Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Speaker]

I remind the House that Members ask the questions and Ministers answer them.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

2. What fiscal steps he is taking to assist women facing high child care costs.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Government do not assume that high child care costs are an issue for women only, but we have increased the provision of free child care for three to four-year-olds to 15 hours a week, and extended that commitment to about 40% of two-year-olds by 2014-15. The Government support low to middle income working families directly through the child care element of working tax credits. We also provide support through employer-supported child care vouchers.

[Mr Sheerman]

But what does the Minister say to young women who are professionals and managers and who, according to the Daycare Trust, face the double whammy of a 30% increase in the cost of nursery provision over the past four years and the loss of their child benefit? What does he say to those young women?

[Danny Alexander]

I say that the Government are increasing the entitlement to free child care for three and four-year-olds from 12.5 to 15 hours a week, and introducing a new entitlement for disadvantaged two-year-olds, so that 40% of two-year-olds will have 15 hours of free child care per week. That represents substantial support for those families, in addition to which there will be tax credit support—depending on income—and access to employer-supported child care vouchers, which were taken up by 500,000 people in 2011-12.

Banking (Responsibility and Reform)

Barry Sheerman Excerpts

Tuesday 7th February 2012 Commons Chamber

[Mr Umunna]

We have said that, if we had known then what we know now, we would not have knighted Fred Goodwin. However, I say to the hon. Gentleman that the future of the banking sector is bigger than the individuals who have featured in the headlines of late. It is important that we debate what happens in the sector as a whole rather than focusing on Fred Goodwin and other individuals, important though it is to make points about them.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

As we are examining history—some Government Members do not like to hear accurate history—I point out that Lord Burns was the Chairman and I was the deputy Chairman of the pre-legislative Joint Committee that considered the financial services Act. I remember that very clearly indeed, because it took us many months and was the first time there had been a joint Lords-Commons pre-legislative inquiry. The context was bitter resentment from the banks, which tried to water down the Bill, and no help from the people who led the Conservative party.

[Mr Umunna]

I presume that my hon. Friend is referring to the Joint Committee that considered the Financial Services and Markets Act 2000. The consensus at the time was shown in the approach instilled in the Act, and we are now revisiting the regulation of the sector.

The crash was global in nature, and the causes cited by the Independent Commission on Banking include declining underwriting standards, the mispricing of risk, a vast expansion of banks’ balance sheets and rapid growth in securitised assets—in short, gross irresponsibility. The commission also stated in its report that one problem was that some bank employees were remunerated

“on the basis of reported profits that were neither time-adjusted nor risk-adjusted, and led to employee incentives that were not always aligned with the long-term interests of the bank.”

The US financial crisis inquiry commission established by President Obama, which reported last year, went further, stating:

“Compensation systems—designed in an environment of cheap money, intense competition, and light regulation—too often rewarded the quick deal, the short-term gain—without proper consideration of long-term consequences. Often, those systems encouraged the big bet—where the payoff on the upside could be huge and the downside limited.”

--- Later in debate ---

[Mr Umunna]

I agree with my hon. Friend. First, an employee understands what is going on in the business—perhaps, in some respects, better than a non-executive director—and, secondly, employees have a stake in the business, and if the business fails, they ultimately pay the price, as thousands of RBS employees going through the redundancy process are now realising.

[Mr Sheerman]

I am certainly not against this sensible proposal to put employees on boards, but as I understand the Walker review and its recommendations, it does not meet the situation now. Instead of innovations, we need something so dramatic that we change the culture in our banking system and its understanding of what is right and wrong, as was mentioned earlier. The culture is what matters, but I see nothing coming from the Government that will fundamentally change the culture that motivates the people working in the sector.

[Mr Umunna]

rose—

Tax Avoidance (Public Servants)

Barry Sheerman Excerpts

Thursday 2nd February 2012 Commons Chamber

[Danny Alexander]

I would not agree with the hon. Gentleman that such arrangements should be put in place for every public sector employee. The review that I have put in place is precisely designed to root out such arrangements across Government.

In answer to the earlier point, I gather that the fees that the hon. Member for Rochdale (Simon Danczuk) asked about are set out in the Student Loans Company annual report, which is available publicly, so he may wish to avail himself of a copy.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

We all know, if we are honest, that the administration of student loans had been a mess for years. However, the fact is that this man was appointed on a higher package of emoluments than the Prime Minister. Why was that?

[Danny Alexander]

What we had was a situation where, as the hon. Gentleman rightly says, for many years—including for many years under the previous Government —the Student Loans Company was in a mess. This man was brought in to run it, and in fairness I think it is widely agreed that he has done a good job of turning it around. In the context of this conversation, I hope that the hon. Gentleman would also recognise that.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 24th January 2012 Commons Chamber

[Danny Alexander]

I will certainly look into the matter that the hon. Gentleman has raised, but it was his party that set up the contracts for many of the executives at RBS, and his party that allowed the bonuses to be paid out. It was also his party that awarded Fred Goodwin a knighthood that he should never have been given, so I do not think that we are going to take any lessons on this from him. We have certainly been looking hard at the remuneration proposals for this year, and I can assure him that bonuses will be far, far lower than they were last year.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

May I remind the Minister that, when in opposition, the present Chancellor and the present Prime Minister promised a really tough regime to reduce the gap between the high earners and the rest of the people in this country. Yesterday’s announcement showed that they have backed away from that promise, but the people in my constituency want a fair society in the so-called big society.

Autumn Statement

Barry Sheerman Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

Absolutely, I happily pay tribute to all the MPs of north Lincolnshire and Humberside who have campaigned for the reduction of the tolls. This was an injustice. The bridge was built many years ago and the debt was paid off, but the tolls were still very high. I am glad that we have been able to help. Along with our enterprise zones in Humberside and our commitment to the renewable energy industry in the area, this will really help the economy.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Chancellor’s statement reminded me of the Budgets not of the last Chancellor of the Exchequer but of the one before that, because it included so much, and almost the kitchen sink. To change the mood in the country, most of which is now deeply in recession—certainly Yorkshire and the Humber are—were we not expecting some imaginative, bold policies today to end youth unemployment?

[Mr Osborne]

I suggest to the hon. Gentleman that a fairly stark difference between me and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) is that I am trying to make the books add up, whereas he did not. We have all been paying the price for that ever since.

Eurozone Crisis

Barry Sheerman Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

Yes, I am confident about that, which is also something that the Bank of England and the Financial Services Authority monitor carefully. The important thing about the test that the European Banking Authority applied was that it not only required banks to hold 9% core tier 1, but marked to market their sovereign debt exposures, which is something that the eurozone resisted for the last year and a half. Of course, the market has priced in some haircuts—to continue the barbershop analogy—of other sovereign debts. That does not mean that I think they will happen; they are what the market thinks will happen. The fact that we have now tested our banks against those marked to market on sovereign debt gives us confidence that the banking system in Britain can withstand whatever is thrown its way in the next couple of months.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Something that I do not often discuss with people in the House is the fact that for some years the previous Prime Minister, Tony Blair, his Chancellor and I chaired the committee on preparations for the euro, on which the present Secretary of State for Business, Innovation and Skills served, so I have some experience in this area. The Governor of the Bank of England said that we were in the middle of the worst crisis in the history of the international economy, but when I listened to today’s statement, the Chancellor seemed to come across as extremely timid about this country’s role in meeting that challenge.

[Mr Osborne]

I will have to thumb through the index of Peter Oborne’s book, “Guilty Men”, to see whether there is a reference to the hon. Gentleman. I will concede that there are a few references to some of my colleagues in that book, but I have a good alibi, which is that I was writing speeches for the Foreign Secretary at the time, making it clear what some of the problems were with the euro, and some of those problems have come to pass.

Independent Banking Commission Report

Barry Sheerman Excerpts

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

Of course, we all want to see the return of the banks to the private sector. If truth be told, the big fall in recent months in the share prices of these banks and others—American and European—around the world have pushed that timetable back a little further. I do not think that that is a surprise to anyone. Our objective is to get these banks back into private hands, and Northern Rock—the good part of Northern Rock, I should stress—is currently up for sale.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Many of my constituents worked for HBOS, and some of them still work for Lloyds TSB. Many of them—and many people throughout the country—would like to know whether the Banking Commission report will do anything to change the values and culture of the banking sector, which to them seems to have been characterised by greed, selfishness and irresponsibility. Is there anything in this report that will lead the sector to have higher standards of moral values and behaviour?

[Mr Osborne]

It will help to see a return of relationship banking, which disappeared over not just the past few years, but the past few decades. It will also make the people running large banks more focused on their retail arms and on delivering a good customer service. The arrival of new faces on the high street will also help to do that, because it will make people up their game. I am not sure that I would describe this as a return to “Captain Mainwaring banking”, as it is sometimes described, because, as I recall from “Dad’s Army”, he was not very good at running anything. What we actually want is good relationship banking where banks understand their customers—

Finance (No. 3) Bill

Barry Sheerman Excerpts

Monday 4th July 2011 Commons Chamber

Amendment 15 goes further in an attempt to strengthen the hands of shareholders by making the advisory vote on remuneration packages binding. In this way, it will enable shareholders to take control of their own companies once again and ensure accountability. It will enable shareholders to hold not only directors but remuneration committees to account.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will my hon. Friend’s amendments help with the sort of situation we faced with HBOS? It was driven into the buffers by its highly paid executive team, who seemed to lose nothing while the shareholders lost everything.

[John McDonnell]

My amendments would go some way to ensuring that the information is published, enabling the Government to look in more detail at such information, while also enabling shareholders to have at least some opportunity to hold the directors to account. As I said, the advisory vote system worked initially, but it certainly has not worked in recent years, as the HBOS example demonstrates. Having a binding vote will give the shareholders some authority. The amendments are an attempt to redress the current imbalance of power between the shareholder and the board. It will not solve all the problems of directors being unaccountable on pay or bonus awards, but it would put another weapon in shareholders’ hands to tackle the issue.

Amendment 17 relates to enterprise investment schemes and accountability. Just as shareholders need information to hold company boards to account, the House should ensure that taxpayer’s money and tax concessions are allocated wisely to groups in society and that value for money is achieved. The amendment would invite the Government to justify in more detail future enterprise investment schemes on the basis of past performance of previously approved schemes. The amendment would seek information from the Minister on the total cost of tax relief with regard to the tax income forgone, the number of jobs created by the companies that have gained tax relief under the schemes, and the number of companies that have failed after the tax relief has been given—calculating the cost of each job created compared with the cost of the tax relief given. The information provided in the paperwork in relation to the Budget and the Finance Bill is not clear. The Treasury briefing on enterprise investment schemes and venture capital trusts sets out the proposals but provides no analysis of past measures and their performance. The Treasury Committee, in its comments on tax relief for EIS under the Finance Bill , suggested:

“The measure also needs to be viewed alongside the other proposals for EIS and whether the existing EIS conditions encourage investment in growth businesses.”

The Treasury Committee, therefore, points us in the direction of undertaking a proper value for money exercise on the proposals.

The amendment would enable the Minister to respond to that. Before we venture into such schemes, particularly EIS, we must ensure that their objectives are achieved with value for money, and the information is not currently available for us to make that judgment.

The Economy

Barry Sheerman Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Ed Balls]

If that was written by the Whips, they will have to do better. What I said was that it would be completely irresponsible for me as shadow Chancellor to make a commitment now to a reverse in the VAT rise for our next election manifesto. Of course I cannot make an unfunded commitment for the next manifesto. The rise in VAT this January was a mistake. It was the wrong tax to raise, it was unfair, and it has depressed confidence and stopped people spending at the wrong time for the recovery. The Chancellor does not have to agree with us that he should not have raised VAT, but he should agree that he did it at the wrong time, and he should temporarily reverse it until the recovery is secure. We now hear from Conservative Central Office that the proposal to cut VAT only temporarily until the recovery is secure would have to be in place for four years of this Parliament. That tells us that the Conservatives think that the recovery will not be secure for the whole of this Parliament, which is precisely the argument that I am making.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is it not the fact that the deniers here today are the Government who deny the collapse in consumer confidence? No one on the Government Benches is doing anything about it, and the economy will not kick-start again unless we tackle it.

[Ed Balls]

My hon. Friend is right, and that is why the Chancellor must break out of his current state of growth denial before it is too late.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Mr Hoban]

If we had continued with the previous Government’s deficit reduction plan, debt would still be rising in 2015, not falling, meaning that we would have to spend an extra £3 billion in one year on debt interest while still having to make spending cuts. The lack of ambition in the previous Government’s plan put our credit rating at risk, thus threatening the prospect of higher interest rates and putting a brake on the recovery.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

When such representations were being made, was the Minister conscious of the effect that these cuts might have on young people in our country? Did he look at last week’s level of unemployment among young people? When will his Government do something for young people in this country?

[Mr Hoban]

The legacy left by the previous Government was that youth unemployment was continuing to rise. The other problem with which the Opposition left us was that our children and grandchildren would have to pick up the tab for Labour’s mismanagement of our economy. We need to get the deficit down to create the foundations for economic growth to ensure that more young people are back in work.