George Osborne MP

3 Apr 2009 08:28:56

George Osborne says G20 summitry will appear very remote to mums in fear of their jobs and families fearing losing their homes

Highlights of George Osborne's response to the Chancellor's statement on the G20 outcome:

Welcomes increased resources for IMF: "The substantial increase in the resources available to the IMF was widely trailed and is very welcome. It will help economies in trouble at a time when credit is scarce, and $500 billion is pledged from member states. Of course, it is a credit facility, so is there an estimate of how much of it is expected to be drawn on over the coming year, as that will determine how much individual countries’ taxpayers—including British taxpayers—might have to provide?"

Welcomes increased commitment to trade finance: "The commitment on trade finance is welcome, too, but how much of the $250 billion in credit lines and guarantees that the communiqué talks about has actually been announced already by national Governments and how much is a new commitment? Clearly, it looks as though the $50 billion for the World Bank is, but what about the remaining $200 billion? When will all that finance be available? As we have all seen in Britain, announcements are all well and good but what saves businesses and jobs is schemes that are actually up and running and operational. When will that happen?"

The G20 should have done more on free trade: "Trade finance will help to reverse the dramatic fall in global trade that is doing so much damage. Of course, rapid completion of the Doha trade round would have done even more and provided a huge stimulus to the world economy. It is a shame that—in my view—the issue was ducked in the communiqué, rather than directly addressed. Indeed, the communiqué talks of reaffirming the commitment made in Washington not to raise new barriers to investment or to trade in goods. However, since Washington, 17 of the 20 countries that sat round the table there and signed the communiqué have increased trade barriers and protectionist measures."

Welcomes new financial regulation: "On financial services, the regulation of the shadow banking system and systemic hedge funds—I suspect the word “systemic” will be important—action on tax havens and principles on bankers’ bonuses are all welcome, although of course it smacks a bit of closing the stable door after the horse has bolted."

Brown-Darling didn't get what they wanted on fiscal stimuli: "The great thing missing from the communiqué is the one thing that the Prime Minister lobbied hardest for—that is, a new commitment to a significant second fiscal stimulus, so that the Chancellor would have cover to announce one in the Budget later this month. That commitment is very obviously not there. Indeed, the $1 trillion being trumpeted today is $1 trillion of loans, credit lines and guarantees. We welcome that, because we, too, have talked about loans and credit guarantees. What it does not contain is a single extra dollar or pound of additional fiscal stimulus. In the communiqué it is explicitly left to individual countries to decide for themselves what their own public finances can support."

George Osborne concludes with a return to domestic politics:

"It is right that the richer countries of the world come together to help those most in need, and we support the commitments entered into today, but the question that the British people will ask tonight is what it all means for them, once the world leaders have left. There is still the small business that cannot get credit. There is still the mother working in the high street shop who fears for her job. There is still the family who fear for their home. The G20 will seem very remote for them. No $1 trillion boost for the IMF and trade finance will help us to deal with a £1 trillion national debt, which we are leaving to our children, thanks to this Government. The truth is that Britain will be clearing up the economic mess created by this Government long after the G20 show leaves town."


27 Mar 2009 12:41:45

Government still too slow to act on Equitable Life

Sir Patrick Cormack MP Treasury questions came around yesterday.

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. ]

Mr. Speaker: Order. The hon. Gentleman is in order.

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.)

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13 Feb 2009 12:22:28

George Osborne asks for coherent view from Government on length of recession

George_osborne_mpThe Commons also hosted Treasury questions yesterday.

Shadow Chancellor George Osborne scented blood:

"Are we really expected to believe that when the Prime Minister appointed Sir James Crosby to the board of the Financial Services Authority, and when the current Chancellor promoted him to the job of deputy chairman in 2007, neither of them had any idea that they were appointing someone whose business model at HBOS was being investigated by the regulator whose board they were appointing him to?

Mr. Darling: As the Prime Minister has just told the Liaison Committee, Sir James’s appointment in 2003 was made on the recommendation of a selection panel that followed an open competition, and that panel, which was chaired by the senior official then responsible for banking regulation, Sir James Sassoon, recommended the appointment of James Crosby. At that time, there was no reason to question that appointment. With the benefit of hindsight, many people now make claims about what they say they knew at that time, but the then Chancellor followed the proper procedures and followed the advice, and he had no reason not to make the appointment.

The FSA has said that in 2002, and subsequently, it drew attention to a number of concerns, as it did with several other organisations. In terms of the law, the way in which the FSA supervises any bank, let alone this one, is a matter for it. Neither the subsequent investigation into the allegations made against James Crosby, nor the concerns that it had, were reported to the Treasury. I would not expect them to have been, given the information that I have from the chief executive of the FSA at the moment.

Mr. Osborne: Either the Chancellor knew what was going on and did nothing, or he was entirely ignorant, and neither is much of a defence. Is not the net closing in on the Prime Minister and the Chancellor? Their accomplices are resigning, their alibi that no one knew what was going on has been blown apart, and their fingerprints are all over the mistakes that were made during the age of irresponsibility.

Is there a coherent view in the Cabinet about how long this recession will last? We know what the Treasury’s forecasts are, and we know what the Chancellor says about the economy recovering halfway through this year, but today the Health Secretary has said that we need to be ready for two years of recession. Is the Health Secretary expressing the collective view of the Government on this issue?

Mr. Darling: In relation to the FSA, the hon. Gentleman’s claims are frankly ridiculous. Appointments were made in the normal way, which is a great deal more open than for some of the appointments that were made in the past. At the time, there was no reason not to accept the recommendations in relation to Sir James Crosby.

On the broader economic picture, as I have said to the House on a number of occasions, there has been an extremely sharp downturn not just in this country but in countries right across the world, and we can see the effects of that. I am clear, though, that if we had followed the hon. Gentleman’s advice and done absolutely nothing to prevent the full effects of the recession from being felt, the impact and the long-term damage to this country would have been substantial. I believe that the action that we have taken is not only justified but will ensure that this recession will be shorter and less painful than would otherwise be the case. I am sorry that the Conservative party continues to take the view that there is absolutely nothing that they are prepared to do to help people and businesses in this country."

Continue reading "George Osborne asks for coherent view from Government on length of recession" »

10 Feb 2009 15:07:29

Sir George Young aims to improve reporting of donations to MPs

Sir_george_young_mpSir George Young is chairman of the Select Committee on Standards and Privileges. Yesterday he addressed the House of Commons.

His committee has published a report suggesting the end of "dual reporting" - whereby MPs have to report donations to both the Register of Members' Interests and Electoral Commission. The committee says that MPs should just record the donations on the Register and the Electoral Commission should then extract the information.

Shadow Chancellor George Osborne and Health Secretary Alan Johnson are both thought to have been caught out by the current requirement to report to both bodies.

Herewith some highlights from Sir George's statement, which was supported by the Government:

"The reporting regime, which is one of the most demanding in the world, needs to be overhauled from time to time to ensure that it is both effective and proportionate. The Committee on Standards in Public Life recommended that such an overhaul should be carried out once in each Parliament, and today’s package of proposals represents the overhaul in the present Parliament.

In addition to making changes that relate to the end of dual reporting, the revised guide clarifies existing rules, implements earlier decisions of the House—for example, on the employment of family members—and responds to developments outside this place, such as the development of new forms of investment vehicles. The final section of the revised guide sets out in greater detail than before the procedure for considering and investigating complaints that a Member has breached the rules. Many of the changes, however, and most of the red print in the revised guide are there to end dual reporting.


Members may well ask, “Well, what is the catch?” I do not believe there is a catch, but there is certainly some give as well as some take. Members will need to provide more information to the registrar than they did previously. However, this will be offset by the removal of any need to report the same information to the commission, and a single form will be provided for this purpose.


Although hon. Members will no longer have to provide information on permissible donations and loans directly to the Electoral Commission, the commission will remain under a statutory obligation to publish all the relevant information as soon as is reasonably practicable. That means that the commission will publish information on its register within one month of receipt. In order to avoid a four-month gap opening up in the commission’s register, it will be necessary to return to the previous practice of requiring Members to register their interests within one month of their election or re-election to the House, rather than within three months, as at present. Separate deadlines for information required under statute and for information required under resolutions of the House would create confusion and lead to error, and the Committee therefore considers it preferable to have a single deadline."

Shadow Leader of the House of Commons Alan Duncan also commented. He found the matter more complicated than he had anticipated:

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20 Jan 2009 09:54:00

George Osborne says first Government bank bail-out failed

George_osborneIn 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.

19 Dec 2008 10:31:27

Tory MPs pose good questions to the Treasury

Justine_greening_mpYesterday the House of Commons hosted Treasury Questions.

Justine Greening, MP for Putney and a Shadow Treasury Minister, asked about loans to small businesses:

"For the 1,500 people losing their jobs and the 60 small businesses going bust every single day, the Government are not tackling the recession. The Government’s small business loan guarantee scheme will not even be up and running until mid-January and even then it will not cover 99 per cent. of loans to companies. Does not the Minister agree that that is too little, too late, that he should get on with our national loan guarantee scheme and that Britain is facing the deepest recession of any G7 country because we have the most incompetent, ineffective Government?

Mr. Timms: The hon. Lady should have a word with some of her colleagues on her Front Bench. I agree with her that it is right for the Government to address these problems, but that contrasts with the policies of those on her Front Bench, which are the policies of do nothing. Those were the policies that we saw in the catastrophic recessions under the last Conservative Government and they are being repeated by Conservative Front Benchers now. The policies that we are putting in place are directly addressing precisely the challenges that small businesses are facing, and that is why such an ambitious and effective package was set out at the time of the pre-Budget report."

They're making every effort to get that "do nothing" line to stick.

North West Norfolk MP and Shadow Minister for Justice Henry Bellingham tabled a question about the balance of payments:

"The Financial Secretary to the Treasury (Mr. Stephen Timms): The pre-Budget report forecast the current account deficit of the UK balance of payments to narrow in the second half of 2008 and in 2009, with net trade forecast to add three quarters of a percentage point to gross domestic product growth next year.

Mr. Bellingham: Is that not an incredibly complacent reply? Is the Financial Secretary not ashamed that having inherited a trade surplus in 1997, our deficit last year was the worst since records began—when William of Orange was on the throne? Is it not a disgrace that the trade deficit in manufactured goods has grown from £7 billion in 1997 to a staggering £59 billion last year? Why do the right hon. Gentleman and the Chancellor never talk about the balance of trade? Is it any wonder that the pound is falling so sharply?

Mr. Timms: I remind the hon. Gentleman that there have actually been quite a few occasions in the past when the current account deficit was higher than it is now. To give him one example, it was 3.8 per cent. in the third quarter of 2007, but it was 4.9 per cent. in 1989 and it is more than 5 per cent. now in the United States. Our strategy is to ensure strong competition in every UK market by promoting openness to free trade, minimising product market regulation and ensuring that there are world-class competition authorities. That is the strategy we are pursuing and we will do so successfully."

Continue reading "Tory MPs pose good questions to the Treasury" »

16 Dec 2008 11:11:48

George Osborne and Chris Grayling slate the Government's economic and welfare plans

Chris_graylingGeorge_osborneYesterday the Conservatives led a debate on the economic, pensions and welfare portions of the Queen's Speech.

Shadow Chancellor George Osborne kicked things off. The Tory amendment indicated humble regret that:

"the Gracious Speech fails to deliver a clear direction for British economic policy, does not contain measures to assist in building a low debt and low tax economy, and lacks any radical action to unblock the credit channels of our banking system; note that many individuals have seen returns on their savings severely reduced as a result of the economic downturn and regret that the Government has no plans for emergency protection of pensioners with a suspension of annuity rules; further regret the absence of a clear strategy on value added tax; and further regret the absence of measures to avoid the United Kingdom undergoing the worst recession in the G7 next year.”.

Mr Osborne then turned the screw:

"What has been the judgment in the last week alone on the Chancellor’s claim? The pound has fallen against the euro, hitting a record low earlier today and demonstrating again the Prime Minister’s maxim that a weak currency is a reflection of a weak economy and a weak Government. The loss of international credibility has sent the cost of insuring British Government debt higher than insuring the debt of those two homes of French fries, Belgium and McDonalds. An independent survey out today says that the drop in the VAT rate seems to have made little difference in lifting consumer confidence and encouraging consumers to spend. The head of Barclays bank says that despite the measures announced by the Government over the past few weeks, such as those on stamp duty, house prices will fall by at least as much next year as they have this year.

This lunchtime, the Minister for the Olympics has contradicted every statement made by the Prime Minister and the Chancellor over the past six months by admitting, in her words, that Britain is facing a recession

    “deeper than any that we have known”.

So, what about all that talk about the 1980s and 1990s now? The Finance Minister of the world’s third largest economy has described the Government’s approach as “crass” and “breathtaking” and raising debt to a level that will take “a whole generation” to pay off. That is the problem with saving the world—sometimes the world answers back."

Shadow Work and Pensions Secretary Chris Grayling wound up the debate for the Conservatives.

Continue reading "George Osborne and Chris Grayling slate the Government's economic and welfare plans" »

27 Nov 2008 12:39:57

Highlights from the Pre-Budget Report debate

George_osborneFollowing 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" »

31 Oct 2008 13:47:06

Labour MPs are gratuitously abusive

Kevin_the_teenagerOn Tuesday I wrote that "Parliament isn't just a place to score political points". Yet some Labour MPs obviously disagree. One might have hoped that during a financial crisis members would want to use Treasury Questions as an opportunity to represent the concerns of their constituents, but apparently not.

To his credit, the Speaker was having none of it, and George Osborne was reportedly moved to thank him.

In the spirit of political balance (sort of) I have accompanied each of the following passages with a little bit of light-hearted, good-natured personal abuse. I have no doubt that these MPs will appreciate it.

Lyn Brown got the ball rolling:

"Lyn Brown (West Ham) (Lab): I congratulate the Chancellor on the recapitalisation of banks, which has been admired and copied throughout the world, but was that task helped by the leaking of confidential documents by the Bank of England and by the hon. Gentleman on the Opposition Front Bench on “The Andrew Marr Show”? What does the Chancellor think of his opposite number’s judgment? [Interruption.]

Mr. Speaker: Order. Did the hon. Lady warn the shadow Chancellor that she was going to make an attack on him?

Lyn Brown: No, Mr. Speaker.

Mr. Speaker: Well she should have done. I call Julian Brazier. [Interruption.] Order. The hon. Lady must behave herself."

What does the Chancellor think of you Lyn? I bet he thinks you're stupid. 'Stupid Lynne Browne' he probably calls you, deliberately spelling your name incorrectly in his head.

Karen Buck was positively menacing:

"Ms Buck: Mr Speaker, I wonder whether it might be possible for you to accept a note signed by everyone on the Labour Benches, because for the next 18 months we all intend to do little else other than attack the shadow Chancellor. [ Interruption. ]

Mr. Speaker: Order. A genuine attack is one thing, but a personal attack on anyone’s integrity will be stopped. I just put that on the record, but I know that the hon. Lady will not indulge in any personal attacks on anyone.

Ms Buck: Perish the thought, Sir."

Do you really have a note to that effect, signed by all Labour MPs Karen? Or did you lie in Parliament? Or was it all a hilarious joke? P.S. I bet Alistair Darling thinks you're stupid too.

Continue reading "Labour MPs are gratuitously abusive" »

6 Oct 2008 17:22:18

George Osborne response to Alistair Darling statement

This is the full text of the response by Shadow Chancellor George Osborne to the Chancellor's emergency statement to the Commons this afternoon as issued by CCHQ.

“Mr Speaker, as we see again from today’s markets these are clearly times of great instability for our economy and great anxiety for the people we all represent here.

Families are deeply worried about their savings, their homes, their jobs and it is up to us to try to work together to get the country through this current crisis.

I don’t think the British public would thank us if they saw happening here in this House of Commons what everyone saw happening in the American Congress.

That is why we offer to look constructively at any proposals brought forward by the British government.

For let’s be blunt about it.

If the banking system fails, it’s not just the banks that go bust.

Continue reading "George Osborne response to Alistair Darling statement" »

19 Feb 2008 08:43:36

George Osborne responds to Chancellor's statement on nationalising Northern Rock

Osborneincommons George Osborne, Shadow Chancellor: "Nationalisation means that the taxpayer’s risk has doubled to £110 billion, or £3,500 for every family in Britain. Every family in Britain will now own the high street bank that wrote more mortgages at the top of the housing market than any other. Every time a home owner fails to meet a mortgage payment, every family in the country will bear the cost. That is what this nationalisation means.

Can the Chancellor tell us about the state of the £100 billion mortgage book that he wants the taxpayer to own? How many bad loans are there? The credit rating agencies now say that the losses are rising at Northern Rock. Is that true? Before we debate the Bill tomorrow, we are entitled to a full statement of the financial position of the company that we are being asked to buy. We are entitled to see the advice from Goldman Sachs that we have all paid for.

Secondly, will the Chancellor agree that it is totally unacceptable for Northern Rock to continue with business as usual? This is now a Government bank; it can borrow and lend more cheaply than any of its high street competitors. Indeed, today it is still offering some of the best savings deals out there—it is still offering the 125 per cent. mortgages that it wrote last year. That is politically and economically unacceptable. Nationalisation can never mean business as usual. The Chancellor said in his statement that the management would be at “arm’s length”. Why is there nothing in the Bill to prevent political interference?

Thirdly, will the Chancellor confirm that he is actually introducing unprecedented, sweeping, draconian powers that will let him nationalise any other bank or deposit-taking institution in Britain by ministerial fiat? [Interruption.] The Lord Chancellor should pay attention; he keeps talking about strengthening the powers of Parliament, but he is about to give the Chancellor of the Exchequer the power to nationalise any bank in Britain without coming to Parliament. That is something that not even Michael Foot dreamed of. It will create further uncertainty in financial markets and do further damage to Britain’s reputation. If the Chancellor is giving himself those sweeping powers only to get round parliamentary procedures for hybrid Bills, he should give himself them for a week or a month, not for a whole year.

The Chancellor had opportunities to avoid the disaster of nationalisation last autumn, and he missed them. He has the opportunity now to avoid the disaster of nationalisation by opting instead for a reconstruction led by the Bank of England, and he will not take it. It would mean £55 billion less exposure for the taxpayer, and none of this farce of business as usual; it would be like the approach that the Chancellor himself recommends for future bank rescues. But instead, the Prime Minister and his Chancellor have dithered their way to disaster. Now what they call the “temporary nationalisation” could, in the words of Ron Sandler, “last years”.

In uncertain economic times, the British people have a right to expect decisive and strong leadership from their Government. Instead, this Chancellor has given us weakness and indecision, with humiliating reversals over capital gains tax, then non-domiciles and now Northern Rock. He has taken Britain back to the 1970s and the failed policies of Labour’s past. We can safely say that he will never recover his reputation for competence. He is now politically a dead man walking and if the Prime Minister could make a decision, he would move him. What matters to the rest of us is that the British economy and its reputation abroad recovers from the Chancellor’s disastrous time at the Treasury. Nationalising a high street bank is not the way to begin, and we will oppose it tomorrow."


22 Jan 2008 00:01:00

Highlights from George Osborne's response to the Chancellor's statement on Northern Rock


On the pre-briefing... "May I thank the Chancellor for finally telling Parliament what the Prime Minister told his press pack, and apparently Richard Branson, on his way to China last Friday? Nothing of substance that the Chancellor said today is not already plastered over this morning’s newspapers and blogs, once again reminding us of how marginal a figure the Chancellor now cuts in this process."

On the scale of the taxpayers' subsidy for Northern Rock... "Can the Chancellor confirm that he wants the taxpayers of Britain to provide a £25 billion mortgage to Northern Rock for years to come? Add in the guarantees to depositors and that figure comes to £55 billion. That is £2,000 for every family in the country: a second mortgage on every home to rescue the reputation of this Government. No British Government have ever provided taxpayers’ support on this scale to a private company. It is bigger than British Leyland, bigger than British Steel—this is back to the 1970s. Life in Brown’s Britain is like an episode of “Life On Mars”."

On the implications for the public finances...
"We already have the worst budget deficit in Europe, and we have learned from today’s dismal public finance figures that the Treasury has borrowed £44 billion so far this year, exceeding the estimates given by the Chancellor to this House. Will he confirm, as he admits, that if the ONS treats the Government as the true economic owner of the liabilities, he will shatter the sustainable investment rule? He says that the measure is only temporary, but the whole point of the deal is that it could be permanent. As ever, the Government’s answer to every economic problem is further debt."

On the delay and dithering... "In September, the Chancellor said that he was providing a little short-term support to help Northern Rock get through its difficulties. Since then, we have had five months of dithering. Today, the taxpayer could possibly be in hock for five years. The Government could have secured a private sale before the bank run. They could have done today’s deal back in September, if they were so keen on it, at a much cheaper price. They could have passed legislation to protect retail depositors, as we proposed, back in October. They could have considered the options of a Bank of England-led reconstruction. Labour Members dismissed that, but when the Chancellor unveils his plans next week he will suggest that in future crises the FSA has the powers to take organisations such as Northern Rock into an effective form of administration. Labour Members will all be voting for that in a couple of weeks time.  Of course, the Chancellor did none of those things. He dithered and delayed. The result is that the British taxpayer is being asked to lend billions of pounds for years to come to salvage the reputation of the Prime Minister and his Chancellor. Labour is saddling everyone in Britain with a second mortgage, and that is the price that we are all now paying for its economic incompetence."

George Osborne at his parliamentary best.

20 Nov 2007 22:05:45

George Osborne attacks "catastrophic" loss of 25 million people's personal data

George Osborne MP, Shadow Chancellor: "The Prime Minister says that the first duty of Government is the protection of the citizen; and today we discover from the Chancellor that the Government are responsible for breaching that duty of protection to 25 million citizens. Let us be clear about the scale of this catastrophic mistake: the names, the addresses and the dates of birth of every child in the country are sitting on two computer discs that are apparently lost in the post; and the bank account details and national insurance numbers of 10 million parents, guardians and carers have gone missing. Half the country will be very anxious about the safety of their family and the security of their bank accounts, and the whole country will be wondering how on earth the Government allowed this to happen.

The Chancellor has to answer the most serious questions. On the question of safety, what contingency plans have been drawn up with the police lest it become clear that millions of personal details have fallen into the wrong hands? On the question of financial security, I understand what the Chancellor said about the precautionary measures taken by the banks this weekend, and I agree with him that people need not contact their banks; but since he has asked millions of people to monitor their accounts, many may well do so. What steps have been taken by the Treasury, the Bank of England and the Financial Services Authority to prepare for any potential financial instability?

If fraud does occur—and of course it is good to hear that there is no evidence of that at present—where will the liability for any losses rest? The Chancellor said at the end of his statement that people would not lose out. Does that mean that the responsibility now rests with the Government, and, in effect, is the Chancellor now offering another general guarantee to depositors and people with bank accounts?

On the question of how this extraordinary security breach could ever have happened, what is the point of the House passing laws to protect the privacy of people’s personal information if those laws are not even enforced at the heart of Government? As the Chancellor himself said, this is the third, and by far and away the most serious breach by Her Majesty’s Revenue and Customs this year. In August, a laptop containing the personal details of 400 taxpayers was stolen after being left in a car overnight, and 15,000 people’s details were lost. [HON. MEMBERS: “He said that.”] He did say it, and it is worth reminding ourselves why there has been a catalogue of mistakes at Her Majesty’s Revenue and Customs. When did the Chancellor first become aware that the security protocols in his own Department were absolutely worthless, and what did he do about it?

We know that it was about 21 days before the breach in security was brought to the Chancellor’s attention—incidentally, two days after it was brought to the attention of senior management in Her Majesty’s Revenue and Customs. Why did the Chancellor then wait for four days before contacting the police? Does he remember just who has been running the Inland Revenue for the last 10 years? The Prime Minister. Can he tell us when he told the Prime Minister about this fiasco?

Finally, there is the issue of how we stop this from ever happening again. I welcome the inquiries that are under way, but can the Chancellor confirm that the police are investigating not just the individual responsible for sending the discs, but those above that individual who are responsible for ensuring that the law is properly enforced in Her Majesty’s Revenue and Customs? Does he agree that today must mark the final blow to the Government’s ambition to create a national ID card? They simply cannot be trusted with people’s personal information.

Since he came to office less than six months ago, the Chancellor has lurched from one crisis to another. Now his Department has compromised the security and safety of every family in the land. This autumn, the Prime Minister said he had shown that the Government could be competent, and now needed to set out his vision. There are 25 million people whose personal details have been lost by this Government. Never mind the lack of vision; just get a grip, and deliver a basic level of competence."

20 Nov 2007 02:43:46

George Osborne responds to the Chancellor's statement on Northern Rock

Osborne_george_portrait "The question we now ask of the Chancellor is simple: has he been honest with taxpayers about the risks that they face, and has he told the whole truth? First, let us look at what he has announced today. He announced that what was supposed to be a short-term emergency facility for Northern Rock may now be extended beyond February and could last for years. Thank you, but we already knew that because it was in a memo from the company’s advisers that was leaked last week. Indeed, throughout the crisis we have learned more from media leaks than we have from the Government.

The Chancellor will not tell us the size of the facility, when he expects it to be repaid or the terms of the repayment, even though much of that information is an open secret in the City. Indeed, the Governor of the Bank of England wants to publish the letter that he sent to the Chancellor to set out those terms. He told the Select Committee that that he wanted to do so, but the Chancellor refuses to publish the letter and simply says that it is in the public interest that he should refuse. Clearly, the Governor of the Bank of England disagrees. Will the Chancellor explain in greater detail why he will not publish that letter?

This is not about the commercial interests that the Prime Minister spoke about last week, but about the public interest and the £900 that has been pledged on behalf of every taxpayer in Britain. The Chancellor talks about the Government’s liabilities being secured against £100 billion of Northern Rock assets, but he does not say that many of the assets are already promised to other creditors. Will he confirm that the free assets at Northern Rock could be closer to £40 billion and that total Government liabilities, through both the facility and the deposit guarantee, might now be approaching the total of the available assets, putting the taxpayer further at risk?

...The Chancellor has failed to address today the two things that he appears so far to have kept secret from Parliament and from the taxpayer. First, will he tell us whether it is true that the Treasury, as well as the Bank of England, has lent money to Northern Rock? He mentioned only the Bank of England in his statement, but today we are told that the Treasury has also lent so-called subordinated term debt, which does not have to be paid for five years, comes at the back of the queue and is in most danger of default if the bank is wound up. If that is true, taxpayers have been exposed to an extraordinary long-term risk, yet we have been told about that Treasury loan by the BBC’s business editor rather than the Chancellor of the Exchequer. If it is true, the Chancellor is surely deliberately withholding information from Parliament and the public. Will he confirm the existence of that Treasury loan?

...We are considering a tale of incompetence and weak leadership from a Government who now reel from one disaster to another. We have a Chancellor who appears to have made secret loans from the Treasury, who has made guarantees to the taxpayer that he cannot be sure of honouring and whose weakness contributes to the instability of the financial system. That is why the Chancellor’s job is now on the line."

Ben Brogan's verdict on George Osborne's response: "I thought George Osborne, normally so effective in the Commons, got it wrong by going for the Chancellor's honesty. It's a difficult charge to make stick and in my book is one best left to your backbench rottweilers on the make."

The Guardian pays tribute to George Osborne's improved Commons performances: "Osborne has worked at his parliamentary performance, with the effects perhaps first evident in a strong performance against Brown during last December's pre-budget report. He is David Cameron's most influential adviser and increasingly punching hard on the economic front too. The pipsqueak is now Politician of the Year, as elected by the Spectator last week."

10 Oct 2007 10:14:48

Osborne responds to Alistair Darling's pre-Budget statement

Osborneincommons Opening section of the Shadow Chancellor's response: "I do not know why the Prime Minister even bothered to turn up. He should have called that election, and let us give the Budget. Instead, we had a pre-election Budget without the election. We all know that the report was brought forward, so that it could be the starting gun for the campaign, before the Prime Minister took the pistol and fired it into his foot.

Let us deal straight away with the announcements on aviation, and on non-domiciles and inheritance tax. For 10 years, the Prime Minister has been sucking millions of families into the inheritance tax net. For 10 years, he has been pulling first-time buyers into stamp duty. For 10 years, he could have reformed air passenger duty. For 10 years, he did nothing on non-doms.

Now, a week after we introduced our plans, the Prime Minister and the Chancellor scrabble around in a panic trying to think of something to say. The Prime Minister talks about setting out his vision of the country, but he has to wait for us to tell him what it is. That is not leadership of this country—it is followership, Prime Minister. It is not strong, Prime Minister, it is weak. He has learned nothing from recent events. The public will see today’s measures as a desperate, cynical stunt from a desperate and weak Prime Minister, and the public can tell the difference between a Labour party that sees this all as a cynical, calculating game, and a Conservative party that believes in lower taxes and in aspirations."

More from Hansard here.