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4.14 pm
Mr. Richard Shepherd (Aldridge-Brownhills) (Con): My right hon. Friend the Member for Wokingham (Mr. Redwood) said, “Call me old-fashioned”. I am old-fashioned, as I believe most Members probably are, in the sense that I believe it is not unreasonable to want to know what liabilities one is entering into, or leastways to hear figures suggesting what those liabilities might be. “Due diligence” is a phrase that echoes through almost every transaction in the commercial world.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): One problem is that due diligence did not happen in the commercial world when it came to our banks. The lesson for the Government is that they need to be much more wary when dealing with the banks.
Mr. Shepherd: That is a very fair correction. Of course we all accept the need for due diligence from those who serve us, professionally and otherwise, in the commissioning and undertaking of the tasks ascribed to them.
This country is clearly frightened. What is happening is without precedent in living memory. Unemployment is growing at an alarming rate, and we are watching companies fold. We know that the liquidity of banks lies behind that. We have already had what I believe was a 90-minute debate on a resolution to make available £40 billion and a further £200 billion. The House has been marginalised in the undertaking of its most fundamental duty, which is the supply of money. We do not know how much we are to supply on this occasion.
I go along with my right hon. Friend the Member for Wokingham in saying that the motion is open-ended, and I am surprised he believes that the Government will even need to return to the House with another such motion. It is pretty comprehensive, yet we know nothing of the figures. The hon. Member for Thurrock (Andrew Mackinlay) asked why we are approving the sums that we are, because they must give bankrupt banks the ability to pay bonuses they would otherwise not be able to pay. Last Thursday, the Financial Times set out the Obama programme for convincing the public why the measures being sought through Congress, which will sit at weekends if necessary to discuss them, should apply to the banks. That programme rests on a condition similar to the one that the hon. Gentleman set out.
Yet this Government have set as their condition the holding of an investigation, which will dribble on until the end of time. How can people be confident that the Government know what they are doing, are on the side of the people and can countenance the payment of such sums? Where in their scheme is correction provided for? The Minister must say more about that. It cannot be reasonable to assume that the House will dance to a tune that it does not even understand. The resolution opens our imaginations to the thought that the Government are as lost as all of us. In fact, they are more lost, as they cannot put a sum on anything.
Mr. Cash: Does my hon. Friend accept that some of us would be very concerned if we did not put down a marker of protest about this? We would prefer to vote against the money resolution, even though we understand that certain undertakings may have been given.
Mr. Shepherd: I want to see Parliament at the centre of what this country decides in relation to the Executive. That has happened throughout our history, and we are elected to ask the Executive for certain informations. We have been hollowed out in the great debate that faces each of our constituents, and we have not even had proper debates on the Government’s economic conduct. They do not want to come to the House to discuss that; they just send a little message, a three-minute speech by the Minister explaining why it is essential that we should bounce along to their drumbeat.
No, no—I agree with my hon. Friend the Member for Stone (Mr. Cash) that we should oppose the motion so that the Government take seriously the intent of Parliament. Each one of us must justify such vast sums, which could bankrupt the nation. The bankruptcy of countries is not unknown in history. When one hears of money simply being thrown around, without ascertaining or establishing conditions, it makes one feel that the Government do not know what they are doing apart from pushing money into the economy somehow. We need to be more intelligent about the matter, and so do the Government.
The Executive are trying to achieve what all hon. Members want—the stabilisation of an economic crisis and beginning of life again. However, that should be done in partnership, so we should oppose the motion.
4.20 pm
Mr. Peter Bone (Wellingborough) (Con): It is a great pleasure to follow my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), who speaks with immense sense and with whom I entirely agree.
I had the great pleasure of attending every Committee sitting, where the Economic Secretary, who is also at the Dispatch Box today, would spend five, 10 or 15 minutes discussing some sentence in the Bill. However, when it comes to spending so much money that we do not even know the size of the sum, with the danger of bankrupting the British economy, we get a very short speech. I do not believe for one moment that that was by the Minister’s design—I think he was sat on from on high. The theory is, “Whatever happens, let’s not discuss the Bill but simply get it through quietly; let’s spend billions and billions of pounds, and nobody will notice.” I spoke in a debate in which we spent £42 billion in 90 minutes. The larger the amount of money, the less time we have to discuss it.
Mr. Newmark: Does my hon. Friend share my concern that the Economic Secretary is mute on the matter because he does not know the figure?
Mr. Bone:
I am grateful for the intervention because I intend to be brief to allow the Economic Secretary time to say at least something about the matter. Perhaps he has no idea about the figure, but he has got to do better. He must come to the Dispatch Box and explain the money resolution in greater detail, otherwise I will not support it. I know that that creates some difficulty for
my hon. Friend the Member for Fareham (Mr. Hoban). He made many of the points that hon. Members of all parties have raised, but he wants to get the Bill through, as we all do. However, if we continue to allow the Government to railroad Parliament, they will be encouraged to do it again and again.
Mr. Cash: Will my hon. Friend take into account the fact that our presence here today to discuss the money resolution must be in accordance with the rules laid down in “Erskine May” and in Standing Orders? We are discussing a proposal for new or increased expenditure, which is not already covered by legislative authorisation. We are therefore in a de novo situation. My right hon. Friend the Member for Wokingham (Mr. Redwood), and my hon. Friends the Members for Aldridge-Brownhills (Mr. Shepherd), for Braintree (Mr. Newmark) and for Gosport (Sir Peter Viggers) have already shown that there is deep concern about the fact that the amount is new and increased, and, as my right hon. Friend the Member for Wokingham said, its implications are stupendous.
Mr. Bone: My hon. Friend speaks with great clarity and is, of course, correct. Time and again, the Executive have performed the same trick. They add things to Bills late in their passage. In this case, they are adding the most massive sum of money.
I realise that I am short of time if I want the Economic Secretary to speak again, and he must make it clear whether we are considering approving expenditure of not only billions but trillions. Will that be incorporated into the Government’s balance sheet? If so, we will be a little country run by a big bank. The Economic Secretary must be clear: will the money be consolidated or not?
4.24 pm
Sir Peter Viggers (Gosport) (Con): The proposal that the Government have put before us is profoundly worrying. It would allow an unlimited amount of expenditure, by authorising
“the payment out of money provided by Parliament of any expenditure of the Secretary of State in respect of, or in connection with, giving financial assistance to or in respect of a bank or other financial institution”.
That is, in fact, a blank cheque.
In January, the Prime Minister expressed surprise and anger that the Royal Bank of Scotland had invested in derivatives—“invested” being a pejorative—and that it had become necessary to write off £2.5 billion of taxpayers’ money, which was irrecoverable from a Russian oligarch. What on earth are we doing surrendering taxpayers’ hard-earned money to a Russian? The Prime Minister expressed anger, but how much more angry should we be that he spent taxpayers’ money on that basis and that he then expressed surprise?
The only way ahead must surely be to tie down the Government, so that they are not so profligate in the expenditure of our money, and to reject the motion. Having said that, I was present when my hon. Friend the Member for Tatton (Mr. Osborne) gave an undertaking that the Bill would go through with our support in February, and on that basis I will not be voting against it.
4.26 pm
Ian Pearson: With the leave of the House, I would like to respond to some of the points that have been raised in this debate, although I appreciate that this gives hon. Members an opportunity to range relatively widely over Government expenditure.
A number of the issues could have been raised in connection with the money resolution on 14 October, which was passed without debate. Indeed, hon. Members will be aware of the convention with regard to money resolutions. Like the hon. Member for Aldridge-Brownhills (Mr. Shepherd), I, too, am old-fashioned.
Mr. Cash: Will the Minister give way?
Ian Pearson: If the hon. Gentleman will let me reply first, I will then give way.
I am old-fashioned enough to believe that a money resolution is about providing the cover for expenditure. We are not debating or voting on the expenditure itself. That will happen through the normal process of supply estimates and votes where appropriate. There will be opportunities to discuss the expenditure that the Government are committed to, but we are asking for cover for expenditure, just as we do for other Bills in normal circumstances.
Mr. Cash: Will the Minister give way?
Ian Pearson: Let me make just a little more progress and answer some of the substantive points that have been made. Then I will give way to the hon. Gentleman.
The schemes covered by the resolution will be subject to the standard arrangements for parliamentary control and for the reporting of expenditure to Committees as appropriate. The Bill makes that happen and will also put in place additional requirements, in line with amendments made in the other place. Hon. Members will be aware that amendments made in the other place imposed a requirement on the Government to report on expenditure and liabilities made or assumed under the Bill. We have accepted the principle behind that amendment and we will debate it in due course, so there will be no lack of transparency on the Government’s part.
Andrew Mackinlay: Does the Minister not understand his and my constituents’ bewilderment that we should be giving the banks a blank cheque, as other hon. Members have said? We understand the gravity of the situation but, at the same time, he and the Prime Minister are not insisting that bonuses should not be paid. I ask him again: will he cut away the nonsense about a review and say, “It shall not happen”?
Ian Pearson: I hear what my hon. Friend says. We all share the public outrage about bonuses that are rewards for failure. Let me say to him that it is not a blank cheque that we are asking people to support today; it is a money resolution that is prepared in the normal way. There will be scrutiny through estimates and votes in the normal way. It is also important to recognise that there are a number of measures in the Bill that are important to people and businesses in his constituency. That is why I hope he will not want to vote against the money resolution, because not passing it would prevent people and businesses in his constituency from receiving substantial support.
Mr. Redwood: Will the Minister give way?
Ian Pearson: In a moment. I just want to address the point about contingent liabilities.
As hon. Members will be aware, Departments are required to note contingent liabilities in their annual resource accounts. In exceptional circumstances, this may be done confidentially to the Chairs of the Public Accounts Committee and departmental Select Committees. In a moment, I hope we will go on to discuss the transparency and reporting amendment that I have tabled in response to the amendment made in the Lords. It proposes six-monthly reporting requirements. We are not hiding away from wanting to report on our liabilities and the actions that we are taking on this matter; we want to get it right, but we also want to do whatever it takes to maintain stability and support for the economy in this difficult time.
I am pleased with the cross-party consensus that we have had during the passage of the Bill, and I ask hon. Members seriously to consider that there is a difference between a money resolution that provides cover for expenditure and a debate on the expenditure itself, which will be held in the normal way.
Mr. Redwood: Will the Minister tell the House how much money we are talking about for this year and next, under this money resolution and the subsequent resolutions?
Ian Pearson: We have explained this, in our previous statements to the House on bank recapitalisation, and in our announcements on the asset purchase scheme. We also explained in detail the fact that we were providing £10 billion in contingent liabilities for supporting the working capital scheme, which will allow £20 billion of lending. However, we do not know what the exact figures will be because, in many cases, we are providing loan guarantees, and our final liabilities will depend on the ability of companies to get through the recession and on whether those guarantees are called. The sooner we act, and the sooner we can get more support to businesses, the more likely the businesses will be to survive at this time—
4.32 pm
Three quarters of an hour having elapsed since the commencement of proceedings on the motion, the Speaker put the Question (Standing Order No. 52).
The House divided: Ayes 273, Noes 7.
AYES
Ainger, Nick
Allen, Mr. Graham
Anderson, Mr. David
Anderson, Janet
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Baird, Vera
Balls, rh Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Beckett, rh Margaret
Begg, Miss Anne
Bell, Sir Stuart
Benn, rh Hilary
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blizzard, Mr. Bob
Blunkett, rh Mr. David
Borrow, Mr. David S.
Bradshaw, Mr. Ben
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, rh Andy
Byers, rh Mr. Stephen
Byrne, rh Mr. Liam
Caborn, rh Mr. Richard
Campbell, Mr. Alan
Caton, Mr. Martin
Challen, Colin
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Ms Katy
Clark, Paul
Clarke, rh Mr. Charles
Clelland, Mr. David
Clwyd, rh Ann
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Cook, Frank
Cooper, Rosie
Cousins, Jim
Crausby, Mr. David
Creagh, Mary
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
David, Mr. Wayne
Davidson, Mr. Ian
Davies, Mr. Dai
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobbin, Jim
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Eagle, Angela
Eagle, Maria
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Field, rh Mr. Frank
Fisher, Mark
Fitzpatrick, Jim
Flynn, Paul
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Goodman, Helen
Griffiths, Nigel
Grogan, Mr. John
Gwynne, Andrew
Hain, rh Mr. Peter
Hall, Mr. Mike
Hamilton, Mr. David
Hamilton, Mr. Fabian
Hanson, rh Mr. David
Harris, Mr. Tom
Havard, Mr. Dai
Healey, rh John
Hendrick, Mr. Mark
Heppell, Mr. John
Hesford, Stephen
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodgson, Mrs. Sharon
Hoey, Kate
Hoon, rh Mr. Geoffrey
Hope, Phil
Hopkins, Kelvin
Howarth, rh Mr. George
Howells, Dr. Kim
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Irranca-Davies, Huw
James, Mrs. Siân C.
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Lynne
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kennedy, rh Jane
Khan, Mr. Sadiq
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, rh Jim
Kumar, Dr. Ashok
Lammy, rh Mr. David
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
Mackinlay, Andrew
Mactaggart, Fiona
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonagh, Siobhain
McDonnell, John
McFall, rh John
McGuire, rh Mrs. Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
McNulty, rh Mr. Tony
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Miliband, rh David
Miliband, rh Edward
Miller, Andrew
Mitchell, Mr. Austin
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morgan, Julie
Morley, rh Mr. Elliot
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Denis
Murphy, rh Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Prescott, rh Mr. John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, rh James
Raynsford, rh Mr. Nick
Reed, Mr. Jamie
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Roy, Lindsay
Ruane, Chris
Ruddock, Joan
Russell, Christine
Salter, Martin
Sarwar, Mr. Mohammad
Seabeck, Alison
Sharma, Mr. Virendra
Sheerman, Mr. Barry
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andy
Smith, rh Mr. Andrew
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Straw, rh Mr. Jack
Stringer, Graham
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thornberry, Emily
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vaz, rh Keith
Walley, Joan
Waltho, Lynda
Watson, Mr. Tom
Whitehead, Dr. Alan
Wicks, rh Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wills, rh Mr. Michael
Wilson, Phil
Winnick, Mr. David
Winterton, rh Ms Rosie
Wood, Mike
Woolas, Mr. Phil
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Tellers for the Ayes:
Ms Dawn Butler and
Mr. Dave Watts
NOES
Bone, Mr. Peter
Davies, Philip
Heathcoat-Amory, rh Mr. David
Pelling, Mr. Andrew
Redwood, rh Mr. John
Spink, Bob
Wareing, Mr. Robert N.
Tellers for the Noes:
Mr. William Cash and
Mr. Richard Shepherd
Question accordingly agreed to.
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