Ken Clarke tears into the Government on automotive loan package

We were promised that he is still a formidable operator, and yesterday Ken Clarke showed his mettle at the despatch box. Responding to the Government's announcement (made in the Commons by Lord Mandelson's deputy Ian Pearson) that it will make up to £2.3 billion available in loans, Mr Clarke said:

"May I begin by thanking the Minister for welcoming me to my new position? I think I have debated matters upstairs in Committee with him twice in the past six months, so I am used to his courtesy and competence, and I look forward to our exchanges.

I am grateful to the Minister for his courtesy in repeating to this House the statement made a few moments ago by the Secretary of State in the upper House. I actually think it is a constitutional outrage that it is being done in that way, and that it is a very poor way of accounting to the House of Commons, but at least we have been given the details of the package, such as it is.

May I say that I am slightly disappointed? I thought that the Secretary of State, whom I am shadowing, would produce some new ideas and some dynamite. He has been trailing a massive programme of support for the automotive industry, but unfortunately the Minister has had the task of producing pretty small beer. Is it not the case that the Secretary of State is not producing a bail-out because the Treasury has finally won an argument inside the Government and explained to him that it cannot afford the kind of support for the industry that, it seemed to me, his Department was trailing over the weekend?"

We'll have to wait and see whether this loan arrangement does indeed end up being a bail-out.

George Osborne says first Government bank bail-out failed

In the company of his new front bench colleague Ken Clarke, Shadow Chancellor of the Exchequer George Osborne responded to the Government's statement on financial markets yesterday.

Alistair Darling announced a new £50 billion Bank of England fund to purchase corporate assets from banks, that Northern Rock may no longer rapidly reduce its mortgage book and that the Government will convert its stake in RBS into ordinary shares, taking up perhaps 70 per cent of RBS.

Mr Oborne responded:

"I begin by thanking the Chancellor for his statement, but he should have been straighter with the British people about the announcements that he is making today. This is not some long-planned, carefully thought-through second phase of Government policy; it is instead the clearest possible admission that the first bail-out of the banks has failed, and now the Government have no option but to attempt a second bail-out—a bail-out whose size we still do not know, whose details remain a mystery and whose ultimate cost to the people of Britain will be known only when this Government have long gone.

Of course we cannot allow the banking system to fail—but for two months now, the Opposition have warned the Government that bank recapitalisation was not working, that the cost of the preference shares was too high, that the liquidity operations had to be extended, that the promised lending to businesses was not taking place, and that Government guarantees to get lending flowing to the real economy were needed."

The new team has started well, and it is perfectly clear that Mr Osborne is as happy about having Mr Clarke on board as the Conservatives are claiming.

Government defeats cross-party amendment on Speaker's committee by four votes

The Government has just defeated an attempt by a cross-party group of MPs to widen the remit of the committee investigating the circumstances of the arrest of Conservative MP Damian Green and the search of his office by a mere four votes.

The amendment - moved by Sir Menzies Campbell - was also signed by a plethora of seniors MPs from different parties, including Conservatives David Davis, Michael Howard and Kenneth Clarke. Defeated by 285 votes to 281, it would have allowed for the committee to get on with its deliberations immediately and not necessarily have a government majority.

The main motion setting up the committee was then passed by 293 votes to 270.

Theresa May has just told the Commons that she and David Cameron were recommending that Conservative MPs do not sit on the committee because it "blatantly flies in the face" of the desire the Speaker outlined last week as to its nature.

Simon Hughes said that the Liberal Democrats took the same view.

The debate saw contributions from a number of Conservatives and here are some of the highlights as documented by PoliticsHome:

Theresa May:

"The motion before us today flies in the face of the Speaker's statement.  It is not only a gross discourtesy to the Speaker, but a flagrant abuse of the power of the executive, a blatant attempt to pack the committee, and delay its work until the controversy is over.  This Parliament deserves better from its Leader.

"The Leader should be in no doubt that if a committee is set up with a government majority that it would not have the support of the opposition."

"The police will not think worse of the Home Secretary to ask awkward questions like 'have you applied for a warrant?'  That is not improper interference. It is the proper exercise of scrutiny for ensuring that the police are doing their job.

"If this Committee is stuffed with Government Officials, we will treat this committee with the same contempt that this Government has shown to the House."

Ken Clarke:

"I do realise how annoying leaks are.  They're not always heroic.

"I don't think that anybody here is in favour of a totalitarian government.  No one on this side is running spies in the government and no one on the front bench is advocating a police state.  I think we have a House of Commons that is committed to parliamentary democracy. 

"We are led in an increasing air of carelessness and indifference.  We don't all respect the rule of law."

Other robust contributions were made by Michael Howard, Iain Duncan Smith and David Davis.

Jonathan Isaby

Highlights from the Pre-Budget Report debate

Following Shadow Chancellor George Osborne's success in securing it, the House of Commons held an Emergency Debate on the Pre-Budget Report yesterday.

Mr Osborne was on bullish form:

"The public would have found it extraordinary if the House of Commons had not properly considered the huge tax measures put forward by the Chancellor on Monday, or indeed the tax measures concealed by the Chancellor on Monday. Those measures are being debated by families across the country who fear their impact, and it is astonishing that the Government did not want them debated in the House of Commons.

The only explanation is that the Prime Minister is running away from the argument, because he knows that he is losing the argument. This Budget started to unravel from the moment it was delivered. The doubling of the national debt shocked the entire country. [ Interruption .] Labour MPs may not be shocked, but the country is shocked to realise that the Government have taken it to the edge of bankruptcy. Within minutes of the report being published, it became clear that the national insurance rises would, contrary to the Chancellor’s claims, hit people on modest incomes. The small print of the Budget book shows that the Chancellor had been less than candid about the stealthy duty rises on alcohol and petrol. Then we discovered the £100 billion black hole in the tax revenues with no explanation of how it will be filled.

...

Yesterday lunchtime, the Institute for Fiscal Studies pointed out that the new top rate would raise, in its words, “virtually nothing”. The Governor of the Bank of England told the Treasury Select Committee yesterday that the Government should be focusing on fixing the banking system. Meanwhile, retailers are up in arms about the huge costs and logistical nightmare imposed by the temporary VAT cut. Last night, the Chancellor U-turned on the proposed hike in whisky duty, which he had announced only 24 hours earlier. Finally, it has been revealed in an official Treasury document signed off by a Treasury Minister that there is a secret tax bombshell to increase VAT to 18.5 per cent."

Continue reading "Highlights from the Pre-Budget Report debate" »

Ken Clarke: The origin of referendums lies with people such as Napoleon and Mussolini

Ken Clarke MP explains his opposition to a referendum:

"There has only ever been one United Kingdom-wide referendum in this country. I had the pleasure of campaigning hard in that election and of finding myself on the winning side. I very much hope that we never have a second referendum, and I am rather appalled that I should be taking part in a debate so many years later in which people are pressing to have another UK-wide referendum.

The precedent was a bad one. In my opinion, Harold Wilson called that referendum for totally cynical reasons, as is widely acknowledged on all sides. He was concerned about party management, almost regardless of which way the result would go. In the event, the pro-European side won quite easily—by a two-to-one majority, I recall—and the people who had demanded the referendum immediately reneged on their undertaking to abide by the result.

A referendum was demanded in those days by the people who were the most numerous Eurosceptics—the ancestors of the hon. Member for Glasgow, South-West (Mr. Davidson). Benn and the left regarded the European Union as a capitalist plot, and the moment they took control of the Labour party in the early 1980s, they started campaigning for immediate withdrawal from the European Union, with no more referendums. The whole thing was a sad and cynical exercise, which fortunately did not do too much lasting damage.

Over the years, the only advocates of referendums as an addition to our constitution whom I can think of—the landmark people—have been Tony Benn and Jimmy Goldsmith. Both of them represented Eurosceptic opinion, but until recently they were, comparatively speaking, voices in the wilderness.

We do not have to go back too long to find a time when people in this House who really believed in the value of referendums were hard to find. Indeed, it was quite easy for them to be swept away. I served under three Prime Ministers: Ted Heath, Margaret Thatcher and John Major. I am glad to say that under each of them, we overruled demands for referendums—almost always on Europe—with the support of the mainstream of the Labour party. It was the accepted wisdom of parliamentarians that we were against them.

I am astonished to find the atmosphere so completely changed now. In fact, it worries me that members of the political ruling class of this country have now lost their self-confidence and their ability to rely on their legitimacy as parliamentarians to such an extent that no one among them dares defy the media, the hard-line Eurosceptics or any other people who demand a referendum, because they find themselves faced with a parliamentary majority that they seek to overturn."

Mike Gapes MP interjects: "I very much agree with the right hon. and learned Gentleman. It would be helpful to the House if could quote the words of Baroness Thatcher. As far as I can recall, she quoted Clement Attlee describing a referendum as “a device of demagogues and dictators”.  Does the right hon. and learned Gentleman agree with that view?

Ken Clarke: "I remember it. I cannot remember the precise words, but it is actually true. The origin of referendums lies with people such as Napoleon and Mussolini. They were populist people who wished to override their parliamentary institutions and to appeal to the people on carefully chosen issues."

Ken Clarke rejects English Parliament

Former Chancellor Ken Clarke, Chairman of David Cameron's Democracy task force, gave evidence to the Commons' Justice Select Committee yesterday.  The Committee is taking evidence on the impact of devolution.  Within his evidence he said that...

• The Conservatives had been mistaken to oppose devolution in 1997;
• That an English Parliament was unnecessary;
• He would be very surprised if the Tories did not propose an answer to the West Lothian Question in their next manifesto;
• That his task force would recommend a solution to the WLQ but that it would probably be different from that recommended by Sir Malcolm Rifkind.

In his evidence Mr Clarke cited the fact that it was the votes of Scottish MPs that ensured that English students would have to pay top-up fees.  If laws kept being imposed on English voters by Scottish MPs there was, he said, a real risk of damaging the Union.

He briefly explained why he was against an English Parliament:

"The average Englishman thinks that they have got a Parliament which is the Westminster Parliament and I think resentment could perfectly well be sorted out so long as we could tackle what I regard as this niggle that sometimes English matters are setlled against the majority of votes of the English MPs.  This English Parliament would be quite a dangerous remedy to that because it will just take a little step further this sense of separate identity."