I am not aware of central banks blocking lending. I am aware that some people in this country have experienced difficulty in getting access to funding through our banks, and we are looking into that. [Interruption.] I think that I can hear the hon. Member for East Devon (Mr. Swire) say, from a sedentary position, South America. I would need to check the position there, because I do not want inadvertently to mislead the House on what is happening there. I agree with the hon. Gentleman that when we do have help, whether from the Export Credits Guarantee Department or the
European Investment Bank, we must make sure that it feeds through to where it matters.
Dr. Roberta Blackman-Woods (City of Durham) (Lab): I, too, welcome the Chancellors statement, and particularly his point about Northern Rock. Many of my constituents and others in the north-east benefit greatly from the decisive action that the Government took to rescue Northern Rock. However, will he say more about how the package of measures announced today will benefit savers in my constituency, and small and medium-sized companies in my constituency and throughout the north-east?
Mr. Darling: My hon. Friend is right to say that the action that we took on Northern Rock is now seen as having been the right thing to do. Clearly, things are still difficult for Northern Rock, as it is for other organisations, and as she well knows, it is also difficult for the people who lost their job with that bank. We are doing everything we can to help. The broader answer to her question is that if we had not done anything, the position would have gradually become more and more difficult. I think that the measures that we announced today will go a long way to help. Obviously, there are a lot of other things going on around the world at the moment, as is shown pretty graphically in the newspapers and on television every day and every night, but I think that the measure is a major step forward. To come back to points that have been raised by Members on both sides of the House, it is important that we try to persuade countries in different parts of the world to deal with the problem. The global economy is a reality now. It brings fantastic opportunities, but there are also some pretty big threats, and we have to deal with them.
Mr. Nigel Dodds (Belfast, North) (DUP): Along with everything else, people are worried about their savings, pensions, mortgages and jobs; that is what people are talking about all the time. I welcome what the Chancellor announced today, and we hope that it is successful, but people are also worried about tax. Will he indicate what the overall impact of the financial package will be in the short and, possibly, medium term, on the tax burden of the average hard-working family in this country?
Mr. Darling: As I indicated earlier, a lot of the money that we have been discussing today is money that the Government will fund through borrowing, but the money will come back. In relation to forecasts for the Governments borrowing generally, I will set them out in the pre-Budget report. However, I very much agree that it is important to protect jobs. I am glad that over the past 10 or 11 years we have been able to do a great deal and to achieve so much by working with the political parties in Northern Ireland, especially after the Good Friday agreement. Anyone who lives in, or visits, Northern Ireland will have seen a tremendous difference in the past 10 years. Ensuring that Northern Ireland is a good place to work and live, and ensuring that there are jobs, is very important.
Mrs. Claire Curtis-Thomas (Crosby) (Lab):
I very much welcome what my right hon. Friend said about supporting small businesses, and I particularly welcome
the aspiration to ensure that the Government pay all bills from small businesses within eight days. However, as I am sure my right hon. Friend will appreciate, many of the companies working for Government are large contractors that have a number of small contractors working for them. If those small contractors are to benefit from this fantastic initiative, which would undoubtedly save them from going bankrupt, my right hon. Friend will have to ensure that the large companies pass on that benefit to the thousands of small-to-medium-sized ones that support them.
Mr. Darling: I agree with my hon. Friend. As she rightly says, there are many companies that do not depend on the Government directly, but are sub-contractors. That issue is worth pursuing, and she might want to take it up with the new Secretary of State for Business, Enterprise and Regulatory Reform, our noble Friend.
Mr. Eric Pickles (Brentwood and Ongar) (Con): The Chancellor rightly wants to protect hard-working taxpayers, but some of those taxpayers also pay council tax. Is he wholly content, given what he has just said, that local authorities are informed investors, and their investments in Iceland will not be covered by the guarantee? Is he aware that we are not talking about trivial sums, but about hundreds of millions of pounds, and about some investments involving payroll? That will create a cash-flow problem. Is he wholly content that the burden should fall on council tax payers?
Mr. Darling: The point that I was making is that there is a distinction between the ordinary man or woman on the streetthe retail investorand others. I am aware of the problem for local authorities, and I will look into it, but my No. 1 concern is to make sure that we protect individual savers, and I am sure that we are at one on that.
Patrick Hall (Bedford) (Lab): My right hon. Friend will, I am sure, agree that the British people have an excellent track record of solidarity when it comes to putting up with difficulties in times of great national need, such as now. The British people will accept their share of the burden, especially if the action taken is seen to be both fair and necessary. Will my right hon. Friend therefore confirm that the review of regulation and remuneration in financial institutions being undertaken by Lord Turner will urgently address the need for fairness and transparency, so that in future we can all see that the system is operating properly?
Mr. Darling: I agree that the system needs to be fair and open. My hon. Friend is quite right that people accept the fact that somebody may be well rewarded for improving the performance of a company or working extremely hard. No one wants to stop that, but we do want to stop situations in which, by accident or as an unintended consequence, people are rewarded for doing things that seriously undermine the financial world, and which are bad not only for their company but for everybody else.
Sir George Young (North-West Hampshire) (Con):
During the recess, the Government waived competition requirements so that Lloyds TSB could proceed with the takeover of HBOS. Ministers subsequently made
supportive statements. However, part of the instability in the banking system is due to continuing doubts as to whether the merger will go ahead. Will the Government use any increased leverage in both banks to bring that uncertainty to an end?
Mr. Darling: The decision to merge was taken on a commercial basis by the two companies, Lloyds TSB and HBOS. The Governments role was to waive the competition requirements that would have put an absolute block on it, because we think that a commercial solution would be far better. However, it is a decision for the companies. There are processes that need to be followed; not least, shareholders have to be consulted. That process is following its course now.
Mr. David S. Borrow (South Ribble) (Lab): My right hon. Friend referred to the effect on the markets earlier this week of weekend speculation about this package. I understand that at the end of last week, the Governor of the Bank of England gave a briefing to the shadow Chancellor. I wonder whether the Chancellor of the Exchequer could confirm whether that briefing was confidential. Is he of the opinion that that confidence has been kept?
Mr. Darling: The Governor of the Bank of England is entitled to meet whomever he thinks appropriate. I am sure that discussions between anyone and the Governor of the Bank of England will, in the normal course of events, remain confidential.
Mr. Edward Leigh (Gainsborough) (Con): Often, the gravest risk to accountability in this House lies when both sides agree; there is sometimes a lack of proper scrutiny. Given that there are now unrivalled risks to taxpayers and that, historically, Governments have a poor record of intervening in the marketplace, what is the Chancellor going to do to protect the interests of the taxpayer and ensure accountability to this House, through the National Audit Office and the Public Accounts Committee, for this taxpayers money?
I am not sure whether that was the first discordant voice that we have heard this afternoon, and the hon. Gentleman is saying that he does not support what we are doing. If that is the case, I just disagree with him. As the Chairman of the Public Accounts Committee, he knows perfectly well that there are mechanismsthrough that Committee and, of course, through the National Audit Officefor holding
Government spending and Governments to account. That is not the only way; there is also the Treasury Committee, and I am accountable to the House, as are other Ministers. There is plenty of scrutiny, and we are very happy to answer questions.
Chris Ruane (Vale of Clwyd) (Lab): Has the speculation by the shadow Chancellor about recapitalisation helped the Chancellor or hindered him in his quest to bring calm and confidence back to the banking sector and the markets?
Mr. Darling: The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) is no longer in his place, but I said to him earlier that we all sometimes have to be careful about what we say and that we need to choose our words carefully. The speculation over the weekend was unhelpful, but that is something that we just have to deal with. It is important that during normal exchanges and proper, healthy debates, peoples views are properly explored. But whatever happened then, I hope that people will see todays announcement as an opportunity to make a step change and a real difference. That is what I would like to concentrate on.
Will the Chancellor enlarge on the potential liability to the taxpayer? The £50 billion for the recapitalisation fund will have to be raised by the Government. How will that money be raised? Will the Government issue bonds, simply print the money or sell more of our gold reserves? What will the interest charge be? How will that be paid for, particularly if the preference shares that the Government buy from the banks cannot pay dividends because the banks themselves lack distributable reserves?
Mr. Darling: As I said earlier, the money will be raised through the Governments normal operations when it needs to raise money. I also said that if firms choose to use the recapitalisation fund, the Government will take preference shares. That is pretty straightforward. The taxpayer will therefore be remunerated for those shares; of course, in due course they will be sold.
That leave be given to bring in a Bill to require a Minister to certify on a Government Bill or a statutory instrument whether or not the Bill or statutory instrument is a result of a decision of the European Union; and for connected purposes.
Our democratic system is based on the principles of transparency and accountability. I do not believe that any right hon. or hon. Member of this House would disagree that members of the public should know the origin of the laws that govern them. When my constituents, especially schoolchildren, come to Parliament, I often explain that, as with other Members of Parliament, one of my roles is to scrutinise the legislation brought before this House. Yet there is little clarityindeed, much confusionover the extent of the European Unions influence on the legislation brought before this House and the other place.
I bring in this Bill neither to praise nor criticise the EU per se, but to uphold the principles of openness and transparency on which our democracy is built. For more than a decade now, members of this House and the other place have been asking the Government what proportion of our law has been initiated by the European Union. No definitive number has ever been agreed. In 2006, the then trade Minister, Lord Triesman, estimated that
around half of all UK legislation with an impact on business, charities and the voluntary sector stems from legislation agreed by Ministers in Brussels.
Other European countries have reached similar conclusions. According to the World Bank Groups review of the Dutch administrative burden in November 2006, EU regulations account for approximately 40 per cent. of all regulations implemented in the Netherlands.
In the 2003-04 Session of Parliament, my right hon. Friend the Member for Wokingham (Mr. Redwood) asked each Department what proportion of its legislation was introduced in response to directives from Brussels. Each Department revealed how differently it was affected, with estimated answers ranging from 0 per cent. to 57 per cent. Clearly, the proportion will vary each year according to the Department. However, Members should not need to ask retrospectively for estimates each year. We are legally bound to introduce the laws made by the European Union; the fact that legislation originated in Europe should therefore be made clear to MPs and members of the public when it is brought before this House.
Hon. Members will be familiar with the statement of compatibility with the Human Rights Act 1998 that Ministers must declare on the face of every Bill. In the same way, my Bill would ensure that Ministers declared whether a Bill or statutory instrument was the consequence of EU decision or EU legislation.
The Bill would be of particular benefit in respect of statutory instruments. So far in this Session of Parliament, more than 2,000 statutory instruments have been laid before the House, yet it is far from clear how many of those are implementing European legislation and how many are home-grown. My Bill will force Ministers to make the information clear, and thereby open up the
legislative process. It will enable legislators and the public to understand the extent to which the European Union influences the laws of this country.
This is an important issue to raise, and not only because transparency is essential to the democratic process; there is considerable debate among the public about Britains place in the European Union. The EU has been widely blamedrightly or wronglyfor the introduction of home information packs and the Governments inability to expel criminals from the UK. The list goes on. Indeed, the EU has even been accused of trying to straighten bendy bananas; I shall not pursue that example as I know how sensitive bananas have become at the Foreign Office.
One of the main problems with the public perception of the EU is that its decisions can appear hidden from public scrutiny and its processes can appear unknown. Turnout at European elections is low, suggesting that the public do not feel involved in the European political process and do not understand how its decisions may affect their lives. If we asked the average personindeed, the average Member of Parliamentwhat the four European institutions were, it would not be surprising if we drew a blank. Despite that, there is both great enthusiasm and great scepticism about the role of the European Union.
The information that the Bill would make available is particularly relevant given that the British Chambers of Commerce, an organisation committed to Britains membership of the EU, has estimated that legislation sourced in Brussels has placed a £47 billion burden on British businesses. The question of the EUs influence on UK legislation is therefore not simply an academic exercise, but a pressing issue for businesses across the countryparticularly at a time when businesses are increasingly hard pressed due to the worsening economic outlook.
Indeed, a recent report published by the BCC, The British Regulatory System, highlighted serious shortcomings with the Governments impact assessment of EU legislation. That has left substantial costs to fall on UK business. Commenting on the findings of the report, Sally Low, BCCs director of policy and external affairs, said:
If we are to see a better regulatory environment for business then the Government must be engaging earlier in the EUs policy making process. Our report highlights the fact that the Government is only focused on the UK end of EU legislation. There must be a clear linkage between events in Brussels and the UKs own consultation and Impact Assessment process.
Without timely engagement and substantive consultation the prospects of the UK influencing EU policy to the benefit of British business is severely limited.
If the full extent of the EUs influence on our legislation were clearer, there would be an even greater imperative to engage fully with the EUs policy making process. This engagement, as the BCC report highlights, has been far too little, far too late from this Government. Indeed, if it were clearer how much legislation already originated from the EU, that might make Ministers a little more cautious before they signed up to still more.
During the debate on the Lisbon treaty we had some opportunity to debate what role the EU should have. The Bill is not intended to reopen that debate; nor am I suggesting that it will completely enlighten the public about the role of the EU and its impact on the UK.
However, it would allow us to have the essential information as to the origin of any new laws being proposed in order that we may subsequently have a more informed debate about Britains place within the EU. Although I am sure that Members will be aware of my views on this matter, I have come neither to praise the EU nor to bury it. In presenting this Bill, I want to ensure that the EUs role can be better understood and scrutinised.
When the right hon. Member for Rotherham (Mr. MacShane), who I am pleased to see in his place, was Minister for Europe, he said that to calculate the number of legislative measures enacted each year in the UK directly implementing EU legislation
would entail disproportionate cost to research and compile.[ Official Report, 17 December 2002; Vol. 396, c. 755W.]
Such a statement leads me to question the extent to which the Government and this House are willing to put a price tag on openness and transparency. I understand the complexities of the process of adopting EU legislation, but such complexities should not make the process inaccessible and opaque.