By Matthew Barrett
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Guido Fawkes has a list of new Conservative members of Select Committees, from Graham Brady's office. Mr Brady explains: "For the following committees I have received the same number of nominations as there are vacancies, the following are therefore elected". The appointments are:
Communities and Local Government
John Stevenson (Carlisle), replacing George Hollingbery (Meon Valley), who became PPS to Theresa May at the reshuffle.
Chris Skidmore (Kingswood), replacing Damian Hinds (East Hampshire), who became PPS to Mark Francois, the Minister of State for Defence Personnel, Welfare and Veterans.
Andrew Percy (Brigg and Goole), replacing Dr Daniel Poulter (Central Suffolk and North Ipswich), who was made the Parliamentary Undersecretary of State for Health Services.
By Matthew Barrett
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Following on from the last few days' rolling blogs, I have below a final list of the MPs (and Baroness Warsi) appointed as Ministers for each department. I have put new appointments in bold.
Department for Business, Innovation and Skills
Department for Communities and Local Government
By Tim Montgomerie
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Andrew Bridgen MP (who writes a good piece on health and safety red tape on ConHome today) recently put a written question asking how much the €uro Implementation Unit cost UK taxpayers.
Mark Hoban, Treasury Minister, has just replied:
The cost of the Euro Preparations Unit in each year since its inception is difficult to ascertain, since much of the expenditure has been grouped within other departmental costs. An estimate of spending in those years that separate data were available is set out in the following table:
By Tim Montgomerie
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Earlier this week John Baron MP called a debate in Westminster Hall to question UK participation in IMF bailouts of the Eurozone. Pasted below are extracts from what he, Mark Hoban MP and Mark Field MP said.
Endless bailouts and EU summits are not addressing the Eurozone's underlying uncompetitiveness: "Will additional IMF funding work? That will simply reinforce existing eurozone policy, which is itself fundamentally flawed. The existing policy simply does not address the core causes of the crisis, which are a lack of competitiveness and Governments spending too much. Debt is the problem, as I have said, not demand. We have had 14 or perhaps even 15 gatherings, conferences and summits to save the euro, but each has failed to address the core reason for the problem, which is a fundamental lack of competitiveness."
IMF packages usually rely on devaluation nut that option is not available inside the Eurozone: "Another reason why this policy will fail is that it fundamentally ignores the importance of devaluation to recovering economies. Usually, there are three elements in an IMF package: reduced spending, increased revenue and the ability to allow the currency to devalue. That last bit is important because a currency that devalues helps to take the strain off the economy. If an economy is deemed to be, say, 25% uncompetitive compared with its neighbours, allowing its currency to depreciate to about the same extent will go a long way towards taking the strain. If we cut off that option, that 25% gain in competitiveness can only really be brought about by cuts to public services, salaries and pension funds. That is simply not an option, and for that reason that makes those austerity packages so much worse."
The Eurozone, not the IMF should address its problems: "I question why the IMF is getting involved in these bail-outs. The eurozone is a currency union. If a state within the United States got into trouble, the IMF would not be expected to ride to the rescue. The same should be true of the eurozone. I contend that Greece is not economically sovereign; it has no central bank; it cannot set interest rates; it has no currency; and it cannot devalue. I would go so far as to question whether Greece is even politically sovereign. At least in the United States, the people can elect the governor of individual states. That is not happening in Greece and Italy."
The Bundesbank should use its reserves to save the Eurozone: "What makes the situation even worse is that the eurozone has resources that could do much more to help the situation. For example, the Bundesbank has reserves of £180 billion, £130 billion of which is in gold, and gold is going up in price. That is in stark contrast to our country and the action of the previous Government, who sold gold at near the bottom of the market."
The UK government is showing no leadership: "The Government seem to have fallen in behind the French and Germans in this cry that somehow we must save the euro. I suggest to the Minister that that is economic clap-trap. Binding divergent economies into a single currency without full fiscal union was, and remains, a massive mistake. Similar thinking warned us of the perils of exiting the exchange rate mechanism, yet look what happened then: almost to the day that we exited the ERM, our recovery started and it was a very strong recovery."
By Matthew Barrett
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Unfortunately Tuesday's main business, the reading (and passing) of the Finance (No. 3) Bill, was more like a left-wing meeting than a proper debate. Labour MPs proposed various ways of taxing banks, including a "Robin Hood Tax" (a tax on financial transactions), and attacked the Coalition's bank levy as too weak.
By Tim Montgomerie
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Yesterday in the Commons Tory MPs voiced concern about legal financial companies that charge very high interest rates. They were speaking in response to proposals from the Labour benches.
Learning the lessons from anti-smoking campaigns, Neil Parish MP called for health warnings to be added to the advertising of companies such as Wonga: "[Wonga] can charge up to 4,500% interest on its loans. Uncle Buck can charge 2,500% and PaydayUK can charge 1,200%. With a base rate of 0.5%, how can charging such inordinate interest be justified? These companies—I call them all loan sharks, to be blunt—travel around our poorest areas... I know that Ministers are not keen on dealing with this problem through regulation, but perhaps we should consider our approach to smoking: we do not stop people smoking—although we have banned it in public places—but we put large health warnings on cigarette packets. The Financial Services Authority, or whichever body will be responsible, should at the very least take action so that there are serious health warnings for those considering taking out these loans."
The MP for Tiverton and Honiton also supported greater support for credit unions: "About 50% of the population in Ireland are involved in credit unions. In the US and Canada, the figure is about 40%, in Australia and New Zealand it is about 25%, but in the UK it is only 2%. I know that the Government are looking into increasing the availability of credit unions across the country, but we need to act much faster. In the meantime, we have to act against these companies, the loan sharks, because people who take out the loans sometimes have to pay back 10, 20, 30 or 100 times as much as they originally borrowed."
By Tim Montgomerie
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In the late 1990s the Tories became the anti-€uro party but in the Commons yesterday a Tory Treasury minister would not echo Boris Johnson's comments and say that it was time for Greece to leave the single currency and pursue an export-led recovery. The frontbench's reluctance contrasted with the anger of Jack Straw and a host of Tory backbenchers, who all called for Greece to quit the currency zone.
It was the Eurosceptic Labour MP, Gisela Stewart, who yesterday forced an emergency statement from the Treasury. Ms Stewart wanted to know what were the Treasury’s contingency plans in the event of a Greek default.
George Osborne was attending a finance ministers meeting and it was left to Mark Hoban, the Financial Secretary, to answer on behalf of the Treasury. He declined to detail any contingency plans but did assure the House that the UK would not participate in any European bailout of Greece:
"We did not participate directly in the May 2010 package of support for Greece, and there has been no formal suggestion of UK bilateral loans or use of the EFSM, which is backed by the EU budget. The UK participated in the May 2010 package for Greece only through its membership of the IMF. So the burden of providing finance to Greece is shared between the IMF and euro area member states, and we fully expect this to continue. Our position on that is well understood across the euro area."
Jack Straw, the former Foreign Secretary, was unimpressed by Mr Hoban's reticence and, enjoying his own backbench freedom, urged the Government to declare that the €uro was dead in its current form (video here):
"Will the Minister not recognise that there is now a mood change in Europe? Der Spiegel, the German magazine has had a cover story [image on right declaring "Sudden and Unexpected"] contemplating the end of the euro as we now know it, and Mr Charles Grant, the well known europhile, has done the same in The Times today. Instead of sheltering behind complacent language and weasel words that we should not speculate, the Government should recognise that this eurozone cannot last. It is the responsibility of the British Government to be open with the British people now about the alternative prospects. Since the euro in its current form is going to collapse, is it not better that that happens quickly rather than it dying a slow death?"
Mr Hoban responded by noting that Mr Straw once wanted to take Britain into the €uro but refused to join him in stating that the current arrangement was over. "We have a strong interest, though, in the continued stability of the eurozone, as it is our major trading partner," said Mr Hoban, "Continued instability in the eurozone could be a factor in holding back the recovery of the British economy."
By Jonathan Isaby
Yesterday afternoon saw the Commons approving a variety of documents on "European Union Economic Governance".
Treasury minister Mark Hoban insisted that none of the conclusions of the EU Economic Governance Task Force chaired by Herman Van Rompuy "encroaches on Parliament’s economic sovereignty" and as regard to the plans for macro-economic surveillance, no sanctions will apply to the UK. He continued:
"Will we have to present our Budget to Europe before we present it to the House? No. Will we have to give Europe access to information for budgetary surveillance that is not similarly shared with organisations such as the IMF, or that is not publicly available on the internet? Again, the answer is no. Will powers over our Budget be transferred from Westminster to Brussels? Again, the answer is no."
"We need to recognise that there are lessons to be learned from the economic crisis, but one lesson that stands out that is relevant to the debate this evening and to the documents is that in an open, global economy, no economy exists in isolation. The failures of economic policy in one country can be exported to other nations, and the imbalances in one economy can have an impact on others. Imbalances such as excessive domestic demand and growth can lead to asset bubbles, an over-reliance on exports or divergence in competition across countries. It is in all our interests to improve co-ordination and co-operation in policy making, to tackle those imbalances and increase the resilience and strength of the global economy.
"However, in our view, increasing co-ordination and co-operation has to be consistent with national sovereignty and the accountability of Parliament. It is those principles that frame our response to the documents and our response to the global economic crisis."
"The information that we provide to assist with the surveillance will always be information that has been made available to this House before it is passed to the Commission. Everything that the Commission gets will have been in the public domain, to the extent that a member of the public will have been able to unearth the same data using Google, albeit with less efficiency."
But not all MPs were prepared to accept that there was no further transfer of power to Brussels involved in the arrangements proposed by the Van Rompuy Task Force. Douglas Carswell summed up that position thus:
By Jonathan Isaby
Further to my report earlier and that of Lee Rotherham on Monday about Herman Van Rompuy's Task Force on EU Economic Governance, Treasury MInister Mark Hoban came to the Commons this afternoon to answer an Urgent Question from Bill Cash on the issue.
Mr Hoban said:
"The report concludes that the EU should take steps to reinforce fiscal discipline and that the euro area in particular must face tougher surveillance of its fiscal policies, with sanctions for non-compliance with the pact where appropriate. It also recommends measures to improve EU-level co-ordination of macro-economic policies. That will ensure that any harmful macro-economic imbalances between member states can be identified and corrective action taken. Finally, the report notes that there should be a permanent crisis resolution mechanism for the euro area. The UK supports its conclusions.
"A strong and stable euro area is firmly in the UK’s own economic interests, given the high level of UK exports to those countries and our close economic ties. In the years before the crisis, fiscal discipline was absent, and not just in states in the eurozone. High levels of debt have exacerbated the problems that some member states face during the economic downturn. The taskforce recommends that there should be greater focus on member states’ public debt levels in future, and the Government agree with that approach.
"I am pleased to note that the report explicitly states that sanctions cannot be applied to the UK under the stability and growth pact. Domestic fiscal frameworks play a crucial role in ensuring that member states act responsibly. EU surveillance is useful, but as the House knows, national Parliaments and national institutions must hold Governments to account for their economic and budgetary policies."
"The UK’s exemption from the sanctions proposal will be explicit, and there will be no shift of sovereignty from Westminster to Brussels. The report makes that clear, agreeing that “strengthened enforcement measures need to be implemented for all EU Member States, except the UK as a consequence of Protocol 15 of the Treaty”.
Bill Cash was not persuaded by the minister's claim:
"Unfortunately, the explanation that we have just heard from the Minister does not answer all the questions that arise in this matter. In particular, the Chancellor of the Exchequer was on the taskforce, and the Council’s recommendation is that these moves should strengthen economic governance “in the EU and the euro area”, in other words not excluding the UK, “and can be implemented within the existing Treaties.”
But Mr Hoban re-iterated:
"The language in the taskforce report guaranteed that sanctions would not apply to the UK. Paragraph 18 of the taskforce report refers “to the specific situation of the UK in relation to Protocol 15 of the Treaties.” In addition, paragraph 4 states that the measures set out in the taskforce report can be implemented through “EU secondary legislation…within the existing legal framework of the European Union”, so nothing in the report requires a treaty change. I am aware that France and Germany have suggested that there may be treaty changes, but we have yet to see the details of such proposals, which would be made to the European Council at the weekend."
Putative treaty changes were also raised by Peter Lilley:
"Can the Minister confirm that even if the proposed treaty concerns only and exclusively the member states of the eurozone, it would still require the support of the British Government to go ahead? Can he assure me that that support will not be given without obtaining concessions in return, such as the return of powers to this country that were unnecessarily given? Can he assure me that we will not give that support without demanding a price? This is the ideal opportunity to obtain that price."
Mr Hoban replied:
"My right hon. Friend makes an important point, but I would point out to him that, at the moment, there are no proposed treaty changes on the table. That may happen at the European Council next weekend, and we should respond to those treaty changes as they arise. However, I go back to the comments that my right hon. Friend the Prime Minister made: we will not agree to any changes to EU treaties that move more powers from this country to the EU."
Further notes of scepticism were raised by several other Tory backbenchers:
Douglas Carswell: In June, Ministers made a big deal of the fact that the UK Budget would not need to be submitted to EU institutions before it was brought to the House of Commons. Will the Minister confirm that, in fact, the UK pre-Budget report data are part of the European semester process, and that, while we might be exempt from sanctions, we are part of that surveillance? Will he be honest and admit that we are part of the EU fiscal scrutiny process?
Mr Hoban: I believe that this Parliament should hear news about this country’s finances before the EU does. We have secured that situation and that was the right thing to do.
Jacob Rees-Mogg: The Minister has drawn our attention to paragraph 18 of the report. I am curious about paragraph 16, which refers to “New reputational and political measures”, including the threat of “enhanced surveillance”. Would the British fiscal position be subject to enhanced surveillance in certain circumstances, and what would that mean?
Mr Hoban: I take the view that the measures that my right hon. Friend the Chancellor has announced in relation to strengthening the fiscal framework, and the consolidation that he announced last week, will ensure that we will not be subject to any surveillance whatever.
Philip Davies: Whenever the Minister defends this country from a power grab and a cash grab by the European Union, he will have the enthusiastic support of Members on these Benches. Some of us are rather nervous, however, because when the Conservatives were in opposition, they opposed the European External Action Service, yet they sang its praises when introducing it in the House not long ago. They also opposed giving more money to the European Union, yet they recently rubber-stamped an increase through this House that had been agreed by the previous Government. Does the Minister agree that his Government should be judged on what they do, and not on what they say?
Mr Hoban: Absolutely. That is why I would encourage my hon. Friend to read this document. He will see the gains that we have managed to secure in Europe to defend our position.
It was Treasury questions yesterday.
Shadow Chancellor George Osborne poured scorn on the Budget growth forecasts:
"As the Chancellor knows, the growth forecasts that he gave us in the Budget last week, which predicted a return to boom levels of growth in just two years, and that the economy would stay at those boom levels, were greeted with near-universal derision, yet they were the fiction on which he constructed every other Budget forecast. When he gave those forecasts, did he know that the IMF was planning to contradict them flatly just an hour later?
Mr. Darling: Yes, of course I knew the IMF forecasts. The IMF takes a more pessimistic view, not just of our economy but of every economy across the world. However, we ensure that our forecasts are based on the information that we have. If hon. Members look at the IMF and its forecasting over the past three months, they will see that it has downrated its forecasting three times since last October, which demonstrates the uncertainty in the system. However, I believe that because of the action that we are taking, because of the fact that we have low interest rates, because inflation will be coming down this year, and because of the action that most other countries are taking to look after and support their economies, that will have an effect, which is why I remain confident that we will see growth return towards the end of this year.
Mr. Osborne: Frankly, I do not think the Chancellor is in any position to lecture anyone else about downgrading their forecasts after last week. Is not the truth this—that the dishonest Budget has completely unravelled in the space of just a week? We have seen the IMF produce those growth forecasts, which were wholly different from the ones given an hour earlier to the House of Commons. We have the CBI saying that there is no credible or rigorous plan to deal with the deficit. We have the Institute for Fiscal Studies pointing to the black hole, and yesterday a former member of the Cabinet, beside whom the Chancellor sat at the Cabinet table, said that his tax plans were a breach of a manifesto promise that is damaging not just to the Labour party, but to the economy. Today we had the Prime Minister getting a lecture in prudence while he was in Warsaw. We are used to Polish builders telling us to fix the roof when the sun is shining, but not the Polish Prime Minister as well.
Does not the collapse of the Budget in the past week and the damage to the Chancellor’s credibility make an almost unanswerable case for an independent office for Budget responsibility, so that we get independent forecasts on Budget day and the assumptions of the Budget are believed by the public?
On Friday the House of Commons had its second reading of the Co-operative and Community Benefit Societies and Credit Unions Bill, brought in by Labour MP Malcolm Wicks (Croydon North).
Shadow Treasury Minister Mark Hoban spoke for the Conservatives. Here are some highlights from his speech:
"The hon. Gentleman asked whether we would support the Bill. He acknowledged that the Liberal Democrats were going to do so, and I see that the hon. Member for Twickenham (Dr. Cable) is a sponsor. I am pleased to say that we, too, will support it. It is very important, as it will modernise the legal framework of co-operatives and protect the interests of the members of co-operatives and industrial provident societies through the provisions that have been expanded on at great length.
We should not underestimate the vital contribution that co-operatives make to the economy. One in three of the population are members of at least one mutual, and among Members of Parliament that rises to the staggering proportion of seven in 10. That strikes me as a very high proportion and shows that it is not just on the Labour Benches that there is interest in, and membership of, the co-operative and mutual sector. I myself am a member of a credit union, the Portsmouth Savers credit union, and my wife is a member of the Co-operative Retail Society. The largest supermarket in the part of my constituency in which I live is run by the Co-op, as indeed are many of the convenience stores. Co-ops are sometimes characterised as being something of the north—I say that as someone who was born and brought up in Durham, and whose mother still remembers her dividend number—but the co-operative and mutual societies movement spreads across the whole country. Every community is touched in some way by its work.
This written answer to Shadow Charities Minister Nick Hurd from 21 April suggests that the Government isn't tightening its belt like it should:
"To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform with reference to the answer to the hon. Member for Fareham of 4 February 2008, Official Report, column 894W, on departmental marketing, how much the Insolvency Service has spent on promotional products since February 2008. 
It was this February 2008 question from Mark Hoban (currently a Shadow Treasury Minister) that prompted Mr Hurd's follow-up:
"To ask the Secretary of State for Business, Enterprise and Regulatory Reform what products featuring departmental or Government branding were procured by (a) his Department and its predecessor and (b) its agencies in each of the last five years. 
The Insolvency Service have spent £14,489 in the last five years on a limited number of promotional products with Insolvency Services branding, including banner stands, pens, clocks, mugs and USB memory sticks."
Mr Hurd established the nature of the branding in February this year:
"To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform with reference to the answer to the hon. Member for Fareham of 4 February 2008, Official Report, column 894W, on departmental marketing, what branding or logos were published on each of the branded Insolvency Service (a) pens, (b) clocks, (c) mugs and (d) USB memory sticks. 
This seems a rather cavalier use of funds, even on a small scale. And more than a little ironic!
The Equitable Life scandal was rightly prioritised by Conservative members, who leapt on Economic Secretary to the Treasury Ian Pearson, who had this to say:
"I am very disappointed that the Public Administration Committee should choose to obscure the real help that it accepts the Government’s payments scheme will deliver under extreme headlines, seemingly driven by an uncritical acceptance of the findings of the ombudsman’s report and by its unjustifiable and irresponsible characterisation of the manner of the Government’s response. [ Interruption. ] As a Government, we do not depart lightly from any of the ombudsman’s findings, but— [ Interruption. ]
Ian Pearson: The Government do not depart lightly from any of the ombudsman’s findings, but in such an important and complex case we have a clear duty to the taxpayer to ensure that our response is informed by a proper and comprehensive consideration of her report. That is what we have done and, as I have indicated previously, we want to move forward with an ex gratia payment scheme just as quickly as possible. We are talking to Sir John Chadwick about the advice that he is providing."
South Staffordshire's Sir Patrick Cormack (above right) was appalled:
"Is the Minister aware that he has just made one of the most shameful statements to have been made from that Dispatch Box in many years? He has rubbished a Committee presided over by one of his own greatly respected colleagues, and discounted the unprecedented second letter from the ombudsman that we all received this week. He has had no support from the Benches behind him, as not a single Labour Member has risen to echo his words. He should be deeply ashamed of himself, because he is bringing the Government and the whole system into disrepute.
Ian Pearson: I have a lot of respect for the hon. Gentleman, who has a very long track record of upholding standards in this House, but we have departed from the ombudsman’s findings only where we have clear and cogent reasons for doing so. We have applied scrupulously the terms of the Parliamentary Commissioners Act 1967, as interpreted by the Court of Appeal in the Bradley judgment. For no other reasons have we departed from those findings. I have to say that I remain very disappointed indeed that the PAC does not appear to have understood some of the arguments that we have made to it."
(The Public Administration Committee is chaired by Dr Tony Wright.)
Shadow Minister for the Cabinet Office Francis Maude has pressed the Prime Minister over the rather fraught issue of Lord Falconer's pension. In November 2007 the Telegraph reported that Lord Falconer was ready to sue Gordon Brown over the size of his pension. Lord Chancellors have historically had generous arrangements to reflect the fact that they have to give up legal careers when they assume the role. Lord Falconer was reported to believe that he was entitled to a pension twice what the Cabinet Office had in mind, i.e. £52,193, according to the Telegraph.
A £100,000 plus pension would not go down well in the current climate, if ever.
Mr Maude has asked the Prime Minister about Lord Falconer's pension:
"Mr. Maude: To ask the Prime Minister pursuant to the answer of 28 January 2009, Official Report, column 541W, on Ministers: pensions, whether Lord Falconer of Thoroton is to receive (a) a pension equivalent to that received by other Secretaries of State in the House of Lords, (b) a pension entitlement derived from the provisions of the Lord Chancellor’s Pension Act 1832 as amended or (c) a pension settlement on another basis in respect of his service as Lord Chancellor; and if he will make a statement. 
"Mr. Heald: To ask the Prime Minister whether the Secretary of State for Constitutional Affairs will receive the pension entitlement of the Lord Chancellor (a) during the planned transition period before the proposed abolition of the office and (b) subsequently, if the office is abolished; and if he will make a statement. 
The Prime Minister: No. The Secretary of State for Constitutional Affairs has elected to receive only a salary and pension equivalent to that received by other Secretaries of State in the House of Lords."
It would be helpful - for the public if not the Labour Party - if a specific figure could be put on Lord Falconer's pension entitlement.
In the latest edition of Hansard, the Prime Minister gives some rather terse responses to written questions put down by Conservative members.
Chichester MP Andrew Tyrie asked about special advisers:
"To ask the Prime Minister how many expert advisers, excluding special advisers, have been commissioned by his Office since June 2007; and on which topics they have advised. 
Here is that answer:
"Mr. Tyrie: To ask the Prime Minister what expert advisers have been commissioned by his Office since 1997; on what topic each was commissioned; and whether the adviser so appointed made a declaration of political activity in each case. 
The Prime Minister: Since 2003, the Government have published on an annual basis the names and overall cost of special advisers and the number in each pay band. Updated information will be published in the usual way."
Shadow Environment minister Greg Barker wanted to know - perfectly reasonably - what the Prime Minister's team is doing about energy and climate issues:
"To ask the Prime Minister what work the No. 10 Policy Directorate (a) has undertaken and (b) plans to undertake on energy and climate-related matters. 
That answer is absurdly brief, and pretty much tautologous.