Dame Harriett Baldwin
MP for West Worcestershire · Conservative · United Kingdom
“I welcome the Chancellor to his new role. I paid close attention yesterday to the long speech he made to reset the narrative and drive growth Britain. In paying tribute to his predecessor, will he recognise that she left the highest tax burden on record? Instead of postponing the words he could utter to my hon.”
“I welcome the new Prime Minister to the Dispatch Box. I note that in his statement he referred to the biggest issues facing the country as being “the economy and the cost of living crisis”. Will he accept that one of the things that has damaged our economy and caused prices to be higher is the tax-and-spend Budget in November 2024?”
“Could the Leader of the House make a commitment that the new Chancellor of the Exchequer will come to the House on the first day we are back from recess?”
“With a stroke of his Whitehall pen, the Secretary of State has just abolished Malvern Hills district council, Worcester city council, wonderful Wychavon district council and Worcestershire county council. He said in his statement that this is about making “real improvements to people’s lives and…communities”.”
“In recent weeks in West Worcestershire, I have met local police and the police and crime commissioner; the police and crime commissioner is being abolished, and the police are being reorganised. I have met the local health commissioners; they are being reorganised, and Healthwatch is being abolished.”
“Will the Leader of the House confirm that, given that the other place is sitting next week, there is nothing to stop him tabling a business statement to enable this House to sit next week? Given the enormity of the events happening in the Government next week, does he not think that would be a good idea?”
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“The simplicity and transparency of the securitisations proposed secure the benefit of those good ways of reducing risk on bank balance sheets, freeing up lending that the banks can do in the real economy to support jobs and growth, which is an important function. That is why we think this simple approach to securitisation is a good way of managing the risks, and we are opposed to the kind of complex securitisations and opaque risks that contributed to the crisis.”
“As far as the proposals before us are concerned, the important point about risk is that, following the crisis in 2007, the market for securitised transactions—which were a source of incredibly un-transparent risk in the financial sector, with incredibly harmful impacts throughout European Union—was so bad that it has now dried up almost completely in the EU. The purpose of moving so rapidly, which the Government support, is to bring back what we would call the good risk of simple transactions to securitise basic lending across the European Union. That is why the speed at which this is moving is welcome.”
“We are working closely with the Bank of England to seek an outcome that addresses financial stability concerns but also provides the necessary incentives to encourage simple, transparent securitisation and to discourage less transparent and unduly complex structures. We are consulting a wide range of market participants and practitioners to inform our contributions to the negotiations. I hope hon. Members will support today’s motion and note “that the Government supports the Commission’s efforts to ensure that the Capital Markets Union action plan supports jobs and growth, and in particular…helping small and medium-sized enterprises…get the funding they need to grow”.”
“We also believe that a self-certification approach attesting to the quality of securitisation is needed in order to avoid the moral hazards that we saw in the past. We believe this regime can be made to work, provided that the criteria for securitisation to qualify as simple and transparent are very clear and unambiguous and that there is clarity for all participants, whatever their roles and responsibilities. The UK’s overriding objective during the negotiations is to get these markets going again in a prudentially sound way. Provided that the overall approach is robust, it is also appropriate to recalibrate the prudential requirements in a more risk-sensitive fashion.”
“A vital objective for such a framework is to restore trust in the information provided in respect of these products, which will, of course, help to address the lack of confidence stemming from the many unpleasant surprises that investors experienced with regard mainly to US-originated securitisations, where complex structures made it difficult for investors to judge the risk involved and where issuers were able to hide behind credit rating agencies. If we want to get these markets going again, it is important that an appropriate balance is found between the responsibilities and corresponding incentives for issuers as well as investors. The Government believe that these proposals provide a sound foundation on which safely to restart European securitisation markets.”
“Unless market participants are given a clear signal that securitisation markets have a long-term future in the EU, we risk losing the experience and the necessary expertise in such instruments altogether, making it difficult to restart these markets. As I said earlier in answer to questions, securitisations can also be a source of instability if they are not done within a robust regulatory framework.”
“From our perspective, it is not just our smaller firms that will benefit; breaking down barriers across the single market will help British firms to diversify their investments at a lower cost and to offer our competitive products to savers across the single market. The European Commission has also published its proposals for a revised regulatory framework for securitisations. The impact of the global financial crisis was severe and has reduced the market for European securitisations, with the end result that that source of funding for the real economy was almost entirely shut down. Some in the industry believe that the EU securitisation market is now slowly dying, with new issuances at only a fraction of the pre-crisis level.”
“The Commission has also identified a set of priority measures for immediate action, which include today’s proposals on securitisation, revisions to current EU legislation on venture capital and prospectuses, and a call for evidence on the cumulative impact of current EU financial services legislation. These are all priorities that the Government support. Although the Government have prioritised helping our small and medium-sized firms, we know that such firms can still find it hard to access finance. The CMU will help by giving them access to more investors across the single market by pooling investment resources, helping venture capitalists and angel investors, and making it easier to list on public markets.”
“Delivery of a CMU forms part of the Government’s agenda for a more competitive EU. If we are to make Europe more competitive, we need a true single market in capital, because that will break down the barriers that stop flows between member states and will help businesses to access the finance that they need to grow and succeed. As Committee members will have seen from the documents, the action plan is thematic, identifying six key areas for reform: financing for innovation; start-ups and non-listed companies; making it easier for firms to access and use public markets; measures on long-term infrastructure and sustainable investment; fostering retail and institutional investment; leveraging bank capacity; and facilitating cross-border investment.”
“European savings levels are quite good, but people lack options to invest their savings in growing firms throughout the single market, because at the moment traditional bank lending to business is stifled and because the many costs of investing money across national borders in the European Union mean that savers have a strong tendency to invest only in their home member state. Importantly, the Commission is not only tackling a problem that we have been advocating should be addressed for some time, but doing so in a way that is firmly rooted in the better regulation agenda for which the Prime Minister and others have been calling. Furthermore, to date there has been no presumption that legislative action is the best course. The Commission has made clear its commitment to consider all options. The action plan fully embodies that approach.”
“I shall probably fall into the trap of using a three-letter acronym, which is something the Treasury likes to do, and refer to the CMU action plan. At the end of September the European Commission published the action plan, which has the Government’s full support because it represents precisely the sort of work that Europe should be undertaking. Following the wave of regulation put in place in response to the financial crisis, the Commission has now turned its attention, in a welcome way, to generating jobs and growth in the European Union. The capital markets action plan represents the beginning of that process and sets out a range of work streams that the Commission will pursue over the rest of its mandate. They will help to increase and diversify access to finance for business and will create opportunities for Europe’s investors.”
“575/2013 on prudential requirements for credit institutions and investment firms; also notes that the Government supports the Commission's efforts to ensure that the Capital Markets Union action plan supports jobs and growth, and in particular that the Government welcomes the focus on helping small and medium-sized enterprises (SMEs) get the funding they need to grow and succeed; and further notes that the Government welcomes the Commission's proposals on securitisation, which provide a framework for the revitalisation of securitisation markets in a prudent and sound fashion, in order to improve access to finance across the wider economy and help to deliver on the objectives of Capital Markets Union.”
“I beg to move, That the Committee takes note of European Union Documents No. 12263/15 and Addenda 1 and 2, a Commission Communication: Action Plan on Building a Capital Markets Union, No. 12601/15 and Addenda 1 and 2, a Commission Proposal for a Regulation laying down common rules on securitisation and creating a European framework for simple, transparent and standardised securitisation and amending Directives 2009/65/EC, 2009/138/EC, 2011/61/EU and Regulations (EC) No. 1060/2009 and (EU) No. 648/2012, and No. 12603/15, a Commission Proposal for a Regulation amending Regulation (EU) No.”
“There are also initiatives on venture capital and simplified prospectuses so that businesses can access capital markets more easily. Those are some of the other examples in this file of the kinds of things that will help long-term investment. I hope that I have been able to address the many points raised by hon. Members and that the Committee will support the motion noting our support for “the Commission’s efforts to ensure that the Capital Markets Union action plan supports jobs and growth, and in particular…helping small and medium-sized enterprises…get the funding they need to grow and succeed”. Question put and agreed to.”
“We retain an open mind on that approach, but we would be very resistant to anything that in any way undermines the UK’s approach to its private pensions sector. The hon. Member for Kirkcaldy and Cowdenbeath asked why we object to binding mediation. We think it would be a real risk to the UK’s sovereignty if things were to be put into binding mediation too soon, so we want that to be a last resort. That is the kind of compromise that we have reached. He asked about long-term investment, and there are other initiatives in the capital markets union action plan on investing in infrastructure and on ensuring that lessons are learned from regimes such as ours in the UK, where insolvency works well, to allow wider infrastructure investment in parts of the EU where significant improvements could be made to insolvency regimes.”
“The Financial Services (Banking Reform) Act 2013 is on track to implement ring-fencing in the UK, and he will know that the European Union has not yet come up with an agreed pan-European approach. We are continuing to implement our own approach. I was also asked about private pensions, and obviously the UK has a much more developed private pension market than some of the other 27 EU countries. There are extensive differences between each country, and we therefore see many obstacles to implementing any kind of cross-border pensions system, particularly with regard to the harmonisation of tax treatment, which is rightfully a member state competence. However, there are some initial suggestions for a potential opt-in to a common approach for people who work in different countries across the European Union over their lifetime.”
“It is true that we are now seeing improvement in small-business lending, which has reached positive territory, but he will know how difficult it has been for small businesses to access finance over the past five years. He will also know that small-business lending has benefited from a range of policy measures, such as the funding for lending scheme and the British Business Bank’s ENABLE scheme. He will therefore appreciate that, although things look as though they are beginning to improve, it still makes sense for us to consider other ways in which we can improve access to finance and improve competition so that small businesses can secure extra funding in order to grow. The hon. Gentleman also asked about ring-fencing, and these initiatives will not have any impact on UK legislation.”
“We learned the lesson from the financial crisis that having the supervisor as close to the markets as possible is an important part of a regulatory regime, which is why we have given back that responsibility to the Bank of England. The Bank is closest to the day-to-day goings on in the market, and it can observe problems earlier than anyone else. We believe in subsidiarity on supervision, which is an important principle. We will fight those who think that there should be a pan-EU supervisor, because we think that would create far too much distance from what is actually going on in the real world. The hon. Gentleman also said that he does not think that there are any credit supply issues; I beg to differ.”
“Member for Leeds East mentioned the Bank of England’s stress test this week, and there are reports from the Financial Policy Committee. I hope he welcomes, as I do, the new rigour in that process. We now have a Financial Policy Committee looking at the potential for the build-up of risks in the system. It looks closely at the characteristics of lending to businesses, to buy-to-let investors, to people who want to buy a home, and so on. There is close scrutiny of what is happening and of the impact on banks’ capital bases were a shock of a particular kind to happen to the world economy. That important improvement to the regulatory system in this country is a result of the changes we made in the last Parliament. The hon. Gentleman also asked about the UK’s position on supervision.”
“I am sure that the Committee, in considering the files initially, would not immediately have thought that such a measure would have justice and home affairs implications, but they arise from the fact that some of the 28 countries of the European Union have a criminal approach to securities fraud that is not necessarily the same as the UK’s. When we did the ministerial write-round, it was brought to our attention that there were some justice and home affairs issues, which is why we have written to the European Scrutiny Committee. We welcome the Committee’s thoughts on whether the UK would be well served by opting in, or whether the UK should exercise its opt-out. The briefings that we have seen do not show a clear impact on the UK one way or the other, so it would be interesting to hear the Committee’s views. The hon.”
“In addition to apologising for that in a letter to my hon. Friend the Member for Stone, I have personally telephoned him to offer my humble apologies for the fact that, on this occasion, things in Europe went faster than we anticipated. We will try to prevent that from happening again. The hon. Member for Leeds East also asked about the second letter that we wrote, and the fact that we have now discovered some justice and home affairs issues to do with the file. In their briefing, my officials said that that was entirely their fault, but I am happy to take all the blame myself.”
“The capital markets action plan is about trying to make it easier by having common rules, so that a saver in Bulgaria can save through a peer-to-peer lending platform started in the UK. All those kinds of thing will help people, businesses, savers and investors, and that is the vision that can sometimes be obscured behind a lot of acronyms. I appreciate the support that Members have articulated for the principles we are aiming for. I reiterate my apology to the Committee for the fact that the Government’s support of the action plan is so wholehearted that things have moved more rapidly than anticipated in the sometimes slow-moving corridors of the Commission. Therefore, we inadvertently went faster than we should have done before the scrutiny of this Committee, which we value so much.”
“However, the concept actually is simple: we want to ensure that a business starting in Leeds East has access to a wider range of funding sources for growth than it does at present. Today, it can go to a small range of banks. As the hon. Member for Kirkcaldy and Cowdenbeath knows, we are trying to expand the range of banks active in the UK. In the five years to 2010, only one new bank started in the UK; in the last Parliament, eight new banks did. In this Parliament, we would like 15 new banks to do so, but we also want businesses in Leeds East and Kirkcaldy to be able to access finances from other sources. If a venture capitalist in Estonia wants to put money into a high-risk but exciting investment in Kirkcaldy or Leeds East, we want that to be feasible.”
“I thank the European Scrutiny Committee for putting forward this important initiative on capital markets union for scrutiny in this debate. I will respond to some of the points made by the hon. Members for Leeds East and for Kirkcaldy and Cowdenbeath. It is important to re-emphasise that the capital markets union initiative is designed purely to have long-term benefits for savers, for small, medium and large businesses and for investors in hon. Members’ constituencies. We must focus on that as the objective of the action plan. The hon. Member for Kirkcaldy and Cowdenbeath said that he appreciated the simplicity of my opening remarks. I tried deliberately to make them simple, because I know that, even if he gets the materials in time, it can sometimes be hard to see the simplicity in them.”
“The national living wage will mean that a full-time minimum wage worker will earn more than £4,700 more by 2020—a 40% pay rise. Additionally, owing to the ripple effect of higher wages, up to a quarter of workers will see some benefit. Economy-wide wages are expected to be, on average, 0.4% higher in 2020.”
“My hon. Friend is right that many of the 900,000 workers in the social care sector will benefit from the new national living wage, including many working in residential care. That is why last week in the autumn statement we made an announcement that councils will have the power over the course of this Parliament to access money that they may need to increase the amount that they pay for social and residential care, with new revenue streams for social care worth up to £3.5 billion by 2020.”
“The hon. Gentleman speaks powerfully of the importance of the self-employed to our economy. We pay tribute to the excellent work that so many self-employed people, including many in my family, do to generate economic growth in this country. He is right that, as wages across the economy grow and as we put more spending power into budgets for social and residential care, we expect that to be passed on to those who are self-employed.”
“Since the financial crisis, households’ financial positions have improved. Household debt as a proportion of income has fallen to 144% in the second quarter of 2015, down from a peak of 168% in the first quarter of 2008.”
“The hon. Lady might remember the terrible roll-out of working tax credits that occurred when the Labour Government were in power. I can assure her that we will continue to improve the administration of tax credits. When her party was in power, people could have a £25,000 change in their income without it affecting their tax credits. We have brought the figure down to £2,500.”
“I am delighted that, on behalf of his constituents in Havant, my hon. Friend has noticed that the Help to Buy ISA scheme launches today. Fourteen financial institutions are already offering this exciting new opportunity to save for a home, and I hope that many of his constituents will take advantage of it.”
“I am sure the hon. Lady will welcome the fact that, in the last Parliament, we took steps to bring credit under the regulation of the Financial Conduct Authority. As a result of that, payday lending has dropped sharply. We are also backing credit unions in many different ways in this country, and we want to ensure that people have an opportunity to save through their workplace credit union. If she will work with me, I can assure her that we will continue to ensure that households that have the lowest proportion of debt at the moment in their repayments will continue to see their financial positions—”
“I congratulate my hon. Friend on his appointment to the APPG, and I look forward to working closely with him to provide the data that he seeks.”
“He is a high-tax, high-inflation, high-unemployment socialist who draws his economic inspiration from the Venezuelan economy and Syriza in Greece. The Government will not take economic lectures from him on how to run our policies, and we will do everything in our power to keep him in opposition.”
“I start by associating myself with the sentiments expressed by the hon. Member for Hayes and Harlington (John McDonnell) about the French atrocities and the importance of our security forces. I and other Treasury Ministers yesterday signed the book of condolence at the French embassy. The economic policy of Her Majesty’s Opposition is now represented by a man who wants to overthrow capitalism, nationalise businesses without compensation, and who answers to Len McCluskey. He is a man who thinks that printing money, and triggering the inflation that hurts the poor and the elderly the most, is a good thing. He thinks that a budget surplus is “barmy”, and that we can balance the books by avoiding “any cuts whatsoever”.”
“Monetary policy has been run by the Bank of England independently, and I am sure that the Scottish National party will continue to support the Bank’s independence against the inflationary tendencies of the hon. Member for Hayes and Harlington. I am pleased to have the opportunity to remind the House once again of how this Government’s long-term economic plan is delivering for the working people of the United Kingdom.”
“First—we heard it here today—is the idea that the deficit does not really matter, that it should not be a priority to rein in unsustainable public spending, and that it is fine to kick difficult decisions down the line. Those views were put to the British electorate in May, and the electorate rejected them overwhelmingly. People looked at the 1,000 jobs that the UK economy had created every day since 2010, and at the highest growth figure in the G7 for the last two years in a row. They looked at rising wages, rising living standards, and falling inequality, and they said, “Your long-term economic plan is working, so we want you to continue the job.” Since the election, national debt has been forecast to fall this year as a share of GDP for the first time in more than a decade.”
“The right hon. Gentleman will have to wait until my right hon. Friend the Chancellor announces his autumn statement next week. Because of the difficult decisions that we have been prepared to take since 2010, the country’s economy for the right hon. Gentleman’s constituents in north Wales is going from strength to strength, and the overall UK economy is now 12% larger than it was when we took over from the Labour Government. As we reach calmer economic waters, it is worrying that some seem to have forgotten the lessons that the crash of 2008 taught us. In recent months we have seen the resurgence of familiar but dangerous ideas.”
“The hon. Gentleman knows that productivity has been a long-term issue for the British economy, and I shall be talking in more detail about our productivity plans in a moment.”
“My hon. Friend is right. The bottomless pit of money from the magic money tree has been brought into service a lot over recent days, and we should focus instead on the good news about the UK economy. The employment rate has reached a record high—”
“Is the hon. Gentleman going to welcome that fact? I do not think he is. Wages have risen by more than 3% this year. Will he welcome that? For people in continuous employment, wages are up by more than 4%— [ Interruption. ]”
“I will give way to the hon. Gentleman when he starts to welcome some of the positive economic facts that I was mentioning, but if he does not know whether he is coming or going, I have a hunch that he is in the right party. The Government absolutely reject the Opposition’s accusation that we are failing to deliver for working people. Not only have we brought greater economic security, we have also delivered more growth, more jobs, and higher wages. That is what people working across this country asked us to deliver, and that is what we are doing.”
“My hon. Friend is right to remind us of two important facts. First, no Labour Government have ever left office with the public finances in a better state than when they came to power, and secondly, no Labour Government have left office without leaving more people unemployed than there were when they came to office. Do we agree with the other points made by the Labour party?”
“I will not give way because I want to make a bit of progress and take each of the points in the motion in turn. I am delighted that the Labour party has remembered to mention the deficit in the motion, although it is not the budget deficit but the current account deficit. Let me remind the House about progress on the budget deficit which, as a share of the economy, has fallen by more than half from its peak in 2009-10 to 4.9% at the end of last year. We forecast that we will be in surplus by the end of this Parliament. That is what the British people asked for, and that is what we are doing.”
“The hon. Gentleman is right to say that this is a serious issue, and I hope that, as one of the more moderate and sensible members of his party, he will be able to convince those on the Labour Front Bench that this is an important issue to tackle. The Opposition motion also mentions tax credits.”
“But make no mistake, creating a low-welfare, low-tax, high-wage economy is one of the most progressive goals a Government can have, and one that we will continue to work towards.”
“I would listen more to the advice of the SNP on the economy if it had not projected that the oil price would remain at over $100 forever and fought last year’s referendum on that basis. Various hon. Members have mentioned tax credits. The British people want to see a lower welfare, lower tax and higher wage economy, and that is what they voted for in May. In the summer Budget, we set out a package of reforms for working people, which included the introduction of the new national living wage, continued increases in the personal allowance and the doubling of free childcare worth up to £5,000 a year for working parents. Of course, we will listen to the concerns raised about the transition period, and my right hon. Friend the Chancellor will set out our response to those concerns next week.”
“My hon. Friend is right to highlight that progressive move, and it gives me a chance to emphasise the fact that yesterday’s data on earnings showed that the lowest earning 10% in our society saw a wage increase of 3.4% over the last 12 months, and that is before these changes have even taken place. The Opposition motion also mentions child poverty. The best route out of child poverty is for a parent or parents to work. On our watch, the number of children growing up in workless families is at a record low, down almost 500,000 from 16.2% of all children to 11.8%.”
“The hon. Lady is wrong about that. Since 2010, in terms of relative poverty, some 300,000 fewer children are living in poverty. The Government losing control of public finances and not being able to do anything about that would be the worst thing that could possibly happen for the opportunities for those children. The people who suffer when the country loses control of its public finances are the low-paid, and the people who get turned out of work are the ones who suffer the most—”
“In fact, since 2010, women have moved faster into jobs in the UK than in any other G7 country, and women’s employment rate has increased more since 2010 than during the previous three Parliaments combined.”
“In that spirit, I shall try to make some progress, Mr Speaker. The richest do not suffer most when the economy suffers. It is not the trade union barons who lose their jobs when that happens: it is the poorest in the country. We are making sure that it never happens again. The motion also mentions the impact of our policies on women. There are now more women working than ever before, the gender pay gap is at the lowest level since records began, and 56% of the people we have taken out of income tax, by raising the personal allowance, are women. Of course, 27.5 million working men and women have had a tax cut since 2010, and 58% of those receiving a much stronger, triple-lock state pension are women. Almost two thirds of the people benefiting from the introduction of the national living wage are women.”