libya as a bunch of Europeans and saying here is our priority agenda, | :32:48. | :32:51. | |
what are you going to do about delivering it? It is not likely to | :32:52. | :32:56. | |
get the buy in that we need. What I suggested is that we have to package | :32:57. | :33:03. | |
the objectives that we want to achieve with objectives that our | :33:04. | :33:09. | |
priorities -- that our priorities with the Libyans. It allows | :33:10. | :33:19. | |
foreigners to operate in Libya's waters and the only way they could | :33:20. | :33:23. | |
sell it to the Libyan people. We have to be acutely sensitive to the | :33:24. | :33:29. | |
concerns in Libya about foreigners. I am in a stress position. I have | :33:30. | :33:34. | |
one bunch of people who are primarily concerned to make sure we | :33:35. | :33:38. | |
don't have any foreigners going in to Libya and the honourable | :33:39. | :33:42. | |
gentleman desperately keen to get some foreign naval forces into their | :33:43. | :33:46. | |
territorial waters. We have to balance this very carefully and get | :33:47. | :33:49. | |
a package which works for the Libyans as well as for the European | :33:50. | :33:56. | |
agenda. The Foreign Secretary and the Shadow Foreign Secretary is | :33:57. | :34:01. | |
speaking in eloquent terms about the Prime Minister, a Government of | :34:02. | :34:05. | |
National Accord and even the House of Representatives. Any member of | :34:06. | :34:08. | |
the British public watching the news yesterday would have seen our | :34:09. | :34:12. | |
Foreign Secretary and the Prime Minister of National Accord holed up | :34:13. | :34:16. | |
in a naval base unable to leave it because there -- because they | :34:17. | :34:23. | |
control arm of the country. Can we have a reality check. Can the | :34:24. | :34:29. | |
Government at last realised that its bid to undermine authoritarian | :34:30. | :34:32. | |
leaders such as Saddam Hussein Gaddafi who had a deal with the | :34:33. | :34:37. | |
Italian Government to return migrants has involved the region in | :34:38. | :34:41. | |
death and destruction? Can we learn the lessons and try and find a | :34:42. | :34:44. | |
strongman and do what the chairman of the home affairs committee once | :34:45. | :34:48. | |
and while we all want is to find some way of creating some kind of | :34:49. | :34:51. | |
safe haven for migrants to be returned? The Chinese have a saying | :34:52. | :34:57. | |
that the journey of 1000 miles starts with a single step and I urge | :34:58. | :35:01. | |
my honourable friend to view this process in that context stop | :35:02. | :35:05. | |
self-evidently I did manage to get out of the naval base in Tripoli | :35:06. | :35:12. | |
yesterday and return to these shores. He is being a little harsh | :35:13. | :35:16. | |
on Prime Minister on the Prime Minister and what he has achieved. | :35:17. | :35:21. | |
There is a process going on whereby militias which only a couple of | :35:22. | :35:25. | |
weeks ago worth threatening to shoot down any aircraft seeking to enter | :35:26. | :35:30. | |
the airport in Tripoli bringing his Government back into the city, who | :35:31. | :35:34. | |
are now patrolling the streets outside that naval base who are | :35:35. | :35:39. | |
present on the ground when I landed in Tripoli yesterday. They have | :35:40. | :35:44. | |
recognised and they have given a tentative consent to this Government | :35:45. | :35:48. | |
process to go forward and its success will depend on prime depth | :35:49. | :35:52. | |
-- on the Prime Minister making the right judgments and being patient | :35:53. | :35:55. | |
enough to bring all the relevant parties with him as he develops a | :35:56. | :36:06. | |
plan for his Government. I thank the Foreign Secretary for advanced copy | :36:07. | :36:10. | |
of his statement. Given the failure of the last Labour Administration is | :36:11. | :36:19. | |
to secure adequate compensation for Libya supplied Semtex for victims in | :36:20. | :36:26. | |
Scotland, England and Northern Ireland, at the same time America | :36:27. | :36:30. | |
was able to get that compensation, won the Foreign Secretary now | :36:31. | :36:33. | |
indicates that he will redeem the situation and place on the agenda | :36:34. | :36:39. | |
for the GNA and for the Prime Minister that compensation will now | :36:40. | :36:42. | |
be a key issue that this Government will now pursue with the new | :36:43. | :36:49. | |
administration? I can confirm to the honourable gentleman that it is | :36:50. | :36:53. | |
already on the agenda. The Prime Minister is aware of our focus on | :36:54. | :36:59. | |
this issue but it is a question of timing. The Government hasn't got | :37:00. | :37:04. | |
access to the great majority of its ministries or its civil servants and | :37:05. | :37:08. | |
hasn't got access to its assets. It would be premature to be making that | :37:09. | :37:15. | |
the number one issue. The Government is focused on the need to raise and | :37:16. | :37:20. | |
resolve these issues at the right point in this progression and the | :37:21. | :37:25. | |
Prime Minister is notified that we will do so. I think it has been a | :37:26. | :37:33. | |
thoughtful exchange between the Foreign Secretary and his shadow. | :37:34. | :37:38. | |
There are figures of optimism but a lot of sombre atmosphere about this, | :37:39. | :37:42. | |
not least because there is other members that have pointed out we | :37:43. | :37:45. | |
have responsibility for what has happened in Libya. | :37:46. | :37:50. | |
May I say this, I think he has dealt with this issue of technical or | :37:51. | :37:58. | |
other expertise skilfully, I think what the British public would be | :37:59. | :38:04. | |
reluctant to be for any sense of our expertise would be going to help one | :38:05. | :38:10. | |
side or other on what could be a bloody civil war. While I think | :38:11. | :38:15. | |
there are difficult things and there are often no good guys, there must | :38:16. | :38:20. | |
be an appreciation that would be something that would cause angst to | :38:21. | :38:24. | |
public if we are to have a functioning Libya in the years | :38:25. | :38:35. | |
ahead. I'm grateful to my honourable friend, and if only it were as | :38:36. | :38:40. | |
simple as if there were two sides. There are 120 sides. We have to make | :38:41. | :38:46. | |
sure the support is behind Government of National Accord. We | :38:47. | :38:48. | |
have to look for bright spots and one of the positive things is that | :38:49. | :38:54. | |
by and large the different fangses are not motor -- factions are not | :38:55. | :38:58. | |
motivated by ideology as they are in some of the other conflict zones, in | :38:59. | :39:04. | |
particular not motivated by extreme religious ideology. A lot is | :39:05. | :39:08. | |
traditional money and power interests. It is people wanting to | :39:09. | :39:14. | |
protect their local fiefdoms, make sure they get their share of the | :39:15. | :39:23. | |
wealth of state. I think Prime Minister Sarrage is going about this | :39:24. | :39:26. | |
in the right way, going with the grain of Libyan society, and trying | :39:27. | :39:33. | |
to build a consensus around it. What guarantees can he offer that our key | :39:34. | :39:39. | |
partners, particularly in Europe have a coherent strategy on good | :39:40. | :39:44. | |
governance and nation building, as well as migration and terrorism, and | :39:45. | :39:50. | |
what assurances did he get from the the GNA that they have a plan to | :39:51. | :39:55. | |
broaden out this deal so it is not beholden and vulnerable to the rival | :39:56. | :40:01. | |
regional armed factions? Well the most effective step to broaden out | :40:02. | :40:07. | |
the legitimacy of the government will be the vote in the HOR. The HOR | :40:08. | :40:16. | |
is committed by the Libyan political accord, the Libyan political | :40:17. | :40:19. | |
agreement to do that and we hope that will happen soon. On the | :40:20. | :40:25. | |
question of our European partners, look, it is true that amng the other | :40:26. | :40:37. | |
26 states migration is at the top of the agenda and it falls to me to | :40:38. | :40:41. | |
urge them, as I urged the chairman of the select committee that, if we | :40:42. | :40:45. | |
want to make progress on this, we are going to have to try and set | :40:46. | :40:48. | |
this in a context that the makes sense to the Libyans, not just that | :40:49. | :40:56. | |
makes sense to us. I welcome the progress the Foreign Secretary has | :40:57. | :41:01. | |
outlined and appreciate his point about the practical realities on the | :41:02. | :41:05. | |
ground. With that in mind, the long-term prospects for Libya are | :41:06. | :41:08. | |
linked to its economic prospects, which are linked to its oil | :41:09. | :41:17. | |
industry. What steps are UK TI and the British Government taking to | :41:18. | :41:24. | |
ensure that UK industry can play its part? Well, my honourable friend is | :41:25. | :41:31. | |
right, of course Libya has Africa's largest oil and gas reserves and a | :41:32. | :41:37. | |
population of only 6 million. So this is in per capita terms a | :41:38. | :41:42. | |
potentially wealthy country. British companies have played an important | :41:43. | :41:47. | |
role in Libya's oil and gas industry and Prime Minister Sarrage made the | :41:48. | :41:52. | |
point yesterday that BP would be very welcome back in the country. I | :41:53. | :41:56. | |
shall pass that on to BP's management. The Foreign Secretary | :41:57. | :42:05. | |
said that there is no appetite in Libya for foreign combat troops on | :42:06. | :42:13. | |
the ground. Is there any appetite in the Libyan political system for | :42:14. | :42:19. | |
foreign air forces, or foreign naval forces operating in Libyan | :42:20. | :42:23. | |
territorial waters? I think we have seen on the latter point, we have | :42:24. | :42:31. | |
seen already a clear wariness of any suggestion of foreign naval forces | :42:32. | :42:36. | |
operating in Libyan waters, even if the focus is counter migration, | :42:37. | :42:40. | |
rather than counter Daesh. I can't rule out and it would be wrong to | :42:41. | :42:47. | |
rule out any future request for air or naval support to a counter Daesh | :42:48. | :42:54. | |
operation. I can envisage the Prime Minister Sarrage if his Government | :42:55. | :42:58. | |
is successful, being able to muster enough grouped forces to mount -- | :42:59. | :43:04. | |
ground forces to mount an attack on the Daesh stronghold around Sirte. | :43:05. | :43:09. | |
Sirte is a coastal port and the Libyans will not be able to develop | :43:10. | :43:13. | |
naval or air assets in any reasonable period of time to support | :43:14. | :43:17. | |
such an operation and it is possible that from a military point of view | :43:18. | :43:25. | |
they would seek assistance. Prime Minister Sarrage would have to | :43:26. | :43:28. | |
balance that military imperative with the political issues that would | :43:29. | :43:33. | |
arise if he were to request foreign assistance. There has been no such | :43:34. | :43:37. | |
request, no discussion of such a request, but if it comes, we will | :43:38. | :43:42. | |
consider it and if we think the UK should take part in such action we | :43:43. | :43:46. | |
will come to the House and allow the House to express an opinion through | :43:47. | :43:54. | |
a vote. A further 21 members are trying to catch my eye. Brevity will | :43:55. | :44:03. | |
assist. I thank my right honourable friend for his statement and I know | :44:04. | :44:09. | |
I may be a lone voice, but I would urge him against Parliamentary | :44:10. | :44:14. | |
approval for every military intervention we take. Can I ask the | :44:15. | :44:20. | |
Foreign Secretary about a strategy to specifically target Daesh, | :44:21. | :44:25. | |
separate, but complimentary to the peace strategy. If we wait for the | :44:26. | :44:30. | |
perfect political settlement, we will wait forever. Well I take my | :44:31. | :44:36. | |
honourable friend's warning on the use of war powers with the | :44:37. | :44:41. | |
importance that it deserves and my my right honourable friend the | :44:42. | :44:45. | |
Defence Secretary published a statement setting out the | :44:46. | :44:48. | |
Government's position. We must maintain the operational flexibility | :44:49. | :44:52. | |
that we need while ensuring that the House of Commons has a proper | :44:53. | :44:59. | |
involvement in any proposed combat deployment. The honourable gentleman | :45:00. | :45:06. | |
asked me, sorry what did he ask me? Daesh. Look, before the Government | :45:07. | :45:11. | |
Government of National Accord was formed, there was a discussion going | :45:12. | :45:16. | |
on among the international community about how we would deal with Daesh | :45:17. | :45:20. | |
if there was no solution on the ground in Libya. We concluded it | :45:21. | :45:24. | |
would be pretty much impossible for us to do so. So I'm pleased that we | :45:25. | :45:29. | |
do now have a government formed in Libya that we can support to do that | :45:30. | :45:39. | |
job. Thank you. UK past intervention in Libya has been a disagser the, | :45:40. | :45:47. | |
the mess we have -- disaster, this cannot happen again. Given that we | :45:48. | :45:51. | |
are offering training and technical support to armed forces away from | :45:52. | :45:55. | |
the front line, could the Secretary of State tell me what amped forces | :45:56. | :46:00. | |
will it be training and supporting, given that Libya has a myriad of | :46:01. | :46:06. | |
competing groups? Well, first, another assertion and I can tell him | :46:07. | :46:11. | |
that it is not the view of the people I met yesterday that the | :46:12. | :46:16. | |
intervention in 2011 was a disaster. It has rid the country of Gaddafi | :46:17. | :46:24. | |
and averted a genocide. He talks in the present tense about training | :46:25. | :46:28. | |
support. I should say yet again we are deliver nothing training support | :46:29. | :46:35. | |
in Libya at the present time. And if any proposals, any request from the | :46:36. | :46:40. | |
Libyan Government comes forward, for training, it would be for militia | :46:41. | :46:45. | |
groups that have signed up to Government of National Accord's | :46:46. | :46:50. | |
security plan and are being incorporated into the Libyan | :46:51. | :46:52. | |
security forces that will be formed from them. Thank you. Like the the | :46:53. | :47:04. | |
honourable lady for Birmingham, I was struck by the Foreign | :47:05. | :47:07. | |
Secretary's correct comments that we need to continue to move against | :47:08. | :47:13. | |
Daesh in Libya. What discussions have been had with gulf state | :47:14. | :47:16. | |
nations in helping with that epest effort? We do of course have | :47:17. | :47:23. | |
continuing discussions with all gulf states. It is well known fact that | :47:24. | :47:30. | |
both Qatar and the UAE have been active in Libya. But it is fair to | :47:31. | :47:36. | |
say that all gulf states have been distracted by the war in Yemen and | :47:37. | :47:40. | |
have not played perhaps as active a role as they did earlier on in this | :47:41. | :47:50. | |
conflict. Given the turmoil in Libya since the five years and one month | :47:51. | :47:55. | |
since the House of Commons authorised action, does he regret | :47:56. | :48:08. | |
having the UK aquay -- agree in the mission to become a mission focussed | :48:09. | :48:18. | |
on regime change? Well, this was a complicated situation opt ground and | :48:19. | :48:23. | |
-- on the ground and having embarked on the the mission to protect the | :48:24. | :48:28. | |
population of Benghazi and having to then follow where that took us in | :48:29. | :48:33. | |
order to protect the population from the retribution that the regime was | :48:34. | :48:38. | |
seeking to vent upon it, we did what we had to do. I think we should be | :48:39. | :48:45. | |
proud of having rid Libya of the tyrant Gaddafi, who had dismantled | :48:46. | :48:49. | |
the structure of government in Libya and that is why Libya has had the | :48:50. | :48:55. | |
problems it has had. There was no Government structure in Libya. | :48:56. | :49:05. | |
Deploying British troops to Libya would add to the demands placed upon | :49:06. | :49:10. | |
them. Can the Secretary of State provide any clarity on how many | :49:11. | :49:13. | |
troops would be necessary and when we will learn from the GNA if | :49:14. | :49:19. | |
British assistance is required. I'm afraid I can't. I can gave personal | :49:20. | :49:23. | |
view that I would expect that we would be talking about training | :49:24. | :49:27. | |
mission on the sort of scale that we are carrying out in other countries | :49:28. | :49:31. | |
around the world. That is to say between tens and hundreds of | :49:32. | :49:40. | |
trainers, not thousands of trainers. The Foreign Secretary says he must | :49:41. | :49:45. | |
tackle Daesh, but Prime Minister Sarrage only operates with | :49:46. | :49:49. | |
permission of the militia, does he not think in certain circumstances, | :49:50. | :49:59. | |
some of the -- militia are a relying on other forces and they are at the | :50:00. | :50:03. | |
heart of Government and where will that leave Libya in the future? | :50:04. | :50:08. | |
There is a misunderstanding about what these militia are. After 2011, | :50:09. | :50:15. | |
Libya fragmented, every city, every town, every region had its armed | :50:16. | :50:19. | |
forces, its armed men protecting their communities. That doesn't make | :50:20. | :50:26. | |
them bad people. They're not extreme Islamists in most cases, they're | :50:27. | :50:29. | |
people who have formed home defence units if you like. They are the only | :50:30. | :50:35. | |
force on the ground. It is not possible to talk about raising a new | :50:36. | :50:40. | |
Libyan armed forces that will take on all these militias, that would be | :50:41. | :50:46. | |
an unrealistic project. The only way forward is to coopt militias into a | :50:47. | :50:52. | |
Libyan armed force and backed by a political system which is highly | :50:53. | :50:58. | |
devolved and assures them of the autonomy and the fair shares of | :50:59. | :51:02. | |
Libya's wealth for the communities that they're seeking to back. | :51:03. | :51:10. | |
Following the point raised by the member for North Antrim about Libyan | :51:11. | :51:15. | |
sponsored IRA murder in Northern Ireland and England, I understand | :51:16. | :51:18. | |
the Foreign Secretary's comments about timing, but given that there | :51:19. | :51:23. | |
is an emerging government in Libya and that we will be releasing | :51:24. | :51:29. | |
something between 7 and 8 billion pounds of frozen assets from this | :51:30. | :51:33. | |
country, will the Secretary of State and his ministerial team continue to | :51:34. | :51:39. | |
do all they can to get compensation for the people who suffered for far | :51:40. | :51:45. | |
too long? Yes, the assurance that I gave to the member for North Antrim | :51:46. | :51:51. | |
extends to the WPC Yvonne Fletcher case. On the floor of the House last | :51:52. | :52:01. | |
week, I urged caution, the member for beck Nam reminded the house of | :52:02. | :52:06. | |
how missions change and the impact on our armed services who may have | :52:07. | :52:11. | |
to make edecisions o'n't hoof. I would -- make decisions on the hoof. | :52:12. | :52:18. | |
In relation, the question is this, we are told in this Parliament, that | :52:19. | :52:23. | |
the North Atlantic treaty organisation is our primary model of | :52:24. | :52:28. | |
defence, yet in this statement, all we have heard and I'm grateful to | :52:29. | :52:34. | |
the EU naval deployment and our European partners, all we heard | :52:35. | :52:40. | |
about was the European Union's role, if the GNA seeks a request, will the | :52:41. | :52:45. | |
Secretary of State advise the House what role is the North Atlantic | :52:46. | :52:51. | |
treaty organisation playing give the organisations that evolve from | :52:52. | :53:02. | |
Jordan to Hungary. I suggest he puts this to his advisor. | :53:03. | :53:11. | |
Nato is our war fighting alliance but we're not talking about | :53:12. | :53:20. | |
fighting, we are talking about real welding and the European Union and | :53:21. | :53:24. | |
bilateral arrangements delivered by other European countries is the | :53:25. | :53:28. | |
right way to go about this. This is not a role for Nato. My right | :53:29. | :53:38. | |
honourable friend and the whole house will recognise that a peaceful | :53:39. | :53:43. | |
Libya is in the interests of the region and Europe. Could he talk | :53:44. | :53:49. | |
about the envisaged timetable he sees for EU discussions to continue | :53:50. | :53:55. | |
and then conclude working closely with the European governments to | :53:56. | :54:02. | |
ensure a colour of -- collective response? I think it would have to | :54:03. | :54:06. | |
be the timetable which will be determined by what is happening on | :54:07. | :54:11. | |
the Libyan side. At the discussion as night we were clear we need to | :54:12. | :54:16. | |
work up a European Union package. Somebody mentioned Turkey. It hasn't | :54:17. | :54:19. | |
escaped the notice of the Libyans how the EU has dealt with Turkey on | :54:20. | :54:27. | |
migration. There will have to be a comprehensive proposal and as soon | :54:28. | :54:34. | |
as is appropriate to make the Libyan Government aware of what such a | :54:35. | :54:38. | |
package might look like, the ball will be in their court to decide | :54:39. | :54:43. | |
whether they wish to request such support. Went as the Foreign | :54:44. | :54:47. | |
Secretary expect to receive the invitation to provide the support | :54:48. | :54:51. | |
that he has mentioned and will he elaborates on what the specific and | :54:52. | :54:56. | |
mutual objectives are, especially the timescales involved. Our troops | :54:57. | :55:03. | |
cannot be involved in an open-ended support. There is a spectrum here. | :55:04. | :55:10. | |
Hard training of troops at infantry level, we are a long way from any | :55:11. | :55:14. | |
request to do that if it comes at all. Advise on structuring military | :55:15. | :55:23. | |
command structures in a civilian led Ministry of Defence, it is quite | :55:24. | :55:27. | |
likely that we will be asked quite soon if we can give advice on that. | :55:28. | :55:31. | |
That is the advice we will probably give from Whitehall. Indeed as my | :55:32. | :55:42. | |
role in the Nato Parliamentary Assembly, I was in Algeria last week | :55:43. | :55:45. | |
and the parliamentarians I met have much experience of bringing a | :55:46. | :55:48. | |
country together after the dog decade. They made it clear they | :55:49. | :55:53. | |
would like to help the Libyan Government through diplomacy and | :55:54. | :55:58. | |
bring together 120 different fractions to come together. They | :55:59. | :56:01. | |
have a lot to offer in the circumstances. Gritty ensured that | :56:02. | :56:07. | |
offers of help Thruway non-military intervention taken as far as they | :56:08. | :56:11. | |
can be with the new Libyan Government? I will be pleased to | :56:12. | :56:18. | |
hear the Algerians wanted to provide assistance based on their own | :56:19. | :56:22. | |
experience of rebuilding a country after a bitter civil war and I am | :56:23. | :56:28. | |
sure the Libyans would be pleased to receive such an offer. I trust the | :56:29. | :56:33. | |
Algerian Parliamentary is felt privileged to meet the honourable | :56:34. | :56:44. | |
gentleman. Come I welcome the ?10 million that you referred to. You | :56:45. | :56:48. | |
looked at security, justice and defence. Can I ask the Minister | :56:49. | :56:52. | |
consider that those serving in the RS -- RUC and PSNI will be part of | :56:53. | :57:02. | |
the security that will be offered? The honourable gentleman raises a | :57:03. | :57:05. | |
good point. There has been an assumption across the House that any | :57:06. | :57:10. | |
training week it would be given by UK military personnel. Some of the | :57:11. | :57:13. | |
training needed will be police training and may be the PSNI might | :57:14. | :57:19. | |
be able to make a contribution to that. It is quite possible that some | :57:20. | :57:25. | |
of the training will be delivered by contractors, often ex-military | :57:26. | :57:29. | |
personnel are working for contractors rather than current | :57:30. | :57:37. | |
serving military personnel. The main concern might constituents have that | :57:38. | :57:43. | |
Libya is the country has the main conduit for illegal immigration from | :57:44. | :57:48. | |
both safe and unsafe countries in Africa. If the Government of | :57:49. | :57:51. | |
National Accord in Libya is unwilling or unable to make this a | :57:52. | :57:58. | |
national priority and if my right honourable friend is unable or | :57:59. | :58:02. | |
unwilling to press the case for how important this is for us, what is | :58:03. | :58:08. | |
the EU plan to prevent this year being one of an absolutely | :58:09. | :58:12. | |
disastrous to set of circumstances where we are about to experience a | :58:13. | :58:18. | |
mass wave of illegal immigration, very dangerously across the | :58:19. | :58:25. | |
Mediterranean towards Italy? Just to reassure my honourable friend, the | :58:26. | :58:27. | |
Libyan Government does understand the importance of this issue. It | :58:28. | :58:31. | |
understands the importance of the Libya because having an organised | :58:32. | :58:38. | |
criminal traffic crosses border undermines Libya 's sovereignty. It | :58:39. | :58:42. | |
understands the importance of addressing this issue for Libya's | :58:43. | :58:47. | |
relations with the international community. The point I was making is | :58:48. | :58:52. | |
we have got to put this agenda in the context of the many other very | :58:53. | :58:58. | |
immediate challenges facing the Libyan people. In answer to his | :58:59. | :59:02. | |
second, what is the EU doing in the meantime? The European naval | :59:03. | :59:12. | |
operation in the Mediterranean is designed to intercept people seeking | :59:13. | :59:18. | |
to migrate on an irregular basis and the European Union from Libya. The | :59:19. | :59:25. | |
global initiative against transatlantic organised crime | :59:26. | :59:29. | |
estimated that the illegal migrant trade is worth 255 to year. The 10 | :59:30. | :59:36. | |
million is hugely welcomed in terms of stopping this awful trade but | :59:37. | :59:41. | |
also with the right honourable gentleman confirm it will plug that | :59:42. | :59:49. | |
gap in Libya's economy so we commit something positive? Libya is | :59:50. | :59:54. | |
potentially a rich country. It has significant oil and gas wealth and | :59:55. | :59:59. | |
it has significant assets. The Government will not be lacking in | :00:00. | :00:08. | |
cash. The ?10 million is simply a UK technical assistance fund. It will | :00:09. | :00:11. | |
fund experts, it will fund the commissioning of studies and advice | :00:12. | :00:16. | |
to the Libyan Government in the areas I either land. My right | :00:17. | :00:22. | |
honourable friend will know the entire region of the South is a | :00:23. | :00:28. | |
black hole. Would it have a good idea of what is going on but we know | :00:29. | :00:33. | |
instability and the availability of arms has created a threat for the | :00:34. | :00:38. | |
whole of sub Saharan and West Africa and not only from Daesh but from | :00:39. | :00:43. | |
Boko Haram who have armed themselves from the Gaddafi arsenals. Can he | :00:44. | :00:46. | |
update the House and what the Government is doing to tackle a | :00:47. | :00:50. | |
threat to sub Saharan and West Africa from Libya? The Libyan | :00:51. | :00:56. | |
Government is acutely aware of the threat to its sovereignty from the | :00:57. | :00:59. | |
porosity of its borders to the south porosity of its borders to the south | :01:00. | :01:04. | |
and south-west. I am speculating but that could be one of the areas where | :01:05. | :01:11. | |
international community is asked for sex -- technical support in the | :01:12. | :01:16. | |
future. This is a long border in on populated area ideally suited to | :01:17. | :01:20. | |
policing by technical means rather than the by border guards on the | :01:21. | :01:26. | |
ground. He will be reassured to know that the Prime Minister stated to me | :01:27. | :01:31. | |
clearly yesterday that although his Government is intricately and the | :01:32. | :01:37. | |
world is focused on Tripoli, use costs of the fact that it has to be | :01:38. | :01:41. | |
Government for the east and south as well as a Government for the West. | :01:42. | :01:47. | |
May I press the Foreign Secretary on the issue of where Libyan personnel | :01:48. | :01:51. | |
might be trained in future? You will recall the unhappy saga in 2014 when | :01:52. | :01:57. | |
some 2000 Libyan personnel were trained in Cambridgeshire. That | :01:58. | :02:02. | |
ended badly with a series of violence, sexual assaults in my city | :02:03. | :02:08. | |
of cabbages -- Cambridge when they were left unsupervised. Can he | :02:09. | :02:11. | |
assure residents in Cambridge that there will be no further training of | :02:12. | :02:15. | |
Libyan personnel in Cambridgeshire and can he upped the House -- that | :02:16. | :02:25. | |
has now about the money owing to the authorities after that experience? I | :02:26. | :02:30. | |
was Defence Secretary at the time and I remember the plans the | :02:31. | :02:38. | |
training. It did not end well and the Libyans are acutely conscious of | :02:39. | :02:45. | |
that. This would be a very different operation in very different | :02:46. | :02:47. | |
circumstances. There are no plans yet and there is no request so I | :02:48. | :02:51. | |
can't give the House any further information about what such a | :02:52. | :02:54. | |
training programme might look like and where it will be conducted. I | :02:55. | :02:58. | |
can give him the assurance that the lessons of what happened has been | :02:59. | :03:04. | |
taken on board by the MoD and will be factored into any future plan. If | :03:05. | :03:14. | |
spending 30 times as much on bombing Libya instead of reconstructing it, | :03:15. | :03:17. | |
I wonder if the Foreign Secretary can tell us what is. If the 10 | :03:18. | :03:21. | |
million announced today that the conflict security fund, can you tell | :03:22. | :03:26. | |
us how will be counted as ODA, the Nato 2% target and how much will be | :03:27. | :03:34. | |
counted towards both? I will write to the honourable gentleman if I am | :03:35. | :03:39. | |
wrong but I think Libya does not qualify for ODA because of the GDP | :03:40. | :03:44. | |
per Capita of the country. If I am wrong, I will write to him and place | :03:45. | :03:50. | |
a copy in the library. The Foreign Secretary spoke about the situation | :03:51. | :03:54. | |
in Benghazi in the past but the situation remains extremely volatile | :03:55. | :03:57. | |
and serious and Reuters were poisoned -- talking of extant ting | :03:58. | :04:03. | |
-- reporting of extensive fighting. I wonder what discussions he had | :04:04. | :04:07. | |
about the situation around Benghazi and whether he expects any requests | :04:08. | :04:10. | |
for support to do with operations in that region of Libya? We did discuss | :04:11. | :04:17. | |
this issue and we discussed it in the context of general -- of the | :04:18. | :04:20. | |
general and the Libyan national army who are active in this area. This is | :04:21. | :04:25. | |
one of the challenges the Prime Minister faces. One of the most | :04:26. | :04:29. | |
effective military units available is under the command of the general | :04:30. | :04:37. | |
who is a better while for those people who are supporters of the | :04:38. | :04:41. | |
Government. The Government does have -- doesn't have an alternative and | :04:42. | :04:44. | |
the effectiveness of the guard force and the LMA in stemming Daesh | :04:45. | :04:53. | |
attacks is an important part of the Government's arsenal of defences. It | :04:54. | :04:57. | |
has to get all these units under some form of effective central | :04:58. | :05:09. | |
control. We implied -- we wanted to prevent and imminent large attacks | :05:10. | :05:19. | |
on civilians in Benghazi. We said we were strung with US you build your | :05:20. | :05:24. | |
country for the future. Will the secretary of state guarantee we will | :05:25. | :05:28. | |
fulfil our promises? That is what we are doing. It has taken a | :05:29. | :05:33. | |
regrettably long time to get the end of the campaign in 2011, the | :05:34. | :05:37. | |
overthrow of Colonel Gaddafi to the point where the Libyan people are | :05:38. | :05:42. | |
now seriously starting to seek to rebuild their democracy and economy. | :05:43. | :05:45. | |
They are now looking to do so and we will be support them. The idea of | :05:46. | :05:56. | |
Daesh being located in Libya is worrying enough in its own right. | :05:57. | :06:02. | |
The prospect of them moving their operational headquarters from Iraq | :06:03. | :06:07. | |
and Syria and Libya should be deeply worrying to us all and especially | :06:08. | :06:11. | |
the Secretary of State. What discussions has he had both with his | :06:12. | :06:15. | |
Libyan counterpart but also with those countries neighbouring Libya | :06:16. | :06:20. | |
to stem the flow of Islamic militants into the country? I have | :06:21. | :06:25. | |
had discussions but with the Libyans and also with the Egyptians and the | :06:26. | :06:29. | |
Tunisians who are very concerned about this. The problem is the | :06:30. | :06:36. | |
principal route of access into Libya for Daesh militants appears to be by | :06:37. | :06:40. | |
sea and the Libyans are struggling to control that route at the moment | :06:41. | :06:50. | |
with that present resources. We know from experience elsewhere that in | :06:51. | :06:55. | |
fledgling democracy is and troubled states that are rife with armed | :06:56. | :06:59. | |
groups that often corruption and conflict become drivers for each | :07:00. | :07:06. | |
other. We also know that there are people who can sort through Livia. | :07:07. | :07:11. | |
If the Foreign Secretary right to minimise the relevance of a | :07:12. | :07:14. | |
humanitarian and civil contribution at least in the medium term? I say | :07:15. | :07:22. | |
Libya is not a poor country. There are tens of billions of dollars of | :07:23. | :07:28. | |
Libyan assets owned by the Libyan people available to the Libyan | :07:29. | :07:32. | |
Government wants the UN decides to unfreeze control of those assets. I | :07:33. | :07:37. | |
don't believe Libya needs humanitarian support in the | :07:38. | :07:42. | |
conventional sense. What it needs is technical support to build the | :07:43. | :07:44. | |
Government structures that will allow the UN to release its own | :07:45. | :07:46. | |
money to it. Could the Foreign Secretary say | :07:47. | :07:59. | |
something about the use of embedded troops in any future operation? And | :08:00. | :08:04. | |
with the House be consulted on any British military personnel embedded | :08:05. | :08:13. | |
in the forces of other nations? The statement that the Defence | :08:14. | :08:16. | |
Secretary made yesterday clarified this point. Where troops or | :08:17. | :08:20. | |
personnel are embedded in the military forces of other nations, | :08:21. | :08:27. | |
they are treated as being part of those forces, they are not covered | :08:28. | :08:33. | |
by the commitment we have made, to come back to the House, it would be | :08:34. | :08:38. | |
absurd if a British pilot embedded in the US Navy, for example, | :08:39. | :08:42. | |
retaining our carrier -based skills ahead of the commission of our own | :08:43. | :08:48. | |
carriers in 2018, had to be the subject of a debate in the House of | :08:49. | :08:51. | |
Commons because of a decision taken by the United States government. | :08:52. | :08:58. | |
In answer to a question last week the Foreign Secretary's ministerial | :08:59. | :09:02. | |
colleagues said they would facilitate a visit of UK victims of | :09:03. | :09:08. | |
terrorism that involved Semtex, in the near future. Is there any | :09:09. | :09:14. | |
indication or timescale as to when we can expect this visit? | :09:15. | :09:20. | |
I do not think that the conditions would be right, right now, to | :09:21. | :09:25. | |
facilitate such a visit. And I can't see exactly what the point of such a | :09:26. | :09:30. | |
visit with the bat this stage. Once the government of National Accord is | :09:31. | :09:34. | |
established, with access to its records and competent civil | :09:35. | :09:37. | |
servants, then I am certainly prepared... And once our own | :09:38. | :09:43. | |
ambassador is back in Tripoli, then I would be prepared to see what we | :09:44. | :09:49. | |
could do to facilitate such a visit. Point of order, Mr Andrew Quinn. | :09:50. | :09:56. | |
In Treasury questions earlier, a minister, inadvertently or | :09:57. | :10:00. | |
vertically, besmirched the work of the House of Commons library. -- | :10:01. | :10:16. | |
advertently. Given that their work is usually valued by all sides of | :10:17. | :10:19. | |
the House and the servants of this House are able to come into this | :10:20. | :10:22. | |
chamber to defend their work, how can we put on the record that | :10:23. | :10:27. | |
members of Parliament of all political persuasions of value and | :10:28. | :10:31. | |
respect the work and research of the House of Commons library? | :10:32. | :10:37. | |
I am grateful for the point of order. I would not seek to comment | :10:38. | :10:40. | |
on the merits or otherwise of a particular report, suffice to say | :10:41. | :10:48. | |
however, I think the House of Commons library service is held in | :10:49. | :10:56. | |
universal esteem. I have always had the highest regard to the | :10:57. | :10:59. | |
professionalism, the competence, the Internet, and the analytical skill | :11:00. | :11:07. | |
of those who work in the service -- intellect. I was told, before | :11:08. | :11:12. | |
employing researchers, first Sea and realise the benefits that the | :11:13. | :11:16. | |
library service can bring. I was told that 19 years ago. It was true | :11:17. | :11:21. | |
then and it is true now, I am sure nobody would suggest otherwise. If | :11:22. | :11:29. | |
there are no more points of order we come to the ten minute rule motion. | :11:30. | :11:36. | |
I beg to move that they should be given to bring a bill that requires | :11:37. | :11:40. | |
the labelling of farm produce sold in the UK to include country of | :11:41. | :11:44. | |
origin, and whether produced in accordance with designated animal | :11:45. | :11:50. | |
welfare standards. I am asking for more transparency so that the | :11:51. | :11:54. | |
British consumer can make a more informed decision about what they | :11:55. | :11:55. | |
are buying. The current situation is confusing, | :11:56. | :12:06. | |
bolted on to EU legislation, with some other offering greater clarity | :12:07. | :12:11. | |
than others. It took a Europe-wide scandal on horse meat finding its | :12:12. | :12:15. | |
way into our food chain to jolt the commission into action. It was a big | :12:16. | :12:20. | |
wake-up call to the meat industry. New EU rules are already being | :12:21. | :12:22. | |
implemented in the UK regarding country of origin labelling for | :12:23. | :12:28. | |
unprocessed pork, lamb, and poultry meat. And I stress, unprocessed, | :12:29. | :12:33. | |
because there's more confusion surrounding imported meat that is | :12:34. | :12:36. | |
processed into sausages then labelled as a British product but | :12:37. | :12:39. | |
that is a can of worms for another day. Although there are better rules | :12:40. | :12:45. | |
on the traceability of meat product of this is not true for milk used in | :12:46. | :12:49. | |
dairy products. Our dairy farmers are having a tough time of it and | :12:50. | :12:54. | |
now dresses are very low. With Britain operating under current EU | :12:55. | :12:59. | |
rules we cannot unilaterally bring in mandatory country of origin | :13:00. | :13:06. | |
labelling -- prices are very low. So far the government has not been able | :13:07. | :13:09. | |
to convince the commission, which is regrettable. The commission and the | :13:10. | :13:13. | |
favours a voluntary code on dairy products and a recent EU report | :13:14. | :13:17. | |
covering dairy indicated it felt that producing such a measure would | :13:18. | :13:22. | |
be costly and bureaucratic. However our own farming Minister has said, I | :13:23. | :13:27. | |
do not accept the argument that it would be too complicated to do this, | :13:28. | :13:32. | |
it might be on some dairy product but an butter, cheese, and some | :13:33. | :13:35. | |
staple product, you could deliver country of origin labelling | :13:36. | :13:41. | |
relatively inexpensively. But we are not going very fast on this agenda. | :13:42. | :13:46. | |
Doctor Judith O'Brien, Chief Executive of dairy UK said, there | :13:47. | :13:51. | |
obvious consumer demand the clearer information on the country of origin | :13:52. | :13:55. | |
of food product is demonstrated by existing rules on fresh meat. A | :13:56. | :14:01. | |
mandatory labelling system would help the dairy industry showcase its | :14:02. | :14:06. | |
product and reassure consumers on its provenance. Clear mandatory | :14:07. | :14:10. | |
labelling is what other government wants. It is in the interest of | :14:11. | :14:14. | |
British farmers and consumers. The UK Government has said there is | :14:15. | :14:17. | |
great potential for significant long-term growth in the dairy sector | :14:18. | :14:21. | |
with the global market expected to grow at over 2% per year for the | :14:22. | :14:27. | |
next ten years. In or out of the EU British dairy farmers should have a | :14:28. | :14:34. | |
bright future. A farm prices report said that it is unacceptable that | :14:35. | :14:37. | |
consumers cannot buy British in confidence and could be misled as to | :14:38. | :14:42. | |
country of origin when they are buying food in the supermarket. It | :14:43. | :14:46. | |
is essential that labelling and produce is improved and I wholly | :14:47. | :14:49. | |
agree. Those consumers who cared deeply about animal welfare need | :14:50. | :14:56. | |
clearer labelling regarding animal rearing processes as well. Consumers | :14:57. | :15:00. | |
do care about how animals in the food chain RKO for in their short | :15:01. | :15:04. | |
lives. There are specific EU requirements and the keeping of | :15:05. | :15:15. | |
pigs, hence. -- hens. It specifically ruled out the use of | :15:16. | :15:21. | |
individual stalls for pregnant sows in 2013. They were banned for | :15:22. | :15:30. | |
cruelty reasons in the UK in 1999. Specifically banned in the rest of | :15:31. | :15:35. | |
the EU from 2013. Shockingly, more than two years on from this, six EU | :15:36. | :15:41. | |
countries are still officially noncompliant with their own key | :15:42. | :15:44. | |
welfare standards. This wilful noncompliance cuts cost for those | :15:45. | :15:48. | |
farmers but the picture it misery for the animals. -- perpetuates. The | :15:49. | :15:57. | |
consumer has a right to know if pork has been reared in band conditions. | :15:58. | :16:01. | |
A campaign group said, the country is -- countries failing to comply | :16:02. | :16:10. | |
France, Cyprus, Greece, Finland, and Slovenia, saying it is appalling | :16:11. | :16:13. | |
that the EU commission fails to enforce its own band. -- ban. We | :16:14. | :16:24. | |
need a level Langfield and production and animal welfare. -- | :16:25. | :16:30. | |
playing field. The German of the rural affairs select committee | :16:31. | :16:34. | |
accused the European Commission prevaricating -- chairman. Giving EU | :16:35. | :16:43. | |
farm is an unfair flouting of the ban on sow stalls. 60% of our pork | :16:44. | :16:51. | |
is imported, undercutting our own farmers. If the consumer wishes to | :16:52. | :16:56. | |
be sure that their pork is cruelty free then clear, mandatory labelling | :16:57. | :17:03. | |
is essential. We know that the EU has been slow in obliging states to | :17:04. | :17:08. | |
adopt high welfare standards, perhaps this is why the strategy | :17:09. | :17:13. | |
does not plan to extend their welfare labelling beyond eggs, it | :17:14. | :17:18. | |
would certainly shame some key EU countries about unacceptable farming | :17:19. | :17:21. | |
practices. The animal welfare foundation said that as demand for | :17:22. | :17:26. | |
livestock continues to surge particularly in developing | :17:27. | :17:27. | |
countries, the importance of ethically sourced food is more | :17:28. | :17:31. | |
important than ever as more animals are farmed. In this country we | :17:32. | :17:38. | |
already have a voluntary scheme demonstrating clear animal welfare | :17:39. | :17:44. | |
and labelling. It demonstrates high quality British produce and that | :17:45. | :17:47. | |
food has been farmed, processed, and packed in the UK. It is Europe's | :17:48. | :17:52. | |
food is traceable, safe to eat and produced responsibly. -- it ensures | :17:53. | :18:02. | |
that. It is not ) that European countries can dodge welfare issues. | :18:03. | :18:08. | |
-- it is not fair. They can hide anonymously behind inadequate | :18:09. | :18:12. | |
labelling. If British consumers were made aware of the lower welfare | :18:13. | :18:16. | |
standards in many European countries I believe they would choose to buy | :18:17. | :18:21. | |
British and by compassionately. We would know where our milk has come | :18:22. | :18:25. | |
from, where an animal has been reared, and how well it was treated | :18:26. | :18:30. | |
in its life and potentially even how it was slaughtered. By championing a | :18:31. | :18:35. | |
robust, sustainable, compassionate British farming industry we are | :18:36. | :18:39. | |
delivering jobs, prosperity, and it's during our own food security. | :18:40. | :18:44. | |
This is what the public wants and I would like to see our government | :18:45. | :18:47. | |
ring a ill in that they do exactly that. -- bring a bill in. | :18:48. | :19:02. | |
As many of that opinion say aye? On the contrary, no? The ayes have it. | :19:03. | :19:13. | |
Who will bring in the bill? Stephen McPartland, will weaken, | :19:14. | :19:23. | |
near Paris, Nigel Evans, and myself. -- Neil Harris. | :19:24. | :19:49. | |
Farm produce labelling requirement will. | :19:50. | :19:57. | |
On what day? Friday, May six. | :19:58. | :20:04. | |
The Kirk will now proceed to read the orders of the day. | :20:05. | :20:12. | |
Bank of England public services built to be considered. | :20:13. | :20:15. | |
We begin with new clause 12 with which it will be convenient to | :20:16. | :20:18. | |
consider the new clause and amendments are listed on the revised | :20:19. | :20:24. | |
selection paper. To move new clause 12. | :20:25. | :20:30. | |
Thank you, Madam Deputy Speaker. I moved government new clause 12, and | :20:31. | :20:37. | |
emphasise how the Treasury Select Committee is an esteemed committee | :20:38. | :20:42. | |
of this House and provides exceptional scrutiny of the | :20:43. | :20:46. | |
government and its regulators. Through its programme of | :20:47. | :20:52. | |
pre-commencement hearings its questions several appointees before | :20:53. | :20:55. | |
they start work. After they have started that they can expect to | :20:56. | :20:58. | |
appear regularly before the committee and the public can expect | :20:59. | :21:04. | |
them to be held firmly to account. The government welcomes this | :21:05. | :21:07. | |
scrutiny of appointees, it is a critical democratic function. That | :21:08. | :21:12. | |
is why we have tabled the new clause to guarantee that in statute the | :21:13. | :21:15. | |
committee always has the chance to scrutinise a new chief executive of | :21:16. | :21:21. | |
the SCA before they start work. Since tabling the amendment... I | :21:22. | :21:26. | |
give way. Will this be setting a trend? Which | :21:27. | :21:36. | |
other important posts or city institutions would now be | :21:37. | :21:39. | |
appropriate for a similar process of approval? | :21:40. | :21:46. | |
I am speaking very narrowly to a particular new clause 12, I am sure | :21:47. | :21:53. | |
it will be something that other committees and the Treasury Select | :21:54. | :21:57. | |
Committee looked at again in future. I expect it to be part of the | :21:58. | :22:00. | |
ongoing discussions between Parliament and the executive. But I | :22:01. | :22:04. | |
speak to the very narrow characteristics of our government | :22:05. | :22:11. | |
new clause 12 this afternoon. Since we tabled the amendment and there | :22:12. | :22:14. | |
have been further discussions with the chair of the Treasury Select | :22:15. | :22:20. | |
Committee over the role of the appointment of the Chief Executive | :22:21. | :22:25. | |
of the SCA and I'm pleased to announce we have found a way of | :22:26. | :22:31. | |
scrutinising further than the context of this legislation, indeed, | :22:32. | :22:34. | |
today the Chancellor has written to the chair of the committee agreeing | :22:35. | :22:38. | |
that the government will make appointments to the Chief Executive | :22:39. | :22:43. | |
of the SCA in such a way to ensure that the Treasury Select Committee | :22:44. | :22:47. | |
can hold a hearing before the appointment is formalised. I give | :22:48. | :22:51. | |
away. I am most grateful. Is the letter in | :22:52. | :22:57. | |
the vote office now, if it has already been penned? | :22:58. | :23:05. | |
The letter is in my binder, and I am very happy, provided the chair of | :23:06. | :23:08. | |
the select committee does not object, to read that out. And if it | :23:09. | :23:14. | |
has not already happened, I will put a copy in the House of Commons | :23:15. | :23:18. | |
library. I am sure that the chair of her select committee will be more | :23:19. | :23:21. | |
than happy to share it. She led me to read it out in full? By popular | :23:22. | :23:25. | |
demand, here is the letter. We have considered the role of the | :23:26. | :23:35. | |
Treasury Select Committee on scrutinising the appointment of the | :23:36. | :23:37. | |
Chief Executive of the Financial Conduct Authority. This scrutineer | :23:38. | :23:41. | |
is important and welcome. I would ensure that appointments to the | :23:42. | :23:45. | |
Chief Executive of the FCA are made in such a way as to ensure the | :23:46. | :23:48. | |
Treasury Select Committee is able to hold a hearing after the appointment | :23:49. | :23:52. | |
is announced but for it is formalised. Should the Treasury | :23:53. | :23:56. | |
Select Committee recommend in his report that the appointment be put | :23:57. | :24:01. | |
as a motion to the whole House, the government will make time for this | :24:02. | :24:03. | |
motion and respect the decision of the House. Additionally, I will | :24:04. | :24:12. | |
speak any future bill to make changes to the legislation governing | :24:13. | :24:17. | |
a to the FCA, CEO, to make the appointees subject to a fixed | :24:18. | :24:20. | |
five-year term. This does not apply to Andrew Bailey library -- recently | :24:21. | :24:26. | |
announced, but would first apply to his successor and I believe these | :24:27. | :24:31. | |
changes will reinforce the Treasury Committee's important scrutiny role. | :24:32. | :24:34. | |
That is the end of the quote in terms of the letter. I give way to | :24:35. | :24:38. | |
the Shadow Chancellor. It would be hobbled to ensure the House that | :24:39. | :24:43. | |
that future legislation would be sooner rather than later. -- it | :24:44. | :24:49. | |
would be helpful. Indeed. And I am sure he will therefore welcome the | :24:50. | :24:53. | |
addition of government new close 12 to the bill today and he will also | :24:54. | :25:00. | |
welcome news that the government will take the appropriate earliest | :25:01. | :25:04. | |
opportunity to reflect that, and indeed, the earliest possible | :25:05. | :25:20. | |
opportunity will be something that the government will consider very | :25:21. | :25:26. | |
carefully following today's session. As I mentioned in the letter, should | :25:27. | :25:30. | |
the Treasury Select Committee follow the hearing, the pre-commencement | :25:31. | :25:34. | |
hearing with a report and recommend in its report that the appointment | :25:35. | :25:40. | |
be put as a motion to the whole House, the government will make time | :25:41. | :25:44. | |
for this motion and, should it result in a boat, the government | :25:45. | :25:46. | |
will respect the decision of the House. As I said in my reply to the | :25:47. | :25:53. | |
Shadow Chancellor, we will also seek an opportunity to alter the | :25:54. | :26:02. | |
arrangement to make the appointee subject to a fixed five-year term. I | :26:03. | :26:07. | |
can confirm that Andrew Bailey, the new CEO has been appointed to a | :26:08. | :26:10. | |
five-year tour which can be renewed, and so, this agreed process would | :26:11. | :26:17. | |
first apply to his successor. This agreement is the right way to | :26:18. | :26:21. | |
reinforce the crucial scrutiny role of the Treasury Select Committee. I | :26:22. | :26:26. | |
give way. I am grateful to the Minister. She is being extremely | :26:27. | :26:31. | |
generous. What the minister says is extremely welcome and a significant | :26:32. | :26:36. | |
step forward. Could the Minister explain why the Chancellor felt it | :26:37. | :26:41. | |
was better not to insert this into the legislation but to have an | :26:42. | :26:45. | |
arrangement through an exchange of letters's the tabled or amendment on | :26:46. | :26:52. | |
Thursday. And as I mentioned in my remarks, there have been further | :26:53. | :26:55. | |
discussions with the Chair of the Treasury Select Committee and I am | :26:56. | :26:58. | |
delighted to be able to announce the result of those discussions today | :26:59. | :27:03. | |
from the dispatch box. I would also like to take a moment to address the | :27:04. | :27:08. | |
question of dismissals of the FCA Chief Executive. I can confirm that | :27:09. | :27:12. | |
the government does not have the power, except in limited | :27:13. | :27:16. | |
circumstances, to dismiss the Chief Executive of the FCA during his or | :27:17. | :27:20. | |
her term of office. I refer the House to schedule one Z a to the | :27:21. | :27:26. | |
financial services and markets Act 2000, paragraph four, which applies | :27:27. | :27:30. | |
to the Chair and external members as well as the CEO. It says, "The | :27:31. | :27:35. | |
Treasury may remove an appointed member from office on the grounds of | :27:36. | :27:40. | |
incapacity or serious misconduct or on the grounds that in all the | :27:41. | :27:46. | |
circumstances, the member's financial or other interests are | :27:47. | :27:48. | |
such as to have a material effect on the extent of the functions as | :27:49. | :27:52. | |
member as it would be proper for the person to discharge", but the | :27:53. | :27:58. | |
lawyers are clear, those are the only reasons the Treasury can | :27:59. | :28:04. | |
dismiss an FCA Chief Executive Tom incapacity, serious misconduct, | :28:05. | :28:09. | |
conflicts of interest. And I hope that offers the House considerable | :28:10. | :28:15. | |
reassurance. I give way. It is worth saying what happened in relation to | :28:16. | :28:20. | |
Maarten Wigley in this regard. He was not technically dismissed but | :28:21. | :28:24. | |
has term was not renewed. The situation was straight forward last | :28:25. | :28:29. | |
year an announcement was made, July 2014 that there would not be a | :28:30. | :28:33. | |
renewal, which would have taken place in March 2016, and as a | :28:34. | :28:41. | |
result, he left his office six months early. I accept that might | :28:42. | :28:47. | |
have been a mutual decision between the Treasury and Mr Wheatley, but it | :28:48. | :28:49. | |
certainly gave the impression that if it was not a fully fledged | :28:50. | :28:55. | |
dismissal, ultimately, the Exeter office came six months before the | :28:56. | :29:05. | |
end of a fixed term. -- the exit from office. The honourable | :29:06. | :29:10. | |
gentleman has stated a fact about the term of office to which he was | :29:11. | :29:14. | |
appointed and the government chose not to renew that term of office. I | :29:15. | :29:21. | |
think it is appropriate to put on tribute what I hope is a cross-party | :29:22. | :29:24. | |
tribute to the excellent work of the acting Chief Executive, Tracy | :29:25. | :29:28. | |
McDermott, who stepped into the role at that time and has carried out | :29:29. | :29:36. | |
that role for almost a full year, absolutely in an exemplary fashion. | :29:37. | :29:42. | |
Any further questions on this section? I am going to move on to | :29:43. | :29:46. | |
the question of evolution, amendments referring to devolution. | :29:47. | :29:52. | |
No further interventions. Madame Liberty Speaker, the next set of | :29:53. | :29:56. | |
amendments in the name of the honourable member for East Lothian, | :29:57. | :30:01. | |
the member for Carmarthen and Andy honourable member for Kirkcaldy and | :30:02. | :30:07. | |
Cowdenbeath forced us to ask exactly who the bank works for. The answer | :30:08. | :30:13. | |
must be the entire United Kingdom. Indeed, this is emphasised in its | :30:14. | :30:19. | |
mission statement to promote the good of the people of the United | :30:20. | :30:22. | |
Kingdom by maintaining monetary and financial stability. To fulfil this | :30:23. | :30:27. | |
mandate the Bank of England goes to great lengths to make sure that it | :30:28. | :30:30. | |
has a comprehensive understanding of the economic and financial situation | :30:31. | :30:34. | |
across all corners of the United Kingdom. The bank has a network of | :30:35. | :30:40. | |
12 agencies which are located across Scotland, Wales, Northern Ireland | :30:41. | :30:43. | |
and the regions of England. Each year those agents undertake some | :30:44. | :30:50. | |
5500 company visits and participate in panel discussions with | :30:51. | :30:53. | |
approximately a further 3500 businesses. In this context, | :30:54. | :30:59. | |
imposing a requirement to have regard to regional representation is | :31:00. | :31:04. | |
unnecessary. A comprehensive framework for regional information | :31:05. | :31:07. | |
gathering already exists. I give way to the normal gentleman. Please | :31:08. | :31:14. | |
inform me who the Welsh representative is because I have no | :31:15. | :31:17. | |
idea who represents Wales on the Bank of England. I will make sure | :31:18. | :31:24. | |
that he or she makes himself or herself known to him with the | :31:25. | :31:29. | |
greatest of speed. It is important to point out that these agents don't | :31:30. | :31:36. | |
engage with us as politicians. I know that the one for the West | :31:37. | :31:42. | |
Midlands and Worcestershire is very engaged with local businesses | :31:43. | :31:45. | |
although I, as a politician, have never met him, and that is no way | :31:46. | :31:51. | |
that it should work. I realise the Minister is trying to be hopeful, | :31:52. | :31:56. | |
but she must recognise the reserve strategic defence between the | :31:57. | :31:58. | |
process of information- gathering through agents and policy-making | :31:59. | :32:03. | |
through the bodies of the bank itself and that is where we are | :32:04. | :32:08. | |
asking for representation. I will be getting to that point as I carry on. | :32:09. | :32:13. | |
As always with the honourable gentleman I am seeking to be helpful | :32:14. | :32:16. | |
so hopefully he will enjoy those remarks when I get to them. In terms | :32:17. | :32:25. | |
of the context he asks, by imposing a requirement as he does in his | :32:26. | :32:30. | |
amendment to have regard to regional representation on the court, | :32:31. | :32:33. | |
effectively the board of directors of the Bank of England, we believe | :32:34. | :32:37. | |
that is unnecessary because of this framework for regional information | :32:38. | :32:40. | |
gathering that already exists, and also, if we were to insist that we | :32:41. | :32:46. | |
find a candidate with the perfect profile for them to serve on the | :32:47. | :32:49. | |
court, only to downgrade them because they lived in an | :32:50. | :32:54. | |
oversubscribed part of the country in terms of representation we did | :32:55. | :32:58. | |
not believe that would be the most effective way to produce an effect | :32:59. | :33:05. | |
of court. I have been clear that in setting both monetary and is | :33:06. | :33:09. | |
financial stability policy the bank must take into account economic | :33:10. | :33:12. | |
conditions in and the impact of policy decisions on every part of | :33:13. | :33:17. | |
the UK. Monetary and financial stability policy must be set on a | :33:18. | :33:23. | |
UK- wide basis. None of the 65 million people this House represents | :33:24. | :33:28. | |
would be well served if different capital requirements applied to | :33:29. | :33:31. | |
banks in different parts of the UK. Monetary policy must be consistent. | :33:32. | :33:36. | |
It is impossible to set different interest rates in one region versus | :33:37. | :33:41. | |
another. Monetary and financial stability are rightly reserved | :33:42. | :33:45. | |
policy areas. The men and women who make up the Policy Committees must | :33:46. | :33:51. | |
have their decision scrutinised, but policy must be set UK - wide. It is | :33:52. | :33:56. | |
this Parliament that must hold them to account. It is this Parliament | :33:57. | :33:59. | |
that holds power of reserved matters as these issues right we are, and it | :34:00. | :34:04. | |
is as Parliament that represents people from every part of the | :34:05. | :34:08. | |
country on an equal basis. Likewise, it ministers who are accountable to | :34:09. | :34:13. | |
this House and who hold positions with the support of a majority of | :34:14. | :34:16. | |
the House of Commons who must be responsible for making the external | :34:17. | :34:19. | |
appointments to the Monetary Policy Committee with each member | :34:20. | :34:22. | |
responsible for considering the impact of their policy decisions on | :34:23. | :34:26. | |
all 65 million people in the UK. Madam Deputy Speaker, we return to | :34:27. | :34:33. | |
the question of the bank was sows hundred -year-old name. It is | :34:34. | :34:38. | |
important to recognise the reputation associated with the name | :34:39. | :34:41. | |
built up over such a long period. During this time the bank has become | :34:42. | :34:45. | |
globally renowned as a strong, independent Central Bank. We should | :34:46. | :34:50. | |
not underestimate the importance of this. International confidence in | :34:51. | :34:53. | |
the Bank of England helps support international confidence in our | :34:54. | :34:59. | |
economy and currency. Turning now to the monetary framework, the | :35:00. | :35:02. | |
government amendment that we have tabled this week is modest. The bill | :35:03. | :35:06. | |
reduces the minimum frequency of monetary policy at the meetings from | :35:07. | :35:09. | |
monthly meetings to at least eight meetings in every calendar year and | :35:10. | :35:14. | |
are meant that are the reporting requirements of the Monetary Policy | :35:15. | :35:17. | |
Committee to match. I give way to the honourable gentleman. I thank | :35:18. | :35:22. | |
the Minister for giving way. She moved on very quickly on the matter | :35:23. | :35:26. | |
of the name. I just wanted to clarify whether or not the | :35:27. | :35:31. | |
government has a view on changing the name of the Bank of England in | :35:32. | :35:34. | |
order to reflect the fact that it is in fact the bank of all of the | :35:35. | :35:37. | |
United Kingdom ommer notwithstanding the fact that in normal everyday | :35:38. | :35:43. | |
parlance it will still be referred to as the bank of England, it's long | :35:44. | :35:47. | |
and proper title surely should reflect all of the nations of the | :35:48. | :35:52. | |
native kingdom. In fact the government was founded by someone | :35:53. | :35:56. | |
from Scotland. He's absolutely right draw attention to the fact that this | :35:57. | :36:02. | |
is an historical anomaly. I would be the first to accept that the | :36:03. | :36:04. | |
monetary policy of the bank of England is set for the whole of the | :36:05. | :36:07. | |
United Ingram, but that does not mean to say that we are going to | :36:08. | :36:12. | |
accept the amendment tabled today to change the name of the Bank of | :36:13. | :36:15. | |
England because we think that it is well established over 300 years that | :36:16. | :36:19. | |
it is called the Bank of England. I think the Treasury are in this | :36:20. | :36:25. | |
instance right not to change the name. The bank of England has a | :36:26. | :36:30. | |
brand and it could be a history lesson for those on the opposite | :36:31. | :36:33. | |
benches. The Bank of England was founded in 19 6094, before I drop | :36:34. | :36:38. | |
the Act of Union that might otherwise have had an impact on his | :36:39. | :36:42. | |
initial name but the brand that it has is important and I would rather | :36:43. | :36:47. | |
hope at least that those on the other parts of the United Kingdom | :36:48. | :36:49. | |
would not feel that their interests are being downgraded just by not | :36:50. | :36:55. | |
appearing in the headline name, not trees that are not least for the | :36:56. | :36:59. | |
reasons that have been set out, that the recognise that it acts for the | :37:00. | :37:04. | |
entirety of the United Kingdom rather than just England. On that | :37:05. | :37:13. | |
point, I hope that his support of the United nature of our kingdom | :37:14. | :37:18. | |
means that his party has now moved on from the discussions of last year | :37:19. | :37:24. | |
were they wanted to break up the United Kingdom, accept the settled | :37:25. | :37:27. | |
will of the Scottish people, that they will continue to benefit from | :37:28. | :37:31. | |
the monetary policy established right across the country. I give way | :37:32. | :37:33. | |
to the gentleman. Further to the point, in that | :37:34. | :37:48. | |
regard, the amendment put forward by my colleague from East Lothian, it | :37:49. | :37:56. | |
actually will address that issue. It is the England and Wales Cricket | :37:57. | :38:02. | |
board, officially, when it comes to the cricket side, but of course, it | :38:03. | :38:04. | |
is named England for promotional purposes. Even if the | :38:05. | :38:11. | |
well-intentioned amendment of my colleague from the Scottish National | :38:12. | :38:16. | |
party, the anchor of England would still for all intent and purposes be | :38:17. | :38:22. | |
known as the Bank of England. -- the honourable gentleman tempts me down | :38:23. | :38:29. | |
a path towards comparisons in terms of sports teams, which I shall | :38:30. | :38:35. | |
decline to be tempted down. In the terms of the amendments we | :38:36. | :38:41. | |
have tabled on the monetary Wallasey committee, the amendment we have | :38:42. | :38:44. | |
tabled is modest. It reduces the minimum frequency of meetings from | :38:45. | :38:49. | |
monthly to at least eight meetings in every calendar year. Our | :38:50. | :38:53. | |
amendments are simply just the reporting requirements to match. The | :38:54. | :38:58. | |
amendment in the name of the member for, and used suggests three add a | :38:59. | :39:06. | |
second policy objective of maximising employment. We conducted | :39:07. | :39:11. | |
a review of the monetary policy framework in 2013. It concluded that | :39:12. | :39:17. | |
a flexible inflation targeting framework was the best approach. | :39:18. | :39:21. | |
Employment is already explicitly part of the committee objectives. | :39:22. | :39:26. | |
The secondary objective is, and I quote, to support the economic | :39:27. | :39:29. | |
policy of the government including the objectives for growth and | :39:30. | :39:34. | |
employment. The most recent monetary policy committee remit letters | :39:35. | :39:38. | |
summarised the government economic policy is, I quote, to achieve | :39:39. | :39:44. | |
strong, sustainable, more balanced route across the country and between | :39:45. | :39:53. | |
industries. I give away. Thank you. She is taking refuge in | :39:54. | :39:59. | |
the existing mandate for the Bank of England, a mandate which we all | :40:00. | :40:04. | |
know, both sides of the floor, has long since become redundant. The | :40:05. | :40:08. | |
inflation target has been dead in the water for years and years and | :40:09. | :40:12. | |
years because inflation is nowhere near 2% and not likely to be that | :40:13. | :40:17. | |
for a long long time. We are looking for other policy measures to replace | :40:18. | :40:22. | |
the 2% inflation target, that is what is implicit in the amendment. | :40:23. | :40:26. | |
Can the Minister please address what future targets the anchor of England | :40:27. | :40:30. | |
should have to address a deflation Iraq rather than an inflationary | :40:31. | :40:39. | |
error, the last 20 years? He asks an important question and there are | :40:40. | :40:42. | |
many opportunities in Parliament, in terms of scrutiny of the bank to ask | :40:43. | :40:48. | |
these important questions, and the mechanism the government chooses to | :40:49. | :40:53. | |
use is the letter process, and the remit. But he and I are both old | :40:54. | :41:02. | |
enough to know how inflation... I know, surely not! How inflation has | :41:03. | :41:08. | |
changed over the years. I think we should all welcome in this House the | :41:09. | :41:12. | |
significant lowering of inflation expectations, and I think we should | :41:13. | :41:18. | |
all remember how important it is that we continue to ask the Bank of | :41:19. | :41:21. | |
England to keep inflation under control and we never return to the | :41:22. | :41:27. | |
kind of impoverishing inflationary policies that so harm to people in | :41:28. | :41:31. | |
the 1970s, particularly the poorest and the oldest in society. Indeed, | :41:32. | :41:44. | |
price stability must take primacy, a single objective is the best way to | :41:45. | :41:47. | |
me sure the inflation target is credible. This in turn anchors | :41:48. | :41:51. | |
all-important expectations and helps keep inflation under control. The | :41:52. | :41:57. | |
system has shown it produces good Labour market outcomes as well. | :41:58. | :42:01. | |
Despite the global uncertainty we have record numbers of people in | :42:02. | :42:05. | |
work. An unemployment rate that is at its lowest in a decade. And a | :42:06. | :42:09. | |
claimant count that has not been lower for over 40 years. Targeting | :42:10. | :42:20. | |
low inflation is yours -- ensures that... I give way. | :42:21. | :42:26. | |
I can remember what inflation was like in the 1970s. It does seem that | :42:27. | :42:31. | |
the Bank of England so monetary policy here is to keep inflation | :42:32. | :42:35. | |
rate down. Surely we must recognise that inflation has been well below | :42:36. | :42:42. | |
the 2% target for a long time now. Does she feel that either there | :42:43. | :42:45. | |
should be a different inflation target, or that there should be a | :42:46. | :42:49. | |
different set of remit of the Bank of England to recognise that, | :42:50. | :43:00. | |
without taking an error if we granted that inflation can ever be | :43:01. | :43:02. | |
vanquished, but recognising that there are other aspects of the | :43:03. | :43:06. | |
economy that the Bank of England in relation to monetary policy should | :43:07. | :43:11. | |
prepare for attention? My honourable friend is an extremely | :43:12. | :43:15. | |
wise and knowledgeable person, I will not refer in any way to his | :43:16. | :43:19. | |
age, he highlights an important point. And emphasises the | :43:20. | :43:24. | |
behavioural characteristic of the recency affect, in that we recognise | :43:25. | :43:32. | |
today inflation is well below the 2% target but it was only in the life | :43:33. | :43:36. | |
of the last Parliament that it was above 5%, so even in the six years I | :43:37. | :43:43. | |
have been a member we have tested the parameters of the inflation | :43:44. | :43:50. | |
target. I do not think there's any need, in these discussions this | :43:51. | :43:54. | |
afternoon, to make any changes to that. If I may just conclude my | :43:55. | :44:00. | |
remarks by speaking briefly on amendments six, seven, and new | :44:01. | :44:06. | |
clause 13. Amendment six states that the controller may enquire into the | :44:07. | :44:11. | |
bank's success in state policy objectives but shall not enquire | :44:12. | :44:13. | |
into the desirability of such objectives being set. The bill will | :44:14. | :44:19. | |
have that exact effect. Amendment six also controls how the auditor | :44:20. | :44:25. | |
general should submit a port. Parliament has designated to the | :44:26. | :44:32. | |
control of the content of national audit office report and the timing | :44:33. | :44:35. | |
of publication. It is important that this independent officer can use his | :44:36. | :44:38. | |
judgment on how Parliament and the public are best served. The National | :44:39. | :44:44. | |
audit act 1983 provides that the controller may report to the House | :44:45. | :44:48. | |
of Commons the result of once he has reported to -- result of any | :44:49. | :45:01. | |
examination, as it mitigates the reports conclusions being overtaken | :45:02. | :45:04. | |
by events. Amendment to seven with this supply restrictions set out in | :45:05. | :45:12. | |
the act of 2000, on the disclosure of protective information in | :45:13. | :45:14. | |
relation to report by the controller and auditor General. Information is | :45:15. | :45:18. | |
specially protected under these rules if it is held by the bank of | :45:19. | :45:23. | |
the purposes of monetary policy. For supporting financial institutions, | :45:24. | :45:29. | |
to maintain stability, or for private banking purposes. Similarly, | :45:30. | :45:32. | |
the amendment in the name of the member for Bishop Auckland would | :45:33. | :45:35. | |
remove three corresponding exclusions in the Freedom of | :45:36. | :45:39. | |
Information Act. I hope to persuade the House that each of the three | :45:40. | :45:42. | |
categories of detected information is entirely sensible. The first, | :45:43. | :45:47. | |
applying to the monetary policy functions, how we communicate | :45:48. | :45:49. | |
monetary policy is extremely important. It moves markets in | :45:50. | :45:55. | |
substantial ways and every detail published minutes is scrutinised for | :45:56. | :46:00. | |
predictions of future changes. Making sure information is presented | :46:01. | :46:05. | |
in a timely way is a vital. That is why the original legislation, | :46:06. | :46:08. | |
creating the committee in 1998, set out the full range of disclosure | :46:09. | :46:11. | |
requirements including publication of the minutes, and of a quarterly | :46:12. | :46:18. | |
inflation report. Since then the tankers implement the | :46:19. | :46:20. | |
recommendations of the review into NBC transparency. -- the bank has. | :46:21. | :46:29. | |
We support the full implication of that review. Financial operations | :46:30. | :46:33. | |
intended to support financial institutions for the purposes of | :46:34. | :46:36. | |
maintaining stability, honourable members will understand that if the | :46:37. | :46:40. | |
bank is to extend emergency liquidity assistance, careful | :46:41. | :46:43. | |
relocation is a critical element of deserving stability. -- preserving. | :46:44. | :46:53. | |
Covert assistance would be reported privately to the committees whilst a | :46:54. | :46:56. | |
broader liquidity scheme is for institutions such as the special | :46:57. | :46:59. | |
liquidity scheme, and the discount window facility, maybe announced to | :47:00. | :47:06. | |
the market. Finally, limited private banking services are excluded from | :47:07. | :47:10. | |
FOIA requests. The Bank of England also provides private banking to | :47:11. | :47:16. | |
customers. It would be entirely inappropriate to subject ordinary | :47:17. | :47:18. | |
bank customer information to disclosure. | :47:19. | :47:28. | |
The appointment of the SCA chief executive. The question is that new | :47:29. | :47:34. | |
clause 12 be read a second time. Thank you, Madam Deputy Speaker. I | :47:35. | :47:40. | |
beg to move amendments six and seven in my name and that of my right | :47:41. | :47:46. | |
honourable friend. But I want to return to the question of new clause | :47:47. | :47:49. | |
one and new clause 12 regarding appointments of the Financial | :47:50. | :47:59. | |
Conduct Authority Chief Executive. To support clause one, giving the | :48:00. | :48:04. | |
selectivity of formal role in the appointment of the chief Executive, | :48:05. | :48:10. | |
and is better placed, in my view, to guarantee the confidence and | :48:11. | :48:13. | |
independence of the regulator than the amendment in the name of the | :48:14. | :48:18. | |
Chancellor, which at our original reading, but too little to change | :48:19. | :48:23. | |
the status quo, and was tabled in response to the amendment forward by | :48:24. | :48:27. | |
the chair of the Treasury Select Committee. We had a similar debate | :48:28. | :48:33. | |
at committee stage on an amendment tabled guarding the appointment | :48:34. | :48:37. | |
process for the Chief Executive of the prudential regulation authority. | :48:38. | :48:43. | |
Select committees have routinely held pre-appointment hearings for a | :48:44. | :48:48. | |
number of public appointments since 2008, with a number of candidates | :48:49. | :48:53. | |
not approved. The previous Coalition Government could develop the | :48:54. | :48:56. | |
scrutiny agenda somewhat when the Chancellor agreed that the Treasury | :48:57. | :49:01. | |
committee could have the power of veto over appointments to the office | :49:02. | :49:05. | |
for budgetary responsibility in 2010. Public Accounts Committee has | :49:06. | :49:18. | |
a veto over appointments of and -- of controller and auditor General. | :49:19. | :49:24. | |
Then subject to a confirmation hearing by the Treasury Secretary. | :49:25. | :49:29. | |
The Treasury Select Committee has power, of course, over the chair and | :49:30. | :49:32. | |
board members in the office of budgetary responsibility, an | :49:33. | :49:36. | |
arrangement that the Chancellor said he would put in place, in his words, | :49:37. | :49:39. | |
because I want there to be absolutely no doubt that this is an | :49:40. | :49:47. | |
independent body. The Minister will be aware that when it examined | :49:48. | :49:50. | |
proposals for the future official conduct authority, back in 2013, the | :49:51. | :49:57. | |
Treasury Select Committee did make a number recommendations on the | :49:58. | :50:01. | |
accountability of the new body to Parliament, including that the | :50:02. | :50:03. | |
legislation provided that the chief executive be subject to the | :50:04. | :50:09. | |
appointment scrutiny. -- pre-appointment. I recall that the | :50:10. | :50:13. | |
Treasury Secretary was disappointed by the government response, in view | :50:14. | :50:19. | |
of the deficiencies in the accountability mechanisms for the | :50:20. | :50:24. | |
Financial Conduct Authority. In the view of the Treasury Select | :50:25. | :50:27. | |
Committee, it was set up, as we heard today, by the letter from the | :50:28. | :50:33. | |
chair, his letter to the Chancellor, on January 26, 2016, following the | :50:34. | :50:42. | |
appointment of the current PRA chief executive is next leader of the | :50:43. | :50:49. | |
Financial Conduct Authority. We had the right honourable gentleman set | :50:50. | :50:51. | |
out the view of the committee that it should have a veto over the | :50:52. | :50:54. | |
appointment and dismissal of the Chief Executive of both the | :50:55. | :50:56. | |
Financial Conduct Authority and the PRA. The letter said that the chair, | :50:57. | :51:05. | |
John Griffiths Jones, told the committee that there was merit in | :51:06. | :51:09. | |
the proposal, when he met the committee members on January 20 this | :51:10. | :51:15. | |
year. I did like this up at committee stage and said it would be | :51:16. | :51:20. | |
helpful to know whether the Chancellor had shared his thinking | :51:21. | :51:23. | |
on calls to extend the appointment hearings and the power of veto to | :51:24. | :51:29. | |
those two positions. -- flag this up. Now we have the reply in the | :51:30. | :51:36. | |
Minister's ring binder. And it was exciting to hear the contents. We | :51:37. | :51:40. | |
got a fantastic insight into the fireside style of exchanges in the | :51:41. | :51:46. | |
government. And on the side of the House we do believe that the | :51:47. | :51:49. | |
Treasury committee should have a greater authority on financial | :51:50. | :51:58. | |
regulation in this country. In relation to the new clause 12 I | :51:59. | :52:01. | |
would say, however, it is not clear what would happen if you she was | :52:02. | :52:11. | |
appointed and appears before the committee- are they left in limbo or | :52:12. | :52:14. | |
in fact settling into their new post? Or practice would simply be | :52:15. | :52:20. | |
business as usual with the Treasury Select Committee not given the power | :52:21. | :52:27. | |
that we all believe it deserves? We do believe that simply requiring any | :52:28. | :52:30. | |
new chief to appear before the committee within three months of | :52:31. | :52:36. | |
appointment delivers nothing particularly new and it is | :52:37. | :52:39. | |
reasonable to expect any new post holder would appear within this time | :52:40. | :52:45. | |
frame, in any event, whether it is currently codified or not. Regarding | :52:46. | :52:53. | |
new clause 12, I am pleased to note, as the Minister herself said, and I | :52:54. | :52:57. | |
have commented upon, is being exciting news, namely that the | :52:58. | :53:03. | |
government, through the means of the Chancellor's letter, communicate and | :53:04. | :53:06. | |
accepts the broad thrust of proposals put forward by the chair | :53:07. | :53:11. | |
of the select committee, and I also note and welcome the Minister's | :53:12. | :53:15. | |
commitment today to introduce the relevant legislation, in her own | :53:16. | :53:21. | |
words, sooner rather than later. I would politely suggest that these | :53:22. | :53:25. | |
changes be introduced in the finance shortly to come before the House. | :53:26. | :53:30. | |
There's an opportunity there not to be missed. | :53:31. | :53:39. | |
In relation to labour's two amendments we tabled following the | :53:40. | :53:44. | |
committee stage and the amendment in the name of the member for Bishop | :53:45. | :53:48. | |
Auckland, each of these amendments in their own way addresses the | :53:49. | :53:54. | |
crucial need for transparency and openness in the Bank of England. The | :53:55. | :54:00. | |
subject of the National Audit Office were the power to investigate the | :54:01. | :54:03. | |
bank has been subject to discussion at each stage of the bill both in | :54:04. | :54:08. | |
the Commons and in the Other Place, the controller and Auditor General | :54:09. | :54:12. | |
was clearly concerned about the proposals in the bill that would | :54:13. | :54:18. | |
have allowed the Court of directors veto over the new powers for the | :54:19. | :54:22. | |
National Audit Office, and there has been, I am pleased to say, clear | :54:23. | :54:27. | |
progress on this issue as the bill has proceeded through both houses, | :54:28. | :54:30. | |
particularly in the Other Place, with the removal of this veto. And | :54:31. | :54:35. | |
the government, in response, as honourable members will recall, | :54:36. | :54:40. | |
posed a memorandum of understanding between the bank and the National | :54:41. | :54:44. | |
Audit Office to establish the draft of which I understand has been | :54:45. | :54:48. | |
welcomed by both sides, so amendments six and seven in the | :54:49. | :54:55. | |
opposition's name seek to extend and clarify the powers of the controller | :54:56. | :55:00. | |
to enquire into the bank's success in achieving its policy objectives, | :55:01. | :55:05. | |
and we believe that this does not encroach beyond the boundaries, | :55:06. | :55:08. | |
questioning the merits of polities that Mac policy decisions or assist | :55:09. | :55:12. | |
the National Audit Office in ascertaining whether the bank is | :55:13. | :55:16. | |
delivering value for money or not. And with regard to new clause to, | :55:17. | :55:23. | |
Labour does seem merits in the proposal for wider geographical | :55:24. | :55:33. | |
representation on the board. Briefly returning to his own close, new | :55:34. | :55:38. | |
clause six, whilst I accept that transparency and openness is the | :55:39. | :55:41. | |
spirit of the age and we cannot move against it, does he not recognise, | :55:42. | :55:49. | |
the Treasury will be at the vanguard of this, I am sure, does he not | :55:50. | :55:55. | |
accept that, at times of great difficulty where there are issues | :55:56. | :56:00. | |
about the stability and functioning of the UK financial and banking | :56:01. | :56:04. | |
system it would be appropriate not just for the Treasury Select | :56:05. | :56:06. | |
Committee but for the Treasury itself to have some say in | :56:07. | :56:10. | |
suggesting that there should be a fully fledged openness, in other | :56:11. | :56:16. | |
words, that the safeguards he has put in place here refer only to the | :56:17. | :56:20. | |
Treasury Select Committee. Does he not see that there might be | :56:21. | :56:23. | |
instances where ministers would, rightly, have concerns about issues | :56:24. | :56:27. | |
stability that should he protected from open transparency at a | :56:28. | :56:32. | |
particular time window might be a move to make these things more open | :56:33. | :56:37. | |
at some point in the future once up to killer threat had passed? -- the | :56:38. | :56:44. | |
particular threat. I thank the honourable member for his | :56:45. | :56:46. | |
intervention. It may be that transparency is not the spirit of | :56:47. | :56:51. | |
the age but also the spirit of the future. I would draw his attention | :56:52. | :56:57. | |
to the fact that the wording is the controller shall submit reports | :56:58. | :57:01. | |
arising from the exercise of his powers under subsection six a, so it | :57:02. | :57:07. | |
is not a completely open book policy in relation to everything else, but | :57:08. | :57:14. | |
in relation to the new clause two, put in the name of the member for | :57:15. | :57:20. | |
East Lothian, we see merit in the proposal for wider geographical | :57:21. | :57:23. | |
representation on the board and our own committee stage amendment, we | :57:24. | :57:29. | |
made this statement for making sure that different stakeholders are | :57:30. | :57:32. | |
represented including dedicated places for customers and the | :57:33. | :57:36. | |
practitioners. And similarly, we do support the amendment tabled by My | :57:37. | :57:41. | |
Honourable Friend, the member for Bishop Auckland, who has a long | :57:42. | :57:45. | |
track record in campaigning for greater transparency in financial | :57:46. | :57:50. | |
services and her amendments it is very well with the opposition's | :57:51. | :57:54. | |
seeking to empower the National Audit Office further by making the | :57:55. | :57:57. | |
case for greater powers for Freedom of Information requests. Now, Madam | :57:58. | :58:03. | |
Deputy Speaker, I turn to new clause three and new clause five put | :58:04. | :58:07. | |
forward respectively by the Scottish National Party and by Plaid Cymru. | :58:08. | :58:18. | |
They have tabled amendments to change the name of the Bank of | :58:19. | :58:21. | |
England. The SNP were so keen to discuss their own amendment that | :58:22. | :58:26. | |
they tabled it twice. We discussed the amendment in committee and it | :58:27. | :58:29. | |
brought it before us again seeking to have the name of Scotland | :58:30. | :58:33. | |
alongside Wales and Northern Ireland as part of the title, and they are | :58:34. | :58:37. | |
now joined by the on-board board member for Carmarthen and four Plaid | :58:38. | :58:43. | |
Cymru who has taken a different tack and removed or national names and | :58:44. | :58:46. | |
removes Ashman refers solely to the bank by the name of the currency and | :58:47. | :58:56. | |
that is sterling with an E and not an I. We are happy to support this | :58:57. | :59:05. | |
as it recognises the unifying role the bank which services all parts of | :59:06. | :59:09. | |
the United Kingdom and we will support this again today, and, Madam | :59:10. | :59:14. | |
Deputy Speaker, in relation to new clauses six and eight and the | :59:15. | :59:17. | |
government amendment three, the amendments do have a number of | :59:18. | :59:23. | |
merits, new clause seven in the name of the honourable member for | :59:24. | :59:27. | |
Carmarthen in with regard to the Monetary Policy Committee sets out a | :59:28. | :59:33. | |
new mandate of objective for the MPC to include maximum employment. New | :59:34. | :59:40. | |
clause six proposes representatives on the MPC from the devolved | :59:41. | :59:45. | |
authorities of Scotland, Wales and England and new clause eight argues | :59:46. | :59:48. | |
that the bank should become more accountable for its decisions to | :59:49. | :59:54. | |
those same bodies. The Labour Party has established a review into the | :59:55. | :59:57. | |
mandate of the Monetary Policy Committee under the former member of | :59:58. | :00:04. | |
the Monetary Policy Committee, David blanch flower, and we have | :00:05. | :00:08. | |
previously said we would look at a wide range of ideas, including what | :00:09. | :00:13. | |
can be learned from the US Federal Reserve. That would include | :00:14. | :00:17. | |
considering the importance of growth, employment, earnings in the | :00:18. | :00:24. | |
committee's double -- deliberations. Indeed, in regard the new clause | :00:25. | :00:31. | |
seven, David Blanchflower has written in city AM that he would | :00:32. | :00:35. | |
consider the importance of maximising employment in his review | :00:36. | :00:39. | |
and David Blanchflower has spoken about the size and crucial we be | :00:40. | :00:46. | |
gender balance of the committee, optimal policy rules, asymmetrical | :00:47. | :00:48. | |
targeting and the relationship with fiscal policy as well as the | :00:49. | :00:53. | |
frequency of meetings, so we do, Madam Deputy Speaker, welcome the | :00:54. | :00:57. | |
proposal for the bank to report to the devolved authorities but are not | :00:58. | :01:02. | |
supporting these amendments regarding the MPC today. We see | :01:03. | :01:06. | |
merit in them as part of an ongoing debate and we look forward to | :01:07. | :01:09. | |
considering and sharing the results of David Blanchflower's review of | :01:10. | :01:14. | |
the MPC in due course and with those comments, I draw my comments to a | :01:15. | :01:25. | |
conclusion. Thank you very much, Madam Deputy Speaker. Can I just | :01:26. | :01:30. | |
say, that was a very good speech and I congratulate the honourable | :01:31. | :01:34. | |
gentleman in covering a lot of ground with a lot of detail and a | :01:35. | :01:40. | |
sense of humour, which I enjoyed. And he saved me the trouble about | :01:41. | :01:45. | |
the OBR and the importance of that as a precedent for what we are | :01:46. | :01:49. | |
discussing today. I would like to say and the sentence, otherwise I am | :01:50. | :01:54. | |
sure that I will be told to be quiet by Madam Deputy Speaker, this is a | :01:55. | :02:00. | |
very good bill. In many respects it implements a good number of the | :02:01. | :02:07. | |
wider objectives of Bank of England scrutiny and accountability which | :02:08. | :02:10. | |
the Treasury Committee has been pushing for, for many years. I just | :02:11. | :02:16. | |
want to take this opportunity to say thank you to those members of the | :02:17. | :02:20. | |
Treasury Committee in the last Parliament, as well as those in | :02:21. | :02:22. | |
this, who pressed with this, it shows that over time things can be | :02:23. | :02:28. | |
achieved if one persists, and it is something about what we are hearing | :02:29. | :02:31. | |
today with respect to the specific amendments which my remarks reflect. | :02:32. | :02:41. | |
I am very pleased that, after quite a lot of discussion with the | :02:42. | :02:49. | |
Minister, I am very grateful for her help and assistance over a number of | :02:50. | :02:54. | |
days and also from the Chancellor of the Exchequer, particularly last | :02:55. | :02:57. | |
night in a telephone conversation which was then followed up by the | :02:58. | :03:00. | |
exchange of letters, that we have now reached agreement, therefore I | :03:01. | :03:10. | |
will not need to take clause one to prevent. The exchange of letters | :03:11. | :03:16. | |
provides most of the objectives we sought on the new clause one. It is | :03:17. | :03:19. | |
worth going through the key points. As the minister clarified | :03:20. | :03:23. | |
effectively by reading out the letter, appointments will be made in | :03:24. | :03:26. | |
a way that ensures the Treasury Committee can hold a hearing before | :03:27. | :03:31. | |
the appointment is formalised. The question about whether it is a | :03:32. | :03:36. | |
pre-commencement or pre-appointment hearing is in my view a distinction | :03:37. | :03:42. | |
without a difference. Secondly, if the Treasury Select Committee | :03:43. | :03:44. | |
disagrees with the appointment, it will report that the House and, if | :03:45. | :03:50. | |
the committee chooses, the government must find time for a | :03:51. | :03:54. | |
debate on the committee report. This would be on a bootable motion to | :03:55. | :04:05. | |
accept the conclusion of the motion -- voteable. The government further | :04:06. | :04:11. | |
angry that they will accept a decision of the House once that vote | :04:12. | :04:14. | |
has been taken. Thirdly, the government will, and this is | :04:15. | :04:18. | |
something there has been some discussion about already this | :04:19. | :04:21. | |
afternoon, at the earliest opportunity change the legislation | :04:22. | :04:25. | |
to ensure that future appointments of chief executives to the SCA are | :04:26. | :04:32. | |
made on a fixed, renewable, 5- year term. I would expect that change in | :04:33. | :04:36. | |
legislation to take place in the next Parliamentary session. I'm not | :04:37. | :04:42. | |
sure that it would satisfy the long title of the bill, but, if it does, | :04:43. | :04:48. | |
we can put it in. I would expect the government to put it in. I also | :04:49. | :04:52. | |
recognise that the Chancellor couldn't fully commit himself to me | :04:53. | :04:58. | |
over the phone, after all, he would have had no time to secure agreement | :04:59. | :05:02. | |
in Cabinet from his colleagues for the legislative time. But I do | :05:03. | :05:07. | |
expect that he would do this as soon as is in. After all, it would be a | :05:08. | :05:12. | |
pretty small, self-contained thing, if that is what it requires. The | :05:13. | :05:16. | |
fourth point, which hasn't so far been mentioned, is that it is his | :05:17. | :05:27. | |
clear view, and I am not in anyway misrepresenting him, that the | :05:28. | :05:29. | |
arrangements we are now putting in place should be the permanent method | :05:30. | :05:35. | |
of appointment. That is, not just something that will disappear with | :05:36. | :05:40. | |
the disappearance of this Chancellor or the helpful minister we have at | :05:41. | :05:44. | |
the dispatch box at the moment, however supportive she may be the | :05:45. | :05:49. | |
proposals. Why has the Treasury Committee devoted so much time to | :05:50. | :05:54. | |
this issue? I would like to give a specific and a general answer to | :05:55. | :05:58. | |
that. First of all, the specifics. There have been widespread concerns | :05:59. | :06:02. | |
at the independence of the SCA, that it has been compromised by the | :06:03. | :06:10. | |
circumstances of his departure, by other apparent interference in the | :06:11. | :06:14. | |
work of the SCA by senior Treasury officials and possibly amongst other | :06:15. | :06:21. | |
things. I have to say that we have explored these in cross-examination | :06:22. | :06:24. | |
in committee, and we have not found any such evidence. The member for | :06:25. | :06:32. | |
the Cities of London and Westminster got right to the point where he | :06:33. | :06:39. | |
credits the perception of interference that nonetheless | :06:40. | :06:43. | |
remains. And that perception makes it harder for regulators to do their | :06:44. | :06:51. | |
job, and it had to be addressed. Bolstering the perceived | :06:52. | :06:54. | |
independence of this key appointment and ensuring that the individual | :06:55. | :06:59. | |
cannot easily be removed by the Treasury, it seemed to us, on the | :07:00. | :07:03. | |
committee, that it was therefore crucial. I give way to my Right | :07:04. | :07:09. | |
Honourable Friend. I want to put it on the record, I do not think there | :07:10. | :07:15. | |
was any undue interference from the Treasury and actually, I am very | :07:16. | :07:18. | |
happy that Andrew Bailey is taking over post I think he will make a | :07:19. | :07:23. | |
very good future chief executive. Nonetheless it was that sense | :07:24. | :07:27. | |
perception within Square mile that we have to have close to our hearts. | :07:28. | :07:32. | |
And can I just briefly say how much I approve of the Treasury accepting | :07:33. | :07:39. | |
the guts of the new clause one and the new clause nine. It is great way | :07:40. | :07:44. | |
to their credit that the not had to go through the House of Lords which | :07:45. | :07:50. | |
happens when amendments are made through House of Lords rather than | :07:51. | :07:54. | |
coming as part of the discussions at the report stage. | :07:55. | :07:59. | |
I would like to touch on one other area with respect to this issue, the | :08:00. | :08:06. | |
apparent statutory protection against dismissal. Which came into | :08:07. | :08:15. | |
question as a result of Martin Wheeler's departure. Whatever the | :08:16. | :08:18. | |
reality, the current protection appeared to be inadequate. That is | :08:19. | :08:23. | |
perhaps because he was only appointed by three year term and it | :08:24. | :08:30. | |
is why a five-year term, a longer term, would provide more protection. | :08:31. | :08:34. | |
To put it even more simply, these changes rectify, in another way, the | :08:35. | :08:44. | |
risk of arbitrary dismissal. If, for example, the committee strongly | :08:45. | :08:46. | |
supports keeping the incumbent after four and a half years, they can make | :08:47. | :08:51. | |
it abundantly clear in a report, and make it clear that they will | :08:52. | :08:56. | |
recommend any other candidate to be voted down to the House of Commons. | :08:57. | :09:02. | |
So in practice I think we have the protection we already wanted. The | :09:03. | :09:11. | |
FCA needs a strong and demonstrably independent Chief Executive | :09:12. | :09:20. | |
countable to -- accountable to Parliament. It has struggled to | :09:21. | :09:24. | |
emerge from the failed FSA, it has since it best staff poached ivory -- | :09:25. | :09:34. | |
by the PRA, and has hit the headlines for all the wrong reasons, | :09:35. | :09:38. | |
with the effect of wiping 20% of the share value of the life insurance | :09:39. | :09:44. | |
sector. With what will amount to a requirement for parliamentary | :09:45. | :09:52. | |
approval of future appointments, or dismissals, the incumbent will be in | :09:53. | :09:54. | |
a stronger position to resist pressure from ministers and | :09:55. | :09:58. | |
officials and his authority will be holstered quite a -- bolstered quite | :09:59. | :10:09. | |
a bit. It is not an issue that Pittodrie a great -- perturbs me a | :10:10. | :10:18. | |
great deal, any attempt to circumvent arrangement would lead to | :10:19. | :10:23. | |
a complete collapse of trust between the Treasury committee and the | :10:24. | :10:25. | |
government and I simply do not foresee that happening. | :10:26. | :10:34. | |
Does he not have at least some small concern that by not putting it on | :10:35. | :10:38. | |
the face of the bill, it does not set a precedent, and to go back to | :10:39. | :10:41. | |
an earlier exchange I tried to have, it might therefore give licence for | :10:42. | :10:47. | |
the Treasury to take this as very much a sweet generous case, rather | :10:48. | :10:53. | |
than recognising that the committee should have an important role in the | :10:54. | :10:57. | |
appointments of senior figures within the financial services | :10:58. | :11:09. | |
firmament? -- sui generis. One can turn the ardent on its head | :11:10. | :11:12. | |
without the need for statutory change with other bodies. -- the | :11:13. | :11:17. | |
document. We now feel a statutory double lock for the head of the oh | :11:18. | :11:26. | |
BR was found to be some use in production of the forecast, but | :11:27. | :11:36. | |
which the perception of might have weakened the oh BR. We have a | :11:37. | :11:40. | |
requirement for a resolution before the House prior to the appointment | :11:41. | :11:44. | |
of the chairman to the Office of National Statistics and now we have | :11:45. | :11:47. | |
these arrangement, so we have a battery of different arrangements | :11:48. | :11:55. | |
from which to draw. May I congratulate my honourable | :11:56. | :11:59. | |
friend in achieving this great success for parliamentary scrutiny? | :12:00. | :12:02. | |
And suggest that it is better that it is done in a non-statutory way. | :12:03. | :12:07. | |
Being statute into the proceedings of the House always present longer | :12:08. | :12:13. | |
term problems and therefore to set a non-statutory precedent has lots of | :12:14. | :12:17. | |
advantages. I always like listening to my | :12:18. | :12:23. | |
honourable friend and member of the Treasury committee, and of course a | :12:24. | :12:28. | |
constitutional expert. It is certainly true that in this place a | :12:29. | :12:34. | |
good deal of course I constitutional change tends to take place | :12:35. | :12:41. | |
gradually. -- quasi. Often as a result of informal arrangement. And | :12:42. | :12:47. | |
that is all to the good. And that is what the honourable gentleman is | :12:48. | :12:51. | |
saying. Everybody is trying to get in, whereas I am tried to get to the | :12:52. | :12:56. | |
end. I was almost there, but I will give way. | :12:57. | :13:04. | |
Does he not feel just the slightest hint of disappointment in the | :13:05. | :13:06. | |
intervention of the honourable member? Because it surely was an | :13:07. | :13:15. | |
historic first that he signed a new clause amending the British | :13:16. | :13:20. | |
constitution. Of course the honourable member, is | :13:21. | :13:28. | |
a great and Bernard constitutional expert, will explain this apparent | :13:29. | :13:33. | |
contradiction to the House, in, I hope, a lengthy disposition in a few | :13:34. | :13:35. | |
moments. -- great and learned. Appointees should be put in | :13:36. | :14:00. | |
a position where they are forced to explain their actions before | :14:01. | :14:05. | |
Parliament, and they should also feel accountable to Parliament. In | :14:06. | :14:11. | |
order to achieve that, the means by which they are appointed or have | :14:12. | :14:14. | |
protection from dismissal is very relevant. That is why this type of | :14:15. | :14:20. | |
change, I think, can offer us something. What we have had over | :14:21. | :14:27. | |
decades with successive governments is governments off-loading | :14:28. | :14:31. | |
responsibilities to quangos, leaving the public with the sense that | :14:32. | :14:34. | |
ultimately nobody is democratically accountable for anything. I think | :14:35. | :14:40. | |
that accountability for decisions formally taken, once upon a time | :14:41. | :14:46. | |
taken directly by ministers, which now sit with an elected appointees | :14:47. | :14:53. | |
in quangos, need a very thorough scrutiny and cross-examination and | :14:54. | :14:55. | |
that is what we have been trying to do. This agreement with the | :14:56. | :15:04. | |
Chancellor is a sizeable step in the right direction. Of course, in an | :15:05. | :15:09. | |
ideal world, I would like access to the statute book to write exactly | :15:10. | :15:15. | |
what I feel, on behalf of the committee, should be there. But we | :15:16. | :15:20. | |
live in the real world. I am very happy with the exchange of letters | :15:21. | :15:23. | |
and grateful to ministers for having agreed it and I won't be taking | :15:24. | :15:36. | |
clause one to. -- to a division. I agree with the member for | :15:37. | :15:41. | |
Chichester that there is a law to be commended in this bill. Some of the | :15:42. | :15:51. | |
good things in course of 12 were actually pushed on the government. | :15:52. | :15:58. | |
-- clause 12. And I also think there are things which are still negative. | :15:59. | :16:04. | |
This brings me to a conclusion. Quite a long conclusion. The bill | :16:05. | :16:12. | |
began as a tidying up operation, that is why it was launched in the | :16:13. | :16:18. | |
Lords, it seemed to be just a few things, essentially regards the 2012 | :16:19. | :16:25. | |
financial services act. But the longer it went through various | :16:26. | :16:29. | |
stages the more became apparent that it was exposing a whole series of | :16:30. | :16:35. | |
issues in the regulatory system which were not fit for purpose. The | :16:36. | :16:42. | |
government has convinced itself that all has been done to resolve the | :16:43. | :16:49. | |
crisis of 2007, with the exception of a little tidying up. But that is | :16:50. | :16:53. | |
not true. What we have discovered, time after time in going through | :16:54. | :16:57. | |
this, is issues with operation of the Bank of England, the regulatory | :16:58. | :17:01. | |
bodies and how they function and how fit for purpose they are, and new | :17:02. | :17:05. | |
issues emerging only in the last few weeks regarding tax havens. All this | :17:06. | :17:12. | |
has appeared. So actually what see is not this Bank of England Bill | :17:13. | :17:18. | |
putting problems away, but rather the start of a whole series of | :17:19. | :17:22. | |
pieces of legislation until we have got it right. Far from being a | :17:23. | :17:26. | |
tidying up operation we have started something her. -- something here. I | :17:27. | :17:35. | |
moved causes two and three in my name in the name of my colleagues. | :17:36. | :17:43. | |
Because it gets to the nub of this thing we have uncovered. The Bank of | :17:44. | :17:47. | |
England in the last 20 years, particularly the last ten, has | :17:48. | :17:49. | |
acquired an extraordinary range of new powers. Not over forecasting, | :17:50. | :18:02. | |
but fundamental policy levers for running the whole economy have been | :18:03. | :18:05. | |
transferred from this House and the executive to the Bank of England | :18:06. | :18:10. | |
itself. It began with transferring to the bank powers over interest | :18:11. | :18:19. | |
rates in 1997, but of course if you transfer that control to the bank | :18:20. | :18:23. | |
you also transfer the setting of the exchange rate, which nobody seemed | :18:24. | :18:27. | |
to notice at the time. De facto, the bank given control over the external | :18:28. | :18:32. | |
sector. And more recently with the issue of quantitative easing the | :18:33. | :18:38. | |
bank has forced interest rates down to zero, so if you cannot live your | :18:39. | :18:41. | |
monetary policy, what else do you do? -- influence monetary policy. So | :18:42. | :18:49. | |
the bank has influence over large swathes of fiscal policy, | :18:50. | :18:51. | |
essentially housing policy, because housing determines the direction of | :18:52. | :18:57. | |
economic growth. In recent weeks the Bank of England has been deciding | :18:58. | :19:03. | |
between buy to let, or for homeowners. Micro-decisions have | :19:04. | :19:11. | |
been transferred to the bank. My worry is it means we have crossed a | :19:12. | :19:14. | |
line in accountability with the bank. That is not a criticism of | :19:15. | :19:22. | |
individuals within the bank or the governor, who I have a high regard | :19:23. | :19:26. | |
for, but we have gradually allowed the bank to take over from this | :19:27. | :19:30. | |
House far too much of the operational policy directing the | :19:31. | :19:37. | |
economy. That is why I think new clause 12, which I am happy to | :19:38. | :19:44. | |
support, is a step forward. It is beginning to redress the balance of | :19:45. | :19:50. | |
accountability. With the government acceptance of the general line of | :19:51. | :19:53. | |
march from the Treasury Select Committee, we are beginning to move | :19:54. | :20:01. | |
to the point where they -- key members of the regulatory regime are | :20:02. | :20:04. | |
confirmed in the appointment by the House. I want to put on record that | :20:05. | :20:13. | |
the two precedents we now have in that direction, the Treasury | :20:14. | :20:17. | |
committee, obviously, in observing the House, informing the appointment | :20:18. | :20:29. | |
of the director of the O BR, and now this appointment of the head of the | :20:30. | :20:39. | |
FCA being affirmed by this House, I think that is the line of march. But | :20:40. | :20:44. | |
I want to put on record that we see that as a down payment. We are | :20:45. | :20:49. | |
moving in a direction where the governor of the Bank of England and | :20:50. | :20:52. | |
all the key regulatory agencies should be confirmed by this House. I | :20:53. | :20:57. | |
know that it will not take a long time. I know there is sometimes a | :20:58. | :21:00. | |
gentle struggle between the executive and the House in terms of | :21:01. | :21:07. | |
who has the say, but what we are seeing here is a move towards more | :21:08. | :21:11. | |
democratic accountability being held by this House. And therefore I | :21:12. | :21:16. | |
welcome it. Let me move on briefly. Two new clause two. Given the policy | :21:17. | :21:32. | |
powers that lie with the Bank of England, I think we had to make sure | :21:33. | :21:36. | |
that the committees of the Bank of England, above all, the ruling | :21:37. | :21:48. | |
court, democratically accountable. So we moved a new clause that says | :21:49. | :21:52. | |
that nominations to the Court of directors of the bank, still may of | :21:53. | :21:58. | |
the Exchequer, should have regard to the importance of ensuring balanced | :21:59. | :22:01. | |
representation of the nations and regions of the United Kingdom. That | :22:02. | :22:06. | |
clause has been written very carefully. There is no suggestion | :22:07. | :22:12. | |
that the court should be a federal body. What we are suggesting is that | :22:13. | :22:17. | |
in the balance of its make up which would have representation of the | :22:18. | :22:21. | |
entire nation because, rightly or wrongly, and I think more brightly | :22:22. | :22:26. | |
than wrongly, there is a perception that the City of London, and the | :22:27. | :22:30. | |
major banks and financial institutions, have too much sway | :22:31. | :22:34. | |
over the court of the bank, and have had, historically. | :22:35. | :22:41. | |
The honourable gentleman is making a powerful point. Does he not agree | :22:42. | :22:47. | |
that, if it must be significant that the peripheral areas of these | :22:48. | :22:52. | |
nations, their economic performance is also peripheral, and that was | :22:53. | :22:59. | |
Isley goes to his point -- precisely goes to his point. I could not agree | :23:00. | :23:05. | |
more. If you look at the long history of the regions of the UK and | :23:06. | :23:11. | |
the nations, Scotland, Wales, northern England and Northern | :23:12. | :23:16. | |
Ireland, they have suffered in the deflationary cycle because interest | :23:17. | :23:20. | |
rates were set to control inflation that was triggered by the City of | :23:21. | :23:24. | |
London and over lending by the City of London. The result was that the | :23:25. | :23:29. | |
North- South divide was a deflationary line with the nations | :23:30. | :23:32. | |
of the North and the regions of the North of England suffering high | :23:33. | :23:37. | |
interest rates which will not germane to their economic problems, | :23:38. | :23:42. | |
but UK interest rates, most of the post-war period, on average, have | :23:43. | :23:45. | |
been higher than the rest of Europe simply to control and curb over | :23:46. | :23:50. | |
lending by the City of London. The result is that in the industrial | :23:51. | :23:54. | |
regions there was deflation. That might have been mitigated to some | :23:55. | :23:58. | |
extent, if there had been broader representation of the nations and | :23:59. | :24:02. | |
its industries on the bleeding bodies of the Bank of England. And I | :24:03. | :24:06. | |
think we need to -- the leading bodies. I think we need to move in | :24:07. | :24:13. | |
that direction. The court, let me remind on board members, is not the | :24:14. | :24:19. | |
institution of the bank that makes monetary policy or fiscal policy. It | :24:20. | :24:24. | |
has oversight over the whole of the bank 's operations in a sense of | :24:25. | :24:27. | |
getting value for money and above all ensuring that there is not | :24:28. | :24:30. | |
groupthink between the different committees that make operational | :24:31. | :24:36. | |
policy. That is why I think, at that level, we need to begin and at that | :24:37. | :24:41. | |
level we need wider representation on the court. Surprisingly, and I | :24:42. | :24:48. | |
raised this previously, actually, this exists to a small degree, | :24:49. | :24:55. | |
because since World War II, traditionally, a trade union | :24:56. | :24:57. | |
representative has always been on the court of the Bank of England. | :24:58. | :25:04. | |
And still is, to this day. So even the government, successive | :25:05. | :25:07. | |
governments, have recognised that on the court, you can have wider | :25:08. | :25:12. | |
representation, wider social representation. When I put it to | :25:13. | :25:17. | |
ministers that, if they rejected the notion of a court that had a wider | :25:18. | :25:21. | |
representation of the economy, if they rejected that, were they going | :25:22. | :25:27. | |
to move to remove Trajan representation? There was a | :25:28. | :25:31. | |
deafening silence from ministers. That is why I am putting the | :25:32. | :25:34. | |
question again, because if you access the principle that there | :25:35. | :25:37. | |
should be trade union representation, and there should, | :25:38. | :25:40. | |
then you should widen that, which is what I am asking for. I have | :25:41. | :25:46. | |
carefully presented the new clause not to suggest that the court should | :25:47. | :25:56. | |
be federal, somebody representing this and that, but simply that we | :25:57. | :26:00. | |
need a balance, and anybody who has sat on the board of a company knows, | :26:01. | :26:05. | |
the first thing you do is to create some representation of different | :26:06. | :26:07. | |
skills and interests, so that the board can Act as a collective. My | :26:08. | :26:14. | |
point is that the court, and to some extent the new committees do not Act | :26:15. | :26:22. | |
as collectives, they are in danger, because of the power we have given | :26:23. | :26:26. | |
to the Bank of England, beginning to Act with the kind of hubris that | :26:27. | :26:32. | |
central banks, when they get too much power, begin to wield, they | :26:33. | :26:35. | |
begin to think they know that the thing, when they don't. We need | :26:36. | :26:39. | |
democratic accountability in the Bank of England, not in the sense | :26:40. | :26:44. | |
that the Bank of England understands it, but that the nation understand | :26:45. | :26:47. | |
this and the nations of the UK understand it, which is why I have | :26:48. | :26:50. | |
been pressing this particular clause. Madam Deputy Speaker, we | :26:51. | :26:55. | |
have made some progress in this Bill. I feel that the progress has | :26:56. | :27:00. | |
been to discover more what we need to do in improving regulatory | :27:01. | :27:03. | |
structures of this economy, but at least there is more, the debate is | :27:04. | :27:09. | |
more open on where we go next, and where we go next is more | :27:10. | :27:15. | |
accountability. This bill makes a down payment on that accountability, | :27:16. | :27:19. | |
it does not deliver it. That is where we go next. Thank you very | :27:20. | :27:25. | |
much, Madam Deputy Speaker. Obviously, in the new landscape of | :27:26. | :27:34. | |
the city, the head of the Financial Conduct Authority is an extremely | :27:35. | :27:37. | |
important post. And therefore, who fulfils it is absolutely vital. I am | :27:38. | :27:44. | |
extremely pleased with the changes that have been agreed this | :27:45. | :27:47. | |
afternoon, and which the Minister announced from the dispatch box | :27:48. | :27:52. | |
which opens the process up and gives the Treasury Select Committee a | :27:53. | :27:57. | |
proper role, and will, we hope, reinforced the independence of that | :27:58. | :28:01. | |
person. Another person with considerable independence is of | :28:02. | :28:04. | |
course the control and Auditor General. I am pleased that we have | :28:05. | :28:11. | |
got away from the idea that the court should decide which part of | :28:12. | :28:15. | |
the bank 's homework that the control and Auditor General should | :28:16. | :28:19. | |
be allowed to march. There is obviously a parallel here with the | :28:20. | :28:25. | |
role that the FDA has with the BBC. At second reading, we asked Treasury | :28:26. | :28:31. | |
ministers to publish the memorandum of understanding. They have now | :28:32. | :28:35. | |
published that document. It is an extremely useful document because | :28:36. | :28:39. | |
what it does is set out, in advance, and agreed framework for the re-met | :28:40. | :28:54. | |
of the C, and that presents is -- prevents others seeing political | :28:55. | :28:59. | |
interference or inappropriate avoidance of scrutiny of particular | :29:00. | :29:07. | |
areas of the bank's work. I would like to speak about new clause 13, | :29:08. | :29:15. | |
standing in my name, which would make the Bank of England subject to | :29:16. | :29:20. | |
the Freedom of Information Act. It seems to me the Bank of England is a | :29:21. | :29:26. | |
public authority and it is carrying out public policy purposes. So the | :29:27. | :29:33. | |
case, surely, the case for covering it doesn't mean to be made. It is | :29:34. | :29:37. | |
the case against it being covered that needs to be made. And the | :29:38. | :29:42. | |
Minister mentioned important points in her speech about why she has not | :29:43. | :29:49. | |
been minded to access the new clause 13, and I would like to respond to | :29:50. | :29:54. | |
what she said. She picked out three areas in particular. Monetary | :29:55. | :29:58. | |
policy, financial operations and private angling. Now, I'll -- | :29:59. | :30:05. | |
banking. I am not entirely sure of all the detail of the Freedom of | :30:06. | :30:11. | |
Information Act, but we all know that local authorities are FOI-able. | :30:12. | :30:22. | |
We know that when you put in Freedom of Information requests to local | :30:23. | :30:26. | |
authorities, we are not able to see the personal report on individual | :30:27. | :30:29. | |
members of staff in those local authorities. So the Freedom of | :30:30. | :30:34. | |
Information Act is not an Act which gives access to this kind of | :30:35. | :30:38. | |
personal information. I would have thought that the same approach would | :30:39. | :30:45. | |
be, would exempt the private banking work of the Bank of England. She | :30:46. | :30:53. | |
also spoke about monetary policy and financial operations. Now, I do not | :30:54. | :30:57. | |
believe that the amendment which I have put down today would run into | :30:58. | :31:05. | |
that area of the bank 's work, and this is because it would, those | :31:06. | :31:10. | |
parts of the bank's work would still be protected by section 29 .1 of the | :31:11. | :31:21. | |
2000 Act. This states, information is exempt information if it is | :31:22. | :31:26. | |
disclosure under this Act would or would be likely to prejudice the | :31:27. | :31:31. | |
economic interests of the United Kingdom or any part of the United | :31:32. | :31:34. | |
Kingdom or the financial interests of any of the administration in the | :31:35. | :31:39. | |
United Kingdom, blah blah blah. I would of thought that as long as we | :31:40. | :31:45. | |
are not amending section 29 of the Act, we would be able to protect the | :31:46. | :31:50. | |
things that the minister was particularly concerned about. The | :31:51. | :31:56. | |
reason I was alerted to this was because of the letter which the | :31:57. | :32:04. | |
Minister herself waved to us in the Chamber in June, which the Governor | :32:05. | :32:10. | |
had written about the sale of RBS shares. I am sure the Minister | :32:11. | :32:18. | |
remembers the occasion very well. In his letter, the Governor said that | :32:19. | :32:23. | |
it was his view that the public interest would be served by | :32:24. | :32:31. | |
beginning to retain RBS -- return RBS to private ownership. Writing | :32:32. | :32:37. | |
this letter was not part of the government financial policy, | :32:38. | :32:39. | |
Prudential policy, it was an intervention in government policy at | :32:40. | :32:44. | |
the Chancellor's request on the issue of a share sale. When the | :32:45. | :32:50. | |
government came before the Treasury Select Committee I ask him about | :32:51. | :32:54. | |
this, and I asked him whether he would share the analysis which | :32:55. | :33:00. | |
underlay the letter which he had written, and he refused point-blank | :33:01. | :33:04. | |
to do so. I am not going to read out the full exchange I had with the | :33:05. | :33:08. | |
Governor on that occasion because I went into that at second reading and | :33:09. | :33:14. | |
it is on the record twice now. But I really feel that, in refusing to | :33:15. | :33:23. | |
give the underlying analysis, the Governor is invading public scrutiny | :33:24. | :33:29. | |
of what is a perfectly proper matter for the public to understand. In the | :33:30. | :33:35. | |
letter, he said, are phased return of RBS to private ownership would | :33:36. | :33:39. | |
promote financial stability, more competitive banking sector and the | :33:40. | :33:47. | |
interests of the wider economy. " None of this is true. It will not | :33:48. | :33:50. | |
promote a more competitive banking sector. We are hoping of course that | :33:51. | :34:03. | |
the Comptroller and Auditor General will secure this analysis but I | :34:04. | :34:09. | |
think a more straightforward way to deal with this which, because the | :34:10. | :34:17. | |
share sales in particular are an issue, the C always looked into | :34:18. | :34:21. | |
share sales, so be might get at the truth on this one occasion, but I am | :34:22. | :34:26. | |
sure there will be other, similar loopholes, and I really do feel that | :34:27. | :34:31. | |
the topicality of seeing this analysis was further undermined last | :34:32. | :34:37. | |
June by the interview in the Financial Times given by Sir | :34:38. | :34:41. | |
Nicholas MacPherson on his retiring from the Treasury, in which he | :34:42. | :34:47. | |
described the sale of more shares from RBS as "Tricky", and he went on | :34:48. | :34:53. | |
to say, "There is a judgment to be made over whether to sell further | :34:54. | :34:57. | |
shares below the 2008 purchase price", so clearly, these are not | :34:58. | :35:04. | |
straightforward matters. They do not fall within the normal room at the | :35:05. | :35:10. | |
Bank of England. They are of public policy significance. They are but | :35:11. | :35:13. | |
one of why it is inappropriate for the Bank of England to be subject -- | :35:14. | :35:18. | |
why it is appropriate or the Bank of England to be subject to the Freedom | :35:19. | :35:25. | |
of Information Act. I would like to speak to the amendments in my name | :35:26. | :35:30. | |
in this group, has been clauses five, six, seven and eight. You will | :35:31. | :35:34. | |
be glad to hear that I am going to be as brief as possible because I am | :35:35. | :35:38. | |
desperate to get to the third briefing so that we can have a vote | :35:39. | :35:42. | |
on those. My amendments aim to achieve two things, firstly to | :35:43. | :35:49. | |
secure justice for my country in the formulation of monetary policy and | :35:50. | :35:56. | |
to let that policy better reflect the evolving UK. These are probing | :35:57. | :36:00. | |
amendments and I wish to draw the government's attention to them again | :36:01. | :36:03. | |
cause these are points the government should go away and look | :36:04. | :36:07. | |
at and come back with its own proposals and future given the | :36:08. | :36:11. | |
legislative programme that appears before the House these days. I was | :36:12. | :36:15. | |
glad to hear that Labour are holding a review into these issues and look | :36:16. | :36:20. | |
forward to reading its findings although it would have been handy | :36:21. | :36:24. | |
had it been prepared in advance, and we had been able to discuss these | :36:25. | :36:31. | |
issues during this bill today. The first of my new clauses proposes a | :36:32. | :36:35. | |
change in the name centre of the bank. We believe that the name of | :36:36. | :36:40. | |
the bank should be changed. The Bank of England is the UK Central Bank | :36:41. | :36:44. | |
and time this was reflected to a greater degree not only in its name | :36:45. | :36:46. | |
but also in its structures and practices. This is undoubtedly a | :36:47. | :36:52. | |
contentious issue for me as a proud Welshman that the Central Bank that | :36:53. | :36:57. | |
the sides monetary policy in Wales is named after another country. The | :36:58. | :37:02. | |
Bank of England was created in 1694, before the present British state was | :37:03. | :37:07. | |
disrupted. Wales was annexed in 1536, Scotland in 1707, and Ireland | :37:08. | :37:14. | |
in 1801. The Central Bank was treated to serve a bloody good | :37:15. | :37:17. | |
entity composed of only Wales and England and the fact that Wales was | :37:18. | :37:22. | |
omitted from the title reflects the inferior status that my country | :37:23. | :37:26. | |
enjoyed in 1694 post-op many of those present in the debate will | :37:27. | :37:33. | |
have heard that my schoolboy hero, Sir Ian Botham, on the daily | :37:34. | :37:37. | |
politics yesterday, said that England is an island, and we should | :37:38. | :37:39. | |
be proud. I was going to say, if only! Despite | :37:40. | :37:56. | |
dubious geographical knowledge this is a continuing mistake suffered by | :37:57. | :38:00. | |
those other nations at the hands of those who confuse England with a | :38:01. | :38:03. | |
larger entity. The injustice persist in cricket with Wales denied a | :38:04. | :38:10. | |
national team in our own right, and other nations denied representation | :38:11. | :38:14. | |
on the central bank. If the British state is a partnership of equals in | :38:15. | :38:17. | |
all institutions must reflect that reality. Including the most | :38:18. | :38:23. | |
important institution underpinning the financial system, the central | :38:24. | :38:27. | |
bank. My suggestion is that it should be the Sterling central bank, | :38:28. | :38:35. | |
reflecting the reality we live in, and showing that those in this place | :38:36. | :38:38. | |
genuinely believe in a respect agenda and partnership of equals. My | :38:39. | :38:42. | |
honourable friend from East Lothian has a similar amendment to that | :38:43. | :38:48. | |
effect and I of course will vote in favour if he is minded to press it | :38:49. | :38:57. | |
to a division. I seek to is your representation of the formations on | :38:58. | :39:08. | |
the monetary policy committee. -- ensure. Full income tax devolution | :39:09. | :39:14. | |
to Scotland, or partial income tax devolution to Wales, even though I | :39:15. | :39:17. | |
believe we should have symmetric evolution of powers, the trajectory | :39:18. | :39:24. | |
is clear nevertheless. Fiscal responsibility combined with a | :39:25. | :39:26. | |
genuine no detriment fiscal framework increases accountability | :39:27. | :39:36. | |
of devolved governments and incentivise them to boost economic | :39:37. | :39:39. | |
performance to invest in public services. The coordination of | :39:40. | :39:44. | |
monetary and fiscal policy is vital in any economic policy. Obviously | :39:45. | :39:50. | |
the central bank is independent but there is undoubtedly coordination | :39:51. | :39:52. | |
with the Treasury is with the expected. -- as would be. Similar | :39:53. | :40:02. | |
protocols need to be developed with Scottish and Northern Irish | :40:03. | :40:04. | |
Exchequer is. National parliaments should nominate to ensure those | :40:05. | :40:10. | |
involved in the process have an understanding of conditions and | :40:11. | :40:13. | |
events in Wales, Scotland, and Northern Ireland. | :40:14. | :40:18. | |
Is he aware that in the USA the central bank is called the Federal | :40:19. | :40:22. | |
Reserve for the very simple reason that it it is appointed federally, | :40:23. | :40:29. | |
and the rate-setting committee is a federal committee? So the principle | :40:30. | :40:33. | |
is well established in other jurisdictions. | :40:34. | :40:40. | |
I read full to my honourable friend for that point, I fully agree. -- I | :40:41. | :40:46. | |
am grateful. And to go back to the point made earlier the North- South | :40:47. | :40:50. | |
divide and the effect of policy on that reality, it is no surprise that | :40:51. | :40:56. | |
the UK is the most grotesquely in equal stake in the EU in terms of | :40:57. | :41:03. | |
geographical wealth, and one of the main reasons is that for far too | :41:04. | :41:07. | |
long monetary policy has been determined in the interests of a | :41:08. | :41:10. | |
very small part of it, the Square mile just down the Thames. All | :41:11. | :41:17. | |
members are currently bank staff or one of the four positions nominated | :41:18. | :41:21. | |
by the Treasury. Fittingly, there are four Mac countries in the UK, | :41:22. | :41:24. | |
which should make it ripe for modification. Following on from this | :41:25. | :41:33. | |
I am very interested in the emerging debate on changing the remit of the | :41:34. | :41:37. | |
MPC, in regard of setting interest rates. Clause seven in my name seeks | :41:38. | :41:43. | |
to expand the objective is to include maximum employment. It is | :41:44. | :41:49. | |
already charged with keeping an inflationary target of 2%. Other | :41:50. | :41:54. | |
central banks such as the Federal Reserve, returning to our earlier | :41:55. | :41:57. | |
exchange, have a dual mandate, going and inflation. In 1977 the US | :41:58. | :42:03. | |
Congress amended the 1913 Federal Reserve act and mandated it to | :42:04. | :42:10. | |
tackle long-term interest rates and, critically, maximum employment, as | :42:11. | :42:15. | |
well as inflation. I take as interest the point made by the | :42:16. | :42:18. | |
Minister that the bank does consider government targets in terms of | :42:19. | :42:23. | |
employment, but there is a difference between employment | :42:24. | :42:26. | |
targets and a mandate for maximum, or rather, from employment. Clause | :42:27. | :42:35. | |
eight in my name seeks to bring accountability to Wales and other | :42:36. | :42:39. | |
devolved government. The British state is rapidly changing as powers | :42:40. | :42:44. | |
and responsibility flow from Westminster to devolved countries, | :42:45. | :42:47. | |
although the pace is not as quick as I would want. We are not privy to | :42:48. | :42:50. | |
meetings between the Treasury Minister and his senior team but can | :42:51. | :42:56. | |
safely assume they are frequent. In regard of parliamentary scrutiny, in | :42:57. | :42:59. | |
this place, the governor and his team meet the Treasury Select | :43:00. | :43:03. | |
Committee at least five times a year. As I mentioned a moment ago | :43:04. | :43:09. | |
fiscal powers are already afoot in the devolved nations with more | :43:10. | :43:14. | |
planned. I hope that the central bank and Treasury agreed that it is | :43:15. | :43:18. | |
in their interest to strengthen the relations between the central bank | :43:19. | :43:23. | |
and the devolved government and Parliament. I am not aware of any | :43:24. | :43:30. | |
structure of meetings for ministers of devolved governments, not least | :43:31. | :43:34. | |
scrutiny of the central bank, by the devolved parliaments. In the | :43:35. | :43:41. | |
interest of mutual respect those structures need to be formalised. | :43:42. | :43:50. | |
I had thought I would come along this afternoon to listen, but I have | :43:51. | :43:57. | |
been stung into action by the Minister, particularly by her | :43:58. | :44:00. | |
comment in relation to new clause three, and two. Allow me to start | :44:01. | :44:07. | |
by... I thank my friend for allowing me to | :44:08. | :44:14. | |
intervene. Does he share my sense of regret and bewilderment that the | :44:15. | :44:16. | |
government can so casually dismissed the proposal to end? And does he not | :44:17. | :44:26. | |
agree it is disingenuous of the Conservative government to talk on | :44:27. | :44:29. | |
one hand of a respect agenda embracing the contribution of all | :44:30. | :44:33. | |
the nations of the UK, and yet at the first opportunity it has to | :44:34. | :44:37. | |
recognise that contribution, it refuses to do so and insist that | :44:38. | :44:42. | |
only England should be in the name of this most significant | :44:43. | :44:46. | |
institution? I agree Talia and I think it is | :44:47. | :44:49. | |
fitting that makes the point that this time. -- agree entirely. As my | :44:50. | :44:58. | |
honourable friend pointed out earlier the Bank of England now is a | :44:59. | :45:01. | |
very different kind of bank from that which it was a a few short | :45:02. | :45:06. | |
years ago, it has a more political role, it makes decisions which have | :45:07. | :45:11. | |
a wider impact than before, and surely in that regard the name needs | :45:12. | :45:15. | |
to reflect the impact its decision-making has. The second | :45:16. | :45:21. | |
reason he is entirely correct is because of the changed political | :45:22. | :45:25. | |
climate in the UK. Not just his good self, but the honourable member also | :45:26. | :45:34. | |
made a similar point about the need to recognise the role of Wales in | :45:35. | :45:39. | |
this. This is an important point, not flimsy, at fundamental, for | :45:40. | :45:45. | |
people who want to see that we have a central and important institution | :45:46. | :45:48. | |
that has proper regard for the whole of the nation. All donations that it | :45:49. | :45:59. | |
seeks to serve. -- all the nations. I was looking a short time ago at | :46:00. | :46:02. | |
the Court of directors of the Bank of England, all 11 of them. If you | :46:03. | :46:09. | |
followed that representation you would be inclined to rename the | :46:10. | :46:13. | |
bank, the bank of the City of London. Because it gives a very | :46:14. | :46:21. | |
little proper representation to, not just the nations of the UK, but the | :46:22. | :46:29. | |
regions also. I enjoyed the analogy made earlier by the honourable | :46:30. | :46:42. | |
member for, the cricket analogy, I have some interest in it, I think | :46:43. | :46:45. | |
the Honourable member pointed out that it is the cricket board of | :46:46. | :46:52. | |
England and Wales. As someone who was born not far from where I was | :46:53. | :47:00. | |
born, in Scotland, the one-time became the captain of the England | :47:01. | :47:04. | |
cricket team. Some years ago. Showing my vintage again. I think we | :47:05. | :47:12. | |
have to have proper regard to all of the nations represented in the | :47:13. | :47:22. | |
United Kingdom. I was also stung by the comment of the Minister, when | :47:23. | :47:28. | |
she said that the Bank of England represents, and has always | :47:29. | :47:33. | |
represented, the whole of the UK. I don't think that is true at all, in | :47:34. | :47:38. | |
its policy-making. I think the Honourable member for Bishop | :47:39. | :47:42. | |
Auckland, and the member for East Lothian, made a very telling points, | :47:43. | :47:47. | |
when they pointed out of the way in which it has undue regard for one | :47:48. | :47:55. | |
part of the United Kingdom. Prior to 2008 many commentators would say | :47:56. | :47:57. | |
that the interest rate setting policy of the bank paid and you | :47:58. | :48:01. | |
regard to the City of London and surrounding areas -- and | :48:02. | :48:16. | |
undue regard, and too little regard to Scotland, Northern Ireland, and | :48:17. | :48:27. | |
the like. Representation for the nations that make up the UK, indeed, | :48:28. | :48:31. | |
a short time ago, I had a quick look on the Internet at who the esteemed | :48:32. | :48:38. | |
figures are. Unless I am subsequently proven to be incorrect, | :48:39. | :48:45. | |
or the Internet is incorrect, one of the directors of the Court of the | :48:46. | :48:48. | |
Bank of England is also a nonexecutive director of the FCA. | :48:49. | :48:55. | |
This is the type of interlocking directorships that I do not think | :48:56. | :49:00. | |
serve the economic policy, the financial sector, well. Do we have | :49:01. | :49:05. | |
such a tiny pool of people who are point -- who we are able to point, | :49:06. | :49:17. | |
but we have to have them represented by the same directors? I think that | :49:18. | :49:20. | |
is not a sign of strength in the way we're going at the moment, but a | :49:21. | :49:27. | |
position extreme weakness. Why are these things important? Again in the | :49:28. | :49:31. | |
Honourable member for East Lothian mentioned a word that has cropped up | :49:32. | :49:35. | |
many times and committed discussions, and that is the | :49:36. | :49:39. | |
importance of avoiding groupthink. It is seen in many studies is part | :49:40. | :49:43. | |
and parcel of the Ford decision-making that contributed to | :49:44. | :49:50. | |
the crash of 2008. If you want to avoid groupthink you need to have | :49:51. | :49:57. | |
people willing to think differently. Willing to put down the critical | :49:58. | :50:02. | |
questions. A chairman who is willing to seek out those with alternate | :50:03. | :50:06. | |
views. I do not see it happening today. I remember some years ago I | :50:07. | :50:12. | |
was sitting, observing, sitting within the confines of a company | :50:13. | :50:17. | |
that was considering a very large proposal, and a paper was presented, | :50:18. | :50:22. | |
and the chairman did a quick round up all the directors and said, what | :50:23. | :50:27. | |
are your thoughts? Every single person immediately said, I think | :50:28. | :50:31. | |
this is a really great paper, we should go with that suggestion. | :50:32. | :50:37. | |
Everyone of them. And the chairman, being extraordinarily wise, said, I | :50:38. | :50:42. | |
am extremely uncomfortable that we have got an immediate consensus, so | :50:43. | :50:45. | |
I'm going to postpone this discussion until our next meeting, I | :50:46. | :50:49. | |
want you to go away and generate critical views. That is the wise | :50:50. | :50:56. | |
course of action. Not to be sucked into groupthink. For all those | :50:57. | :51:00. | |
reasons I think that new clause two deserves the support of all those | :51:01. | :51:03. | |
who do not want to replicate the mistakes of the past. | :51:04. | :51:11. | |
Like many others in the chamber, and clearly within the Treasury Select | :51:12. | :51:15. | |
Committee, while I welcome progress, I have serious concerns about this | :51:16. | :51:24. | |
bill and its gradual compromising of the independence of the key | :51:25. | :51:33. | |
regulators, the FCA, and Prudential Regulation Authority. Following the | :51:34. | :51:36. | |
opening remarks, touched upon by many in the House including the | :51:37. | :51:40. | |
Honourable member from East Lothian, I welcome the determination of the | :51:41. | :51:44. | |
government that more oversight is needed in regards to the appointment | :51:45. | :51:49. | |
of the Chief Executive of the FCA by the Chancellor. However I have | :51:50. | :51:53. | |
concerns about the new procedures, is announced. Until the legislation | :51:54. | :51:58. | |
is announced this is very much open for debate and I hope we do so | :51:59. | :52:02. | |
thoroughly. Just as was touched upon by my honourable friend, another | :52:03. | :52:08. | |
consideration would be this. Surely if the appointment is recommended to | :52:09. | :52:13. | |
be put forward as a motion to the House the government could simply | :52:14. | :52:17. | |
whip votes to prove the Chancellor's appointment. Select committees | :52:18. | :52:20. | |
provide substantially more apolitical deliberation of the | :52:21. | :52:25. | |
specialised issues. For this reason, I believe, a direct veto of the | :52:26. | :52:29. | |
appointment needs to be considered. Issues around the Treasury Select | :52:30. | :52:39. | |
Committee approval is even more pertinent following the appointment | :52:40. | :52:42. | |
of Andrew Bailey, something touched on by the right honourable member | :52:43. | :52:49. | |
for Chichester. Prior to his appointment he was the deputy | :52:50. | :52:51. | |
director of the Prudential Regulation Authority. His move | :52:52. | :52:57. | |
between the two regulators at the recommendation of the Chancellor | :52:58. | :52:59. | |
leaves questions as to whether a revolving door may exist. As many in | :53:00. | :53:07. | |
this chamber learned in the wake of the 2008 financial crisis, | :53:08. | :53:12. | |
separation of church and state is of paramount importance when it comes | :53:13. | :53:18. | |
to the banks. I feel the Government is ignoring this critical lesson. | :53:19. | :53:22. | |
One may wonder about the appointment of Mr Bailey's appointment given | :53:23. | :53:26. | |
that his predecessor was allegedly forced a you have the job by the | :53:27. | :53:31. | |
Chancellor, according to commentators, for reportedly being | :53:32. | :53:35. | |
perceived to be too tough on financial institutions. A lighter | :53:36. | :53:41. | |
touch on regulation could mean that selling of Government shares in | :53:42. | :53:46. | |
Lloyds Banking Group and RBS could be less troublesome for the | :53:47. | :53:51. | |
Chancellor. Particularly given the capping of the losses of the | :53:52. | :53:55. | |
mis-selling scandal. The Chancellor stated in the 2016 Budget he expects | :53:56. | :54:00. | |
the Government to be able to sell it share in RBS for ?25 billion. | :54:01. | :54:06. | |
Despite the fact that the Bank arranged ?9.3 billion in high yield | :54:07. | :54:11. | |
energy loans between 2011 and 2014 alone, and its share price currently | :54:12. | :54:16. | |
stands at roughly half of what was paid for it by the taxpayer in 2008. | :54:17. | :54:21. | |
Clearly the Chancellor faces a serious challenge. There are two | :54:22. | :54:23. | |
clause in this particular contained in the Bill as outlined which I | :54:24. | :54:34. | |
believe are particularly detrimental to the maintenance... Part 2 clause | :54:35. | :54:41. | |
18 states the Treasury is required to make recommendations regarding | :54:42. | :54:47. | |
economic policy as it pertained to the regulator at least once a year. | :54:48. | :54:53. | |
Part 1, 13 states the Treasury at any time can make recommendations to | :54:54. | :54:57. | |
the Prudential Regulation Authority regarding economic policy. As it per | :54:58. | :55:01. | |
Ince to the objectives of the PRA. That is the maintenance of stability | :55:02. | :55:07. | |
within the financial sector. These recommendations made by the Treasury | :55:08. | :55:13. | |
are not binding they manifest as increasing the level of political | :55:14. | :55:16. | |
involvement in the function of the regulators which at their inception | :55:17. | :55:21. | |
were intended to be independent of political influence. Given the | :55:22. | :55:28. | |
recent speculation that the FC had bowed to political pressure when it | :55:29. | :55:36. | |
abandoned a probe in 2015, these clauses are concerning to say the | :55:37. | :55:40. | |
least. The particular reference to Part 1 clause 13, the requirement | :55:41. | :55:43. | |
that Treasury make recommendations at least once a year to the PRC | :55:44. | :55:49. | |
creates a greater onus of responsibility on the Treasury the | :55:50. | :55:52. | |
remain aware of the systemic risks in the financial system. I fear that | :55:53. | :55:56. | |
given the track record of this Government, it may well be asleep at | :55:57. | :56:01. | |
the wheel when it comes to management of systemic risks. As I | :56:02. | :56:05. | |
have mentioned previously This Morning chamber, this UK Government | :56:06. | :56:10. | |
has thus far failed to address the source of substantial systemic risks | :56:11. | :56:13. | |
inherent in the financial system and the wider economy, that of leveraged | :56:14. | :56:17. | |
lending to the oil and gas sector, by British banks and US banks active | :56:18. | :56:23. | |
in the UK market. And the slice and dice repackaging of these loans into | :56:24. | :56:28. | |
derivative products, which are sold to investors. Numerous publications | :56:29. | :56:34. | |
have warned for the moment with the stagnation price of oil this | :56:35. | :56:38. | |
structure poses serious risks. With the Financial Times reporting in | :56:39. | :56:42. | |
December 2024, there's a stark parallel with the US property market | :56:43. | :56:47. | |
collapse that heralded the start of the 2008 global financial crisis | :56:48. | :56:53. | |
and... Along the way. There are already signs that the first | :56:54. | :56:57. | |
dominoes may be falling, as default rates on these high yield loans are | :56:58. | :57:03. | |
rising at a startling rate. Wells Fargo said 57% of its loans in its | :57:04. | :57:11. | |
energy portfolio were categorised as at risk of default. Based on these | :57:12. | :57:16. | |
figures 24 billion of which is at risk of default. UBS analysts have | :57:17. | :57:26. | |
put sales notices on Wells Stock. In the United States the Federal | :57:27. | :57:29. | |
Reserve has stepped up its review into lending which could lead to | :57:30. | :57:34. | |
systemic risks. However, the systemic risk involved This Morning | :57:35. | :57:38. | |
lending has been ignored by the Conservative Government here. | :57:39. | :57:41. | |
Political influence on the regulators was a key factor as | :57:42. | :57:47. | |
touched on earlier and the failure of the regime to predict the | :57:48. | :57:51. | |
financial sector and the wider economy to the systemic risk which | :57:52. | :57:59. | |
led to the 2007-08 crisis. This Government has unable to acknowledge | :58:00. | :58:01. | |
systemic risks which is so apparent to so many in the industry today. In | :58:02. | :58:05. | |
relation to the composition of the Court of Directors of the Bank of | :58:06. | :58:09. | |
England, news clause 2, if the Government truly beliefs in one | :58:10. | :58:16. | |
nation Conservatism, new clause 2 should be incorporated. Finally, | :58:17. | :58:20. | |
Madam Deputy Speaker, this Bill has outlined a serious potential to | :58:21. | :58:25. | |
weaken the UK rectory regime and compromise the independence of the | :58:26. | :58:30. | |
regulators, bring us back to a system where banks are seen to be | :58:31. | :58:34. | |
too big to fail. Otherwise known as business as usual. Thank you Madam | :58:35. | :58:36. | |
Deputy Speaker. Thank you Madam Deputy Speaker, I | :58:37. | :58:44. | |
think I will perhaps leave on one side the remarks of the last | :58:45. | :58:49. | |
speaker, because I don't recall him participating in the debate at | :58:50. | :58:54. | |
second reading or at committee or earlier today. I think it doesn't | :58:55. | :58:59. | |
reflect the full view of other parties This Morning House that | :59:00. | :59:04. | |
actually this Bill is a very good Bill. In the words of the Chair of | :59:05. | :59:09. | |
the Treasury Select Committee. But what I would like to do, Madam | :59:10. | :59:14. | |
Deputy Speaker, is respond to some of the points that have been raised | :59:15. | :59:19. | |
in this section of the debate. In particular to put on record how | :59:20. | :59:25. | |
pleased I am that everyone welcomes the Government's new clause 12, | :59:26. | :59:31. | |
which is supplemented by the text of the letter from the Chancellor to | :59:32. | :59:35. | |
the Chair of the Treasury Select Committee, which was sent earlier | :59:36. | :59:40. | |
today and which I read out in my opening remarks. I think this has | :59:41. | :59:46. | |
been an important opportunity to put on record how our amendment | :59:47. | :59:53. | |
recognises the important scrutiny role provided by the Treasury Select | :59:54. | :59:57. | |
Committee and would also put on record the important role that this | :59:58. | :00:04. | |
House has in scrutinising the executive. It is an opportunity | :00:05. | :00:09. | |
again for us to emphasise the importance, the necessity even, of | :00:10. | :00:16. | |
preserving the independence of the FCA chief executive, in terms of | :00:17. | :00:20. | |
their operational role, apart from Government. And the amendment that | :00:21. | :00:25. | |
we have tabled today reaffirms that commitment to continued independence | :00:26. | :00:31. | |
of the FCA. It is absolutely vital that consumers and firms know that | :00:32. | :00:36. | |
regulatory decisions are being taken in an objective and impartial way. | :00:37. | :00:41. | |
The FCA is an operationally independent regulator. It must carry | :00:42. | :00:45. | |
out its functions in line with the framework of objectives and duties | :00:46. | :00:49. | |
established in statute. And the independence of that executive is | :00:50. | :00:53. | |
protected by statute with clear provisions requiring the terms of | :00:54. | :00:57. | |
appointment to be such that the appointee is not subject to the | :00:58. | :01:01. | |
direction of the Treasury or by any other person. And throughout their | :01:02. | :01:11. | |
appointment, the FCA cheer economic is scrutinised to ensure their | :01:12. | :01:14. | |
continued independence. It was notable Madam Deputy Speaker that | :01:15. | :01:18. | |
during the course of this debate nobody was able to point to anything | :01:19. | :01:24. | |
in terms of the allegations that have been made in the press in terms | :01:25. | :01:30. | |
of operational interference. I look forward to hearing the Treasury | :01:31. | :01:33. | |
Select Committee's report, because I though they have done a thorough | :01:34. | :01:37. | |
investigation into this matter. The amendment that we've tabled today | :01:38. | :01:41. | |
ensures that the Treasury Select Committee always has time to | :01:42. | :01:45. | |
scrutinise an appointee before they get their feet under the desk. I | :01:46. | :01:51. | |
have also put on record that once appointed, the legislation is very | :01:52. | :01:57. | |
clear. The Government absolutely cannot dismiss an FCA CEE save in | :01:58. | :02:01. | |
the limited circumstances that are set out in statute. I won't read out | :02:02. | :02:07. | |
again, Madam Deputy Speaker, the schedule 1 ZA to the financial | :02:08. | :02:11. | |
services and markets Act 2000, paragraph 4, but I referred to it in | :02:12. | :02:18. | |
my opens remarks. It applies not only to the CEO but also to the | :02:19. | :02:25. | |
Chair and to the external members as well. In hearing from the right | :02:26. | :02:31. | |
honourable member Chichester in terms of his reaction and his | :02:32. | :02:35. | |
decision to withdraw his new clause 1, he asked a couple of further | :02:36. | :02:42. | |
questions. He asked about whether he could expect that the legislation to | :02:43. | :02:47. | |
outline the five-year term would be in the next session. As he knows, he | :02:48. | :02:55. | |
has our commitment to find an early opportunity to put this into | :02:56. | :03:01. | |
legislation. Indeed, he himself is aware of the strictures that do | :03:02. | :03:07. | |
exist in terms of writing round and getting cabinet agreement. He has | :03:08. | :03:12. | |
that now from the dispatch box. He asked whether the legislation is | :03:13. | :03:15. | |
permanent. That's a very good question to ask. Of course, when we | :03:16. | :03:20. | |
legislate, it is possible that it becomes permanent, but it is also | :03:21. | :03:24. | |
permanent of course for future Government and for future houses of | :03:25. | :03:29. | |
Commons, indeed future Treasury Select Committees to change | :03:30. | :03:32. | |
legislation, so I will make that point. Will the Minister give way? I | :03:33. | :03:38. | |
will on that point. I'm grateful to the more for what she has been | :03:39. | :03:42. | |
saying. The clarification that I'm seeking is that the arrangement, but | :03:43. | :03:47. | |
not the legislation so much, which of course stands or falls like any | :03:48. | :03:54. | |
legislation, the arrangement put in place between the Treasury committee | :03:55. | :03:58. | |
and the Treasury, the Chancellor today and the exchange of letters, | :03:59. | :04:02. | |
will be made permanent. It is intended that that should be a | :04:03. | :04:15. | |
permanent arrangement. Well, as he as the Chancellor says, it is not to | :04:16. | :04:20. | |
ensure permanence, but I can assure him that it is his intention that it | :04:21. | :04:25. | |
remains the case for the length of time that he is able to exert pour | :04:26. | :04:28. | |
and influence over that particular issue. So I hope that answers the | :04:29. | :04:34. | |
question in the spirit in which it is asked. In terms of the points | :04:35. | :04:39. | |
raised by the honourable gentleman from Leeds East, he asked me to | :04:40. | :04:45. | |
clarify that the NAO can look at the bank's success at meeting their | :04:46. | :04:50. | |
Octoberives but not necessarily the desirability of the objectives | :04:51. | :04:53. | |
themselves. Very already said that's exactly what this Bill achieves. The | :04:54. | :04:58. | |
arrangements set out in the Bill have been agreed by the Comptroller | :04:59. | :05:01. | |
and Auditor General and the Governor, and the terms of reference | :05:02. | :05:06. | |
have been made available to the House. The Comptroller and Auditor | :05:07. | :05:11. | |
General is content that the scope of his powers are appropriate and the | :05:12. | :05:15. | |
bank is content they do not go too far. He asked whether the bank | :05:16. | :05:19. | |
should have practitioner representation. The PRA has a | :05:20. | :05:25. | |
practitioner panel which ensures the interests of those are communicated | :05:26. | :05:32. | |
to the PRA. This panel includes representatives of banks, insurers, | :05:33. | :05:34. | |
building societies and credit unions, all of whom widely read his | :05:35. | :05:40. | |
new favourite publication, the City AM. And consumest have an input | :05:41. | :05:45. | |
through the FCA consumer panel, which has a statutory right to make | :05:46. | :05:50. | |
representations to the PRA. The honourable lady from Bishop Auckland | :05:51. | :05:54. | |
asked about the Bank of England and the extent to which it is subject to | :05:55. | :05:58. | |
the FOI Act. To be clear, it is thanks to this Bill that the bank is | :05:59. | :06:05. | |
subject to the FOI Act. There are three specificed exclusions to the | :06:06. | :06:10. | |
Act as it applies to the bank, which as I have explored, explained | :06:11. | :06:13. | |
earlier are entirely sensible. Indeed the Bank of England isn't | :06:14. | :06:17. | |
alone in having particular elements of its work carved out from the Act. | :06:18. | :06:28. | |
Other organisations with specific exclusions include S4/C in Wales, | :06:29. | :06:32. | |
the Competition Commission and the BBC. To her question about the | :06:33. | :06:38. | |
Governor's analysis for supporting selling RBS shares at prices | :06:39. | :06:43. | |
substantially above where shares are trading today, the Governor has | :06:44. | :06:49. | |
explained his analysis is based on confidential information obtained as | :06:50. | :06:53. | |
part of the supervisory responsibilities, where there is a | :06:54. | :06:58. | |
standard exemption in the Freedom of Information Act. The honourable | :06:59. | :07:03. | |
Member for East Lothian, he said the Bill had a lot to be commended. He | :07:04. | :07:08. | |
asked about the range of expertise and perspectives on the court. He | :07:09. | :07:13. | |
raises rt. He raises an interesting philosophical question - in the past | :07:14. | :07:16. | |
the court has been a much larger organisation. Certainly in the views | :07:17. | :07:21. | |
of the Treasury Select Committee, an unwieldy organisation with 19 | :07:22. | :07:23. | |
members, but it should represent the views of the entire UK. All members | :07:24. | :07:27. | |
should consider the whole UK rather than acting as a representative of a | :07:28. | :07:31. | |
particular part of the UK. He seems to have forgotten our exchange at | :07:32. | :07:35. | |
committee in which we talked about the trade union representation of | :07:36. | :07:39. | |
the court. I assured him we have not said anything in the passage of this | :07:40. | :07:43. | |
Bill that would change that post war reality. Reality. Reality. Each each | :07:44. | :07:47. | |
the committees of the Bank of England will have a strong ex-term | :07:48. | :07:50. | |
representation and no external member will be able to serve on more | :07:51. | :07:54. | |
than one of which the policy committees at the same time. This | :07:55. | :07:58. | |
answers some of the questions raised by the Member for Kirkcaldy and | :07:59. | :08:02. | |
Cowdenbeath in terms of group think. By legislating for each to which | :08:03. | :08:08. | |
committees and providing that the statutory duties and can be | :08:09. | :08:13. | |
exercised in no other way we empower the varied perspectives of the | :08:14. | :08:15. | |
external members on each. It adds up to a set of protections | :08:16. | :08:26. | |
for oversight that mitigates the risk of just one view emerging from | :08:27. | :08:29. | |
the court or any other bank's committees. Further to the speech | :08:30. | :08:34. | |
from the honourable gentleman from Carmarthen East, and if he wants to | :08:35. | :08:39. | |
get in touch himself, the bank's regional representation in Wales, | :08:40. | :08:44. | |
his agent, Steve Hakes, and deputy agent Ian Derek, I hope he will take | :08:45. | :08:48. | |
the opportunity to do that. Does he wish to ask further questions? I am | :08:49. | :08:53. | |
grateful to the Minister for giving way. She will have heard the | :08:54. | :08:57. | |
heartfelt concerns of those representatives of Wales, Scotland | :08:58. | :09:00. | |
and Northern Ireland in relation to the accountability back to the | :09:01. | :09:06. | |
devolved governments. Would she at least it to a Treasury report or | :09:07. | :09:10. | |
request the Bank of England to put out a report on how they aim to | :09:11. | :09:14. | |
improve their account ability and relations with devolved governments | :09:15. | :09:18. | |
in Parliament? There are a range of different ways, particularly with | :09:19. | :09:22. | |
membership of the Treasury Select Committee in this house, having a | :09:23. | :09:29. | |
member from Scotland, a range in ways this can happen, we welcome the | :09:30. | :09:33. | |
fact that the very coins we have in our pockets are minted in the great | :09:34. | :09:37. | |
country of Wales. In terms of his question about the Federal Reserve | :09:38. | :09:43. | |
's dual mandate, he identified the Federal Reserve as the example of a | :09:44. | :09:49. | |
bank that adopts a dual mandate. US policymakers judged that right for | :09:50. | :09:54. | |
them. We believe the stability of price is important for anchoring | :09:55. | :09:57. | |
inflation expectations and we are joined by other central banks, | :09:58. | :10:00. | |
including those in Canada, New Zealand and the ECB. I think that I | :10:01. | :10:07. | |
have have the opportunity to respond to a range of issues raised in this | :10:08. | :10:10. | |
party for debate, and I would like to commend the government's new | :10:11. | :10:18. | |
clause to the house and hope it will agree to include that in the bill. | :10:19. | :10:25. | |
The question is that new Clause 12 be read a second time. I think the | :10:26. | :10:36. | |
ayes have it. The question is that the new Clause 12 be added to the | :10:37. | :10:43. | |
bill. I think the ayes have it, the eyes have it. We now come to Clause | :10:44. | :10:46. | |
2. As many of that opinion say aye? | :10:47. | :10:52. | |
Division! Clear the lobby. The question is that the new Clause | :10:53. | :12:27. | |
2 be read a second time. That opinion, say aye. | :12:28. | :19:02. | |
MADAM DEPUTY SPEAKER: Order. The eyes to the right, 246. The noes to | :19:03. | :24:33. | |
the left, 303. Speaker peerk the eyes to the right | :24:34. | :24:46. | |
246, the noes to the left, 303, the noes have it, the noes have it. | :24:47. | :24:53. | |
Unlock. We now come to new clause 9, with which it will be convenient to | :24:54. | :24:56. | |
consider the new clauses and amendments listed on the selection | :24:57. | :25:02. | |
paper. Mr Charles Walker to move. Madam Deputy Speaker, thank you very | :25:03. | :25:06. | |
much. I rise to move new clause 9, which seeks to prevent the | :25:07. | :25:10. | |
restriction or withdrawal of banking services from potentially tens of | :25:11. | :25:14. | |
thousands of people. People that include soldiers and those serving | :25:15. | :25:20. | |
in the armed forces, judges, civil servants, trade unionists, local | :25:21. | :25:23. | |
councillors and their officials, because these people along with | :25:24. | :25:27. | |
their family and associates are deemed to be politically exposed | :25:28. | :25:34. | |
persons for the purposes of the fourth money laundering directive, | :25:35. | :25:41. | |
to be put into UK law. New clause 9 is straightforward in its scope. It | :25:42. | :25:46. | |
seeks to ensure that when exposing the money laundering directive into | :25:47. | :25:50. | |
UK law reasonable regard is given to those parts of the directive that | :25:51. | :25:54. | |
deal with proportionality. New clause 9 makes clear that prior to | :25:55. | :25:59. | |
the directive's enactment the financial services and markets Act | :26:00. | :26:04. | |
2000 is amended so that the Financial Conduct Authority is | :26:05. | :26:08. | |
required to publish clear guidance to the banks, defining what the FCA | :26:09. | :26:13. | |
deems to be proportionate. New clause 9 also makes regulatory | :26:14. | :26:20. | |
provision for peps, who believe they've been treated unreasonably by | :26:21. | :26:25. | |
their banks, to ask that their case is adjudicated by the FCA. Will the | :26:26. | :26:33. | |
honourable gentleman give way? Can I congratulate him for bringing | :26:34. | :26:37. | |
forward this new clause? I understand from topical questions | :26:38. | :26:40. | |
today it is likely to be accepted by the Government, so he's is obviously | :26:41. | :26:45. | |
in the right area at the moment. Does he also, is he also concerned | :26:46. | :26:50. | |
that banks are actually acting in advance of this? There is quite a | :26:51. | :26:54. | |
lot of evidence that they are already gathering information about | :26:55. | :26:58. | |
ordinary law abiding members of the public and using that as an excuse | :26:59. | :27:02. | |
to restrict their banking activities? The honourable gentleman | :27:03. | :27:07. | |
makes a valid point. Banks are derisking at the moment and they are | :27:08. | :27:13. | |
derisking very aggressively. What we need to do is inject proportion alt | :27:14. | :27:18. | |
into their actions. I believe what I'm bringing forward today for this | :27:19. | :27:24. | |
House to decide on will go some way in achieving that. Because what new | :27:25. | :27:31. | |
clause 9 does is it inserts process of adjudication, so where a | :27:32. | :27:36. | |
politically exposed person believes they are being treated unfairly, | :27:37. | :27:39. | |
being denied access to banking services, they can take that | :27:40. | :27:43. | |
concern, that complaint to the FCA and it can adjudicate on that and | :27:44. | :27:50. | |
decide whether the banks are interring the directive | :27:51. | :27:52. | |
overaggressively, and if they are can levy a fine on the bank for | :27:53. | :27:54. | |
doing that. New clause 9 hassing New clause 9 is needed because it is | :27:55. | :28:13. | |
clear that interpreting the money laundering directive banks are | :28:14. | :28:18. | |
making no distinction when determine hag is a politically exposed person | :28:19. | :28:23. | |
from those peps drawn from the hotbeds of Nigeria and the Russian | :28:24. | :28:27. | |
subcontinent and those from developed democracies such as our | :28:28. | :28:32. | |
own with high levels of scrutiny and accountability. May I put on record | :28:33. | :28:36. | |
the thanks of all of enoughs the house for the diligence and the | :28:37. | :28:40. | |
focus and the tenacity of my honourable friend for Broxbourne for | :28:41. | :28:44. | |
bringing this massively important issue to the attention of the | :28:45. | :28:48. | |
Government, and for what we hope will be a satisfactory conclusion | :28:49. | :28:53. | |
today. Does he agree with me that the collateral damage of some of | :28:54. | :28:58. | |
this precipitous action by banks has impacted on people's families, which | :28:59. | :29:04. | |
is therefore having a big impact on their credit worthiness for the | :29:05. | :29:07. | |
whole future? My honourable friend makes a good point. The banks have | :29:08. | :29:11. | |
acted very aggressively in this case. I shall come on to that in a | :29:12. | :29:19. | |
few moments in my #1350e67. Can I also the economics secretary for her | :29:20. | :29:22. | |
time and patience in dealing with this matter? I've been speaking to | :29:23. | :29:26. | |
her about this for four months. On occasions I've got a little | :29:27. | :29:31. | |
overexcited, I admit, and she has always maintained high levels of | :29:32. | :29:35. | |
good humour and patience, so I thank her for that. It is important that's | :29:36. | :29:41. | |
put on the record. Mr Speaker, at the late stage without the | :29:42. | :29:46. | |
intervention of new clause 9, the directive risks blighting the lives | :29:47. | :29:50. | |
of decent people. People working in public life and service, and not | :29:51. | :29:56. | |
just these people but, as my right honourable friend pointed out in his | :29:57. | :30:01. | |
intervention, their partners, their spouses, their children, parents, | :30:02. | :30:04. | |
siblings and in-laws. This is not proportionate. Even more worrying, | :30:05. | :30:10. | |
Mr Speaker, the directive covers the close associates of politically | :30:11. | :30:15. | |
exposed persons. I am aware that one close associate actually is a member | :30:16. | :30:20. | |
of the press lobby and had some problems with an ISA and was subject | :30:21. | :30:26. | |
to close questioning by his bank. When he asked the person at the end | :30:27. | :30:31. | |
of the phone from the bank why are you conducting yourself This Morning | :30:32. | :30:34. | |
way, the response was, because we understand that you are an associate | :30:35. | :30:40. | |
of the Prime Minister. So even the media are caught in this directive | :30:41. | :30:45. | |
or the banks preparing for the introduction of this directive | :30:46. | :30:50. | |
through their derisking. The Financial Action Task Force, whose | :30:51. | :30:53. | |
guidance underpins the directive, and is referred to in the directive | :30:54. | :31:01. | |
repeatedly, states that and I quote, Mr Speaker, for close associates | :31:02. | :31:06. | |
examples include the following types of relationships. I think the House | :31:07. | :31:09. | |
needs to listen carefully to this, because it is quite an odd | :31:10. | :31:15. | |
paragraph. Examples include the following types of relationships: | :31:16. | :31:19. | |
Known sexual partners outside the family unit. EG girlfriends, | :31:20. | :31:24. | |
boyfriends, mistresses. Prominent members of the same political party. | :31:25. | :31:30. | |
Civil organisation. That could be the National Trust. Labour or | :31:31. | :31:36. | |
employee unions as the pep. Business partners or associates, especially | :31:37. | :31:41. | |
those that share beneficial ownership of legal entities with the | :31:42. | :31:45. | |
pep or are otherwise connected. Mr Speaker, my fear is that without | :31:46. | :31:51. | |
clear Government backed FCA guidance as provided for in new clause 9 the | :31:52. | :31:55. | |
banks will continue to draw on the work of the Financial Action Task | :31:56. | :31:59. | |
Force, which goes on the state in paragraph 37 of its 2013 guidance, | :32:00. | :32:04. | |
there should be awareness that middle ranking and more junior | :32:05. | :32:08. | |
official s could act on before of a pep to circumvent controls. These | :32:09. | :32:12. | |
less prominent public function s could be appropriately taken into | :32:13. | :32:16. | |
account as customer risk factors in the framework of the overall | :32:17. | :32:19. | |
assessment of risks. Will my honourable friend give way? I will. | :32:20. | :32:25. | |
I am grateful. The case he is making is so overwhelming, could he tell | :32:26. | :32:29. | |
the House whether he is aware of anyone who is opposed to what he is | :32:30. | :32:34. | |
trying to do? Well, I am sure there will always be people opposed to | :32:35. | :32:39. | |
what I am trying to do, because that is the nature of society. We live in | :32:40. | :32:45. | |
an open society where people are a different point of view on many | :32:46. | :32:51. | |
issues. But actually what the money laundering directive should be about | :32:52. | :32:55. | |
is capturing bad people, not capturing all people, Mr Speaker in | :32:56. | :33:01. | |
its scope. Because if everybody's bad, then it is very difficult to | :33:02. | :33:05. | |
identify who is actually breaking the law. We want to go after the law | :33:06. | :33:11. | |
breakers not people who by accident are described as peps or identified | :33:12. | :33:18. | |
as peps by banks in this country. I am obliged. Does the honourable | :33:19. | :33:25. | |
member share my concern that the rush to implement these actions | :33:26. | :33:31. | |
ahead of the transcription of the legislation indicates a desire by | :33:32. | :33:39. | |
the banks to do what seems to be decisive action to a group of people | :33:40. | :33:44. | |
who are quite easy to target? And actually they'll be less keen to do | :33:45. | :33:49. | |
so for people who are harder to track down? I should say I know the | :33:50. | :33:57. | |
fondness of the right honourable gentleman for East Yorkshire for | :33:58. | :34:01. | |
live music, a fondness that I share, but there are limits. | :34:02. | :34:07. | |
Mr Speaker, I thought it complemented the speech to which | :34:08. | :34:17. | |
honourable member. It was like an opera singing exercising his lungs. | :34:18. | :34:21. | |
LAUGHTER. Banks need to invest their resources, time and energy in going | :34:22. | :34:25. | |
after people who are high risk. Banks know who are high risk. To be | :34:26. | :34:29. | |
perfectly honest whatever people in this country think of their members | :34:30. | :34:34. | |
of Parliament, their trade unionists, their council officers, | :34:35. | :34:37. | |
their council leaders, their Assembly Member, their Scottish | :34:38. | :34:41. | |
Parliament members, these in the main are not bad people in indulging | :34:42. | :34:47. | |
in money laundering. I'm not saying there won't be a bad apple but they | :34:48. | :34:51. | |
don't present the real and current risk. I want the energies of banks | :34:52. | :34:56. | |
not focused on chasing after the good, but as I said a few moments | :34:57. | :35:02. | |
ago, chasing after the very bad. Mr Speaker, as I said, the FATF, | :35:03. | :35:08. | |
Financial Action Task Force, which says even middle ranking people can | :35:09. | :35:15. | |
be involved in money laundering, does basically put everyone, | :35:16. | :35:18. | |
everyone perhaps above the grade of 7 in the Civil Service in the frame. | :35:19. | :35:21. | |
Think of any organisation and you think of people in that | :35:22. | :35:26. | |
Government-backed organisation, trade union, regional organisers, | :35:27. | :35:30. | |
potentially if banks follow the FATF guidance these people could be | :35:31. | :35:33. | |
deemed to be politically exposed persons and have both their banking | :35:34. | :35:37. | |
facility withdrawn or curtailed but those of their families and | :35:38. | :35:41. | |
associates. Mr Speaker, I am going to make progress, because I wasn't | :35:42. | :35:46. | |
planning to speak for so long. Once a pep always a pep, because although | :35:47. | :35:50. | |
article 22 of the directive states that after 12 months have past from | :35:51. | :35:55. | |
the point that a politically exposed person has left office, a bank can | :35:56. | :36:00. | |
decide that that person is no longer a pep. Sounds like good news. | :36:01. | :36:06. | |
However, the article foes on to say, but banks be required to take into | :36:07. | :36:12. | |
account the continuing risk posed by the person and to apply appropriate | :36:13. | :36:17. | |
and risk-sensitive measures until such time as the person is deemed to | :36:18. | :36:23. | |
pose no further risk, specific to politically exposed persons. Mr | :36:24. | :36:27. | |
Speaker, this, or Madam Deputy Speaker, this is the lobster pot | :36:28. | :36:32. | |
from which few will escape, because banks are risk averse, much better | :36:33. | :36:36. | |
to keep someone as a pep indefinitely than take the risk, | :36:37. | :36:40. | |
unless we are obliged to downgrade them to just the status of a normal | :36:41. | :36:44. | |
customer. Madam Deputy Speaker, in short, without the protections and | :36:45. | :36:50. | |
guidance contained in new clause 9, we could see, forget people serving | :36:51. | :36:55. | |
in public life. Let's talk about people who've left public life. | :36:56. | :37:04. | |
Ex-Army officers, ex-judges, ex-training union representatives, | :37:05. | :37:06. | |
volunteers of political parties and former members of Parliament denied | :37:07. | :37:10. | |
the opportunity to serve on charitable and company boards | :37:11. | :37:14. | |
because their presence on those boards would confer the status of | :37:15. | :37:18. | |
politically exposed person on the rest of the board. A state us that | :37:19. | :37:23. | |
is best avoided by individuals not yet stigmatised. And, if conferred, | :37:24. | :37:28. | |
a state us that could lead to a withdrawal of the relevant charity | :37:29. | :37:32. | |
or company's banking services by its bank. This isn't supposition, Madam | :37:33. | :37:36. | |
Deputy Speaker, I'm not making this up, along with the restriction of | :37:37. | :37:40. | |
banking services, the closure of personal accounts, the black bawling | :37:41. | :37:44. | |
of family members, this is happening now. | :37:45. | :37:49. | |
In accepting clause 9 the Government will enshrine that banks have a | :37:50. | :38:00. | |
legal duty to act proportionately. This is the correct thing to do. In | :38:01. | :38:06. | |
conclusion, new clause 9 isn't about protecting politicians. And of | :38:07. | :38:12. | |
course as politicians, we are politically exposed people. Even a | :38:13. | :38:18. | |
PPS in the Treasury has had difficulties with this. But it is | :38:19. | :38:22. | |
not about protect politicians. Although their rights are no less of | :38:23. | :38:28. | |
deserving of respect than anyone else's, it is about protecting the | :38:29. | :38:33. | |
banking and employment rights of the thousands of people whose name | :38:34. | :38:38. | |
appear in the civil service year book and those military personnel | :38:39. | :38:46. | |
that serve our country, and it is about protecting council officials, | :38:47. | :38:49. | |
protecting the rights of trade unionists. New clause 9 not only | :38:50. | :38:55. | |
protects their rights, it protects the rights of their families. | :38:56. | :39:00. | |
Families who had no say in their career choice, but are dragged into | :39:01. | :39:06. | |
the scope of the directive and finally, I do thank the Government | :39:07. | :39:11. | |
for indicating earlier today that it is accepting new clause 9. By doing | :39:12. | :39:15. | |
so, it will reduce the chances of let's say an army officer serving | :39:16. | :39:21. | |
their country, somewhere hot and dangerous, getting a telephone call | :39:22. | :39:26. | |
from his or her spouse, saying darling, why you are being shot at | :39:27. | :39:31. | |
we have had our bank account closed. The Government is doing the right | :39:32. | :39:36. | |
thing and it to be congratulated for doing the right thing today. Thank | :39:37. | :39:46. | |
you. The question is new Laws clause 9 be read a second time. I'm pleased | :39:47. | :39:52. | |
to follow the honourable gentleman, who made an excellent speech on an | :39:53. | :39:58. | |
important subject and showed his characteristic bravery in addressing | :39:59. | :40:03. | |
an issue that many other members wanted to have addressed, but were | :40:04. | :40:08. | |
unenthusiastic to put themselves in the firing line for. The minister | :40:09. | :40:15. | |
said in the debate we had earlier that Edinburgh was happy -- | :40:16. | :40:20. | |
everybody was happy with this bill. I feel now we have come to the | :40:21. | :40:26. | |
section on financial services, she may discover that perhaps we are not | :40:27. | :40:30. | |
quite so happy with this part of the bill. The opposition front bench | :40:31. | :40:40. | |
have put forward amendments 18 to 9 and I wish to speak in support of | :40:41. | :40:46. | |
them. I'm also sympathetic to aemd 10 put forward by the SNP. The | :40:47. | :40:53. | |
problem we have is that getting the senior management regime right is | :40:54. | :40:59. | |
vital to reducing the risk of further irresponsible behaviour in | :41:00. | :41:02. | |
the financial institutions, particularly the banks. We all know | :41:03. | :41:09. | |
the devastating impact which their behaviour had on the rest of the | :41:10. | :41:15. | |
economy and anybody who is in doubt about this should see the film The | :41:16. | :41:21. | |
Big Short, it wonderfully described this episode, albefrom it an | :41:22. | :41:28. | |
American point of view. What we see from the senior manager's regime | :41:29. | :41:34. | |
clauses in this bill I'm sorry to say is a retreat from the sensible | :41:35. | :41:41. | |
legislation that was taken in 2012, following the Parliamentary | :41:42. | :41:45. | |
commission on banking standards. Which recognised that one of the | :41:46. | :41:50. | |
ways of changing behaviour and changing culture is to make those | :41:51. | :41:55. | |
people at the top of the banks accept their full responsibility. | :41:56. | :42:00. | |
I'm afraid the clauses in this Bill, which the Government are putting | :42:01. | :42:08. | |
forward, do no longer do this. It is completely sensible for people to be | :42:09. | :42:11. | |
expected to have the same responsibility for the behaviour of | :42:12. | :42:17. | |
those who work for them, as we see in other institutions on for example | :42:18. | :42:24. | |
health and safety. We have seen a number of arguments for the | :42:25. | :42:29. | |
Government decision to... As it were reverse the reversal of the burden | :42:30. | :42:37. | |
of proof. It is rather... An awkward mouthful. But one of the main | :42:38. | :42:44. | |
arguments which has been put forward is that the regulatory burden of the | :42:45. | :42:51. | |
approach which was legislated for in 2012 is too burdensome and I think | :42:52. | :42:56. | |
this really misses the whole point, which is that we want people to | :42:57. | :43:02. | |
spend more time looking at how to reduce risk, rather than a great | :43:03. | :43:09. | |
deal of time on how to make lots and lots of money irrespective of the | :43:10. | :43:14. | |
risk which they are putting into the economy. Not for themselves. Not on | :43:15. | :43:22. | |
their own account. But which affects all over financial institutions. I | :43:23. | :43:27. | |
attended a seminar and there were senior practitioners there from law | :43:28. | :43:31. | |
firms, from accountancy firms, from some of the big asset managers and | :43:32. | :43:37. | |
they were supportive of the original Parliamentary commission approach. | :43:38. | :43:44. | |
And so I said, you know, my feeling was it was disappointing the | :43:45. | :43:47. | |
Chancellor was going back on this. But that he wasn't just doing it as | :43:48. | :43:52. | |
a whim, he was doing it because he had been lobbied to do it. I asked | :43:53. | :43:58. | |
them why they thought he had been lobbied to do it. Of course, it was | :43:59. | :44:02. | |
the naive question and I had no idea what the answer would be. They all | :44:03. | :44:06. | |
roared with laughter and said, well, it is obvious, it is a way of, to | :44:07. | :44:13. | |
facilitate people making millions of pounds without facing any down side | :44:14. | :44:17. | |
risks. We cannot put ourselves in this situation again. The cost of | :44:18. | :44:25. | |
the bailout in 2008 was ?133 billion. We must take serious think | :44:26. | :44:31. | |
lessons which can be learned and that is why the amendments which | :44:32. | :44:37. | |
have been put forward by my front bench and the SNP are ones which the | :44:38. | :44:41. | |
Government should take seriously and accept. Thank you. I would like to | :44:42. | :44:52. | |
take this opportunity to introduce new clause 10 in my name, aimed at | :44:53. | :44:59. | |
safeguarding the free debt sector and this is a broke amendment. I | :45:00. | :45:02. | |
know she is looking forward to responding to it. There has been a | :45:03. | :45:09. | |
long debate over the fee versus principle in debt management plans. | :45:10. | :45:15. | |
It is not my intention to re-open that debate now, although I'm | :45:16. | :45:19. | |
concerned about free providers. Organisations such as pay plan and | :45:20. | :45:24. | |
Christians against poverty operate the fair share model of free debt | :45:25. | :45:28. | |
management, which cease creditors covering the cost of customer plans | :45:29. | :45:36. | |
on a polluter pace basis. In other words schemes that are free to the | :45:37. | :45:45. | |
debtor. Their facing pressure fro fee-charging firms. In one case it | :45:46. | :45:51. | |
left 16,000 debt management clients unsupported and the customers are | :45:52. | :45:56. | |
being signposted to free providers, but that is the last thing you want | :45:57. | :46:02. | |
to happen when you're caught up in heavy debt, that the person who is | :46:03. | :46:06. | |
advising you disappears and you're having to sit down with new people. | :46:07. | :46:11. | |
The debt management sector is nearing a desperation point and the | :46:12. | :46:16. | |
market is becoming inefficient and consumers are treated badly in many | :46:17. | :46:22. | |
cases. Those fair share operate ors have seen their revenue reduce. As | :46:23. | :46:28. | |
more and more fee-chargers leave the market, we will face a situation | :46:29. | :46:32. | |
where fair share operators are unable to provide economically | :46:33. | :46:37. | |
viable plans. Plainly, we are facing a situation in which condition | :46:38. | :46:41. | |
soupers -- consumers will be charged higher fees and their options will | :46:42. | :46:45. | |
be limited. Again going in the wrong direction. There have been efforts | :46:46. | :46:51. | |
over the course of the last Parliament aimed at safeguarding | :46:52. | :46:54. | |
free debt management provision, mainly on the creation of a | :46:55. | :46:59. | |
voluntary protocol and members have tried to make similar long-term | :47:00. | :47:04. | |
changes, reflecting the cross party nature of the issue. Efforts include | :47:05. | :47:09. | |
those of the debt management working group of which I'm a member and I | :47:10. | :47:16. | |
see the chair there I think poised to speak. Efforts have been aimed at | :47:17. | :47:27. | |
free debt management services. I see such an approach may not be | :47:28. | :47:31. | |
feasible. But this making provision for a tweak to the financial | :47:32. | :47:41. | |
services Act mandating all credit or thes to have consumer free debt | :47:42. | :47:47. | |
plans. Many to accept a reduction in the amount due in exchange for a | :47:48. | :47:51. | |
plan being put in place, but some do not. And this new clause seeks to | :47:52. | :48:01. | |
tackle that. While this does fall short of outlawing fee charging | :48:02. | :48:08. | |
plan, it ensures customers can access free debt plans. This is for | :48:09. | :48:16. | |
needed reform and I'm hopeful it with be implemented without delay. I | :48:17. | :48:22. | |
would lank to thank the minister for her interest and her guidance. Every | :48:23. | :48:28. | |
age has its challenges and it may well be that historians will look | :48:29. | :48:33. | |
back at our era and marvel at the levels of debt. This can arise by | :48:34. | :48:42. | |
misfortune, poor choices or by the actions of others. But it vital the | :48:43. | :48:46. | |
right help is at help to help people out of debt. The FCA can make the | :48:47. | :48:52. | |
rule changes contained in this new clause. I would like to thank the | :48:53. | :48:57. | |
Economic Secretary for her patience and kindness and commend this new | :48:58. | :49:04. | |
clause to her and to the House. Thank you. I'm not rising to support | :49:05. | :49:12. | |
this amendment. While I have sympathy with the member in his aim | :49:13. | :49:20. | |
to keep the free to consumer plans going, I don't feel this is the | :49:21. | :49:23. | |
amendment that will do it. I'm unclear as to the early-morning the | :49:24. | :49:31. | |
fee is being use -- I'm unclear as to the term fee, because it is a | :49:32. | :49:35. | |
voluntary arrangement and I'm concerned about what public benefit | :49:36. | :49:43. | |
will it be. Is this actual lay legislative issue. I do have wider | :49:44. | :49:52. | |
concerns, and I do feel there are too few debt providers giving | :49:53. | :49:57. | |
advice, but I feel the landscape is confusing. Broadly, to introduce a | :49:58. | :50:04. | |
statutory funding management for one debt solution, a debt management | :50:05. | :50:08. | |
plan, I don't feel is the right way forward. There are lots of options | :50:09. | :50:13. | |
available for people in debt, including bankruptcy, debt relief | :50:14. | :50:23. | |
warders, debt plans, consolidation. Many of those plans are not funded | :50:24. | :50:35. | |
sustainably. If paid ?35 for each order. That is not a sustainable | :50:36. | :50:42. | |
solution. What I don't want to see is organisations actually offering | :50:43. | :50:46. | |
plans on the basis of how they're funded, not what what is best for | :50:47. | :50:49. | |
the individual. I think that this amendment could lead to providers | :50:50. | :50:54. | |
doing that. I am sure many wouldn't do that, but it may lead to more | :50:55. | :50:59. | |
providers opting to offer the fair shared solution, because it is | :51:00. | :51:03. | |
statutory funded and they make a loss on every debt relief warder. | :51:04. | :51:07. | |
That is not best for the individual in debt. I think we need a proper | :51:08. | :51:14. | |
review of the landscape of the debt solutions that are around. I do | :51:15. | :51:19. | |
believe that it is too complex and it is not properly costed. I also | :51:20. | :51:25. | |
believe that the providers of the debt solutions have insufficient | :51:26. | :51:30. | |
funding. And as the member referred to, there has been a problem with | :51:31. | :51:33. | |
the debt management plan. In fact the review of the fee charging debt | :51:34. | :51:39. | |
management companies said 60% of their clients were actually put in a | :51:40. | :51:44. | |
worse position by going to a fee-charging debt management | :51:45. | :51:47. | |
company. That cannot be allowed to continue and I'm pleased that the | :51:48. | :51:53. | |
FCA are cleaning up the market. "Concerned what will happen is the | :51:54. | :51:58. | |
people who have come off a debt management plan, having taken that | :51:59. | :52:01. | |
big step to deal with their debts and it is a big step, to face up to | :52:02. | :52:06. | |
the fact that you can't pay your bills is a difficult decision to | :52:07. | :52:09. | |
make, they have taken that step, they have gone to a provider and | :52:10. | :52:15. | |
been told your providers was wasn't providing a good service, find | :52:16. | :52:19. | |
somebody else. I worry they won't actually look around and I hope that | :52:20. | :52:25. | |
the Secretary will look at ways of promoting people going to other | :52:26. | :52:29. | |
providers. I also hope that funding will be available for those other | :52:30. | :52:33. | |
providers as well and that they won't be left in the position of | :52:34. | :52:40. | |
having to pick up a large number of people all at | :52:41. | :52:51. | |
I do have sympathy with the motives behind the amendment but I don't | :52:52. | :52:58. | |
feel that this amendment will some of the main problem, which is that | :52:59. | :53:03. | |
many of the debt solutions and many of the providers of these solutions | :53:04. | :53:09. | |
don't have sufficient funding and that this amendment will focus on | :53:10. | :53:14. | |
one solution and my well skew the market in the wrong way to the | :53:15. | :53:18. | |
advantage of the providers rather than the advantage of the people who | :53:19. | :53:27. | |
need the solution. Madam Deputy Speaker, can I refer to clauses, | :53:28. | :53:35. | |
amendments 1 and 2 in my name and in passing amendments 2 and 9 from the | :53:36. | :53:41. | |
Labour benches. I won't be pressing one and two to a vote should the | :53:42. | :53:47. | |
Labour benches move on 8 and consequential 9, we will be | :53:48. | :53:51. | |
supporting them. Can I say briefly to the Minister, I have said in the | :53:52. | :53:57. | |
previous debate there is much in this Bill to commend itself to us, | :53:58. | :54:02. | |
to the House. There is much that will add to the regulatory regime | :54:03. | :54:07. | |
and its performance in the UK. But the worst part of this proposed | :54:08. | :54:13. | |
legislation, the thing that really takes away as a time bomb inside it | :54:14. | :54:19. | |
is the attempt by Government to shift legislation that it put in | :54:20. | :54:27. | |
place only four years ago on the reverse burden of proof for major | :54:28. | :54:34. | |
financial infractions. Here we come to the nub of it. Legislation was | :54:35. | :54:41. | |
put in place four years ago which identified senior managers in major | :54:42. | :54:44. | |
banking and financial organisations. And if on their watch some serious | :54:45. | :54:50. | |
infraction of regulatory rules was encountered, they would be held | :54:51. | :54:54. | |
responsible automatically. Unless they could prove that they had taken | :54:55. | :55:01. | |
due steps to stop that happening. It was put there with a great deal of | :55:02. | :55:06. | |
public support, and support in this House, because it was the one sure | :55:07. | :55:10. | |
way of ensuring that the financial sector at senior level did not do | :55:11. | :55:18. | |
what it had done all through the 200-08 crisis, of blaming everyone | :55:19. | :55:20. | |
else and saying it wasn't their fault. It made senior managers | :55:21. | :55:27. | |
responsible. Just as senior managers in other organisations in utilities | :55:28. | :55:31. | |
become responsible for a major crisis. Now, why would the | :55:32. | :55:37. | |
Government want to change that before it even got into operation? | :55:38. | :55:44. | |
Which was only this month. The point is that graves t graves the wrong | :55:45. | :55:48. | |
signal -- that gives the wrong signal. You put legislation in place | :55:49. | :55:53. | |
and you see if it works, let's try it, we have a consensus behind it. | :55:54. | :55:57. | |
To put the legislation in place and before it is even in operation to | :55:58. | :56:01. | |
say we are going to pull that, to change, that this from a Chancellor | :56:02. | :56:08. | |
whose constant restrain is he has a long term economic plan. This change | :56:09. | :56:12. | |
sends out all the wrong signals. That's the key issue here. The | :56:13. | :56:18. | |
Minister will say well, we think it was disproportionate. Now that we've | :56:19. | :56:22. | |
widened the number of people caught up in the senior management regime | :56:23. | :56:27. | |
to tens of thousands, it becomes problematic about how we could apply | :56:28. | :56:32. | |
it. I know all the explanations. But I put it to the Minister, by | :56:33. | :56:38. | |
reneging on legislation this Government put in place to great | :56:39. | :56:44. | |
fanfare four years ago we are signalling to the world that we are | :56:45. | :56:47. | |
loosening the regulatory bounds. You may think you are not, but you've | :56:48. | :56:52. | |
sent the wrong signal out. It is like another signal this Government | :56:53. | :56:57. | |
has been sending out. Year after year after year the Chancellor and | :56:58. | :57:01. | |
Treasury Minister got up and told us, we should pay lower taxes. Taxes | :57:02. | :57:07. | |
are bad, keep your own money. Then suddenly we discover hounds of | :57:08. | :57:12. | |
thousands of people are setting up offshore secret bank accounts, the | :57:13. | :57:15. | |
Government gets all holy and says, we didn't mean you to do that. This | :57:16. | :57:20. | |
Government speaks sometimes with two voices. I know individual Ministers | :57:21. | :57:25. | |
are very honest and sincere, but sometimes Ministers don't understand | :57:26. | :57:28. | |
they speak with one voice on taxes, one voice on regulation, and then | :57:29. | :57:34. | |
they do the opposite. It sends out the wrong signal. You cannot go on | :57:35. | :57:38. | |
as a Government blaming other people. You are to blame if you | :57:39. | :57:42. | |
change this rule without putting it into force for a few years to see if | :57:43. | :57:46. | |
it works. That's why we have to keep the existing 2012 legislation as it | :57:47. | :57:51. | |
is until it's been proven otherwise that it doesn't work. Thank you | :57:52. | :57:59. | |
Madam Deputy Speaker. I beg to move new clause 14 and amendments 8 and 9 | :58:00. | :58:04. | |
and 10 which are a consequence upon amendment 8 in my name and that of | :58:05. | :58:08. | |
my right honourable friend and honourable friends. I would like to | :58:09. | :58:14. | |
speak first to our new clause 14 on combatting abusive tax avoidance and | :58:15. | :58:17. | |
then to our amendments on the reverse burden of proof or the | :58:18. | :58:22. | |
presumption of responsibility as I choose to call it regarding senior | :58:23. | :58:25. | |
managers within the banking sector. Fist of all new clause 14. In the | :58:26. | :58:32. | |
wake of the Panama papers leak, which the honourable member for East | :58:33. | :58:36. | |
Lothian just mentioned, Labour tabled new clause 14, combatting | :58:37. | :58:39. | |
abusive tax avoidance. This new clause sets out that combatting | :58:40. | :58:43. | |
abusive tax avoidance should be established as a new regulatory | :58:44. | :58:48. | |
principle for the FCA, and requires that they undertake in consultation | :58:49. | :58:52. | |
with the Treasury an annual review for presentation to the Treasury | :58:53. | :58:56. | |
into abusive tax avoidance. This new clause makes clear that part of this | :58:57. | :59:02. | |
new principle should be measures to ascertain and record beneficial | :59:03. | :59:06. | |
ownership of trusts, using facilities provided by banks with UK | :59:07. | :59:10. | |
holding companies or entities regulated by the Bank of England or | :59:11. | :59:15. | |
the FCA, control of shareholders and ownership of shares and investment | :59:16. | :59:19. | |
arrangements in an overseas territory outside the UK involving | :59:20. | :59:23. | |
UK financial institutions. Now, honourable members will be aware | :59:24. | :59:29. | |
that Labour has published its tax transparency enforcement programme | :59:30. | :59:33. | |
following the Panama papers leak and the release of information thaws of | :59:34. | :59:41. | |
companies listed in the Mossack Fonseca papers have financial | :59:42. | :59:45. | |
services provided by UK banks. Our programme makes clear that Labour | :59:46. | :59:49. | |
will, and I quote, work with banks to provide further information over | :59:50. | :59:52. | |
beneficial ownership for all companies and trusts that they work | :59:53. | :59:57. | |
for. So, Madam Deputy Speaker, this new clause seeks to establish a | :59:58. | :00:02. | |
procedure to enact that. The Government announced a deal on the | :00:03. | :00:06. | |
global exchange of beneficial ownership information last week, | :00:07. | :00:10. | |
something we welcome as an initial step but something which in our view | :00:11. | :00:15. | |
is insufficient. The measures announced by the EU this week are | :00:16. | :00:20. | |
welcome but do not go nearly far enough, because they only require | :00:21. | :00:24. | |
partial reporting. As my honourable friend the Shadow Chancellor said | :00:25. | :00:29. | |
last week, the turnover threshold is far too high, and Labour MEPs in the | :00:30. | :00:34. | |
European Parliament will be doing the right thing in pushing to get | :00:35. | :00:38. | |
that figure further reduced so that it is still more difficult for large | :00:39. | :00:42. | |
corporations to dodge paying their fair share of tax. Banks need to | :00:43. | :00:47. | |
reveal the beneficial ownership of companies and trusts they work with. | :00:48. | :00:52. | |
That means establishing a record of ownership of companies and trusts | :00:53. | :00:55. | |
supported by UK banks, whether the Europeans are resident in the UK or | :00:56. | :01:03. | |
not. We must ensure that Crown dependencies and overseas territory | :01:04. | :01:09. | |
enforce stricter standards, but where UK banks is involved it is | :01:10. | :01:15. | |
right a record is maintained of the company beneficial owners they | :01:16. | :01:22. | |
advise. Now, the tax experts have written that Jersey, grncy and the | :01:23. | :01:29. | |
Cayman Islands are, to quote, cock whom. They must have registers of | :01:30. | :01:38. | |
beneficial ownership, even for the use of UK enforcement agencies. The | :01:39. | :01:41. | |
shadow chairman said in response it fails to do anything to tackle the | :01:42. | :01:47. | |
tax havens in British overseas territories. Failure to take | :01:48. | :01:53. | |
responsibility for these undermines the effectiveness of this agreement. | :01:54. | :01:57. | |
Similarly, Madam Deputy Speaker, we are aware that the FCA wrote to | :01:58. | :02:03. | |
banks urging them to declare their links to Mossack Fonseca by 15th | :02:04. | :02:08. | |
April. We believe the FCA's call on UK financial institutions to review | :02:09. | :02:14. | |
links with Mossack Fonseca is also welcome, but the regulator should | :02:15. | :02:18. | |
recognise the need for complete transparency to retain public | :02:19. | :02:23. | |
confidence. The FCA shoo-in our view seek full disclosure and act without | :02:24. | :02:28. | |
delay. The slow drip, drip responses of the Prime Minister's office over | :02:29. | :02:33. | |
recent weeks have only served to fuel public concern and have, with | :02:34. | :02:39. | |
respect, been very much a lesson in how to unintentionally raise | :02:40. | :02:43. | |
suspicion. The FCA should publish which financial institutions it has | :02:44. | :02:46. | |
written to and why, what information it has asked them to provide, and | :02:47. | :02:50. | |
what action it will take following now that the 15th April deadline has | :02:51. | :02:57. | |
passed. Importantly, it cannot allow banks and their subsidiaries to | :02:58. | :03:01. | |
conduct an open ended internal investigation but must establish an | :03:02. | :03:06. | |
early deadline to disclose all information on their relations with | :03:07. | :03:11. | |
Mossack Fonseca so the regulator can take all necessary action. | :03:12. | :03:15. | |
Campaigners, Global Witness, responded by saying, these are | :03:16. | :03:19. | |
welcome first steps, but they were concerned that in their words, UK | :03:20. | :03:24. | |
authorities were missing the wider points. Mossack Fonseca is no bad | :03:25. | :03:30. | |
apple, it is just a smaller part of the much deeper problem. So, Madam | :03:31. | :03:33. | |
Deputy Speaker, that is why it is necessary that we have a clear | :03:34. | :03:37. | |
direction of travel to record beneficial ownership of trusts | :03:38. | :03:41. | |
services by UK banks, as we are seeking to do with this new clause. | :03:42. | :03:47. | |
So, given the widespread concerns of tax avoidance, the British public | :03:48. | :03:52. | |
who bailed out the country's banking sector deserve to know the facts | :03:53. | :03:56. | |
regarding the role UK banks have in this unfolding story. So with new | :03:57. | :04:01. | |
clause 14, Labour has made a positive and practical proposal to | :04:02. | :04:06. | |
take steps to increase tax transparency and publicly available | :04:07. | :04:09. | |
information on the beneficial owners of companies and trusts the | :04:10. | :04:13. | |
registered in tax havens. And now, Madam Deputy Speaker, I want to turn | :04:14. | :04:19. | |
to the remainder of the amendments. As set out at second reading and in | :04:20. | :04:23. | |
our committee stage amendments, Labour's position was made very | :04:24. | :04:29. | |
clear. Removing the reverse burden of proof, removing the presumption | :04:30. | :04:33. | |
of responsibility is unreasonable, unwise and, I'm sorry to say, risky. | :04:34. | :04:38. | |
We continue to support the legislation agreed by the same | :04:39. | :04:44. | |
Chancellor and in both houses as recently as 2013, in the financial | :04:45. | :04:49. | |
services banking reform Act. That is why we've retabled our amendments in | :04:50. | :04:53. | |
relation to keeping the presumption of responsibility. And it shouldn't | :04:54. | :04:58. | |
be forgotten, Madam Deputy Speaker, that this measure was a key | :04:59. | :05:02. | |
recommendation of the Parliamentary Commission on Banking Standards who | :05:03. | :05:05. | |
said that it would make sure that those who should have prevented | :05:06. | :05:08. | |
serious Prudential and conduct failures would no longer be able to | :05:09. | :05:13. | |
walk away simply because of the difficulty of proving individual | :05:14. | :05:18. | |
culpability in the context of complex organisations. The | :05:19. | :05:22. | |
presumption of responsibility as currently set out in legislation | :05:23. | :05:25. | |
applies to senior managers. It means that to avoid being found guilty of | :05:26. | :05:30. | |
misconduct when there has been misconduct in an area tore which | :05:31. | :05:33. | |
they are responsible, they'll have to prove they took reasonable steps | :05:34. | :05:38. | |
to prevent that contravention taking place. This Bill removes that onus | :05:39. | :05:47. | |
on senior bankers. That onus is entirely reasonable, entirely | :05:48. | :05:50. | |
proportionate, and as very bitter experience tells the British people, | :05:51. | :05:54. | |
entirely necessary. Misconduct and misdemeanors in the financial | :05:55. | :05:58. | |
services are not merely a tale from history. In 2015, the FCA had to | :05:59. | :06:04. | |
final firms more than ?900 million. There was also the LIBOR scandal, | :06:05. | :06:08. | |
foreign exchange fines and the mis-selling of PPI to the value of | :06:09. | :06:14. | |
up to ?33 billion. The presumption of responsibility is so reasonable | :06:15. | :06:19. | |
and so necessary that the policy was introduced with cross-party support. | :06:20. | :06:23. | |
That cross-party support should not be forgotten. The 2013 Act applied | :06:24. | :06:28. | |
the presumption of responsibility through the senior managers and | :06:29. | :06:33. | |
certification regime to all authorised persons. Today's Bill | :06:34. | :06:39. | |
extends that regime to a wide range of businesses but has watered down | :06:40. | :06:43. | |
the presumption of responsibility to a mere duty of responsibilitiment | :06:44. | :06:47. | |
the vast majority of people working in the financial sector are not and | :06:48. | :06:50. | |
are not affected by the existing legislation as it stands and would | :06:51. | :06:54. | |
remain unaffected should our amendment pass. That is why the | :06:55. | :06:58. | |
legislation was passed by the members opposite in the first place. | :06:59. | :07:04. | |
In December 2013, when speaking of the stricter legislation being | :07:05. | :07:07. | |
introduced by the Government, including the reverse burden of | :07:08. | :07:11. | |
proof, the then Economic Secretary to the Treasury, the right | :07:12. | :07:16. | |
honourable member for Bromsgrove, told Parliament that, in his words, | :07:17. | :07:19. | |
the introduction of this offence means that in future those who've | :07:20. | :07:24. | |
been, who bring down their bank by making thoroughly unreasonable | :07:25. | :07:27. | |
decisions can be held accountable for their actions. Senior managers | :07:28. | :07:30. | |
would be liable if they take a decision that leads to the failure | :07:31. | :07:35. | |
of the bank. The maximum sentence for the new offence reflects the | :07:36. | :07:38. | |
seriousness that the Government and society more broadly placed on | :07:39. | :07:41. | |
ensuring that our financial institutions are manage inside a way | :07:42. | :07:45. | |
that does not recklessly endanger the economy or the public purse. On | :07:46. | :07:51. | |
that I do agree with the right honourable member for Bromsgrove, | :07:52. | :07:53. | |
who is completely right on this occasion. It is a shame there's been | :07:54. | :07:59. | |
a change in portion and the Chair of the Treasury Select Committee said: | :08:00. | :08:11. | |
Other campaigners have expressed their support. Including Martin Wolf | :08:12. | :08:19. | |
of financial times. We have retabled this amendment to state our | :08:20. | :08:23. | |
opposition to this unwelcome, unnecessary and risky change. The | :08:24. | :08:28. | |
legislation was introduced by the Chancellor in 2013 and members of | :08:29. | :08:31. | |
the House should not forget it was due to come into force in March this | :08:32. | :08:37. | |
year. It is yet to be even tested as the member for East Lothian has | :08:38. | :08:45. | |
said. Now is not to make this concession to bankers. The | :08:46. | :08:50. | |
announcement of the settlement, including the departure of Martin | :08:51. | :08:55. | |
Weekly from the FSA, the scrapping of the review into banking culture | :08:56. | :09:01. | |
and the discovery that UK banks and crown dependent territories are a at | :09:02. | :09:08. | |
the heart of tax haven scandal means this proposal to remove the | :09:09. | :09:10. | |
presumption of responsibility is the wrong proposal at the wrong time and | :09:11. | :09:15. | |
we will urge members to support our amendments N relation to new clause | :09:16. | :09:21. | |
10, tabled by the member for South west Devon, we recognise the concern | :09:22. | :09:29. | |
about fee charges in the debt management sector, who often charge | :09:30. | :09:34. | |
large amounts and can add to problems. In the scenario proposed, | :09:35. | :09:44. | |
instead of charging customers, the companies would receive income from | :09:45. | :09:53. | |
a levy. How it is not clear how this helps consumers specifically. These | :09:54. | :09:56. | |
rules could bind some commercial organisations to play fees to other | :09:57. | :10:01. | |
ones. There are some serious competition issues here and I'm | :10:02. | :10:05. | |
aware that the FCA have concerns about this point too and there are | :10:06. | :10:10. | |
questions to ask about how the creditors set the level of those | :10:11. | :10:17. | |
fees. It wouldn't stop companies charging consumers in addition to | :10:18. | :10:23. | |
the the fee, it could lead to commercial providers advising people | :10:24. | :10:26. | |
on the basis of their creditors, not on their actual needs. While the | :10:27. | :10:34. | |
amendment can be presented as a way of killing fee charging, it may | :10:35. | :10:39. | |
result in a lifeline being thrown to this sector and critics may well ask | :10:40. | :10:43. | |
why the Government should prop up this market just at the point that | :10:44. | :10:48. | |
the FCA is cheaping it up -- cleaning it up. And it introduces a | :10:49. | :10:54. | |
funding mechanism for one debt solution, debt management plans, | :10:55. | :10:58. | |
when there are many options available for people, including | :10:59. | :11:06. | |
bankruptcy, debt consolidation and individual voluntary arrangements. | :11:07. | :11:11. | |
Only about one third of those people seeking debt advice are provided | :11:12. | :11:18. | |
with a debt management plan. While we welcome the debate, it is | :11:19. | :11:24. | |
necessary to consider how we meet the need of all people with debt | :11:25. | :11:30. | |
problem and we don't support the new clause and finally new clause 9 in | :11:31. | :11:36. | |
relation to money laundering in the name of the member for Brox born, | :11:37. | :11:46. | |
I'm aware this is an issue on concern. The rules at the moment | :11:47. | :11:55. | |
require banks and businesses to carry out enhanced due diligence on | :11:56. | :12:00. | |
all politically exposed persons. That is persons entrusted with a | :12:01. | :12:05. | |
public function. If the transposition of the EU directive | :12:06. | :12:11. | |
into domestic legislation is mishandled, also a wide range of | :12:12. | :12:16. | |
other people could be affected and it could affect tens of thousands of | :12:17. | :12:23. | |
people including civil servants, city workers, and even the families | :12:24. | :12:29. | |
of armed forces officers serving our country abroad. The EU's fourth | :12:30. | :12:35. | |
money laundering directive will need to be transposed into UK law as has | :12:36. | :12:40. | |
been mentioned within two years and it is necessary that we get this | :12:41. | :12:46. | |
right to ensure that the safe guards proposed to prevent money laundering | :12:47. | :12:53. | |
and the provisions governing the register of beneficial ownership of | :12:54. | :12:57. | |
companies and don't get in the way of the individuals use of their bank | :12:58. | :13:02. | |
accounts, securing mortgages or supporting charities. We do believe | :13:03. | :13:06. | |
this is an important issue and we are grateful to the member for all | :13:07. | :13:11. | |
the hard work he has done on explaining the Po pen shall risks -- | :13:12. | :13:26. | |
potential risks. Thank you. Can I start with new clause 9? Which has | :13:27. | :13:33. | |
been tabled by the member for Brox born and colleagues which addresses | :13:34. | :13:38. | |
the issue of politically exposed persons. My colleague is an expert | :13:39. | :13:44. | |
not only in speaking, but in Parliamentary procedure and I | :13:45. | :13:48. | |
commend him for the use of both. The Chancellor and I are very concerned | :13:49. | :13:53. | |
about this issue as he knows and we are grateful to the member for his | :13:54. | :14:01. | |
work in collating examples he has heard from colleagues and from the | :14:02. | :14:06. | |
banking sector. It is right that the know your customer requirements | :14:07. | :14:09. | |
should be tailored to the risk posed. I would like to reassure the | :14:10. | :14:14. | |
House that we are on the side of colleagues in this regard. I | :14:15. | :14:19. | |
therefore welcome this amendment and a strong message it sends to banks | :14:20. | :14:27. | |
as they implement these rules. And the clause itself addresses guidance | :14:28. | :14:31. | |
and guidance will help the banks to take an effective proportionate and | :14:32. | :14:35. | |
commensurate approach to politically exposed persons. The Government | :14:36. | :14:40. | |
intends to implement new money laundering regulations by June next | :14:41. | :14:43. | |
year at the latest. And this amendment will come into force at | :14:44. | :14:47. | |
that time and we will be consulting on the new regulations this year. As | :14:48. | :14:51. | |
well as accepting this amendment, I would like to take the opportunity | :14:52. | :14:55. | |
to update the House on other action we have taken to resolve these | :14:56. | :15:02. | |
issues on behalf of members. Since the member for Brox born has his | :15:03. | :15:07. | |
adjournment debate. We had a meeting with the banks that I organised with | :15:08. | :15:14. | |
the Home Office's Security Minister and the Chancellor wrote to the | :15:15. | :15:18. | |
banks on 23rd March, to explain our views. We will continue to work with | :15:19. | :15:23. | |
the banks with the FCA and others to ensure that a sensible proportionate | :15:24. | :15:27. | |
approach prevails. I have also written not once but twice with a | :15:28. | :15:33. | |
dear colleague letter to all members and peers giving colleagues the name | :15:34. | :15:42. | |
of a senior designated person to contact at each major bank should | :15:43. | :15:47. | |
they encounter problems. So I would like to thank the member for | :15:48. | :15:50. | |
bringing this issue to the Noor of the House -- floor of the House so I | :15:51. | :15:56. | |
can give this reassurance of the attention the Government is paying | :15:57. | :16:03. | |
to this challenge. Turning to the amendment new clause 10, tabled by | :16:04. | :16:10. | |
the member for South West Devon, I would like to thank him for the | :16:11. | :16:14. | |
collaborative approach he has taken in tabling the amendment and his | :16:15. | :16:19. | |
commitment and that of his all party group to support households in | :16:20. | :16:24. | |
problem debt. The Government shares his concerns about the potential | :16:25. | :16:29. | |
detriment to consumers participating in some debt management plans and I | :16:30. | :16:33. | |
recognise the importance of protecting this group of consumers. | :16:34. | :16:38. | |
The Government's focus has been on reforming the regulation of the | :16:39. | :16:41. | |
sector to ensure that financial services firms are on the side of | :16:42. | :16:45. | |
people who work hard, do the right thing, get on in life. | :16:46. | :16:49. | |
Responsibility for regulating debt management firms like all other | :16:50. | :16:54. | |
consumer credit firms transferred from the office toff fair trading to | :16:55. | :17:09. | |
the financial authority. The Debt management firms were in the first | :17:10. | :17:15. | |
group of firm to require full authorisation and the FC is | :17:16. | :17:21. | |
scrutinising firms. Firms which don't meet the conditions will not | :17:22. | :17:25. | |
be able to continue to offer debt management plans. Removing | :17:26. | :17:29. | |
noncompliant firms from the market will reduce the risk to harm to | :17:30. | :17:34. | |
consumers and ensure that consumers have access to sustainable repayment | :17:35. | :17:44. | |
plans. The honourable lady raised the question of the handover of | :17:45. | :17:49. | |
clients with debt management plans, whose firms have not been authorised | :17:50. | :17:54. | |
by the FCA. That is something that the FCA is paying close attention to | :17:55. | :17:59. | |
try and ensure that there is a hand off which has regard not only to | :18:00. | :18:09. | |
data protection but the position of someone who has been in a plan and | :18:10. | :18:13. | |
trying to find a better alternative for them. Turning to the issue | :18:14. | :18:18. | |
raised by the amendment, how debt management plans are funded, | :18:19. | :18:22. | |
charities like step change and Christians against poverty already | :18:23. | :18:26. | |
negotiate voluntary funding agreements through the fair share | :18:27. | :18:31. | |
model. Introducing changes to this such as mandatory contributions has | :18:32. | :18:37. | |
the potential to have unintended consequences, disrupting what is a | :18:38. | :18:43. | |
successful arrangement and setting this level of this share is not | :18:44. | :18:47. | |
supported by the not for profit sector. Similarly not for profit | :18:48. | :18:54. | |
providers that are concerned that formalising fair share may change | :18:55. | :18:58. | |
charity's relationships and compromise their independence and | :18:59. | :19:03. | |
their ability to be seen as impartial is essential to | :19:04. | :19:07. | |
encouraging people to come forward for support. With the authorisation | :19:08. | :19:12. | |
process ongoing and the changes in the market, now is not the right | :19:13. | :19:17. | |
time to introduce changes to way plans are funded. Any consideration | :19:18. | :19:22. | |
of changes should be taken when the shape of the market is known. The | :19:23. | :19:26. | |
best setting for looking at the full landscape of debt advice will be in | :19:27. | :19:33. | |
the context of public financial guidance review which includes a | :19:34. | :19:37. | |
commitment to monitor the process. If necessary if funding arrangements | :19:38. | :19:41. | |
will be reviewed and the government may consider broadening the funding | :19:42. | :19:46. | |
base to include other sectors to ensure consumers get the help they | :19:47. | :19:52. | |
need. I trust this assures the member that the government continues | :19:53. | :19:55. | |
to consider it a priority to help those facing problem debt and he | :19:56. | :20:00. | |
will not put his amendment to the House this afternoon. Turning to the | :20:01. | :20:05. | |
reverse burden of proof and the senior managers resume in amendments | :20:06. | :20:19. | |
one, two, eight and ten. We reject both these sets of amendments, | :20:20. | :20:25. | |
because the senior management with a duty of responsibility will be an | :20:26. | :20:29. | |
effective tool for holding senior managers to account. The duty of | :20:30. | :20:35. | |
responsibility will extend to all senior managers, the discredited | :20:36. | :20:38. | |
approved persons regime will be replaced. Firms must identify what | :20:39. | :20:46. | |
their managers are response yob for. -- responsible for. They will not be | :20:47. | :20:51. | |
able to wriggle off the hook. The reverse burden of proof is not | :20:52. | :20:55. | |
needed to deliver what we want to deliver - a culture change. To quote | :20:56. | :21:03. | |
Lord Turnbull, he said in future senior managers will have to take | :21:04. | :21:07. | |
responsibility for what goes on in the teams for which they're | :21:08. | :21:10. | |
responsible and for the actions of the people they have appointed and | :21:11. | :21:17. | |
given accreditation. I still fail to see why the reverse burden of proof | :21:18. | :21:21. | |
is the only way to get people to understand that. The proposal in the | :21:22. | :21:32. | |
bill is superior. As the building societies association said in Nair | :21:33. | :21:36. | |
written evidence to the -- in their written evidence, the lack of | :21:37. | :21:40. | |
accountability is the result of the failure of allocate responsibilities | :21:41. | :21:44. | |
in firms. Because is in will be addressed be I the new strengthening | :21:45. | :21:50. | |
accountability in banking rules, through responsibility maps, | :21:51. | :21:54. | |
individual statements of individual, handover arrangements, the reverse | :21:55. | :21:59. | |
burden of proof is unfair and redundant. Not my words but the | :22:00. | :22:03. | |
words of Building Societies Association. | :22:04. | :22:09. | |
Today was a good debate is about what happens when goes wrong. And | :22:10. | :22:16. | |
refers Ali reverse burden of proof, the senior manager responsible for | :22:17. | :22:19. | |
the area of the firmware that which occurred would have too proved they | :22:20. | :22:22. | |
have taken reasonable steps to prevent it. This bill would impose | :22:23. | :22:28. | |
statutory responsibility and senior managers. They would have to take | :22:29. | :22:35. | |
steps to prevent breaches of regulations. When such a breach | :22:36. | :22:38. | |
occurred, it would fall to the regulators to show the responsible | :22:39. | :22:42. | |
senior manager had failed to take such steps. The duty will be | :22:43. | :22:46. | |
extended with the senior managers and certification regime to senior | :22:47. | :22:50. | |
managers in all authorised financial services firms, ensuring they are | :22:51. | :22:55. | |
held to the same high standards as those in banks. Contrary to the | :22:56. | :23:02. | |
allegations of the member for Leeds East, the bill is in no way soft on | :23:03. | :23:07. | |
bankers. A senior manager can be found guilty of misconduct if a | :23:08. | :23:10. | |
breach occurs in the area for which they are responsible and they did | :23:11. | :23:13. | |
not take reasonable steps to prevent it, whether they were aware of the | :23:14. | :23:21. | |
contravention or not. He quoted from a previous economic Secretary, my | :23:22. | :23:24. | |
colleague for Bromsgrove, and I think he might be confusing the | :23:25. | :23:31. | |
reverse burden of proof would be criminal offence of recklessness, | :23:32. | :23:34. | |
causing a bank to fail. I can assure him and the house that this criminal | :23:35. | :23:38. | |
offence, with a possible seven-year sentence attached, came into effect | :23:39. | :23:47. | |
in March. Turning to the new Clause 14, which seeks to give the FCA and | :23:48. | :23:54. | |
PRA a statutory duty to have regard in combating tax avoidance and | :23:55. | :24:00. | |
report to the Treasury, I welcome the opportunity to set out the | :24:01. | :24:04. | |
measures this government has done, far more than any previous | :24:05. | :24:08. | |
government, to tackle tax evasion, tax avoidance and aggressive tax | :24:09. | :24:13. | |
planning. It has become a world leader in tax transparency. However, | :24:14. | :24:19. | |
as the UK tax authority is HMRC, rather than the FCA, or PRA, they | :24:20. | :24:25. | |
are the ones responsible for ensuring that individuals pay the | :24:26. | :24:31. | |
taxes that they owe. Last week, we set off a far more effective package | :24:32. | :24:36. | |
of proposals to tackle the problem of tax evasion and avoidance, | :24:37. | :24:38. | |
ensuring a multi-agency approach, both by strengthening HMRC and | :24:39. | :24:46. | |
involving relevant bodies like the FCA. It is to give the body is the | :24:47. | :24:55. | |
ability to do their job, whether by changing tax laws or providing | :24:56. | :24:57. | |
additional funding to strengthen capability. I could go on in terms | :24:58. | :25:02. | |
of all of the measures, I do welcome the opportunity, and if you want to | :25:03. | :25:07. | |
hear more, in the July 2015 budget, we confirmed an extra 800 million | :25:08. | :25:12. | |
investment to fund additional work to tackle evasion and noncompliance. | :25:13. | :25:18. | |
HMRC's specialist offshore unit is investigating more than 1000 cases | :25:19. | :25:22. | |
of offshore ovation around the world, with more than 90 individuals | :25:23. | :25:27. | |
subject to criminal investigation, even before last week, HMRC had | :25:28. | :25:32. | |
already received a great deal of information on offshore companies, | :25:33. | :25:34. | |
including in Panama and including Mowsack Fonseca. It comes from a | :25:35. | :25:41. | |
wide range of sources and is the subject of intense investigation. We | :25:42. | :25:45. | |
are going further, by providing new funding of up to ?10 million for an | :25:46. | :25:49. | |
operationally independent cross agency task force. The task force | :25:50. | :25:53. | |
will include analysts, compliance specialists, investigators from the | :25:54. | :26:01. | |
HMRC, the National Crime Agency, the Serious Fraud Office and the | :26:02. | :26:03. | |
Financial Conduct Authority. It will have full independence and report to | :26:04. | :26:06. | |
my honourable friend, the Chancellor and the Home Secretary. Of course, | :26:07. | :26:14. | |
the FCA has a role to play. The FCA's 2016-17 business plan states | :26:15. | :26:17. | |
that the fight against financial crime and money laundering is one of | :26:18. | :26:20. | |
their priorities. Their rules require firms to have affected | :26:21. | :26:24. | |
systems and controls to prevent the risk that they might be used to | :26:25. | :26:28. | |
further financial crimes. That is why the FCA has written to financial | :26:29. | :26:32. | |
firms asking them to declare their links to Mowsack Fonseca. If the FCA | :26:33. | :26:37. | |
was to find any evidence that fans have been breaking the rules, it | :26:38. | :26:41. | |
already has strong powers to take action. However, it is HMRC that is | :26:42. | :26:44. | |
ultimately responsible for investigating and prosecuting | :26:45. | :26:49. | |
offences associated with tax evasion. Finally, with regard to | :26:50. | :26:54. | |
trusts, we believe we have secured a sensible way forward by ensuring | :26:55. | :26:58. | |
that trusts that generate a tax consequence in the UK may be | :26:59. | :26:59. | |
required to report their beneficial required to report their beneficial | :27:00. | :27:04. | |
ownership information to HMRC by focusing on such trusts, and we are | :27:05. | :27:07. | |
focusing on those where there is a higher risk of money laundering or | :27:08. | :27:12. | |
tax evasion, which arise when trusts migrate or generate income gains, | :27:13. | :27:18. | |
and minimising burdens on the vast majority of perfectly ordinary, | :27:19. | :27:20. | |
legitimate trusts. While I appreciate the spirit with which | :27:21. | :27:25. | |
this amendment has been tabled, I do not believe it would be appropriate | :27:26. | :27:29. | |
to change the role of the FCA or the PRA, and I would urge the honourable | :27:30. | :27:36. | |
member to withdraw his amendment, otherwise the Government will have | :27:37. | :27:41. | |
to vote against it. The question is that new Clause 9 be read a second | :27:42. | :27:46. | |
time. As many of that opinion, say aye. The contrary, no? I think the | :27:47. | :27:53. | |
ayes have it, the ayes have it. The question that Clause 9 be added to | :27:54. | :28:01. | |
the bill, of that opinion, say aye, of the country, no, the ayes have | :28:02. | :28:05. | |
it. New Clause 14, Richard Burden to move formally? The question is that | :28:06. | :28:11. | |
new Clause 14 be read a second time. As many of that opinion, say aye. | :28:12. | :28:18. | |
The contrary, no? Division! Clear the lobby. | :28:19. | :29:33. | |
That new Clause 14 be read a second time. Of that opinion, aye, to the | :29:34. | :29:39. | |
contrary, no. The ayes have it. Order, order! The ayes to the right, | :29:40. | :40:54. | |
245. The noes to the left, 299. The ayes to the right, 245, the noes to | :40:55. | :41:01. | |
the left, 299. The noes have it, the noes habits. We now come to | :41:02. | :41:05. | |
Amendment eight, Richard to move formally. The question is that the | :41:06. | :41:10. | |
amendment be made. As many as are of the opinion, say "aye". To the | :41:11. | :41:16. | |
contrary, "No". Division. Clear the lobby. | :41:17. | :43:37. | |
The question is that me amendment be made. As many as are of the opinion, | :43:38. | :43:45. | |
say "aye". To the contrary, "No". Tell us for the noes. Thank you very | :43:46. | :43:48. | |
much. Order. The ayes to the right, 246. | :43:49. | :49:16. | |
The noes to the left, 300. The ayes to the right, 246. The noes | :49:17. | :53:03. | |
to the left, 300. The noes have it. Unlock. We now come to Amendment 4, | :53:04. | :53:12. | |
with which it would be convenient to consider Amendment 5. Jonathan | :53:13. | :53:19. | |
Edwards to move Amendment 4? I am delighted we have got to this | :53:20. | :53:22. | |
grouping, as I feared this stage of the bill would have been concluded | :53:23. | :53:26. | |
prematurely. I have only a very short speech for the house, but, | :53:27. | :53:31. | |
luckily, this is a rather straightforward and uncomplicated | :53:32. | :53:36. | |
matter. If I had known I had more time than I assumed, which is a very | :53:37. | :53:42. | |
rare privilege in this place, I would have made a far lengthier | :53:43. | :53:47. | |
speech, quoting extensively from the masterpiece History Of Wales by the | :53:48. | :53:59. | |
late, great John Davies. The great historian, a member of the Labour | :54:00. | :54:06. | |
Party and of Plaid Cymru, Gwyneth Williams, tied to my constituency. | :54:07. | :54:11. | |
I'd like to speak to the amendments, 4 and 5, which I am delighted has | :54:12. | :54:18. | |
been supported by the Labour front bench. I was surprised when I was | :54:19. | :54:22. | |
eating my complex to receive an e-mail from the Western mail | :54:23. | :54:26. | |
correspondent, citing a press release by the Shadow Secretary of | :54:27. | :54:29. | |
State for Wales saying that they supported my amendments. It was a | :54:30. | :54:36. | |
very good moment, maybe the of a beautiful relationship. I fear I | :54:37. | :54:39. | |
might be doing my best to scupper those endeavours after the election. | :54:40. | :54:46. | |
I aim to press Amendment 4 to a vote, with your permission. I have | :54:47. | :54:51. | |
spoken on this issue before in this chamber, I would like to reiterate a | :54:52. | :54:56. | |
view points I made during the second reading. The amendment deals with | :54:57. | :55:01. | |
the historic anomaly that prohibits Wales from producing its own | :55:02. | :55:04. | |
distinctive banknotes, while both Scotland and Northern Ireland are | :55:05. | :55:09. | |
allowed to do so, to celebrate their respective national figures and | :55:10. | :55:15. | |
landmarks. I am grateful to the honourable gentleman for giving way. | :55:16. | :55:21. | |
Would he support me in saying that my predecessor, but one, for what | :55:22. | :55:26. | |
was then the constituency, made possibly the greatest contribution | :55:27. | :55:33. | |
as a backbencher to change the lives of people, would he be a fine | :55:34. | :55:39. | |
candidate to go on such banknotes? Thank you for the intervention. I | :55:40. | :55:41. | |
feared I would have a lot of interventions along these lines. I | :55:42. | :55:48. | |
will be noting some notable names, during my speech. I think it is not | :55:49. | :55:51. | |
a matter for us as politicians to determine. I will give way in a | :55:52. | :55:58. | |
minute. I think it would be appropriate for there to be a | :55:59. | :56:01. | |
conversation amongst the people of Wales, who they would like to have | :56:02. | :56:06. | |
on their banknotes. I thank the honourable member for giving way. | :56:07. | :56:23. | |
Could I suggest, that they consider Bevin, founder of the National | :56:24. | :56:27. | |
Health Service? That is certainly one of the names I would like to see | :56:28. | :56:31. | |
put forward, I was referring to him earlier in my speech. He will note, | :56:32. | :56:37. | |
of course, that we have had two great men recommended, that I would | :56:38. | :56:40. | |
like to see more women represented on banknotes, Welsh or indeed Bank | :56:41. | :56:45. | |
of England, and would he think that whether or not one was a big | :56:46. | :56:50. | |
spender, Dame Shirley Bassey would be an excellent person to be on a | :56:51. | :56:56. | |
Welsh banknotes? I am grateful for that intervention. I did see that | :56:57. | :57:00. | |
name mentioned, very honourably in the Labour press notice this | :57:01. | :57:04. | |
morning. Mr Deputy Speaker, like other parts of the UK, Wales was | :57:05. | :57:09. | |
once awash with small banks, covering relatively small | :57:10. | :57:11. | |
geographical areas, allowed to issue their own banknote. The bank Charter | :57:12. | :57:18. | |
act brought an end to Welsh banknotes and provincial banknotes | :57:19. | :57:23. | |
in England, but that did not apply to Ireland or Scotland. Four bags in | :57:24. | :57:26. | |
Northern Ireland and three in Scotland have the authority to issue | :57:27. | :57:30. | |
their own banknotes, provided they are backed by Bank of England notes. | :57:31. | :57:36. | |
It would allow Lloyds Banking Group, which holds the writes to the bank | :57:37. | :57:42. | |
of Wales brand, partly publicly owned by Welsh taxpayers, to issue | :57:43. | :57:47. | |
Welsh banknotes, in the same way as is permitted for the three banks in | :57:48. | :57:52. | |
Scotland and Northern Ireland. Would he agree that it is a cultural | :57:53. | :57:55. | |
advantage that is gained from issuing banknotes, it is worthwhile | :57:56. | :58:04. | |
doing? The value goes to the taxpayer, and it would be a good | :58:05. | :58:09. | |
move? I am grateful to my parliamentary leader for the | :58:10. | :58:11. | |
intervention. He is completely right. That is widely four banks in | :58:12. | :58:16. | |
Northern Ireland and the three in Scotland have continued with this | :58:17. | :58:19. | |
practice. With that in mind, considering there is a stake in | :58:20. | :58:24. | |
Lloyds, there is a commercial interest for that bank and also a | :58:25. | :58:27. | |
public interest, due to part ownership of the bank. To do so | :58:28. | :58:35. | |
would be a welcome boost to Brand Wales, and recognise the country has | :58:36. | :58:44. | |
an economic entity. We celebrate individuals, while also celebrating | :58:45. | :58:50. | |
architectural splendour, such as that of Belfast City Hall. In | :58:51. | :58:55. | |
Scotland, the notes pay tribute to the fantastic bridges and recognise | :58:56. | :58:58. | |
the contributions of the likes of Walter Scott and Robbie Burns. | :58:59. | :59:03. | |
Currency in Wales recognised people like Elizabeth fry. Previous notes | :59:04. | :59:11. | |
have portrayed Michael Faraday, William Shakespeare, George | :59:12. | :59:14. | |
Stephenson and the first Duke of Wellington. All great people, Mr | :59:15. | :59:18. | |
Deputy Speaker. But non-, to my knowledge, have anything to do with | :59:19. | :59:24. | |
my country. Is it not fair and sensible for us in Wales to use | :59:25. | :59:28. | |
notes that recognise our historic landmarks, such as the incredible | :59:29. | :59:40. | |
ones of my constituency, Port Menai in Wales and other greats, nominated | :59:41. | :59:48. | |
the seventh most prominent person of the 20th century. David Lloyd | :59:49. | :59:51. | |
George, the originator of the welfare state, and Bevin, the | :59:52. | :00:03. | |
architect of the NHS. A case could also be made for what is arguably | :00:04. | :00:06. | |
the most famous Welsh painting a wall. The painting of a Baptist | :00:07. | :00:22. | |
chapel in the north of Wales is a national icon. Much as Constable's | :00:23. | :00:30. | |
is in England. The Royal Mint produces Welsh specific coins. The | :00:31. | :00:38. | |
Minister referred to the Royal Mint earlier in the debate. A national | :00:39. | :00:47. | |
poll found that over 80% of the Welsh public supported these calls. | :00:48. | :00:55. | |
82%, when I looked at the Pole on the website today. If we are | :00:56. | :01:02. | |
unsuccessful tonight, I would hope that the UK Government would support | :01:03. | :01:05. | |
Plaid Cymru and putting right this historic anomaly and bringing | :01:06. | :01:12. | |
forward their own proposals. On the point of coins, I have to do have a | :01:13. | :01:18. | |
Welsh pound coin here. It reeks of nationalist propaganda. Around the | :01:19. | :01:26. | |
edge, it says, through an eye to my country, which I agree with, but | :01:27. | :01:31. | |
issued by the Royal Mint. A grateful intervention, it makes my point | :01:32. | :01:34. | |
entirely. There is no issue of principle, it is about finding the | :01:35. | :01:37. | |
mechanism to deliver on this issue. The issue has had significant media | :01:38. | :01:46. | |
coverage in Wales. Considering we are only two weeks away from the | :01:47. | :01:50. | |
Welsh general election, I would put it to the Treasury ministers and the | :01:51. | :01:55. | |
front bench that the election prospects of their candidates in | :01:56. | :01:59. | |
Wales may be damaged if they choose to ignore the strong views of the | :02:00. | :02:02. | |
people of Wales on this issue. The question is that Amendment four | :02:03. | :02:11. | |
be made. Absolutely. Come on in. We would | :02:12. | :02:25. | |
like to speak in support of both Amendment 4 and Amendment 5, in the | :02:26. | :02:30. | |
name of the honourable member for Carmarthen East. In the debate at | :02:31. | :02:34. | |
committee, the ministry highlighted the presence of the Royal Mint in | :02:35. | :02:38. | |
Cardiff and its role in the production of our coins. Indeed, in | :02:39. | :02:42. | |
reflecting upon that, it is worth noting that the ?1 coin reflects | :02:43. | :02:48. | |
each nation with the Royal Arms, the three Lions, an oak tree for | :02:49. | :02:53. | |
England, the Thistle and the lion rampart of Scotland, the flax plant | :02:54. | :02:57. | |
and the Celtic cross for Northern Ireland, and, of course, both the | :02:58. | :03:07. | |
Dragon and the leek for Wales. We also have pound coin celebrating the | :03:08. | :03:11. | |
capital cities and the floral emblems of each nation in the United | :03:12. | :03:15. | |
Kingdom. It seems anomalous that Scotland, with its own parliament, | :03:16. | :03:19. | |
has its own banknotes, Northern Ireland, with its own Assembly has | :03:20. | :03:23. | |
its own banknotes, but that Wales, with some flourishing Assembly, has | :03:24. | :03:28. | |
no national identifier on circulating currency. I would like | :03:29. | :03:32. | |
to thank my honourable friend for giving way. I do hope if this | :03:33. | :03:43. | |
measure passes tonight that there will be some people from North Wales | :03:44. | :03:48. | |
also featured on banknotes. Does he not agree this would be a fine | :03:49. | :03:52. | |
opportunity to showcase the great figures of literature and music of | :03:53. | :03:55. | |
Wales as well? I think my honourable member makes a fantastic suggestion. | :03:56. | :04:06. | |
I might return with some suggestions from music, maybe if not literature. | :04:07. | :04:10. | |
It is important that all aspects of Welsh culture are represented when | :04:11. | :04:15. | |
the Welsh people come to choose what is on their banknotes. It seems to | :04:16. | :04:21. | |
me also that a celebration of iconic Welsh scenes and places would be | :04:22. | :04:25. | |
appropriate to consider, were that to be, for example, the steel | :04:26. | :04:31. | |
industry of Port Talbot, or the mining communities of the valleys, | :04:32. | :04:34. | |
even though the Tower colliery, which people who know about the | :04:35. | :04:38. | |
history of mining in Wales will no was run as a cooperative when miners | :04:39. | :04:45. | |
used redundancy payments to turn it into a very successful co-operative. | :04:46. | :04:47. | |
I think this is imagery that would be well supported across the nation. | :04:48. | :04:54. | |
In relation to suggestions that have already been made for Shirley | :04:55. | :05:05. | |
Bassey, Aneurin Bevan, it would be great to see him on the banknote. | :05:06. | :05:14. | |
Maybe his various quotes about members of the animal kingdom on | :05:15. | :05:18. | |
there. My own suggestion for what it is worth, it is 30 years since the | :05:19. | :05:22. | |
foundation, the formation of the great Welsh rock band The Manic | :05:23. | :05:27. | |
Street Preachers, I would love to see them celebrated on the new | :05:28. | :05:31. | |
banknote, they might have ideological objections to that. It | :05:32. | :05:36. | |
is also the 20th anniversary since Everything Must Go. I don't mean the | :05:37. | :05:40. | |
Chancellor's policy in relation to RBS shares, 20 years since the album | :05:41. | :05:46. | |
of that name. As my honourable friend, who brought this amendment | :05:47. | :05:52. | |
made clear, it is for the people of Wales, not people of York Cholla | :05:53. | :05:57. | |
anywhere else, to decide what appears on the Welsh banknotes. -- | :05:58. | :06:02. | |
York or anywhere else. I do hope that the Conservative government | :06:03. | :06:05. | |
does not permit the cardinal error of snubbing the Welsh people in | :06:06. | :06:08. | |
their desire for their own banknotes. I never thought of the | :06:09. | :06:16. | |
point that was just made from that sedentary position, so the lack of | :06:17. | :06:21. | |
any Welsh banknotes appears to me to be an error and one that this | :06:22. | :06:26. | |
amendment seeks to make good on. We would appreciate the Government | :06:27. | :06:29. | |
agree with the amendment, we would appreciate the government taking on | :06:30. | :06:32. | |
the task of investigating the potential costs and time frames such | :06:33. | :06:37. | |
a change. But we will wholeheartedly and enthusiastically support these | :06:38. | :06:45. | |
amendments. Thank you, anybody would think that there was a Welsh general | :06:46. | :06:50. | |
election going on this afternoon, wouldn't they? I am so glad that we | :06:51. | :06:55. | |
had time to have this debate this afternoon. I remember, Mr Deputy | :06:56. | :07:01. | |
Speaker, the shock in Worcestershire that there was when Elgar, whose | :07:02. | :07:09. | |
birthplaces in my constituency, was taken off the ?20 note. It was a | :07:10. | :07:14. | |
very live political issue, I can assure him. So, I sympathise with | :07:15. | :07:19. | |
the emotional attachment that we all have two hour banknotes and his | :07:20. | :07:24. | |
desire to make the case that he has done so ably this afternoon, as | :07:25. | :07:29. | |
indeed have other colleagues on having some Welsh characteristics in | :07:30. | :07:33. | |
terms of banknotes. I will be going through why we are not actually | :07:34. | :07:37. | |
going to agree to this particular amendment today, but also some other | :07:38. | :07:41. | |
things that are happening in terms of our new banknotes, that I hope | :07:42. | :07:44. | |
will go some way to giving Welsh colleagues some cheer. | :07:45. | :07:49. | |
The history lesson, Mr Deputy Speaker. It is a rare in that it is | :07:50. | :07:58. | |
a country that allows certain commercial banks to issue banknotes. | :07:59. | :08:02. | |
And as he rightly pointed out, since the 1840s when the House passed the | :08:03. | :08:07. | |
bank Charter act, there has been no new bank that has been allowed to | :08:08. | :08:09. | |
issue commercial bank notes in the United Kingdom. To put it in | :08:10. | :08:14. | |
context, the 1840s is a long time ago and the time both Elizabeth Fry | :08:15. | :08:18. | |
who we now celebrate on the Bank of England ?5 note and Charles Darwin, | :08:19. | :08:24. | |
who we find on the ?10 note. And since then, many of the banks that | :08:25. | :08:28. | |
were originally authorised to issue banknotes have lost all surrendered | :08:29. | :08:32. | |
their rights. The last private note issue in Wales was the north and | :08:33. | :08:37. | |
south Wales bank. It lost its note issuing rights in 1908 when it was | :08:38. | :08:43. | |
taken over by the Midland bank which has now been rebranded as HSBC. | :08:44. | :08:48. | |
Today, only seven commercial notaries remain, three banks in | :08:49. | :08:51. | |
Scotland and for in Northern Ireland. Bus-macro four. The | :08:52. | :08:58. | |
Government is committed to preserving tradition as the | :08:59. | :09:02. | |
amendments made by clause 36 of this will show. But turning to the | :09:03. | :09:10. | |
amendment itself, I will give way. Will she agree with my earlier point | :09:11. | :09:14. | |
that it is a commercial advantage to issue one's own notes? Why can that | :09:15. | :09:24. | |
advantage not be extended to Wales? Well, it comes to the point I was | :09:25. | :09:28. | |
just about to answer that in terms of the detail of this amendment, it | :09:29. | :09:32. | |
seeks to confer the right to issue commercial banknotes, a clear | :09:33. | :09:36. | |
commercial advantage, in the country of Wales to just one bank. The | :09:37. | :09:40. | |
Lloyd's Banking Group. This appears to be based on a link to the right | :09:41. | :09:45. | |
to issue is that wasn't broken over a century ago. I would like to | :09:46. | :09:53. | |
clarify for the honourable member, the taxpayer only owns just under | :09:54. | :09:57. | |
10% of Lloyd's Banking Group, but it is true that in the past, part of | :09:58. | :10:02. | |
and indeed today, part of Lloyds banking group as a commercial bank | :10:03. | :10:07. | |
note issuance operation and that made be why he has chosen to focus | :10:08. | :10:11. | |
on one bank in his amendment. Again, that was due to the acquisition of | :10:12. | :10:16. | |
the Bank of Scotland Opposition -- operation which is authorised issue | :10:17. | :10:20. | |
banknotes in Scotland. To extend the privilege to issue banknotes give | :10:21. | :10:22. | |
back commercial advantage in Wales to do this one bank as outlined in | :10:23. | :10:28. | |
his amendment would raise competition and commercial issues | :10:29. | :10:31. | |
for others. I like the wide range of suggestions we have heard for | :10:32. | :10:37. | |
different people to be represented on a Welsh banknotes. I reiterate | :10:38. | :10:41. | |
the point I made earlier, that the coins in our pocket Art minted in | :10:42. | :10:49. | |
Wales -- are minted in Wales. And I appreciate the motive behind this | :10:50. | :10:52. | |
amendment to deal with that symbolic issue that he feels so strongly | :10:53. | :10:57. | |
about rather than with the pressing economic or practical need to have | :10:58. | :11:01. | |
different banknotes. I can confirm that the Bank of England has already | :11:02. | :11:03. | |
announced that future banknotes, starting with the polymer ?5 note, | :11:04. | :11:10. | |
which will be issued from September 2016, will include symbols that | :11:11. | :11:15. | |
represent all four home nations. For Wales, the image will be taken from | :11:16. | :11:20. | |
the Royal coat of arms and the royal badge of Wales. And the bank | :11:21. | :11:23. | |
recently announced that the design for the ?5 note will be revealed on | :11:24. | :11:29. | |
the 2nd of June 2016. So I am very glad we have had the chance to | :11:30. | :11:34. | |
discuss the merits and he will understand why I cannot support the | :11:35. | :11:37. | |
particular amendment that he has tabled tonight. But I welcome the | :11:38. | :11:44. | |
chance to put out the message that there will be an important symbol of | :11:45. | :11:50. | |
Wales on the new note. Thank you very much. As many as are of the | :11:51. | :11:59. | |
opinion, say "aye". To the contrary, "No". Division, clear the lobby. | :12:00. | :13:37. | |
The question that amendment for be made. As many as are of the opinion, | :13:38. | :13:44. | |
say "aye". Phone Bowness. To the contrary, "No". | :13:45. | :20:12. | |
Order! Order! The eyes to the right, 239. The nose to the left, to his -- | :20:13. | :23:29. | |
301. The ayes to the right, 239, the no's | :23:30. | :23:50. | |
to the left, 301. The no's covered, the no's habit. We now come to | :23:51. | :23:56. | |
government amendment three. The question is will the amendment be | :23:57. | :24:00. | |
made, as many of that opinion say aye? The ayes have it, the ayes | :24:01. | :24:11. | |
habit. The Minister to move. -- the ayes have it. I beg to move that | :24:12. | :24:17. | |
this bill now be read a third time. It has been a pleasure to take this | :24:18. | :24:21. | |
legislation through the house, there has been a very good level of | :24:22. | :24:24. | |
interest from members on all sides of the house and a wealth of | :24:25. | :24:28. | |
suggestions and recommendations have been made which is testament to how | :24:29. | :24:32. | |
important the issues in this bill are. Indeed some of the suggestions | :24:33. | :24:37. | |
have made their way into the bill. The bill will make the bank of | :24:38. | :24:41. | |
England more transparent and accountable to Parliament and the | :24:42. | :24:45. | |
public. Further strengthen standards in the financial services sector and | :24:46. | :24:49. | |
strengthen protections for consumers, especially when accessing | :24:50. | :24:54. | |
the new pensions. Building on the fundamental reforms to the regular | :24:55. | :24:59. | |
tour introduced by the financial services act 2012 the Bill delivers | :25:00. | :25:04. | |
a set of important evolutionary changes to the bank. It ends the | :25:05. | :25:10. | |
status of the regulation authority and create a new prudential | :25:11. | :25:13. | |
regulation committee, in the same footing as the monetary policy | :25:14. | :25:16. | |
committee and the financial policy committee. It makes the oversight | :25:17. | :25:20. | |
function is the responsibility of the whole court, ensuring every | :25:21. | :25:24. | |
member of the court, executive and nonexecutive can be held to account | :25:25. | :25:28. | |
for the use of these functions. And it enhances the accountability of | :25:29. | :25:32. | |
the bank to Parliament by making the whole bag subject for the first time | :25:33. | :25:38. | |
to any or oversight. -- the whole bank. Mr Speaker as I may, something | :25:39. | :25:48. | |
I said earlier, I said in a old and in how high, it is this bill that | :25:49. | :25:54. | |
brings in the NA oh oversight. And it brings in the recommendations of | :25:55. | :25:57. | |
the worst review, updating the requirements of timing for monetary | :25:58. | :26:00. | |
policy committee, publications and meeting. As the Right Honourable | :26:01. | :26:06. | |
member from Chichester said, this bill brings the Bank of England more | :26:07. | :26:10. | |
up-to-date as an institution and in doing so it should greatly improve | :26:11. | :26:14. | |
the scope for making it accountable to Parliament and to the public. | :26:15. | :26:19. | |
During the passage of the bill we have rightly devoted considerable | :26:20. | :26:21. | |
time to the question of the appropriate role of parliament, the | :26:22. | :26:26. | |
Treasury Select Committee plays a crucial role in providing expectant | :26:27. | :26:30. | |
scrutiny of the chief executive and the agreement we have announced | :26:31. | :26:34. | |
today reinforces that. The second aspect of the bill strengthens | :26:35. | :26:40. | |
conduct in the financial sector by strengthening the regime to all | :26:41. | :26:45. | |
firms covered by the discredited authorised persons regime that we | :26:46. | :26:49. | |
inherited. We all agreed on the importance of high standards of | :26:50. | :26:53. | |
conduct in the UK financial services industry, this government has | :26:54. | :26:56. | |
already taken the initiative in this area, we take a key step by bringing | :26:57. | :26:59. | |
in the regime for the banking sector in March this year, the expansion of | :27:00. | :27:04. | |
this new regime to all authorised persons will enhance personal | :27:05. | :27:07. | |
responsibility for senior management across the industry and raise | :27:08. | :27:11. | |
standards of conduct more broadly. The third part of this bill | :27:12. | :27:16. | |
introduces support for consumers accessing the new pension freedoms. | :27:17. | :27:22. | |
To support consumers who from April 2017 will be able to sell the | :27:23. | :27:25. | |
annuity income stream in the secondary market for annuities, the | :27:26. | :27:29. | |
bill will extend the scope of the pension in the service to cover | :27:30. | :27:33. | |
these consumers and introduce a requirement which in effect ensures | :27:34. | :27:37. | |
producers with a high-value annuity is even appropriate financial advice | :27:38. | :27:41. | |
before making the decision to sell their annuity income stream. These | :27:42. | :27:47. | |
measures will make consumers better informed and less vulnerable to | :27:48. | :27:51. | |
mis-selling and scams. In order to ensure fairness for people seeking | :27:52. | :27:55. | |
to access their pensions hourly, the bill will also give the SC a new | :27:56. | :28:00. | |
duty to cap early exit charges that act as a deterrent. This will | :28:01. | :28:05. | |
provide real protection to consumers in contract -based pension schemes | :28:06. | :28:07. | |
who are looking to make use of the freedoms. The bill also supports the | :28:08. | :28:14. | |
government's consumer protection measures by giving you Treasury new | :28:15. | :28:19. | |
powers to provide financial assistance that act to provide | :28:20. | :28:22. | |
financial assistance to illegal money lending teams targeting loan | :28:23. | :28:26. | |
sharks. We have added the amendment tabled by the Honourable member from | :28:27. | :28:32. | |
Broxbourne. Too close, Mr Deputy Speaker, I would like to thank all | :28:33. | :28:35. | |
honourable and right Honourable members who have contributed to the | :28:36. | :28:39. | |
debates on this bill both by speaking at the tabling of | :28:40. | :28:43. | |
amendments. I would like to thank in particular all of the members of the | :28:44. | :28:47. | |
public bill committee for their efforts and for the time spent going | :28:48. | :28:51. | |
through the bill was by clause. The member for a lead East and the | :28:52. | :28:55. | |
member for Rover Hampton Southwest provided the talent in discussion | :28:56. | :28:59. | |
throughout the passage of the bill. The member for East Lothian at the | :29:00. | :29:02. | |
right honourable member for Kirkcaldy and Cowdenbeath is also | :29:03. | :29:09. | |
some close scrutiny to the bill. The Right Honourable member from | :29:10. | :29:12. | |
Chichester made some valuable contributions particularly regarding | :29:13. | :29:15. | |
the Treasury Select Committee matters which have been most helpful | :29:16. | :29:20. | |
and insightful. I would like to also thank the Treasury whips, the member | :29:21. | :29:24. | |
for Truro and Falmouth, the member from Central Devon who have provided | :29:25. | :29:27. | |
me with so much support both during and outside of the bill debates. And | :29:28. | :29:31. | |
the chairs of the public Bill committee the Honourable member for | :29:32. | :29:35. | |
optimum and sale West, in the Honourable member from Sedgefield, | :29:36. | :29:41. | |
as well as your -- as well as yourself Mr Deputy Speaker who have | :29:42. | :29:45. | |
handled our scrutiny so well. I would like to thank my Parliamentary | :29:46. | :29:49. | |
Private Secretary who took on the important and thankless task of | :29:50. | :29:52. | |
ensuring I got the right grieving during sessions and supporting me | :29:53. | :29:58. | |
more generally. -- I got the right grieving during the sessions. And | :29:59. | :30:03. | |
also to Lord Ashcroft that others who took this bill through the other | :30:04. | :30:06. | |
place and will continue to do so when the other place considers the | :30:07. | :30:10. | |
amendments we have made. Finally I would like to give thanks to the | :30:11. | :30:13. | |
organisations that have assisted us in developing the bill, the Bank of | :30:14. | :30:18. | |
England, and the Financial Conduct Authority as well as the sincere | :30:19. | :30:22. | |
thanks that I ought to Treasury officials, lawyers and Parliamentary | :30:23. | :30:25. | |
Counsel who have spent many hours in the box drafting amendments and | :30:26. | :30:32. | |
meetings -- minutes for this debate. We have had useful discussions | :30:33. | :30:37. | |
across all sides of the house, even in the instances where we did not | :30:38. | :30:39. | |
agree and has to settle through a vote. We have shown an understanding | :30:40. | :30:44. | |
of each other's position and approved the legislation as a | :30:45. | :30:47. | |
result. This bill will go back to the other place where their | :30:48. | :30:50. | |
Lordships will consider the useful changes we have made in this place. | :30:51. | :30:54. | |
I hope they will welcome the legislation in its current form. To | :30:55. | :30:59. | |
conclude, this bill makes changes to strengthen the governance and | :31:00. | :31:01. | |
accountability for the Bank of England, it will contribute to the | :31:02. | :31:05. | |
government's commitment to strengthen standards across the | :31:06. | :31:07. | |
financial services committee -- industry and ensure that consumers | :31:08. | :31:12. | |
are protected. I commend these are bidding to the house. The question | :31:13. | :31:17. | |
is the bill be ready third time. Thank you. It is my pleasure to | :31:18. | :31:23. | |
speak for the opposition in today's third reading of the bank of England | :31:24. | :31:28. | |
and financial services Bill. Very kindly the tragedy -- the chair of | :31:29. | :31:31. | |
the Treasury Select Committee referred to make good humour and | :31:32. | :31:35. | |
good nature in my speeches earlier, I am afraid if you are here now he | :31:36. | :31:38. | |
would be disappointed with the speed I about to make. People can be | :31:39. | :31:42. | |
forgiven for thinking I am returning to what some would think is my poor | :31:43. | :31:47. | |
faced modus operandi. The role of government in legislating for | :31:48. | :31:52. | |
financial stability and ensuring the Bank of England act in the interest | :31:53. | :31:58. | |
of the wider economy means getting the legislation right, writing of | :31:59. | :32:02. | |
the 2008 banking crisis is an important task for any responsible | :32:03. | :32:06. | |
government, one that governments around the world have focused on | :32:07. | :32:08. | |
fulfilling throughout the past decade. It is a task that has been | :32:09. | :32:13. | |
attempted since the bankers crisis of 2008, but today the bank -- the | :32:14. | :32:19. | |
bankers Chancellor is threatening the setback this task. This bill has | :32:20. | :32:23. | |
seen a number of changes since it first appeared in the other place, | :32:24. | :32:29. | |
some of them for the better. But it is a precipitous changes that the | :32:30. | :32:32. | |
government is making the financial services regulation. Through its new | :32:33. | :32:35. | |
settlement with the financial sector including through measures in this | :32:36. | :32:39. | |
bill would suggest the government has failed to learn the lessons of | :32:40. | :32:45. | |
the 2008 bankers crisis. This bill Mr Deputy Speaker is a missed | :32:46. | :32:50. | |
opportunity. The measures we have challenged at second reading, in | :32:51. | :32:55. | |
committee and reports include the proposed abolition of the bank 's | :32:56. | :32:59. | |
oversight committee, the proposed veto of the National Audit Office | :33:00. | :33:04. | |
powers of investigation, the proposed downgrading of the power of | :33:05. | :33:08. | |
the prudential regulation authority to a committee of the bank and the | :33:09. | :33:14. | |
proposed reversal of the presumption of responsibility for misconduct | :33:15. | :33:19. | |
cases for senior managers. We have also, however, welcomed the number | :33:20. | :33:23. | |
of measures including the Lord's stage concessions on the powers of | :33:24. | :33:28. | |
oversight for the banks nonexecutive directors. The reversal of the veto | :33:29. | :33:31. | |
on the National Audit Office powers of investigation and the measures | :33:32. | :33:37. | |
announced to fund HMRC's illegal money lending teams. But we are Mr | :33:38. | :33:45. | |
David Speaker disappointed that other proposals have not been | :33:46. | :33:49. | |
accepted by the government. -- Mr Deputy Speaker. The week of the | :33:50. | :33:57. | |
Panama papers has reawakened public concern over our financial system. | :33:58. | :34:01. | |
The publication of thousands of documents detailing the systematic | :34:02. | :34:05. | |
use of tax havens for the registration of secret trusts and | :34:06. | :34:07. | |
shell companies and serviced by UK banks and holding trillions of | :34:08. | :34:13. | |
pounds out of reach of HMRC has rightly outraged people across the | :34:14. | :34:21. | |
UK. And across the globe. That is my LO today be offered the government | :34:22. | :34:26. | |
an opportunity. -- that is why earlier today we offered the | :34:27. | :34:30. | |
government an opportunity. The opportunity to deliver the necessary | :34:31. | :34:35. | |
tax transparency measures with our new clause 14. That clause if the | :34:36. | :34:38. | |
government had supported it would have instituted a new principle for | :34:39. | :34:44. | |
the SCA, the principle of combating abusive tax avoidance arrangements. | :34:45. | :34:48. | |
-- FCA. Including establishing a register of beneficial owners of | :34:49. | :34:54. | |
trusts serviced by UK banks. But of course that in itself is not | :34:55. | :34:59. | |
sufficient. And Labour has set out our tax transparency enforcement | :35:00. | :35:03. | |
plan, and our new clause LO today raised a vital area of the UK banks | :35:04. | :35:09. | |
involvement in the Panama papers. Which the FCA has now asked them to | :35:10. | :35:14. | |
report upon. The government itself has set out some initial plans but | :35:15. | :35:19. | |
with respect has not in her view grasp the ball by the horns, it has | :35:20. | :35:25. | |
itself been dragged there by campaigners, by charities and | :35:26. | :35:30. | |
commentators, urging quite rightly action on anti-abuse rules and | :35:31. | :35:36. | |
country by country reporting. It is also, Mr Deputy Speaker, the | :35:37. | :35:40. | |
regulation of bank activity here in the UK that has been such a dominant | :35:41. | :35:44. | |
issue in recent years. The government has today rolled back on | :35:45. | :35:50. | |
and you turned on. The presumption of responsibility has set out as | :35:51. | :35:56. | |
applies to senior managers. To avoid being found guilty of misconduct | :35:57. | :36:00. | |
when there has been misconduct in an area of which they are responsible | :36:01. | :36:02. | |
they will have to show that they took reasonable steps to prevent | :36:03. | :36:07. | |
that contravention. This bill removes that one is on top bankers, | :36:08. | :36:14. | |
an onus that is entirely reasonable, entirely proportionate and as very | :36:15. | :36:21. | |
better experience tell the British people, entirely necessary. | :36:22. | :36:25. | |
Misconduct and misdemeanours in financial services are sadly not | :36:26. | :36:30. | |
merely a pale from our history, in 2015 for example the FCA had to find | :36:31. | :36:37. | |
firms more than ?900 million. -- had to find firms. There was also the | :36:38. | :36:41. | |
libel or scandal and the mis-selling of PPI to the tune of ?33 million. | :36:42. | :36:50. | |
The presumption of responsibility is so reasonable and necessary that the | :36:51. | :36:52. | |
policy was introduced with cross-party support. That should not | :36:53. | :36:58. | |
be forgotten and it is remarkable, Mr Deputy Speaker, that's just days | :36:59. | :37:02. | |
after the leak of the Panama papers and pressure on the Prime Minister | :37:03. | :37:07. | |
to defend his creative financial arrangements that the government can | :37:08. | :37:11. | |
come to this house and defend its decision to reverse regulation it's | :37:12. | :37:17. | |
chosen to bring in back in 2013 following the car brands of work of | :37:18. | :37:20. | |
the chair of the Treasury Select Committee and my colleague Lord | :37:21. | :37:24. | |
McFaul and others of the Parliamentary commission on banking | :37:25. | :37:28. | |
standards and it is a measure of course that they are yet even to | :37:29. | :37:34. | |
implement, a measure rolled back by a bankers Chancellor under pressure | :37:35. | :37:37. | |
from those who would have been scrutinised. This change of policy | :37:38. | :37:44. | |
does not take place in isolation but as I have already said as part of | :37:45. | :37:48. | |
the Chancellor 's new settlement with the financial sector. | :37:49. | :37:58. | |
Another idea was to strengthen the role of the Treasury Select | :37:59. | :38:03. | |
Committee in relation to the appointment of the chief executive | :38:04. | :38:07. | |
of the FCA. It is the Treasury's influence over them and financial | :38:08. | :38:12. | |
regulation has been subject to so much debate and concern in the past | :38:13. | :38:18. | |
year. Debate and concern about the removal of Martin Wheatley, debate | :38:19. | :38:21. | |
and concern about the scrapping of the FCA review into banking culture | :38:22. | :38:25. | |
and more widely, as part of the post-crushed debate, there have been | :38:26. | :38:30. | |
concerns about whether or not bank capitalisation and beverage would be | :38:31. | :38:35. | |
an sufficient levels and whether or not is suitably strong written and | :38:36. | :38:37. | |
friends will actually be implemented. Added to this toxic | :38:38. | :38:44. | |
cocktail of the bankers, chancellors bonus stirring is his unhealthy | :38:45. | :38:51. | |
obsession with flogging off the Government's shares at a huge cost | :38:52. | :38:54. | |
to the public purse. I have previously asked the minister if the | :38:55. | :38:59. | |
Government will establish a floor price for the sale of RBS shares and | :39:00. | :39:04. | |
they have with Lloyds, or do the accent the Chancellor got it wrong | :39:05. | :39:09. | |
when he said his lost leader last year would lead to better sales? | :39:10. | :39:14. | |
Also, Mr Deputy Speaker, there is also the issue of pensioner master | :39:15. | :39:19. | |
trusts. During the committee stage, the minister told my colleague, the | :39:20. | :39:22. | |
shadow financial Secretary, that they would bring forward legislation | :39:23. | :39:27. | |
with the pensions minister who has since told the DWP Select Committee, | :39:28. | :39:33. | |
I have been pressing for a pensions Bill, but so far, we don't have one, | :39:34. | :39:38. | |
even though the Government couldn't protect savers without one. Will the | :39:39. | :39:43. | |
Minister said when the Government will take action? This bill, Mr | :39:44. | :39:47. | |
Deputy Speaker, is a missed opportunity. A missed opportunity to | :39:48. | :39:50. | |
demonstrate how the Bank of England could carry out its work in the most | :39:51. | :39:55. | |
efficient way possible, with transparency, accountability in its | :39:56. | :39:58. | |
decision making, serving the interests of the people who sent us | :39:59. | :40:02. | |
here to represent them. A missed opportunity to demonstrate the | :40:03. | :40:06. | |
senior managers in the financial sector who continue to do their jobs | :40:07. | :40:11. | |
while being effectively and inappropriately regulated. -- | :40:12. | :40:13. | |
appropriately. More opportunities for the missed target Chancellor. | :40:14. | :40:18. | |
But the context of this poll is vital to understanding our concerns | :40:19. | :40:23. | |
and the concerns and demands of the wider public. We are eight years on | :40:24. | :40:27. | |
from the economic crisis, the bankers crisis which brought the | :40:28. | :40:30. | |
financial services sector and our country to its knees and was rescued | :40:31. | :40:34. | |
by the decisive action of the then Prime Minister. I will give way. Do | :40:35. | :40:41. | |
not agree we should be taking these banks over and run them... These | :40:42. | :40:46. | |
dodgy banks that have been troubled all these years? The Prime Minister | :40:47. | :40:52. | |
at the time did step in and take appropriate action. The important | :40:53. | :40:55. | |
thing is the lessons of the financial crisis and the banking | :40:56. | :40:59. | |
crisis or learned. I believe those on this side of the House have | :41:00. | :41:02. | |
learned their lessons, but I'm afraid those on the Government | :41:03. | :41:08. | |
benches have not. I would ask Mr Deputy Speaker, does the Chancellor | :41:09. | :41:12. | |
and Government still not understand the widespread anger out there? Do | :41:13. | :41:15. | |
the Chancellor and the Government not recognise the public's deep | :41:16. | :41:19. | |
distaste for an ever expanding horror story of bailed out bankers | :41:20. | :41:24. | |
not being brought to book and Panama Papers shining a light on the | :41:25. | :41:29. | |
squalid practice of the super rich squirrel and away money off sure | :41:30. | :41:33. | |
that Britain needs. Britain needs family files schools and hospitals | :41:34. | :41:39. | |
and yes, to get the UK's debt down which has rocketed on the | :41:40. | :41:44. | |
Chancellor's watch. And as I said on second reading, all of this well | :41:45. | :41:49. | |
there are cuts to pay, to pensions, to welfare, councils and to our | :41:50. | :41:54. | |
services. The public is right to remember that because of the | :41:55. | :42:00. | |
behaviour of some top bankers, people who this House is meant to | :42:01. | :42:04. | |
represent have lost their homes and jobs. We should never forget that it | :42:05. | :42:08. | |
was the bank's crisis that caused the deficit at the Government have | :42:09. | :42:13. | |
relied upon as their justification for the political ties to cut our | :42:14. | :42:17. | |
public services, cut funding to our local authorities, the incomes of | :42:18. | :42:21. | |
working people and support for the most vulnerable people in our | :42:22. | :42:26. | |
communities. The global financial class states used increasingly | :42:27. | :42:32. | |
deficits and stored the economy. It also gives the Government the | :42:33. | :42:35. | |
opportunity to carry out their long harboured ideological desire, | :42:36. | :42:40. | |
decades-old, to cut public services and wither away the states. We need | :42:41. | :42:47. | |
a healthy and effective banking sector, but one that is | :42:48. | :42:50. | |
appropriately regulated, that serves the interest of the whole economy | :42:51. | :42:55. | |
but does not hurt ordinary people or small and medium sized businesses | :42:56. | :42:58. | |
and delivers the investment our country needs for long-term growth. | :42:59. | :43:03. | |
The Conservative Government climb-down on the presumption of | :43:04. | :43:07. | |
responsibility, which they had previously supported, will hinder, | :43:08. | :43:11. | |
not hell, the fulfilment of those ambitions. Personal responsibility | :43:12. | :43:16. | |
is vital for the operation of our regulatory systems. The Chancellor's | :43:17. | :43:23. | |
policy U-turn produces exactly the responsibility that the | :43:24. | :43:25. | |
Parliamentary commission on banking standards recommended in its | :43:26. | :43:29. | |
reports. Scrapping a key measure before it added even been tested | :43:30. | :43:35. | |
makes no sense. Unless, of course, the Chancellor is just following | :43:36. | :43:40. | |
bank's orders. The startling and was a bit as scrapping of a widely | :43:41. | :43:44. | |
welcomed the measure shows there is a very real risk of failing to learn | :43:45. | :43:50. | |
the lessons of the crisis of the bankers and that, Mr Deputy Speaker, | :43:51. | :43:55. | |
is why we are proposing this Bill today and I urge all members to do | :43:56. | :44:03. | |
the same. Mr Deputy Speaker, we will also from our side of the House be | :44:04. | :44:12. | |
posing the bill at third reading. The Chancellor Treasury questions | :44:13. | :44:15. | |
today came up with a phrase and I wrote it down, because I was rather | :44:16. | :44:22. | |
taken with it. He was quite certain that we had better and tougher | :44:23. | :44:26. | |
regulation of the financial system. It is a good test. It is a good test | :44:27. | :44:33. | |
of this Bill. Do we have tougher regulation, Mr Deputy Speaker? Well, | :44:34. | :44:40. | |
as the law now stands this evening, if a name and manager, a senior | :44:41. | :44:47. | |
manager, in any major financial institution discovers that there has | :44:48. | :44:54. | |
been major corruption, major wrong doing, major regulatory failure in | :44:55. | :44:59. | |
his or her bank on his or her watch, they are culpable, unless they can | :45:00. | :45:06. | |
prove to the FCA that they took reasonable steps to stop that | :45:07. | :45:11. | |
happening. They are now responsible, as we speak, and have been for a | :45:12. | :45:16. | |
month and a half. If we pass this Bill tonight, that changes. That | :45:17. | :45:24. | |
manager will no longer be personally responsible. They will be able to | :45:25. | :45:29. | |
argue, actually, I ticked all the boxes, I signed all the forms, I | :45:30. | :45:36. | |
went to all the group therapy sessions with my trading floor and | :45:37. | :45:40. | |
told them to be good boys and girls. And do you know what? They weren't, | :45:41. | :45:45. | |
they didn't. They hid it from the! And so we will go through the whole | :45:46. | :45:49. | |
cycle again. But the law as it stands at the moment, as passed by | :45:50. | :45:57. | |
this Government and this Chancellor, makes each individual senior named | :45:58. | :46:02. | |
manager responsible like the captain of a ship or a ferry, if something | :46:03. | :46:06. | |
goes wrong, they are responsible, they cannot claim otherwise. Pass | :46:07. | :46:13. | |
this Bill and we are far from toughening the law, we weaken the | :46:14. | :46:17. | |
law. And the only explanation we have heard from this Government, Mr | :46:18. | :46:21. | |
Deputy Speaker, is that it is a bit more complicated than that. Because | :46:22. | :46:25. | |
in this Bill we are going to widen the bar people to tens of thousands | :46:26. | :46:29. | |
will be designated responsible people when it comes to identifying | :46:30. | :46:33. | |
who is in charge when something went wrong. I get to that. It is | :46:34. | :46:37. | |
perfectly possible, as we tried in committee, to ring fence and say, | :46:38. | :46:42. | |
well, very senior people in a major banks, systemically dangerous banks, | :46:43. | :46:45. | |
they should be held personally responsible unless they can prove | :46:46. | :46:50. | |
they took proper steps. But, no. The Government is using the widening of | :46:51. | :46:56. | |
the designated person's regime in order to be able to weaken and water | :46:57. | :47:01. | |
down the legislation as it currently exists. And that tells me, Mr Deputy | :47:02. | :47:06. | |
Speaker, that this Government is not actually serious about being | :47:07. | :47:11. | |
tougher. They are only concerned about getting by. It was an | :47:12. | :47:15. | |
interesting thing, an interesting point of debate during the | :47:16. | :47:21. | |
committee, when we were talking about transfer vehicles. They were | :47:22. | :47:29. | |
to do with how the insurance market reinsurers itself to spread the | :47:30. | :47:35. | |
risk. And in the Bill, it is a good thing to put into the Bill, there | :47:36. | :47:43. | |
are other clauses which give the Treasury the power to regulate in | :47:44. | :47:48. | |
its other fashion, to use the Chancellor's keyword, to regulate in | :47:49. | :47:53. | |
its other fashion the use of transfer vehicles in the reinsurance | :47:54. | :48:05. | |
market. What is happening is, in the insurance market, the reinsurance | :48:06. | :48:09. | |
market, where the existing insurers can offset some of the risk, they | :48:10. | :48:14. | |
usually offset it by selling some of the risk to specialist wholesale | :48:15. | :48:18. | |
houses who buy into the risk but whose capital covers the risk if | :48:19. | :48:23. | |
something goes wrong. Instead, the insurance market is moving to | :48:24. | :48:25. | |
reassuring through the use of specialist vehicles of the same kind | :48:26. | :48:32. | |
that got us into trouble in the lead up to 2007. It was interesting that | :48:33. | :48:38. | |
when this was being discussed, ministers argued we needed to be the | :48:39. | :48:42. | |
regulatory framework in place so that could make it easier to shift | :48:43. | :48:48. | |
the burden of the really in a surer and as a market away from | :48:49. | :48:52. | |
wholesalers who capitalised to be able to do it through special | :48:53. | :49:01. | |
vehicles that we use all the tricks and trades of the financial market | :49:02. | :49:05. | |
led to the disaster of 2007. That is said to me that deep down within | :49:06. | :49:08. | |
this Bill, the Government actually is up to its old tricks of wanting | :49:09. | :49:16. | |
to deregulate and make things less regulated, less tougher regulation, | :49:17. | :49:19. | |
rather than more. On those grounds, I think the Bill fails its test and | :49:20. | :49:24. | |
we should vote against it. There are good things in the Bill. I think in | :49:25. | :49:31. | |
particular, I figure can pride ourselves through the committee | :49:32. | :49:34. | |
stage until today at the report stage, was that the Government was | :49:35. | :49:39. | |
persuaded, and I use the word in inverted commas, to take on the ad | :49:40. | :49:43. | |
vice of the Treasury Select Committee. And for the first time, | :49:44. | :49:50. | |
they granted the president that the chief executive of the FCA in the | :49:51. | :49:54. | |
future will be subject, de facto, to having their appointment approved by | :49:55. | :50:01. | |
the Treasury Select Committee. That is to say, by this House, rather | :50:02. | :50:06. | |
than the executive. That two things. First of all, it makes the FCA more | :50:07. | :50:11. | |
accountable, because it is accountable to this House rather | :50:12. | :50:15. | |
than the executive. Secondly, it protects the FCA from interference | :50:16. | :50:18. | |
by the executive. That is a good precedents. If that president is | :50:19. | :50:24. | |
extended, then we will be able to ensure that all the key regulatory | :50:25. | :50:31. | |
bodies and their senior staff are approved by this House and in | :50:32. | :50:35. | |
particular, ultimately, that the governor of the Bank of England is | :50:36. | :50:39. | |
subject to scrutiny and approval by this House, rather than simply been | :50:40. | :50:43. | |
appointed by the executive. That is important because of the very large | :50:44. | :50:47. | |
powers that are being transferred to the Bank of England since the crisis | :50:48. | :50:52. | |
of 2007. But there are still loose ends, and still -- and now I come to | :50:53. | :50:58. | |
the word better in the Chancellor's report. Have things got better? A | :50:59. | :51:02. | |
little bit, I think, with the ability of this House to protect the | :51:03. | :51:11. | |
FCA and have a role in appointing the head of the FCA. They're all | :51:12. | :51:18. | |
loose ends at the FCA, Mr Deputy Speaker. Much of this bill and | :51:19. | :51:24. | |
debate has been about the FCA. The Financial Conduct Authority is in | :51:25. | :51:27. | |
the last instance the consumer's champion. It regulate the conduct of | :51:28. | :51:35. | |
the banks in regard to how they sell and much of the problems we've had | :51:36. | :51:40. | |
in the last decade has been the mis-selling of the banks. I think | :51:41. | :51:44. | |
every member of this House will know the number of legacy organisations | :51:45. | :51:47. | |
and campaigns, because we have still not put right the mis-selling and | :51:48. | :51:51. | |
there was a whole range of banks and products since the turn of the | :51:52. | :51:59. | |
millennium. The FCA is important and protecting it is important because | :52:00. | :52:02. | |
in the last regard, it is the consumer's champion. A view weeks | :52:03. | :52:08. | |
ago, I went to their headquarters and at a meeting with Mr John | :52:09. | :52:13. | |
Griffith Jones, who is the chair man of the FC. | :52:14. | :52:19. | |
Outputted to him, I said you are the consumer champion. He does not feel | :52:20. | :52:28. | |
that the FCA is a consumer champion. He said that is going too far. | :52:29. | :52:34. | |
Because in the end at the moment the FCA is still too much the creature | :52:35. | :52:43. | |
of the Treasury. If you want a tougher and better regulatory regime | :52:44. | :52:47. | |
what you need to do is break the FCA really independent. We are getting a | :52:48. | :52:56. | |
new Chief Executive of the FCA, but I am not going to stand here tonight | :52:57. | :53:03. | |
and offer platitudes and pleasantries, Mr Deputy Speaker. I | :53:04. | :53:08. | |
think when we get the new Chief Executive, I think the chairman of | :53:09. | :53:11. | |
the SCA should consider his position because I think we also need a new | :53:12. | :53:16. | |
chairman of the FCA. We are only starting the road of making sure our | :53:17. | :53:19. | |
regulatory bodies are fit for purpose. We have not got there yet. | :53:20. | :53:26. | |
Finally, I feel there are many people in Wales and Scotland and | :53:27. | :53:30. | |
Northern Ireland to disappointed that the government stood on | :53:31. | :53:34. | |
ceremony and decided it would not widen the remake of the membership | :53:35. | :53:39. | |
of the core bodies of the Bank of England starting with this court to | :53:40. | :53:43. | |
allow proper representation of all of the regions and nations through | :53:44. | :53:50. | |
the north of England. Most people in this country and certainly the | :53:51. | :53:54. | |
people in the Celtic regions are long of the view that the bank of | :53:55. | :54:00. | |
England as the banks of the key regulatory authorities are far too | :54:01. | :54:04. | |
focused on the Square mile of the City of London and the needs of the | :54:05. | :54:10. | |
City of London. We will never, never have a tougher, better financial | :54:11. | :54:13. | |
regulatory system unless we widen that we met until the whole nation, | :54:14. | :54:20. | |
the individual nations and the nation of the UK are represented. | :54:21. | :54:24. | |
Until we do that the Bank of England is still suspect. That was not | :54:25. | :54:31. | |
delivered. So there is still across this country, there is still a | :54:32. | :54:37. | |
suspicion that the banking regulars of the system operates in the | :54:38. | :54:40. | |
interests of the mentally of the bankers rather than the people and | :54:41. | :54:46. | |
until that changes we will not have a better or tougher regulatory | :54:47. | :54:50. | |
system, we will simply have the same old regulatory system dressed up | :54:51. | :54:55. | |
under a different name, and the same old banking crisis will be round the | :54:56. | :55:04. | |
corner yet again. Order! Order! Under the order of the house of the | :55:05. | :55:07. | |
first of federally I must now put and indeed I will put the question | :55:08. | :55:12. | |
necessary to bring proceedings to a conclusion. As many in favour of | :55:13. | :55:20. | |
CIA, contrary now. Division. Clear the lobby. -- in favour say I. | :55:21. | :57:49. | |
Order! Order! The question is will it now be read at the third time? As | :57:50. | :57:58. | |
many in favour CIA, to the contrary now. Tellers for the eyes, Sarah | :57:59. | :58:04. | |
Newton and Jackie Doyle Price. Tellers for the nose, Judith Cummins | :58:05. | :58:14. | |
and Jeff Smith. -- for the nos, Judith Cummins and Jeff Smith. | :58:15. | :03:39. | |
Order, order! The ayes to the right, 298. The noes to the left, 237. | :03:40. | :08:11. | |
Thank you. The ayes to the right, 298, the noes to the left, 237. So | :08:12. | :08:18. | |
the ayes have it, the ayes have it. Unlock! Order, we now come to Motion | :08:19. | :08:24. | |
to move? The question is as on the to move? The question is as on the | :08:25. | :08:28. | |
order papers. As many as are of the opinion, say "aye". Vote-no macro. I | :08:29. | :08:33. | |
think the ayes have it, the ayes have it. Mr Gavin Williamson. Thank | :08:34. | :08:39. | |
you, Mr Speaker. I would like to present a petition today signed by | :08:40. | :08:44. | |
4962 people who have joined me in our campaign against building on the | :08:45. | :08:49. | |
green land between it grates whirly and chiselling K. The residents of | :08:50. | :08:57. | |
those places in the South Staffordshire constituency and | :08:58. | :09:00. | |
others, declared that the current proposals to build 136 houses will | :09:01. | :09:09. | |
identity of our individual villagers identity of our individual villagers | :09:10. | :09:11. | |
and could cause substantial environmental damage and it further | :09:12. | :09:18. | |
notes that residents have already successfully fought these proposals | :09:19. | :09:24. | |
at a local council level in 2013. The petitioners therefore request | :09:25. | :09:28. | |
that the House of Commons urges the Government to take all possible | :09:29. | :09:32. | |
steps to encourage South Staffordshire District Council to | :09:33. | :09:36. | |
reject these proposals and if the proposals go to the planning | :09:37. | :09:40. | |
Inspectorate, to also encourage them to reject the proposals so that the | :09:41. | :09:44. | |
green belt can be conserved for future generations. | :09:45. | :09:58. | |
come now to the journeyman. Beg to come now to the journeyman. Beg to | :09:59. | :10:11. | |
move? Thank you. The question is that this House do now adjourned. -- | :10:12. | :10:21. | |
Journal. Thank you, Mr Speaker. I'm grateful for this debate and far | :10:22. | :10:25. | |
Right Honourable members for expressing interest in it. I'm | :10:26. | :10:29. | |
particularly that the right back remember he's here to answer for the | :10:30. | :10:35. | |
Government an eye. I know the nation sleeps more soundly and sweetly in | :10:36. | :10:37. | |
the knowledge he is our security minister. Mr Speaker, the question | :10:38. | :10:44. | |
is not a new one, we have grappled with how we view and respond to our | :10:45. | :10:50. | |
fellow citizens going abroad to fight in foreign wars, not for | :10:51. | :10:54. | |
money, as mercenaries, but because they believe it is the right thing | :10:55. | :11:00. | |
to do. Joining the side of the conflicts which ostensibly at least, | :11:01. | :11:03. | |
is certainly to those unversed in the complexities of an individual | :11:04. | :11:09. | |
conflict, holds widespread public support is viewed by many, but at | :11:10. | :11:14. | |
that time the majority as the right side. Or is in one way or another, | :11:15. | :11:22. | |
Britain's ally. 50,000 English, Scots, Welsh and Northern Ireland | :11:23. | :11:26. | |
fought in the American Civil War. Several thousand fought in the | :11:27. | :11:30. | |
Spanish Civil War, as memorialised by George Orwell. And dozens, more | :11:31. | :11:35. | |
recently, of the British volunteers joined Croatian units during the | :11:36. | :11:42. | |
Yugoslav wars between 1991 and 1995. After the experience of the American | :11:43. | :11:46. | |
Civil War, Parliament passed the foreign enlistment act, which | :11:47. | :11:50. | |
prevents Britons from a listing in a foreign army at war with another | :11:51. | :11:54. | |
state, currently at peace with the United Kingdom. But that act was | :11:55. | :12:01. | |
never properly enforced. It was and remains extremely difficult to | :12:02. | :12:06. | |
monitor and prosecute. Though was returning from the Spanish Civil War | :12:07. | :12:10. | |
were frequently expecting to be given a hero 's welcome. In fact, | :12:11. | :12:15. | |
invariably, they were treated with suspicion by the police. They faced | :12:16. | :12:20. | |
workplace discrimination and many were even prevented from a listing | :12:21. | :12:30. | |
in World War II. -- and listing. Today, many, perhaps hundreds, I do | :12:31. | :12:34. | |
not have an authoritative estimate, perhaps the Minister will give us | :12:35. | :12:37. | |
that in a minute, hundreds perhaps of British citizens have travelled | :12:38. | :12:41. | |
to northern Iraq and from there into Syria training with the Kurdish | :12:42. | :12:48. | |
forces and the militias and ultimately, fighting on the against | :12:49. | :12:58. | |
IS. In some cases the most fierce fighting at Kobane in this conflict. | :12:59. | :13:05. | |
He's got a very, very interesting debate here at the adjournment. Many | :13:06. | :13:11. | |
of the people who went to the middle East to fight on the Allied side, | :13:12. | :13:18. | |
they said that we are as a Government supported them. They | :13:19. | :13:21. | |
checked with police forces before and were allowed to go. But when | :13:22. | :13:24. | |
they returned some were arrested and questioned. Isn't it wrong if you | :13:25. | :13:32. | |
check if you can go and then when you return you are rested? Why | :13:33. | :13:37. | |
should that be? I will return to that issue in a moment. The | :13:38. | :13:40. | |
Government and country needs to have a clear and consistent policy. If we | :13:41. | :13:45. | |
let individuals go, why should we arrest them for terrorism on their | :13:46. | :13:51. | |
return. I'm grateful to the honourable gentleman for giving way | :13:52. | :13:54. | |
and I applaud him for his debate. The opposite of that happened in my | :13:55. | :13:58. | |
constituency when one of my constituents went to Iraq and fought | :13:59. | :14:02. | |
with the Kurdish forces and when he returned to Heathrow, he expected to | :14:03. | :14:09. | |
be stopped, but he was not. He then went back to jailing and self | :14:10. | :14:12. | |
referred to the police. The first duty of estate is to protect its | :14:13. | :14:15. | |
citizens, we should be checking as we go out and come back, otherwise | :14:16. | :14:18. | |
they are a risk to national security. I thank the honourable | :14:19. | :14:29. | |
member. Their stories suggest there is not a clear policy and they do | :14:30. | :14:32. | |
not give us great confidence our border controls as different | :14:33. | :14:37. | |
individuals have clearly been treated in different ways. A growing | :14:38. | :14:40. | |
number of individuals have been profiled in the media, some have | :14:41. | :14:44. | |
even been on more than one at all, if you like, and I've been in | :14:45. | :14:48. | |
contact with 20 families, some of who I will refer to this evening, | :14:49. | :14:54. | |
including one of my own constituents that is from Newark in | :14:55. | :14:58. | |
Nottinghamshire. Two Britons and an Irish man were arrested this weekend | :14:59. | :15:03. | |
crossing back from Syria into northern Iraq. So this remains a | :15:04. | :15:08. | |
topical issue. And at least one British citizen, a former Marine, | :15:09. | :15:14. | |
from Barnsley, has been killed in action. The Foreign Office says the | :15:15. | :15:21. | |
jute difficulties and the lack of control and services in the area it | :15:22. | :15:24. | |
is difficult to estimate whether or British citizens have been killed in | :15:25. | :15:28. | |
action and what may have become of their bodies. Behind every one of | :15:29. | :15:31. | |
these individuals is a family, and I have been able regular contact with | :15:32. | :15:37. | |
my constituents, Aidan's mother, Angela and his grandmother, Pamela, | :15:38. | :15:42. | |
Jerry is ten months abroad. I cannot understand -- understates their | :15:43. | :15:45. | |
concern and anguish. The initial thought that they would turn on the | :15:46. | :15:51. | |
television on one day see their son or grandson in an orange jacket on | :15:52. | :15:56. | |
the television. In their case, there is also access to is that their son | :15:57. | :16:00. | |
and grandson took this decision in a sound mind and good faith because he | :16:01. | :16:04. | |
could not continue to watch the atrocities on television every night | :16:05. | :16:08. | |
and turn a blind eye. I would not dare to generalise about the motives | :16:09. | :16:11. | |
of all those who have gone out there, but those I have met and I | :16:12. | :16:16. | |
have met several good and brave people who deserve respect and fair | :16:17. | :16:21. | |
treatment under the law. I thank the Honourable member for giving way and | :16:22. | :16:25. | |
allowing me to seek a bit of ad fight on something that is unusual | :16:26. | :16:30. | |
case of a UK citizen injured fighting the forces of base-macro | :16:31. | :16:36. | |
who I met in a refugee camp in France and he is the leading a | :16:37. | :16:40. | |
pretty miserable existence because he refuses to abandon his wife and | :16:41. | :16:44. | |
baby boy who are not entitled to seek asylum did have two that | :16:45. | :16:50. | |
country in Kurdistan. He is not entitled to asylum in the UK or do | :16:51. | :16:55. | |
they meet the minimum of these requirements, partly due to his | :16:56. | :16:58. | |
injuries. I am seeking advice on how we can help this courageous UK | :16:59. | :17:04. | |
citizen so we can get him and his family out of this miserable | :17:05. | :17:07. | |
existence of the refugee Council of Europe and back here where he | :17:08. | :17:11. | |
belongs. I am grateful to the honourable lady for raising that and | :17:12. | :17:15. | |
perhaps the Minister will respond to her point later. I am pleased that | :17:16. | :17:19. | |
other honourable member have come across individuals in the same | :17:20. | :17:27. | |
circumstances I have. These individuals are entering an | :17:28. | :17:29. | |
exceptionally dangerous situation which we must ponder in this House. | :17:30. | :17:33. | |
Many are not at all prepared or suitable to go to these conflict | :17:34. | :17:39. | |
zones. Some of the militias are wittingly or unwittingly becoming | :17:40. | :17:42. | |
involved in divide opinion sharply. It is difficult for the layperson to | :17:43. | :17:46. | |
navigate their record and legal factors in the United Kingdom. Some | :17:47. | :17:51. | |
of these groups have been accused of war crimes and some of the | :17:52. | :17:55. | |
association with terrorism. The diplomatic situation is complex and | :17:56. | :17:59. | |
becoming increasingly hostile toward those and listing in Iraq and | :18:00. | :18:04. | |
Turkey. And it is exceptionally difficult to understand what these | :18:05. | :18:08. | |
citizens have actually done whilst in the field. Also, who they have | :18:09. | :18:12. | |
associated with and to predict with confidence how they will behave on | :18:13. | :18:16. | |
their bitter. I start from the premise that whilst we act knowledge | :18:17. | :18:21. | |
the bravery and seek fair and appropriate treatment, we should be | :18:22. | :18:25. | |
discouraging and inhibiting British citizens from going out in the first | :18:26. | :18:31. | |
place to the extent that we can. Particularly, and I will return to | :18:32. | :18:35. | |
this, if we are to arrest some of them when they return under the | :18:36. | :18:39. | |
terrorism act, there are several militias operating in the region but | :18:40. | :18:42. | |
the principal group I have come across and which is recruiting | :18:43. | :18:52. | |
British citizens, the YPG have a Facebook account. They are easily | :18:53. | :18:56. | |
contactable on the line. My constituents, with no prior | :18:57. | :18:59. | |
knowledge of the reason was able to Google search, make contact, | :19:00. | :19:03. | |
organises travel at low cost and with great ease. As far as I know, | :19:04. | :19:08. | |
and perhaps the Minister could comment on this, the Home Office | :19:09. | :19:11. | |
Internet providers have made no effort to close down these sites in | :19:12. | :19:15. | |
a way they might do off-site encouraging recruitment of British | :19:16. | :19:19. | |
citizens to fight on the other side. Many recruited on making rational | :19:20. | :19:23. | |
choices and it is not my intention this evening to imply otherwise or | :19:24. | :19:27. | |
discredit them. But there is clear evidence that some are far less well | :19:28. | :19:32. | |
equipped to make those decisions. A 19-year-old man who previously | :19:33. | :19:35. | |
worked as a florist in Manchester and had never left the UK in his | :19:36. | :19:40. | |
life, a young man with Asperger's, a British citizen who had been | :19:41. | :19:50. | |
diagnosed with PTSD and previously tried to take his life. Journalists | :19:51. | :19:54. | |
have been contacted by former service men asking for ways to | :19:55. | :19:58. | |
return to Iraq, support the Iraqi and Syrian people in the name of | :19:59. | :20:02. | |
their fallen comrades who gave their lives in the Iraq and Afghan wars. | :20:03. | :20:11. | |
I'm most grateful to the honourable gentleman and initiating this | :20:12. | :20:14. | |
excellent debate. We must try and prevent people going in the first | :20:15. | :20:18. | |
place, he is correct. What more does he think the Internet companies | :20:19. | :20:22. | |
should do to bring down these sites as quick as possible? Right now, the | :20:23. | :20:27. | |
referral process takes too long. I am grateful for that and I concur. | :20:28. | :20:35. | |
It is important that not only those sites which are actively recruiting | :20:36. | :20:39. | |
British citizens to fight for Daesh macro, but of those sites that may | :20:40. | :20:45. | |
be preying on vulnerable citizens and nonetheless getting themselves | :20:46. | :20:49. | |
into great danger must also be taken down by Facebook and others. Some of | :20:50. | :20:55. | |
those individuals, particularly ex-service men and women would be | :20:56. | :20:58. | |
advised not to go to the conflict zone. Few questions are asked by | :20:59. | :21:04. | |
recruiters, no military experience is required, health is not checked | :21:05. | :21:08. | |
and many arrive at airports completely in the dark about what | :21:09. | :21:13. | |
they are to expect. They could be kidnapped, held to ransom, who | :21:14. | :21:20. | |
knows. When he says health is never checked when going out, then the | :21:21. | :21:25. | |
question arises about the trauma and their state of mind needs to be | :21:26. | :21:29. | |
checked when they return for the addition of security, because they | :21:30. | :21:32. | |
may inadvertently get drawn into other criminal activity. I am | :21:33. | :21:36. | |
grateful for that point and the short answer appears to be very | :21:37. | :21:40. | |
little support is offered to those returning individuals. Certainly, my | :21:41. | :21:48. | |
only research suggests the vast majority are not even questioned by | :21:49. | :21:52. | |
the police or Security Services on a return. Many have a little knowledge | :21:53. | :21:56. | |
of the principal militias I've just described such as the YPG. They | :21:57. | :22:05. | |
divide opinion and many if not most Britons who go out have no real | :22:06. | :22:10. | |
knowledge of this group or the accusations against them. And the | :22:11. | :22:15. | |
have accused YPG of war crimes. -- Amnesty International. Recent | :22:16. | :22:27. | |
reports suggest that some foreign fighters have left the YPG in the | :22:28. | :22:30. | |
field because of their views and joined others even more obscure such | :22:31. | :22:34. | |
as the so-called self-sacrifice group which operates in another | :22:35. | :22:42. | |
region. I thank you honourable gentleman for giving way. What | :22:43. | :22:56. | |
position do you put ex-service men who wants to fight against the | :22:57. | :22:57. | |
Kurds? | :22:58. | :23:02. |