The Chancellor of the Exchequer (Mr. Gordon Brown): The Basel committee on banking supervision expects to complete the new Basel accord on regulatory capital requirements by mid-year 2004, with implementation planned for the end of 2006.
Mr. Beard : I thank my right hon. Friend for that reply. Given the increasing tendency of banks to transfer their risks to insurance businesses, does he agree that the capital adequacy of insurance companies that trade internationally may need international regulation similar to that provided for the banks by the Basel accord?
Mr. Brown: I am grateful to my hon. Friend, who chairs an all-party committee that has been looking at this matter. The Basel accord is a voluntary arrangement that involves the banks. The EU directive that will flow from it will include financial institutions. I gather that a separate directive will cover the insurance industry, but this House would debate all those matters before any directive was agreed.
Dr. Vincent Cable (Twickenham) (LD): Can the Chancellor confirm that one of the objectives of risk-based regulation under the Basel accord is the prevention of dangerous booms and busts in bank lending? Will he therefore explain why, at a national level, no one is taking responsibility for the often reckless debt promotion by the leading banks and credit card companies? Given yesterday's conclusions of the Treasury Committee, does that not suggest that the Government and the regulators are either blind or asleep where the banks are concerned?
Mr. John McFall (Dumbarton) (Lab/Co-op): I assume that my right hon. Friend the Chancellor will be using his credit card prudently over the Christmas period. However, India and China are not included in the Basel II accords, and the USA is rumoured to be unwilling to sign up. Will that not have an effect on the final agreement?
Mr. Brown: I am grateful again to the Chairman of the Select Committee. He has completed a report on credit cards and it is receiving the attention that it deserves today. I hope that people named by the Treasury Committee will look at the report's conclusions. I know that my hon. Friend has also taken an interest in the Basel accord, and it is true that it involves the G10. However, in the nature of things, other countries took up the recommendations in the previous Basel accord. As far as America is concerned, all those involved are working to the mid-2004 deadline. Despite the comments two days ago by one of the US regulators, I am assured that the intention is to complete the work as soon as possible. That will lead to implementation not in 2005 but in 2006. At the same time, we will be discussing an EU directive. That would not be voluntary: it would be a statutory guideline for banks and some financial institutions as well.
The Chancellor of the Exchequer (Mr. Gordon Brown): Investment in public services since 1997 has resulted in Cumbria gaining 400 extra teachers and more than 700 extra teaching support staff, while Cumbria and Lancashire have gained nearly 100 extra general practitioners and 1,600 more nurses.
Tony Cunningham : I thank my right hon. Friend for that reply. I hope that he will take the opportunity of coming to visit my constituency to see the success of the increased public spending. We have a new further education college, a new police station, four new roundabouts, a new bypass, two new Sure Start projects, and work has just started on the building of a new hospital. I am sure that he will agree that it is no coincidence that all that success has been achieved under a Labour Government.
The Chancellor of the Exchequer (Mr. Gordon Brown): I receive a variety of representations on the Government's measures to help people into work. The success of those measures is evident in Wednesday's employment figures. There are more people in work now than at any time in our history, and the unemployment rate in Britain is at its lowest since 1975. The new deal has helped more than 950,000 individuals into work.
Mr. Todd : I thank the Chancellor for that answer. There is a great deal for which we are thankful in South Derbyshire, with those who are unemployed and claiming benefit now numbering only 8501,100 fewer than when the Government came to power. I would welcome his response to my gentle suggestion that he clarify the future of the export credits guarantee scheme, which is critical to the future of companies such as Rolls-Royce, which employs many of the workers in my area.
Mr. Brown: I have met John Rose, the head of Rolls-Royce, and we are aware of the importance that it attaches both to export credit guarantees and to the Government's support for innovation and for science. My hon. Friend will know that we are doing more than any Government have done to promote science in this country.
As for the new deal, not only has my hon. Friend's constituency seen a very big reduction in unemployment, but unemployment rates in almost every one of the constituencies of Conservative Front Benchers are now 2 per cent. or below.
Mr. Michael Fallon (Sevenoaks) (Con): Will the Chancellor confirm that two thirds of the new jobs created this year are in the public sector and that, although many of them may be very worth while jobs in nursing and teaching, they all have to be paid for by the wealth-creating sector?
Mr. Brown: I thought that the hon. Gentleman was going to congratulate us on the 60 per cent. cut in unemployment in his constituency since 1997. The reason why he did not is that the Conservatives want to abolish the very instrument for getting unemployment downthe new deal. He will know that it is completely untrue to say that two thirds of jobs created since 1997 have been created in the public sector. The fact is that 1.24 million jobs have been created in the private sector. Conservative Members should be congratulating us on
Valerie Davey (Bristol, West) (Lab): In Bristol, the new deal has been particularly successful in getting young people into work. Will my right hon. Friend comment on the level of youth employment nationally and its effect on the economy?
Mr. Brown: Only around 5,000 young peoplean average of eight per constituencyhave been unemployed for more than a year. In the mid-1980s, under a Conservative Government, 350,000 young people were in that position. The fact that the Conservatives would abolish the new deal shows that they have learned nothing from the mistakes of the past.
Bob Spink (Castle Point) (Con): In a spirit of Christmas cheer, I congratulate the Chancellor and the Government on their job creation efforts, which have gone wellthere is no denying that. [Hon. Members: "Oh!"] Well, fair play. However, may I encourage the Chancellor to look again at the growing level of regulation, which is depressing job creation in the wealth-generating sector?
Mr. Brown: It is precisely because of the issues involved in regulation that we simplified the VAT system in the Budget and removed the audit requirements and the requirement on companies to issue two sets of accountsone for the Inland Revenue and one for Companies House. The hon. Gentleman has welcomed the new dealhe should have a Christmas lunch with the shadow Chancellor, who said that the new deal is an expensive failure. They must reconcile those contradictory positions.
Mr. Dennis Skinner (Bolsover) (Lab): Is the Chancellor of the Exchequer aware that, in coalfield areas, particularly Derbyshire, the Tories took the pits out of the public sector, put them into the private sector and then shut every single one? Since 1997, we have had the mammoth task of trying to rejuvenate those areas. That has been a huge success, but we still have one pendingthe Bolsover-Markham employment zone, near junction 29A off the M1. Five thousand jobs will materialise in that area. Will he ensure that as the planning applications have not been called in we can have a Christmas present for all the people in north Derbyshire?
Mr. Brown: Christmas cheer is around at the moment and I respect my hon. Friend's work, undertaken even when he was ill, in promoting coalfield regeneration. We will look back on the past few years as an attempt to resurrect communities that were left with terrible problems as a result of the way in which the coal industry was run down in the 1980s. I shall consider his proposal for Bolsover, but he should know that the new deal for communities is being expanded. There are now 2,000 designated enterprise areas, with huge incentives for development. We are intent on not only keeping unemployment low but tackling areas of continuing long-term unemployment that deserve the support of a compassionate Government.