Liam Byrne
MP for Birmingham Hodge Hill and Solihull North · Labour · United Kingdom
“The loss of 4,000 jobs at Jaguar Land Rover is a body blow for workers, families and communities across the west midlands, so I commend Richard Parker, the Mayor of the West Midlands, for moving quickly on Monday to put £500,000 on the table to help ensure that everybody gets back to work.”
“I wholeheartedly welcome this well-rounded statement from the Foreign Secretary, and put on record my thanks to the new Prime Minister for the hard yards that I know he has put in over recent days and weeks.”
“I am grateful to my hon. Friend for giving way, and I offer my warmest congratulations to her on her appointment to the role; she will be a brilliant Minister.”
“Let me start with a word of thanks to my hon. Friend the Member for Chester North and Neston (Samantha Dixon), who is not in her place, who said quite rightly that an awful lot has changed since the Bill was first introduced to this House. Indeed, a lot has been revealed over the course of the summer.”
“The effect of new clause 34 would be to ban off-ramping, ban new forms of digital currency transactions and ban memecoins, which are exactly the kind of measures that Ministers now need to bring forward. If we want to take the crypto system out of political finance, this is what we need to do.”
“No doubt we will learn that Mr Cottrell was in fact on the electoral register when that money was passed. No doubt we will discover that his mother, Fiona Cottrell, declared and did not disguise the fact that the money had ultimately come from her son.”
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“A wide range of other expenses can also be allowed when it is judged safe for that to be done. The licensing regime is now sophisticated and well developed, and helps us to guarantee the proportionality of asset-freezing. Last week, in her statement to the House on licensing, the Exchequer Secretary announced a new approach that will safely lighten the impact of the regime on the families of designated individuals. The Treasury will continue to report to Parliament each quarter on the operation of the asset-freezing regime.”
“Yes, and when individuals wish to challenge decisions that entail closed-source evidence, the special advocacy procedure is also available. The second question on which I want to touch is whether the proposed acquisition of powers by the Executive strikes the right balance between protecting national security and protecting the rights of our citizens. The Bill aims to ensure that the Government’s actions are proportionate, and that they intervene only to the extent that is necessary to disrupt terrorist finance. That approach mirrors international best practice for terrorist asset-freezing, which in turn reflects standards set out by the Financial Action Task Force. The orders therefore include a licensing regime which ensures that designated persons have access to legal aid and living expenses.”
“I am grateful for the opportunity to clarify the position. They would be dealt with on a case-by-case basis, and in line with code A of the Police and Criminal Evidence Act 1984, which provides the Government with guidance on reasonable grounds for suspicion.”
“They can make an application to the High Court to have that decision set aside. Courts can then judge whether the grounds of a decision were reasonable, and can scrutinise the Minister’s decision that the designation was necessary for public safety. That scrutiny will include all the material before the Treasury when the decision was made and any material available that should have been considered. The courts have the power to quash Treasury designations if they are found not to have met the strict criteria set out in the orders. At the point of the designation, the Treasury issues a legal expenses licence, which includes legal aid. That means that the designated person is able to seek legal assistance immediately and challenge the Treasury’s decision.”
“It is essential that these decisions are made in a transparent manner, so the orders will continue to ensure that designated persons are informed of their designation along with an explanation, that the public are informed of the person’s name and location by a notice on the Treasury’s website, and that the House is informed through a quarterly report on the operation of the regime, including information on new designations, reviews and de-listings, the amount of funds frozen and licensing statistics. Finally, there is the critical question of how decisions taken by the Exchequer Secretary are open to challenge; we might discuss this further later. The orders we seek to underpin provide a clear route by which any individual affected by a designation or a licence can contest the Exchequer Secretary’s decision.”
“Yes, indeed. Licensing decisions can be, and are being, challenged in court to ensure that they are appropriate. The third safeguard on which I want to touch is what qualifies an official to make a decision, because it is important for the House to consider the accountability of the decision taker. Decisions are not taken by unelected officials. Asset-freezing decisions are made personally, assiduously and carefully by the Exchequer Secretary, and officials advising her draw their counsel from either the police or the Security Service, and, where appropriate, that may include information from criminal trials. Wider evidence must also be provided, where it exists, but the final decision rests with the Minister. The fourth question on which I want to touch is transparency and whether decisions are taken in secret or in a transparent manner.”
“I am confident that the courts have the necessary latitude to consider the two tests that an individual needs to fail to become designated. First, there must be reasonable evidence that they are involved in terrorist activity, and the courts are perfectly able to consider the evidence on which the Minister relied when making that decision. Secondly, the courts are able to consider whether the freezing of an individual’s assets is necessary in order to protect the public. Even if there is information from closed sources, procedures are available that ensure that courts are able to review that material, too.”
“Thus, a second test also needs to be considered: whether the asset-freezing order put in place is needed for the protection of the public.”
“I understand that, but I think that the protection in place is appropriate, because in the first instance we are dealing with whether there is reasonable suspicion—and reasonable suspicion is the right point on which to rely, because we are seeking to act in a pre-emptive manner in order to ensure that the economic resources available to somebody involved in terrorist activity are not used for a terrorist attack or the maintenance of terrorist infrastructure. The test of reasonable suspicion is a lower one, but clear guidance as to what constitutes reasonable suspicion is available. It is important that the courts are able to look at the evidence available to a Minister, on which that Minister relies, and investigate whether they made a proper and rational decision based on it.”
“Two further terrorism orders rely on the same UN Act for their legal substance and there is therefore a risk that they are vulnerable to being struck down. In addition, there is a problem in respect of those individuals covered by clause 3(1)(b) of the Al-Qaida and Taliban (United Nations Measures) Order 2006. However, these assets are frozen under EC regulations. The only issue with freezing things under EC regulations is that sanctions are not attached, so the Government will introduce secondary legislation to attach sanctions to those EC regulations.”
“Only closed-source evidence is used in the special advocate procedure, but we must ensure that appropriate checks and balances are in place. I am satisfied that against the test of reasonable suspicion judicial review is an appropriate way to ensure that Ministers act rationally and in the spirit of the law. I wish to say a word about the sunset clause, which is important for the House to debate. We proposed a sunset clause period in this Bill ending 31 December 2010, but amendments have suggested that that is too long. The House must strike a balance between urgency and careful deliberation. The Bill is designed to solve the urgency problem; given that a stay of judgment was not handed down by the Supreme Court, it is important that assets frozen under the Terrorism Act 2006 remain frozen.”
“In conclusion, in these times of severe threat to our national security we cannot afford to fail to take the necessary steps to disarm terrorists or to disarm them of their financial power. Without primary legislation of the kind before the House, we will leave gaps in our defences that will give flexibility and capability to people who intend serious harm to the British public. The Bill provides for the safeguards for the citizen set out in the orders to remain in place. Those safeguards, I would argue, are tried and tested defences against the misuse of power by the Executive. At the same time, the Bill will provide Parliament with the proper time needed to consider and debate permanent legislation in full and I therefore commend the Bill to the House.”
“If, as I hope, the House agrees this legislation over the two days, it will need to turn its mind to considering the right procedures for debating the full legislation in order to tease out some of the questions that have just been posed. This legislation equips the Executive with strong powers and I could not be confident that, given the looming elections and recesses, this job of scrutiny could be safely dispatched and a full Bill could be taken through both Houses before 31 July 2010—the date that I believe was proposed by the Liberal Democrats. We are therefore asking for a sunset clause of 31 December, in order to ensure that the draft Bill, published last week, is debated in full.”
“I do not want to take a single word away from the opportunity that we will have to debate this legislation at more length. The right hon. Gentleman makes a good point to show why the House needs some time to debate our proposed transposition of the Orders in Council, on which we are relying, into primary legislation. These are exactly the kinds of debates that we need to test. The only point that I should make this afternoon is that the judicial review test is the norm in a number of other national security contexts and courts have demonstrated readily that it can be adapted to ensure an appropriately robust level of scrutiny of ministerial decisions. Let us return to the final question of a sunset clause.”
“The International Monetary Fund sets out estimates of deficits around the world. We remain determined to halve the deficit over four years, and we have set out clear plans to do so.”
“We make no apology for intervening to protect businesses and families from the worst economic storm for the last 60 years, but the reason that we had the flexibility to take that action is that we went into this recession with the second lowest level of debt in the G7. If the hon. Gentleman takes the IMF figures for 2014, he will see that the figures for this country are 18 per cent. lower than the average for the G7. Once recovery is set in, we have to take steps to halve the deficit over the course of four years and to bring down the structural deficit by some two thirds, and we have set out clear plans to do so—in sharp contrast to the Conservatives.”
“My hon. Friend is right. Suggestions have been put to us for reducing public spending next year—for example, reducing eligibility for child trust funds—but of course that would require legislation in this House, which it is unlikely could be delivered within the next financial year. Others have said that we could reduce eligibility for child tax credits, but of course the proposals that we were told would save £400 million would, in fact, save only £45 million. So the Conservative party has offered no credible plans to reduce public spending next year. However, the key point is that it would be the wrong thing to do because it would put at risk the recovery that we have fought hard for.”
“Moving health care closer to home is a policy objective of this Government. I think that the hon. Gentleman has in mind a scheme that has been submitted by his local NHS to the Department of Health. That scheme is currently under consideration by that Department and when it comes to me, I can assure him that I will review it thoroughly, but also promptly.”
“I am always happy to meet groups of right hon. and hon. Members. In particular, I would like to put on record my thanks to my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for her tireless campaigning on behalf of the project. We are proud of the number of hospitals that the Government have built. We said that we would build 100 new hospitals by 2010; in fact, the Department of Health is on course to build 126 by the end of this year. The scheme to which the hon. Gentleman referred is yet to come to me for approval. The House would expect me to look at the business case thoroughly when it arrives, but as I said to him a moment ago, I also understand the need for speed.”
“My hon. Friend can rest assured on that point. I met the Secretary of State for Health last week to begin our preparations together for considering that particular project. I hope that she will be able to join me and any other hon. Members who would like to get together to discuss that important new development.”
“The Government fully recognise the benefits of early intervention and the value for money that it brings. That is why I announced in the Command Paper that I laid before the House before Christmas a new programme of work designed to test innovative forms of finance aimed at boosting investment in early intervention.”
“I would like to put on record my personal thanks to my hon. Friend for the pioneering work that he has overseen in Nottingham, where there is a great deal for policy makers and for politicians to learn. Like him, I am keen that we explore new ways of drawing money into innovative projects focused on early intervention, and I hope the measures that we have announced to create in this country a social investment wholesale bank, together with social impact bonds that will be brought forward by the Secretary of State for Communities and Local Government and, I hope, the Secretary of State for Justice will be a substantial step in testing some of the ideas that are being pioneered now in Nottingham.”
“My hon. Friend will know of the virtues of the scheme that was introduced in England. It can not only deliver a reduction in families’ heating bills, but have an impact on reducing the country’s carbon emissions. The requisite spending is a devolved matter in Scotland. Barnett consequentials were provided on the £20 million addition that was made to the budget of the Department of Energy and Climate Change, but the argument will of course need to be prosecuted in Scotland.”
“As the hon. Gentleman will know, the figures for public pension liabilities, and the way in which they are financed, were set out in the long-term finance report that was presented to the House alongside the pre-Budget report.”
“We also stand for investing in growth, new jobs, new industries and new infrastructure that together will be vital in balancing our economy better in the years to come. I hope that the crispness and clarity of our position in this debate will be matched, especially by the Opposition. This week, policy pose after policy pose has given way to position after position, sometimes with up to three difference stances in one afternoon. However, credit where credit is due: the Opposition are nothing if not nimble, as they hop madly between constituencies that they are so desperate to please. We will have none of that on this side of the House, so let me use the few minutes allotted to me this afternoon to set out some of the measures that my right hon. Friend the Chancellor presented before Christmas.”
“I beg to move, That this House has considered the matter of the Pre-Budget Report. I welcome the chance to open today’s debate, the first on the pre-Budget report. I welcome it because decisions as significant as these should be tested in debate, so that the House and the public whom we represent can see clearly where each party stands and, amidst the arguments that we have in the media and elsewhere outside, where the policy of each party really rests. We on the Government Benches are very clear about where we stand. We stand on the side of workers, businesses and home owners, who need protection from the worst global recession in 60 years, and for locking in recovery. We stand for taking the difficult decisions that will be needed to halve the deficit over the four years to come, while protecting our priorities for public services.”
“However, the second point made by the Chancellor in the pre-Budget report is about looking ahead—to the years beyond 2010 and the return to growth and prosperity in the years to come. I am afraid that those years of growth will not be years without difficult decisions—indeed, they will be full of them—and especially not without the decisions needed to halve the deficit and protect our priorities in public services. We have said that, in our judgment, the right time frame over which to execute this difficult decision is the 48 months up to the end of 2013-14.”
“In the pre-Budget report, the Chancellor forecast a return to growth, but as we know, over the next period unemployment may continue to rise in the short term. So to lock in the recovery, the Chancellor said that he was able to do more: by extending the Time to Pay scheme for as long as it is needed; by deferring the proposed increase in corporation tax for smaller companies, leaving the 2010 tax rate unchanged for nearly 900,000 small businesses; by freezing support for mortgage interest at 6.08 per cent. for six months more, to help people who are worried about their mortgage payments; and, perhaps most importantly, by ensuring that every 18 to 24-year-old who has been out of work for more than six months is offered the chance of a job, training or community service.”
“I will give way in a moment. The first objective of our policy as set out in the pre-Budget report is, of course, to secure the recovery. When we look back over the year that has passed, we are glad that we ignored the idiosyncratic advice proffered by the Opposition and, instead of doing nothing, as they suggested, chose to act: to rescue the banking system from the brink of collapse; to cut VAT; to invest £5 billion in jobcentres, which have helped 3 million people out of unemployment in the past year; to introduce measures to allow families to stay in their homes, helping to ensure that repossessions are two times lower than in the 1990s recession; and to set up the Time to Pay scheme, which has helped more 160,000 businesses to spread their tax payments over a timetable that they can afford, helping to keep insolvency rates three times lower than in the 1990s.”
“Let me explain that in detail in a moment. It is fair to say that the Conservatives have questioned our judgment that four years is the right time frame over which to halve the deficit, but their questioning has been in the style and manner of rather open-ended, slightly ponderous thinking aloud. They have not offered an alternative proposition, such as reducing our four-year time frame to three. They know what the price of such a move would be, and they seem unsure whether they want to pay it.”
“Of course, to this sum may be added the windfall of lower unemployment. For the purpose of the PBR, we made the extremely cautious assumption that unemployment would not fall. In fact, if unemployment does indeed come down, as we expect it to, the benefits bill will be billions of pounds lower. It is also possible that, as the economy grows faster—as the Bank of England has projected—there will be further fruits of growth in the years to come. The House will rightly ask how such windfalls will be put to use. I will state the position bluntly, by repeating what the Chancellor said to the Treasury Committee. He said that, in the event that growth turns out to be more robust than in his forecast, borrowing would naturally fall faster, and that it would then be possible to reduce the structural deficit further in the medium term.”
“They include: £8 billion to be delivered by 2012-13, identified across the public sector through cutbacks in Whitehall through the operational efficiency programme; £600 million from the greater use of online systems to deliver public services; £650 million from cuts in consultancy, marketing and communication spending across government; £550 million from cutting back on quangos and arm’s-length bodies; £550 million from local government, including reducing the costs of inspection; £140 million from cutting senior civil service costs by 20 per cent.; £1.4 billion from ending temporary employment measures as unemployment falls; £850 million from delaying things that can wait, or from cutting back systems such as the NHS IT programme; £900 million from asking businesses and students to pay a little more for training; £360 million from reforming the criminal justice system and legal aid; and £730 million from focusing regeneration and transport spending on areas where it is needed most.”
“That is why this pre-Budget report, together with the command paper “Putting the Frontline First”, announced £20 billion of cuts and efficiencies. If the House will bear with me, I think that it will be helpful if I run through them.”
“As the chief economic adviser said to the Committee, we have decided to deliver two thirds of that sum through spending, and one third through new taxes. On decisions on tax, we have set out plans to raise £19 billion from new taxes, which we have sought to introduce in a fair way by ensuring that 60 per cent. of them are paid by the top 5 per cent. of earners in this country. That leaves £38 billion to be secured from spending cuts. Capital investment must fall, as it safely can, from today’s historically unprecedented level. In the 2008 pre-Budget report and the 2009 Budget, we announced substantial reductions to the overall capital spending budget, and that is set out on page 189 of the pre-Budget report book. Yes, Departments will have to cut back, which is why we have reduced our plans for current expenditure from 2011 onwards.”
“That is an important point that I will address directly in a moment. First, let me return to the question of the level of detail, because the House is right to ask how the sums will add up in 2013-14. In framing my remarks, I should like to draw on the excellent report from the Treasury Select Committee and the evidence presented to the Committee by the Chancellor and by Her Majesty’s chief economic adviser. Our judgment is that the deficit must fall from £178 billion this year to £96 billion in 2013-14, a fall of £82 billion. We anticipate that £25 billion of that sum will come from growth, and the return to business as usual, including the reversion of the VAT rate, but, as the Chancellor said to the Treasury Committee, £57 billion must come from discretionary action—in other words, decisions.”
“My hon. Friend is absolutely right. The fact that unemployment is so much lower now is a result of many of the actions that we took to ensure that businesses had flexibility over cash flow and that there was guaranteed new help for young people after nine months. We were, however, conscious of the need to do more than that, which is why we said in the pre-Budget report that no young person should be out of work for longer than six months without being offered a job, training or community service.”
“We have also proposed £200 million for the strategic investment fund, of which £150 million will be routed to support low-carbon investment. We are doubling the UK’s commitment to funding carbon capture and storage demonstration sites from two to four. We are increasing support for low-carbon vehicles and setting out additional funding for low-carbon industries and energy efficiency, including Warm Front. Those are all policies—indeed, all ambitions—in which the Conservative party has little interest.”
“It sets out how we will maintain our leadership in the low-carbon sector, how we will boost investment in our national infrastructure and skills, and how we will support our world-class high-tech industries. Over the next year or two, we will extend by £500 million the amount of lending available to small and medium-sized enterprises, through a 12-month extension of the enterprise finance guarantee scheme. We have created a new growth capital fund, with a new £325 million. We have created Infrastructure UK, which will help to accelerate private sector investment in new infrastructure. We are proposing to introduce a patent box, which is a reduced rate of corporation tax applying to income from patents from April 2013.”
“I will address this point before I give way. The pre-Budget report set out plans to rebalance our economy in the years to come. In the Budget, we said that we would do this through fair tax increases and the tighter control of public spending, to ensure that long-term interest rates were kept low. That point has often been made by the hon. Member for Runnymede and Weybridge (Mr. Hammond). There are now great strengths on which we can build in the years to come. We have low interest rates and low inflation. We also have the most flexible labour market in Europe, the lowest rate of corporation tax in the G7 and a competition regime that is among the best in the world. That is why we are judged to be one of the best places in the world in which to do business and to attract inward investment. The pre-Budget report develops those strengths.”
“Youth unemployment, in my view, is too high, but the hon. Gentleman will recognise that something like 200,000 to 250,000 of the numbers in the current count provided by the International Labour Organisation include those in full-time education who may be looking for part-time work. The hon. Gentleman is wrong to bandy around figures in headline terms in a debate such as this without setting out some of the detail.”
“This is not a new notion, as that was said last July. Is the plan fast enough for the Governor of the Bank of England? The shadow Chancellor is fond of quoting the Governor. The shadow Chancellor is not in his place.”
“Let me deal with the points about bonds, which were raised by the hon. Member for Kettering (Mr. Hollobone), after which I will give way again. I hope that over the hours to come, we get a chance to explore some of the myths thrown around during the last week, starting perhaps with the most important question of whether our plan to cut the deficit is fast enough. Is it fast enough, for example, for the people who buy our bonds? We have heard a lot about the intentions of PIMCO and some of the quotations bandied around the House to date have, of course, been a bit selective and one-sided, if I may say so. PIMCO, reflecting on the flight to safety that brought buyers to UK bonds and brought gilt rates so low is naturally thinking about divestment into riskier assets as the world economy returns to its former state.”
“Member for Runnymede and Weybridge and I have had late at night in TV studios around London since 9 December—I am sure that you, Mr. Deputy Speaker, will have been struck like me by the sheer contrast between 212 pages of detail on specific, pressure-tested proposals and the vacuous nonsense of the Conservative party.”
“Again, their views are sometimes traduced in this House, but the reality is that in Moody’s analysis published last month, both the US and the UK triple A ratings are described as “resilient”; all three rating agencies have acknowledged the UK has access to particularly deep and liquid capital markets; and on perhaps the ultimate test of demand, gilt auction performance remains strong. Ten-year gilt yields averaged over 11 per cent. in the 1980s; they are now around 4 per cent. I hope that all these arguments and more are debated this afternoon. If I were forced to characterise this pre-Budget report, I would say that the sweep of its ambition is matched by the depth of its detail. In the debates that we have had—not only in this place, but in the media and elsewhere, and particularly in the debates the hon.”
“No, indeed. In fact, the full answer from the Governor of the Bank of England on this question paints a very different picture. He gave his answer in evidence to the Treasury Select Committee, saying: “It is certainly true that if you eliminate the deficit too aggressively it will have an adverse consequence.” He went on to say: “You have to take action to bring down the deficit of the size we have—it is a very large structural deficit—but to do so at a rate that is consistent with the restoration of growth in the economy”. That is why we propose to reduce the structural deficit from 9 per cent. to 3.6 per cent. in the space of just one Parliament. Is our deficit reduction plan fast enough for the ratings agencies?”
“The growth forecasts that we have set out are the basic answer to that question. There is, of course, a degree of uncertainty about the future path of growth for our economy. The independent forecast is different from the forecast that the Chancellor presented, while his forecast is rather lower than that presented by the Governor of the Bank of England. It would be difficult, especially this afternoon, for me to decouple these projections for the public finances and those presented for growth.”
“I seem to remember that the hon. Gentleman intervened on the Chancellor earlier in the week, so it will not surprise him to learn that I have nothing to add to the Chancellor’s excellent answer provided to the hon. Gentleman at that time.”
“The Chancellor has thus set out a central scenario, clarifying what we think is the right judgment to make on public finances and what the consequences for growth will be.”
“I am trying to avoid taking the House through what would be a quite complicated economic equation, which no one will be surprised to hear I have not brought with me this afternoon. The hon. Gentleman is looking at only one side of the argument. He will know that when we have such a large structural deficit because of the action we have taken to protect the country from the worst of the economic storm, it is vital to set out for members of the public and for taxpayers, as well as for people who buy our bonds, exactly how we plan to reduce that deficit. We have set out the fastest deficit consolidation plan in the G7. Without that clarity in place, it would be quite possible for long-term interest rates to begin to rise, which would also be damaging to the success of investment in this country in the years to come.”
“The Conservatives’ “all things to all people” policy has left them with a £34 billion credibility hole that they cannot airbrush away. If the Shadow Chancellor spent more than 40 per cent. of his time on economics, perhaps the hon. Member for Runnymede and Weybridge would not be in such an embarrassing position this afternoon; but he is, and the whole House is looking forward to seeing whether he can climb out of the hole in which his party leaders have left him.”