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by Paul Goodman

George Osborne bested Ed Balls yesterday.  But the Treasury team also faced three sharp questions from its own side, which the sketchwriters have duly picked up this morning.  Here they are in full, together with the answers.

First –

"Mr David Davis (Haltemprice and Howden) (Con): There is a lot of public disquiet about alleged enormous sweetheart deals done with major public companies-Vodafone and others-in the last five years. Three or four months ago, I tabled a question asking how many of these deals had been done, costing more than £100 million at a time. The answer I received was that the information requested was "not readily available" and could be provided "only at disproportionate cost". I received a similar blocking answer this morning. When is the Minister going to tell the House what HMRC has been up to?

Mr Gauke: The National Audit Office has investigated and examined that as a matter of course. There is no question of sweetheart deals. The reality is that HMRC is seeking to recover as much tax as is due. That is what it has done in a number of cases. I am not going to comment on individual cases. That is a matter of confidentiality; I do not get to see the details. None the less, I think wild allegations have been made against HMRC, for which there is little or no evidence."

Second –

"Mr Douglas Carswell (Clacton) (Con): The Chancellor is entirely right to emphasise the need to be careful with public money. Will he therefore please explain his role in approving the deal to make the UK taxpayer liable for billions of pounds to bail out the euro under the European stabilisation mechanism? Will he respond to my freedom of information request, and publish the advice that he was given on the agreement on assuming office?

Mr Osborne: First, I will look at my hon. Friend's FOI request, because I have not seen it. The broader point that I would make is that my predecessor as Chancellor, in the weekend between the general election and the creation of the new Government, agreed to the creation of the European stability facility. That involves a UK commitment which takes place on the basis of qualified majority voting; we do not have a veto. I made it clear to the previous Chancellor at the time that I did not support what he had done. However, it has happened and we have to live with the consequences."

Third –

"Sir Peter Tapsell (Louth and Horncastle) (Con): Do Treasury Ministers agree that the real problem with bankers' bonuses is that they are paid not out of profits, but out of revenues? Taxing banks after the bonuses have been paid merely depresses dividends, particularly for pension funds. Why are bankers' bonuses not paid out of profits, as they always were by my very efficient stockbroking firm?

Mr Hoban: My hon. Friend makes an important point. Of course, under the old regime, there was no clawback when bonuses were paid out in cash, and no lock-up. The new code on remuneration introduced by the Financial Services Authority, which is ahead of international practice, has clear rules on deferral, requires that bonuses be clawed back for poor performance, and requires that bonuses for significantly highly paid members of staff-those who take risks-be paid out principally in shares, not in cash. That will ensure that the interests of bankers are aligned with those of shareholders."

9 comments for: Three sharp questions for George Osborne from his backbenches

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