Thank you, Mr. Speaker.
Despite those achievements, my constituents are now understandably concerned about the way in which global economic issues affect them. How does my right hon. Friend feel that these events compare with those of the early 1990s, when Britain was plunged into recession after recession?
It is right that people are concerned about what is happening in the global economy, and it is right that people want to know, as a result of global financial turbulence, what will happen to our economy over the next few months. That is why I am pleased to say that yesterday’s inflation figures showed that our inflation rate was 2.1 per cent., half the rate in America, and why I am also pleased to report that today’s employment figures showed that employment had risen by 175,000 in the last quarter, and was up by a quarter of a million over the year. Unemployment is down, the claimant count is down and inactivity is down. Under our Government, unemployment is down and employment up: we have the best employment record in history.
Last year, the Government promised that they would get back all the taxpayers’ money lent to Northern Rock. Can the Prime Minister tell us the exact amount of both the loans and the guarantees, and will he repeat today the pledge that all the taxpayers’ money will be paid back?
That is our intention. If I may say so, I welcome the chance to bring the House up to date on what is happening with Northern Rock. Northern Rock shareholders and depositors were let down by bad management. It was a bad business plan.
In September, the Leader of the Opposition was good enough to say that he overwhelmingly supported our action. The action that we took was first to ensure that there was stability in the economy, and we said that to ensure stability we would secure the deposits of all Northern Rock depositors. We also said that we would stand behind the company with support from the Bank of England. In the next few weeks we will consider how we can find buyers for Northern Rock, and I think everyone in the House would say that we should rule out no option in doing so. That is the right course to take.
Let me tell all Members what comes first. We had to intervene to ensure stability, so that the instability of Northern Rock would not spread across the economy. That is what we have achieved over the past four months, and the Opposition should be supporting us, not criticising us.
I asked the Prime Minister a very specific question about the figures. I think that the taxpayers, each of whom is currently lending about £1,800 to this bank, would like the figures to be confirmed in the House of Commons. It has been reported that the taxpayer is exposed to the tune of £55 billion: £26 billion of emergency loans and £29 billion of guarantees. Will the Prime Minister confirm those specific figures?
I asked the Prime Minister a specific question about the figures, which he simply could not bear to read out. That is what taxpayers who are worried about supporting the bank and about the extent of the support are asking about.
Let me ask the Prime Minister something else. At the time that the guarantee was given, was he advised that the level of taxpayer support could reach this huge level of £55 billion?
I have said that we will do what is necessary to protect the stability of the economy. I do not apologise for taking the action that is necessary because it has ensured the stability of the economy. Perhaps the Leader of the Opposition will answer the question: does he still support our action?
For once, I did not ask the Prime Minister for an apology. I just asked him a straight question about the figures and whether he was advised about how bad it could be. He will not give an answer, so we do not know whether he was advised that the taxpayer could be in to the tune of £55 billion.
Let me ask the Prime Minister another specific question and see whether he can answer this one. Can he give an assurance that the level of support required from the taxpayer cannot get any higher than £55 billion?
It is precisely for that reason that we do not provide a running commentary on figures. Under any Government, including the previous Government, it was not the practice to pre-empt what the Bank of England does, which is to announce the figures itself, but I have to return to this point. We intervened to ensure stability in the economy and to ensure that Northern Rock would not spread across the economy to the rest of the financial system. We also intervened to protect depositors. Both those objectives in the past four months have been achieved. Is the right hon. Gentleman now telling me that, from a position of wholeheartedly supporting that action, he is now against it—yes or no?
I will tell you what you did. When it came to the need for a total guarantee of deposits, you dithered and delayed. When it came to the opportunity of pushing for a sale with Lloyds TSB, you dithered and delayed, and when it came to the advice that you were getting to sell the bank straight after the bank run, you dithered and delayed. Why did you dither and delay? It was because you were planning a general election. Will the Prime Minister confirm that he received advice from his financial advisers to push for an immediate sale after the bank run?
No, and there was no offer from Lloyds TSB, as the right hon. Gentleman alleges. He should return to the substance of the issue: if we had not intervened to save Northern Rock, there was a danger that that would spread across the whole economy. He supported our doing that in September. Does he still support us now? If we had not intervened, depositors would have lost their money. Their money has been protected. He supported us in September on that. Does he support us now? I say that we have taken the right, consistent action in the interests of the stability of the economy. To go backwards and forwards as he is doing would put the stability of the economy at risk.
The substance of the issue is that it is the Prime Minister’s regulatory system, it is his bank failure, it is his dithering, and it is his failure to deal with this issue. If it is the case, as he says, that he was not advised to go for an immediate sale, can he explain why the Bank of England was quoted as saying that he was
“unable to focus because morale throughout the government is so low”?
The fact is that we have had months of dithering and billions of pounds of taxpayers’ money is at risk. Does the Prime Minister accept that, if nationalisation goes ahead, it will be a massive failure of Government policy and a fresh chapter in the incompetence of this Government?
The Bank of England supports our action, the Financial Services Authority supports our action, and the Opposition used to support our action. I have looked at the policy of the Opposition between Sunday and Wednesday: on Sunday, the right hon. Gentleman said he was against nationalisation; on Monday at his press conference he said, perhaps by mistake, that we should look at nationalisation; and on Tuesday night’s “Newsnight” the shadow Chancellor said that we should look at administration, which is a route to a fire sale of the asset. They change their position every day; the only change they represent is that they change their positions all the time. We are for stability; they would bring instability.
Were the Prime Minister and his Government aware of his predecessor’s plan to attend the conference of the main party of the French right to announce his candidacy for the presidency of the European Union, as a prelude to his candidacy for the presidency of the world, the universe and everything? Did the Prime Minister know of that intended candidacy when his predecessor was negotiating the European constitution, and did that not represent a conflict of interests?
My right hon. Friend the former Prime Minister is doing a wonderful job because he is speaking up for peace in the middle east; I approve of his taking up any opportunity he gets to put his advocacy of a peaceful settlement for the middle east, and he was right to do so.
I am aware of the issues the hon. Gentleman raises, but the recommendations on the reconfiguration of maternity services were made by consultants and clinicians on the ground, and they are in the interests of the safety of all patients, all mothers, and all daughters and sons who are born. I hope that, on reflection, the hon. Gentleman will look at the massive investment we are making in the national health service, both in his area and in other areas. There are six new hospital developments in the whole of the region that he represents, and there have been 7,000 new staff, and waiting times of six months or more, of which there were 30,000 in 1997, are down to 57. That is what the health service is achieving.
My hon. Friend takes a great interest in energy matters. The availability of secure energy is one of the big issues affecting this country, and it is what led to the energy White Paper last week, to our decision on nuclear power, and to our decisions to extend renewable sources of energy, to make ourselves less dependent on foreign sources of energy and to cut the carbon that is used in energy. I hope that every part of the United Kingdom will feel able to support all those decisions.
The Royal Institution of Chartered Surveyors says that home repossessions will rocket this year by 50 per cent., with one repossession every 12 minutes. What comfort can the Prime Minister offer the 45,000 British families who now face the prospect of losing their homes this year?
What I can say to them is that we are determined to have low interest rates; to have low interest rates we have to have low inflation; and to have low inflation we have to have a decent economic policy, which I am afraid the hon. Gentleman’s party does not have.
The reality is that the Prime Minister allowed, on his watch, grossly irresponsible lending practices by banks to destabilise the housing market. Will he act now to ensure that mortgage lenders take their responsibilities seriously and do more to stop evictions, or will he just sit there wringing his hands while British families lose their homes?
I think that the hon. Gentleman forgets that there are 1.5 million more home owners under a Labour Government than there were before our Government started. We have extended home ownership to all regions of the country and to people who previously could not afford it.
I have been given a copy of the dossier on the hon. Gentleman that, unfortunately, was prepared by the person sitting next to him, who suggests that on every major economic and social issue the leader of the Liberal party has flip-flopped, and keeps flip-flopping.
I am grateful to my hon. Friend because, as he says, massive housing investment has been made in his constituency—this is the answer to the Liberal party’s point—and that housing investment will continue with £1 billion more provided in the next three years. We are determined to remove substandard housing, to have more affordable housing and to extend home ownership, but that is possible only if we run a strong economy. I say to all Members of this House that ours is the country that has managed to have low inflation at the start of this year, half that of America, and at the same time has seen jobs expanding when unemployment is rising in America and in other countries, and that gives me hope that our economy can withstand what is clearly global financial turbulence.
When it comes to the work of the Secretary of State for Work and Pensions, unemployment is down; employment is up; more single parents are in jobs; fewer people are claiming incapacity benefit; more long-term unemployed people are getting back to work; and, since my right hon. Friend became Secretary of State, hundreds of contracts have been signed with local employers to get thousands of people back to work. That is why I have confidence in what he is doing.