Oral Answers to Questions
Chris Leslie Excerpts(10 years, 2 months ago)
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Danny Alexander
I join my hon. Friend in congratulating Warburtons bakery on that investment and on the jobs it is creating. It is of a piece with businesses creating more than 1.6 million private sector jobs since the Government came to office, because we have created the right conditions for businesses to grow. The reduction in employers’ NICs for young people will give that business an incentive to take young people on in those new jobs.
Chris Leslie (Nottingham East) (Lab/Co-op)
How many more young people have been claiming jobseeker’s allowance for more than 12 months compared with when the Chief Secretary took office four years ago?
Danny Alexander
As I said in my answer to the first question, the number of young people on jobseeker’s allowance is 120,000 lower than it was in May 2010. The Labour party told us that it would not be possible to create enough jobs even to take up the jobs lost in the public sector but, in fact, more than 1.6 million jobs have been created in the private sector since the Government took office. The hon. Gentleman should congratulate us on that record.
Chris Leslie
Perhaps the Chief Secretary did not hear me properly—I asked about the long-term youth claimant count. The number of young people who have been out of work for 12 months or more has doubled under this Government from 28,300 to 56,100. Frankly, 56,000 young people will be staggered by the complacency of his answer. Surely we should be offering a guaranteed starter job for all young people who have been out of work for a year or more, paid for with a repeat of the bankers’ bonus tax. Does he still believe that those bankers need their millions more than those young people need their opportunities?
Danny Alexander
Long-term youth unemployment was down 25,000 on the quarter. Youth unemployment is down 15% in the hon. Gentleman’s constituency, and he ought to welcome that. The fact is that the bonus tax, which the former Chancellor says would not raise any money, is being spent on, I believe, 10 different measures by Labour, showing how fiscally incredible its plans are.
Oral Answers to Questions
Chris Leslie Excerpts(10 years, 3 months ago)
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Danny Alexander
We have already taken steps to ensure that the annuities market works better. We are examining it further to ensure that people who have saved for a pension can get a proper deal in retirement.
Chris Leslie (Nottingham East) (Lab/Co-op)
When it comes to the cost of living, does the Chief Secretary now agree that it was a big mistake for the Chancellor to issue such dodgy statistics last week, desperately pretending that the public have never had it so good? The Government’s first statistical dodge was adding in only tax changes that they like and ignoring tax rises and cuts to tax credits, which, by the way, disproportionately hit women. Their other dodge was trying to prove that the rich were really doing very well by leaving out that thing that they do not like talking about today—the millionaires’ tax cut. They were such blatantly skewed figures—is the Chief Secretary not just a little bit embarrassed about such statistical trickery?
Danny Alexander
A vast amount of words, but not one of them welcoming the most important set of statistics today—the growth figures that have been published this morning. The year 2013 was the first calendar year since 2007 with economic growth in all four quarters, and I wish the hon. Gentleman had welcomed that.
Chris Leslie
Week after week, month after month, we come to the Dispatch Box and beg the Government to do something about the cost of living crisis, but all we hear from the two Government parties is, “Crisis? What crisis?” How out of touch can they possibly be? I want to ask the Chief Secretary a simple question. Does he really, genuinely think that the British public are better off today than when he came to office?
Danny Alexander
I know for a fact that the British public are better off than they would be if the hon. Gentleman’s party had stayed in office. He’s got a cheek, he really has.
Again, no welcome for the growth figures or the fact that, last week, we saw the largest quarterly rise in employment in our country’s history. No welcome for the big tax cuts for working people in this country or the range of measures that we have taken to ask the wealthiest to pay more. Those are the things that are getting this country back in the right direction, something that the hon. Gentleman’s party would fail to do.
Banking
Chris Leslie Excerpts(10 years, 4 months ago)
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Chris Leslie (Nottingham East) (Lab/Co-op)
I beg to move,
That this House believes that Government reforms have failed to deliver a competitive banking system which serves the interests of consumers or the needs of businesses and the British economy; is concerned that customers have limited choice and low levels of trust and confidence in the banking market; is disappointed that recent legislation has fallen short of the recommendations of the Independent Commission on Banking which called for action to diversify the sector and ensure that major new banking service providers are created; believes that banker remuneration remains unacceptably high; regrets the fact that it has taken the EU to act to rein in excessive bonuses in Britain in the absence of domestic action, but believes that the Government as a majority shareholder in RBS should not approve any request to increase the cap; and calls on the Government to prevent a return to business-as-usual in the banking sector, which continues to require real reform and competition so that the UK can earn its way out of the cost of living crisis.
Mr Deputy Speaker—[Interruption.] My apologies, Mr Speaker; I correct my first sentence. I want to explain to the House that for many of our constituents—[Interruption]—including those of the hon. Member for New Forest East (Dr Lewis), January can often be a difficult month financially, with families facing higher fuel bills and receiving credit card statements for the often very expensive Christmas period. Not everyone has such reactions to the new year, however, because for many of the luckiest bankers working in the City, January and February is party time—bonus season—when their high salaries are often dwarfed by even higher windfalls, which are enough to make a lottery winner look on in envy.
Last week, the City recruitment company Astbury Marsden reported that bonuses for the most senior staff in banking and financial services may increase by as much as 44% in this bonus season, despite all Ministers’ talk about how such payouts have been scaled back. In 2012, the financial sector paid out an eye-watering £14 billion in bonuses to top staff. At least £1.7 billion of bonuses were held back until just after that fateful day last April when the Chancellor of the Exchequer cut the top rate of tax for the richest 1%, who are those with earnings of more than £150,000 per year. Incidentally, the postponed payouts cost the public purse at least £85 million in lost taxes.
What about the rainmakers, as they are sometimes called—the most senior traders or masters of the universe? The number of UK bankers who earn more than £800,000 rose by 11% to 2,714 last year, which is more than in the rest of Europe combined. For that set of senior bankers, the compensation—a word that the banking sector sometimes uses instead of the word pay that the rest of us use—rose from £1.1 million to more than £1.6 million in 2012. That does not look like an industry that is licking its wounds; it looks like business as usual.
Mr Tobias Ellwood (Bournemouth East) (Con)
The shadow Chief Secretary to the Treasury seems to have glossed over the fact that City bonuses tripled in the last five years of the Labour Government. I want to ask him a more general question. Given the catastrophic role that the banking industry played in the economic downturn, why are we having only a half day’s debate on this important subject and squeezing it together with another important debate on the national minimum wage? The Treasury Committee is also meeting this afternoon to talk about these issues with the Governor and one of the deputy governors of the Bank of England. The Committee’s members will therefore not be able to participate in this debate. I wonder whether that is a reflection of the fact that Labour is not taking this matter as seriously as it should.
Chris Leslie
I am not sure that the hon. Gentleman has alighted on the best criticism of the fact that we are having an Opposition debate today on the failures in the banking sector. He is a bit off message because he at least admits that it was the banks that got us into the economic catastrophe in the first place. That is slightly off the script that Ministers usually use.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does my hon. Friend agree not only that this is a good day to have this debate, but that most of the people in Huddersfield, whom I represent, and in this country cannot understand the culture of bonuses for bankers? These people have failed us and have failed small businesses and start-ups, and yet they have a bonus culture that is unlike anything else in the country.
Chris Leslie
My hon. Friend is right to speak of the anger that his constituents feel. While many of his constituents and mine are struggling with the cost of living crisis, what has been the Chancellor’s response to the concerns about, and the evidence of, excessive pay? Does the Chancellor regret the millionaires’ tax cut or missing another year of the bankers’ bonus tax? Does he reflect on the outrage among the public, which my hon. Friend has expressed, who want leadership in tackling such brazen rewards? No; the response of the Chancellor of the Exchequer is to oppose even the most basic transparency, which would let shareholders know about bankers who are paid more than £1 million, and to oppose any action in the UK to tackle the excessive bonus culture.
The Chancellor’s response to public concern was to travel to Brussels in September last year to oppose Europe-wide moves to limit bonus payouts to no more than 100% of salary levels for those who are on £400,000 or more, unless there is approval from shareholders. The Chancellor continues to spend hundreds of thousands of pounds in legal fees to fight that new EU rule tooth and nail, even though it has only just come into force.
Stephen Mosley (City of Chester) (Con)
Does the hon. Gentleman accept that under this Government, bonuses have more than halved?
Chris Leslie
I do not know where the hon. Gentleman was at the beginning of my speech, but City analysts are predicting that the bonus round for 2013 will see an increase of 44%. I do not know whether he thinks that that is acceptable or whether many of his constituents are receiving increases in their pay of 44%, but I would bet that they are not.
Sammy Wilson (East Antrim) (DUP)
Does the hon. Gentleman recognise that although bonuses may have been halved, in banks such as RBS, which is still making losses and denying the finance that is needed to businesses across the United Kingdom, bankers bonuses are still sometimes in excess of twice their salaries?
Chris Leslie
That is exactly the issue that we are debating.
For all the sophistry and smoke-and-mirrors attempts by Ministers, including the Prime Minister earlier today, to give the impression that they are taking action on bonuses, we know that they confront a key decision because of the new Europe-wide decision to limit bonuses. However they try to spin their way out of it, they will have to confront that decision. It is a matter of national embarrassment that UK policy on bankers bonuses was not led by the UK Treasury. Now that we have a bonus ratio in statute, albeit from the European Union, surely the Minister will not cast his shareholder vote, on behalf of the taxpayer, to allow state-owned banks to shell out bonuses that are above the level of their salaries.
Jesse Norman (Hereford and South Herefordshire) (Con)
It is deplorable that this debate has been scheduled during a Treasury Committee hearing. As a member of that Committee, I have seen over the past few months and years the attempts to clear up the appalling wreckage that was left in 2010. Is it not true that under the last Government, this country ran a budget deficit of 3% at the top of the economic cycle and that we had the highest levels in recorded history of personal and household debt?
Chris Leslie
There they go again, denying that the banks had any responsibility whatever for the global financial crisis. Obviously, it was Labour’s investment in schools and hospitals that caused the devastation in dozens of countries worldwide and recession across—[Interruption.]
Mr Speaker
Order. The hon. Member for Hereford and South Herefordshire (Jesse Norman) is usually the epitome of the cerebral philosopher; an air of calm usually exudes from his every orifice. He has become uncharacteristically over-excited. He must calm himself, consider the merits of yoga and listen to what the shadow Chief Secretary has to say.
Chris Leslie
I now have an image in my mind, Mr Speaker, but we will move on.
I want to pin down the position that the Prime Minister was trying to spin in Prime Minister’s questions. The market expectations are that the loss-making RBS will pay about £500 million in bonuses in 2013, despite the string of allegations about LIBOR fixing and the accusations that it forced viable businesses into default in a bid to seize their assets on the cheap. When life is getting harder for so many households and bank lending to businesses is falling, it cannot be right for the Chancellor to approve a doubling of the bank bonus cap when the taxpayer has a stake.
Chris Leslie
I will give way to my hon. Friend in a moment, but I want to finish this point.
The Prime Minister gave the clear impression at Prime Minister’s Question Time that he would veto higher pay and bonuses. Perhaps he was unintentionally misleading in the way that he made that point. He might want to come back to correct the record. Some of us think that he was conveniently looking at the total remuneration at RBS as a device to slip out of the question about how he will exercise the shareholder vote.
The House needs to know that RBS has reduced the number of bankers on its roll by about 2,000 in the past year. One would therefore expect its pay bill to fall, and so it should, but that does not get it out of answering the question about the individual senior bankers who are earning £400,000 or more. Will the shareholder, in this case the Chancellor of the Exchequer, give them permission not just to have bonuses of 100% of their salaries, but to bust through that and go to 200% of their salaries? That is a crucial test for the Chancellor. Whatever the sophistry and warm words we might get from the Prime Minister, they cannot wriggle out of confronting that decision.
Huw Irranca-Davies (Ogmore) (Lab)
Does my hon. Friend agree that this is a question of leadership? If leadership is not shown by the banking sector itself, it is for this House and this Government to show leadership. My constituents cannot understand why these people live in a stratosphere in which they are under no moral or financial obligation to behave properly. Let us show some leadership on this matter in today’s vote.
Chris Leslie
My hon. Friend is right. The motion states explicitly that the Chancellor should exercise his role as the majority shareholder to prevent an extreme approach to bonuses.
Andrew Gwynne
My hon. Friend will know that on 1 January the EU bankers bonus cap came in and it restricts the payment of bonuses to not more than the amount of a salary on a 1:1 ratio. Does it not tell the House all we need to know about this Government’s attitude towards bankers bonuses that their first action is to submit a legal challenge to the European Court of Justice against the EU cap?
Chris Leslie
One of the questions I have for the Minister is precisely about how much it is costing the taxpayer, in all those legal fees to hire barristers, to try to overturn the bankers bonus cap. I will be happy to give way to the Minister if he has an update for the House on whether the figure is £100,000, £200,000 or £300,000. How much is being spent on legal fees? The Minister’s eyes are not gazing across the Chamber at this point, so perhaps he will come back to that in his speech.
I wanted to quote for my hon. Friends something that the Chancellor said in August 2009, when he was in Opposition:
“It is totally unacceptable for bank bonuses to be paid on the back of taxpayer guarantees. It must stop.”
That is the position the public were led to believe the Chancellor would take when in office. Strangely, that does not seem to be the position he takes now.
Ian Lucas (Wrexham) (Lab)
Does my hon. Friend agree that it is very important indeed to establish the amount of money that is being paid to individuals, such as the £5.8 million in the year ending 2010 to the chief executive of RBS and the £5.8 million paid out by Lloyds? Will our constituents not recognise that the Conservative party is saying absolutely nothing about the level of those payments to individuals, and that it is defending them?
Chris Leslie
Government Members will have to confront this issue, because it is a decision they will to have to take. Those traders and executives were former colleagues of the Financial Secretary to the Treasury, who was one of the senior bankers at Deutsche bank. Perhaps he can tell us whether, when he was a banker before the election, his bonus was more or less than 100% of his salary. Perhaps he can fill us in with that bit of history.
In our motion, we have made the point about instructing United Kingdom Financial Investments Ltd and making sure that it acts accordingly and turns down this proposal if bonuses come to more than 100% of salaries. That is not fair. Most of the people watching this debate will think, “Well, it would be nice to get any bonus at all. The same amount as my pay? Crikey, that would be phenomenal, but twice the amount of pay is totally unacceptable.” The Chancellor and the Minister will have to confront the anger of the public on this issue if they fail this test.
Guy Opperman (Hexham) (Con)
The motion mentions the requirement for greater competition. The hon. Gentleman will be aware that the dozens of challenger banks that have sprung up under this Government since 2010—
Guy Opperman
I can definitely assure the hon. Gentleman that that is absolutely correct and that many are coming forward. Does the hon. Member for Nottingham East (Chris Leslie) regret voting in April 2012 against greater competition in the banking sector?
Chris Leslie
I am not quite sure what planet the hon. Gentleman is living on, but we have been consistently tabling amendments to financial services legislation to encourage more competition and to have an inquiry into retail banking competition. At every stage, the Government have refused to go down that route.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The hon. Gentleman is probably aware that the respected Nobel prize winner Professor Joseph Stiglitz said in his book, “The Price of Inequality” that one of the ways forward is to
“curb the bonuses that encourage excessive risk-taking and short-sighted behaviour.”
The hon. Gentleman will see that we are back on that trajectory. We are heading for another crash and another period of excess in banking, as the monopolists’ rent-seeking behaviour continues in the City.
Chris Leslie
The hon. Gentleman makes a fair point. This morning the Chancellor gave his rationale for disagreeing with the European banker bonus cap. It is a shame that he did not take a lead in trying to construct something of his own to rein in this culture. After all, we would have had a repeat of the banker bonus tax. The Chancellor’s argument is, “Oh well, this is just going to move it all on to pay and on to ordinary salaries.” Surely one of the lessons of the banking crisis is that the excessive, short-termist risk and reward bonus culture was driving dysfunctional behaviour that got us into the mess in the first place. Frankly, I am sure those bankers will try to find all sorts of little dodges and weaves to get around the rules, but we have to make the system more transparent and we need to move towards a remuneration arrangement that is much more about sustainability, stability, professionalism and serving the customers. It would be foolish for the Government to try to sue Brussels on this point and hold out against public opinion, which has had enough of this excessive behaviour.
Emily Thornberry (Islington South and Finsbury) (Lab)
I wonder whether my hon. Friend can help the House. Have the Government ever given any indication on what they believe the upper limit should be on bankers’ pay?
Chris Leslie
I do not think they have, although I think before the general election the Prime Minister indicated that he did not want any taxpayer-owned banks to pay out bonuses of more than £2,000. We know what happened to that proposal.
The issue goes beyond anger about bank bonus season. Serious reforms to the banking culture and the role of banking in the economy are still required. Ministers still have not grasped the role that banks ought to be playing to repair our economy. They are still out of touch on the causes of three years of economic stagnation and the reforms to the banking sector that are still needed. How much more evidence do they need? Despite the billions of pounds needed to ensure that the cash machines kept working; despite the mis-selling and ripping off consumers; despite the money laundering and sanctions busting; despite banks peddling interest rate swaps to struggling small firms; despite multi-billion losses in the disastrous London Whale scandal—London Whale was the name given to a trader—and fines of more than £1 billion for Deutsche bank in the United States for mis-selling mortgage-backed securities; and despite the rigging of LIBOR and other benchmark indices, including investigations into attempts by up to 15 banks to manipulate a £5 trillion dollar a day foreign exchange market; despite all that the Government still do not have the stomach to do what it takes to clamp down on misconduct and to finish the job.
Mr Russell Brown (Dumfries and Galloway) (Lab)
My hon. Friend mentions the LIBOR scandal and the mis-selling of products. May I put on record my thanks to the hon. Member for Aberconwy (Guto Bebb) for his work as chair of the all-party group on interest rate swap mis-selling?
On bonuses and reward, does my hon. Friend believe that perhaps what we should say to high earners is that there will be no more bonuses until they have sorted out the mess the Financial Conduct Authority is currently investigating, and until all the individuals and companies have had their cases considered fully and have been compensated for the mess the bankers made?
Chris Leslie
My hon. Friend puts his finger on the point, which is that most of our constituents would say that bonuses are supposed to be for good or excellent performance and not just part of the run-of-the-mill, ordinary pay they receive regardless of whether they do well, make losses or get involved in all sorts of problems and difficulties. That is part of the problem with the culture in the banking sector, with which, frankly, the legislation introduced by the Government has so far just not dealt with.
Jesse Norman
Perhaps the hon. Gentleman could update the House later on what cap on bonuses was set by the previous Prime Minister, or the one before that. Does he not accept that the past few years, as he has just demonstrated with his recitation of scandals, was a period of the most lax supervision? It was under the previous Government that the Bank of England allowed these dreadful evils to take place. That is why it has made such a difference introducing the new senior persons regime, the new authorised persons regime and all the other changes, as well as the new definition of competition in legislation.
Chris Leslie
The hon. Gentleman and I differ in our analysis of what happened—I will explain why in a moment—and that says a lot about where we need to take policy. I do not believe that we have finished the job of banking reform, which seems to be the impression we are getting from the Government Front Bench. He and I might agree that more is needed—I will talk a bit about that in a moment—but stopping short of those reforms will not prevent another bank failure or protect the interests of normal customers and society so that they, not the high remuneration of those senior bankers, come first.
Sheila Gilmore (Edinburgh East) (Lab)
Does my hon. Friend share my incredulity that the Conservative party, which in opposition accused the then Government of over-regulation, should now suggest it was previously in favour of more regulation?
Chris Leslie
There is a touch of revisionism from Government Members, but perhaps that is a bit generous; their attempt to rewrite history is breathtaking. I have no doubt that when the Minister speaks my hon. Friends will hear a complacent desire just to move on from banking reform and a desperation to make party political points about the history of the banking crisis. They will try, with all their might, to pretend that it was Labour’s spending on schools and hospitals that caused a global recession in dozens of countries worldwide, but my hon. Friends will not hear from him about how the banks must still be made to pay for their egregious and scandalous abuses and over-leveraged trades in sub-prime mortgage securities.
All sense that the banks must be held accountable for the state we are in has been airbrushed from the Government’s narrative, because they want to blame their political opponents rather than upset their corporate friends. Perhaps the Minister likes to turn a blind eye, in the knowledge that it really was the banks that were responsible for the global financial crisis, or perhaps he has now genuinely convinced himself that it was primarily the fault of Governments and that the banks were only a little bit to blame. Either way, they have the wrong analysis, which explains why they have the wrong policies. By failing to tackle the root causes of recent economic devastation and the deficit that built up as a result, they are maintaining the risk that banks could once again turn to the taxpayer to bail them out, should they fail again. Never again must the taxpayer pick up the losses for the reckless behaviour of banks, and never again must our economy and public services be thrown into such turmoil because of the negligence and monumental greed of banking executives and traders.
Mr Jim Cunningham (Coventry South) (Lab)
I apologise for arriving late, Mr Speaker. I am sure my hon. Friend would agree that in the last Parliament the Conservative party, in opposition, only ever complained about red tape. Did he notice that for the first time today the Prime Minister talked about the recession not being the fault of the Labour party?
Chris Leslie
This is why this Government’s narrative is beginning to crumble around the edges. Most people realise that the banking sector was totally dysfunctional and causing great difficulties. Of course we need better policing throughout the international community and by the regulators, but if we are to rehabilitate the banking sector, we cannot shy away from the tough decisions needed to change its structures and behaviour. There are still too many areas in which the Government have left banking reform unfinished.
Chris Williamson (Derby North) (Lab)
Returning to the point about complacency, did my hon. Friend see the briefing note from the British Bankers Association prior to this debate? It says that
“no other industry is subject to such influential pay supervision”.
I have never heard anything so ridiculous in my life. Does he agree that this “influential pay supervision” is patently failing in its job?
Chris Leslie
We have to feel sorry for senior bankers facing a bonus of merely the same amount as their basic take-home pay, as 200% bonuses are obviously vital for their survival—for the record, this is sarcasm. It is complete nonsense, of course.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
I have been listening intently to my hon. Friend’s delineation of the big ticket items where the banks have failed and where the Government appear not to criticise them, but on a more localised issue, Scottish constituents of mine have consistently been rack-rented and ruined by RBS, as the Tomlinson report said, yet these bankers complain in the local press in Scotland that their £4 million-worth of bonuses is less than the £6 million that HSBC bankers get—and these are people who consistently destroyed companies in Scotland. I hope the Minister will address the question of their faults and how they have acted since the crash.
Chris Leslie
Of course, we want to see rewards, bonuses and pay that reflect performance. That is my hon. Friend’s basic point. It is not asking for too much.
In too many areas, reform has been left unfinished. Four times the Government have rejected our proposals for bankers to face an independent licensing regime with an annual validation process for competence; they have delayed a decision on leveraging that could prevent excessive risk taking; and they have continued to resist a sector-wide back-stop power for the full separation of retail and investment banking, should the ring-fencing not work. Moreover, there is insufficient scope for proper scrutiny before the further sale of Treasury assets, and we know that the Government sold both Northern Rock and the first tranche of Lloyds shares at a loss. Despite month after month of persistently falling lending to small and medium-sized enterprises—a fall of £12 billion in the past year alone—the Government have had to throw out Project Merlin, ditch credit easing and reboot their funding for lending programme, but still to little effect. It is obvious that we need a serious British investment bank, supported by a network of regional banks and capitalised with revenues from the market value of 3G spectrum licences, yet here we are, in the fourth year of this Government, and their half-hearted attempt at a business bank is still not fully up and running.
Kwasi Kwarteng (Spelthorne) (Con)
Members are listening to the hon. Gentleman with astonishment. What exactly did the previous Labour Administration do in 13 years to regulate the sector that he is talking about?
Chris Leslie
The previous Government introduced a bankers bonus tax, which raised billions of pounds that helped improve our public services. Government Members need to wake up and realise that they need to repeat that strategy.
While we are on the subject of bank taxation and the levy, let us look at what the Government have done, because it has been such a colossal disappointment so far. The Prime Minister promised that his bank levy would raise £2.5 billion each year, but they have never been bothered about making the banks pay their fair share, because their hearts are not in it, so the bank levy has fallen short of that target year after year. It raised only £1.6 billion in 2011, and despite their subsequent promises, it then again raised only £1.6 billion in 2012, and they are expecting a further shortfall this and next financial year—the Minister could confirm this. In the past three years, the bank levy has raised £2.1 billion less than they promised. With £2 billion, we could kick-start the construction of 80,000 houses or employ more than 20,000 nurses—the same number the NHS is short of. It represents a serious and scandalous shortfall in tax collection.
Chris Leslie
I would like to make some progress.
Perhaps the most serious area of reform left untouched by the Government is the continued dominance of the big five banks, which gives customers limited choice and helps feed disillusionment and low trust. The Government have an action plan to deliver competition in the banking sector, but we cannot see it. We need more competition and banks that are hungry to serve the interests of consumers, businesses and the British economy, and a wholehearted shift in the number of market participants serving households and businesses, not a half-hearted tinkering around the edges.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It has been widely trailed today that a future Labour Government, if elected, would try to force banks to sell off branches. That will cause great concern, particularly in rural areas, because it is their branches that would be most likely to be disposed of. How would his proposals help create competition for our high street businesses?
Chris Leslie
This is not about shutting branches; it is about making a more competitive sector. Time after time, we have tabled amendments to financial services Bills calling for more competition in the banking sector. The Independent Commission on Banking, chaired by Sir John Vickers, called for action to diversify the banking sector, but the Treasury’s approach to divestments of branches from NatWest and Lloyds was not exactly a raging success. It would have been better if the Government had taken our advice and gone for a competition review of the retail sector and not just the business banking sector. They often say “We are looking at competition”, but it is usually only in business banking. They need a more comprehensive approach; the customer needs better service and competition to bring down fees and charges.
There is still no obligation on banks to provide a basic bank account for all customers, even though we know it helps people on low incomes to save money and plan their budgets. The jury is out on whether the seven-day current account switching service will be enough or whether steps should be taken towards full portability of bank accounts for customers. The Government could introduce a fiduciary duty of care, explicitly putting the best interests of customers first and foremost in the financial services sector.
Today, banks are an essential utility; they are supposed to be there to help customers, not to hinder the economy or act like untouchable vested interests. We need to clean up the behaviour of the banks and end the culture of excessive risk and reward. Those are the traits of the old economy; the new economy that we need demands a more modern banking sector—more competitive and diverse, accountable to its customers, supporting long-term investment at home and delivering the sustained growth that we need. That will be the task of the next Labour Government.
Sajid Javid
The hon. Lady seems to suggest that it is best to have Ministers who have no experience or knowledge in the areas for which they are responsible. We saw that under the previous Government, and look what happened. To win back the confidence of the British people, we need a long-term economic plan for recovery.
Chris Leslie
I would not want the Minister unintentionally to miss answering the important question that my hon. Friend the Member for West Ham (Lyn Brown) asked. For the record, do the Government believe that the senior bankers at the Royal Bank of Scotland should or should not be allowed to pay bonuses of over 100% of pay?
Sajid Javid
I will come to that later in my speech when I will deal with some of the issues that the hon. Gentleman raised.
Bringing back confidence to the economy will of course mean dealing with the banking sector to make it more stable, more resilient and more efficient. That is exactly what this Government have been doing for the last three years.
Sajid Javid
I will come on to that topic shortly and share with the hon. Gentleman some numbers that show what has happened to the pay of top bankers.
Sajid Javid
I will come on to it. The hon. Gentleman raised the two issues of banking competition and remuneration and I want to cover them.
I was very pleased that the hon. Gentleman talked passionately about the importance of competition. It is a shame that the previous Government did absolutely nothing to encourage it for 13 years. It is worth reminding the Chamber that when the last Government took office there were at least 10 major UK banks, but over their 13 years of incompetence they continued to permit and manage banking takeovers which shrank the number of market players and left the big banks to dominate.
Greater competition in banking is good for people and businesses and the economy. That is why we are implementing the recommendations of the Independent Commission on Banking for improving competition; indeed, we are going further. We are addressing the issue of too big to fail through ring-fencing, meaning that big banks will no longer get a competitive advantage from this implicit guarantee. We have put competition at the heart of financial services regulation by giving the Financial Conduct Authority a formal competition objective as well as making provision for a secondary competition objective for the Prudential Regulation Authority. We are also making sure that the FCA has the right tools to get the job done on competition by giving it concurrent competition powers.
While competition dropped under Labour’s stewardship, it is increasing under ours. As we have heard, since the crisis Metro Bank, Virgin Money and the new TSB brand have entered the market. Indeed, RBS also announced recently that it has teamed up with investors, including the Church Commissioners, to launch a 300-branch challenger bank, Williams & Glyn’s, focused on small businesses.
In fact our financial regulators are currently in talks with 22 potential new bank applicants because of the steps we have taken to promote banking competition. On top of that we are creating a new payment systems regulator so that smaller banks and others can access the payment systems fairly and more transparently, and we have secured a seven-day current account switching service to make sure that people have the confidence to change accounts. There are further innovations coming on cheque imaging and mobile payments. This is a Government who are bringing competition back to banking.
On bankers’ pay, we understand the depth of public anger but we will not take any lectures from the Labour party. While bonuses continued to increase year after year on its watch, even after 2007, they are now down 85% from their peak in 2008. Since 2010 we have been leading the way on tackling unacceptable pay practices. First, we have introduced rules that require significant parts of bonuses to be deferred and paid in shares, which means there is now a much better alignment of pay with risk and performance. While we make sure that only good performance can be rewarded, we are also making sure that poor performance can be punished by introducing measures that mean firms have clawback policies to reduce or revoke pay retrospectively.
Those steps are having an impact. The 2012 bonus pools at almost all major banks have declined massively since this Government came to office. The truth is that while Labour talks about clamping down, this Government get on with the job.
Sajid Javid
My hon. Friend again rightly points out that the previous Government did nothing when bonuses were reaching a record high. Even after they had carried out the world’s largest bank bail-out, pumping in over £40 billion of taxpayers’ money, they still allowed bonuses the next year to reach an all-time peak of almost £12 billion. That is their legacy.
Chris Leslie
We now come to the point that the Minister has twice said he would address later on, so will he address it now? Will the Chancellor of the Exchequer be using his power as a shareholder in the Royal Bank of Scotland to allow its senior bankers to exceed the level of bonus beyond 100% of pay: yes or no?
Sajid Javid
That is exactly what I was coming on to next. It is important for taxpayers that any proposals by RBS are considered fully and properly. The Government have not yet received a proposal from RBS on bonuses; once we do, we shall be in a position to judge whether it represents value for taxpayers.
The Government do not support the EU cap on bonuses. The Government have fought against it and we are currently challenging it in court. The bonus cap creates perverse incentives by removing the link to performance. It is damaging to financial stability; it is opposed by the PRA and the Bank of England; and, indeed, the cross-party Parliamentary Commission on Banking Standards rejected crude bonus caps as unworkable.
Let me turn finally to the bank levy.
Oral Answers to Questions
Chris Leslie Excerpts(10 years, 5 months ago)
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Nicky Morgan
My hon. Friend is right. As I said, Paul Johnson of the Institute for Fiscal Studies said:
“We’ve have had the biggest recession we’ve had in 100 years”.
It is hardly surprising that household incomes and wages have fallen. We recognise that times have been very tough for households and for businesses, but as my right hon. Friend the Chancellor’s autumn statement showed last week, we are on the right path to a responsible recovery now.
Chris Leslie (Nottingham East) (Lab/Co-op)
Does the Minister expect that after the autumn statement average earnings will keep pace with rising energy bills this winter?
Nicky Morgan
What we have done in the autumn statement is to give £50 off energy bills. We are putting money in people’s pockets with the personal allowance, through capping rail fares, through the council tax freeze and with the fuel duty freeze. The hon. Gentleman has a cheek to talk about putting money in people’s pockets when the Government whom he supported left behind the economic crisis from which we are having to pick up the pieces.
Chris Leslie
I guess we have to take that as confirmation that the Minister does not expect average earnings to keep pace with rising energy bills this year. Is it not true that, despite the autumn statement, all we have seen is a policy that tinkers around the edges and means that energy companies will still see their profits rising as households continue to see their bills rising? When will she be on the side of households who are worried about heating their homes, and when will she support an energy price freeze and stop always defending the excessive profits of the big six energy companies?
Nicky Morgan
The hon. Gentleman has clearly learned nothing. Does he realise that his energy policy is a complete con, that energy companies have already said that they would have to freeze investment, and that they would put prices up beforehand and afterwards? The Government are absolutely on the side of hard-working families and their household budgets, and we are putting £50 in their pockets now.
National Infrastructure Plan
Chris Leslie Excerpts(10 years, 5 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Chris Leslie (Nottingham East) (Lab/Co-op)
(Urgent Question): To ask the Chief Secretary to the Treasury to update the House on the national infrastructure plan.
The Chief Secretary to the Treasury (Danny Alexander)
Thank you, Mr Speaker, for giving me this opportunity to explain the national infrastructure plan to the House. I thought I might have tested the House’s patience back in June with my lengthy statement on infrastructure, but I am glad that there is an appetite for further conversation on this subject.
In June, I set out our plans to invest more than £100 billion of taxpayers’ money over the next decade towards improving our transport networks, our energy networks and our digital networks, and in other specific infrastructure projects crucial to our civic life. This morning, the Government published the latest updates of the national infrastructure plan and the investment pipeline that goes with it.
First, the documents provide an update on the projects that have been delivered to date—I am sure that we will return to that later. Secondly, the documents update our plans to improve future delivery. The updated pipeline provides the most comprehensive overview of planned and potential infrastructure investment ever produced, which gives investors the long-term clarity and certainty they need to put their money into our infrastructure. The NIP also includes changes relating to legal and planning practices, including reforms to judicial review, for example, the creation of a special planning chamber to ensure that the planning system and judicial review process does not cause excessive delays in any infrastructure project.
Thirdly, the documents published today update some of the details of our previous infrastructure plan. Let me give the House a few details. First, we set out changes to the strike price regime for renewable energy, and they have a number of components. We have reduced slightly the support being offered in the future for onshore wind and large-scale solar production. We are also increasing substantially investment in offshore wind. In particular, we think that the strike prices we have announced, with the increase in 2018-19, are likely to lead to at least 10 GW of investment in offshore wind between now and 2020—more if the prices can come down. This is about meeting our growth commitments and our green commitments as cost-effectively as possible.
The NIP sets out decisions on the future of the renewable heat incentive and the prices that we pay for different technologies under it. The plan also sets out a few changes to some specific transport schemes. We have listened carefully to the public response to the consultation on the tolling of the A14 and we have decided not to go ahead with that tolling, but not at any cost in terms of the time taken to deliver that very important project. We have decided to provide new investment in the A50, a crucial road link where there are many delays and bottlenecks. We are working closely with Staffordshire county council and the local enterprise partnership to work through the delivery of that. We have decided to contribute £30 million to the development of the proposed “Garden bridge” in London. We have also made announcements about supporting Government procurement of electric vehicles and some other important developments, such as our plans to double our corporate asset sales target from £10 billion to £20 billion by 2020.
We confirm that the feasibility studies we set out in June, particularly on routes such as the A1 to Scotland, the A303, the A27 and the trans-Pennine routes, are well under way and that full plans for each of those routes will be set out by this time next year. Following correspondence from Sir Howard Davies in advance of the interim report by his airports commission, we have set out plans to improve surface access to airports around London—in particular, £50 million will be contributed to a new Gatwick airport railway station. The subject of rural broadband was mention in the earlier Question Time, and we are committing £10 million to identify the best technologies to reach those hardest-to-treat premises.
Finally, today’s publication lays out the commitment made today by a group of insurers to work with Government and regulators and invest £25 billion in UK infrastructure over the next five years. I am sure that hon. Members on both sides of the House will agree that that represents a massive vote of confidence by some of our most important companies in the UK economy. The plan also draws attention to the new agreement signed with Hitachi and Horizon this morning, which commits us in principle to offering a guarantee for their new nuclear power station in Anglesey. I am sure that hon. Members who have had a chance to look through the document will recognise that this is real evidence that we are making real progress on delivering infrastructure fit for our country’s future. The NIP demonstrates a long-term vision for our energy, transport and digital networks. It is a plan that is helping to secure long-term investment and that will lead to sustainable, strong long-term growth. As such, I look forward to the hon. Member for Nottingham East (Chris Leslie) welcoming it with open arms and congratulating us on the progress we have made.
Chris Leslie (Nottingham East) (Lab/Co-op)
Time and again, the Chief Secretary boasts about his grand plans for infrastructure, yet the reality is always such a let down. With the country facing a cost of living crisis, is it not about time that the Government invested in the fundamentals to strengthen our economy for the long term? When will all these reheated press releases finally translate into diggers on the ground? Is it not the truth that since this Government were elected, work on infrastructure has fallen by an astonishing 15%, according to the Office for National Statistics? A 15% fall in infrastructure output since May 2010 should be a badge of shame for this Chief Secretary to the Treasury, as it happened on his watch.
This is a Minister who has a long history of issuing press releases in the hope that they magically translate into delivery on the ground. Once upon a time, many years ago, his press releases claimed that £20 billion from the pension funds would go into infrastructure, but only £1 billion was pledged, and nothing has yet been invested. Why should we believe that today’s press release about a supposed £25 billion from insurance funds is actually going to happen? Will he confirm that there is no new Government money for infrastructure today? In fact, will he admit that he is cutting the capital infrastructure budget in real terms by 1.7% for 2015?
For all the spin from this chief press officer to the Treasury, three quarters of the projects in this pipeline will not be in service until after the next election. Nearly a fifth of them will not be in service until after 2020. Members might have a niggling sense of déjà vu. Should not the Chief Secretary be just a little bit embarrassed to go through this same routine again? He pretends that he has got this fantastic record when he is transparently not delivering. It is worse than the emperor’s new clothes. He has been left exposed by a failure to deliver, and his record is out there for all to see.
Does not the chopping and changing on the A14 tolling in Suffolk say everything about the Government’s incompetent approach to infrastructure delivery? Costs have shot up £200 million and they have wasted three years on faffing around. On flood defences, they have cut spending by £100 million. On green investment, can the Chief Secretary not see that business investors are tearing their hair out at the erratic stop-start approach to support for renewables? Are we supposed to be impressed that the Government are looking at options to bring in private capital for the green investment bank? It is beginning to look like the return of omnishambles.
On schools, the Government scrapped Labour’s Building Schools for the Future, but of the 261 schools that their replacement Priority School Building programme was supposed to deliver, construction has started on only two. There is not a single word in this proposal today about housing investment. The Chief Secretary’s emergency guarantees legislation for £40 billion of underwrites has been a flop. His new version of private finance has not taken off. None the less, I must give him some credit today for one major advance for society. On the front page of his press release today, he pledges £8 million for new light bulbs for NCP car parks. What a shining example of infrastructure investment that is. I must ask: how many Treasury Ministers does it take to announce a change in the light bulbs? It is one thing putting out press releases, but can he at least try to make them vaguely convincing? He even resorts to claiming credit for projects that started before the election. This is a Treasury that has neglected the fundamentals that we need for a economic recovery that is built to last. For all the hype, the hot air and those press releases, we are left with a shambolic infrastructure programme and cuts in infrastructure plans. When will he get a grip?
Danny Alexander
It is very rare that I find myself thinking that Labour Members must wish that they had the shadow Chancellor on the Front Bench asking the questions and not the shadow Chief Secretary—the former policy wonk in the shadow Chief Secretary role with no new ideas of his own whatsoever.
The shadow Chief Secretary is quite right to say that this plan is not about new Government money, as I announced £100 billion-worth of new Government policy in June. He is wrong, however, on his comparisons with capital spending. Capital spending is higher in this Parliament as a share of the economy than it was under the previous Government. He is also wrong to criticise our announcements on energy today. The announcements on strike prices have been welcomed by commentators as diverse as Greenpeace, which states that it is right to focus on the costs of offshore wind, and the Renewable Energy Association, which described today’s announcement as a good day for renewable energy and renewable heat. I remind the hon. Gentleman that this Government were the first to put in place a green investment bank, something his party never bothered to do when it was in office.
Hearing the hon. Gentleman talking about infrastructure reminds me that his party cannot even decide what it thinks about the most important infrastructure project in the country, let alone what to do about it. The moment the Labour party comes out with a proper policy on High Speed 2 is, I suspect, a long time away. That is a pretty pathetic failure on Labour’s part to back investment in the north, northern cities and Scotland.
On delivery, let me say this. Onshore and offshore, underground and overground—[Interruption.]—wired and wireless, tarmac and train track, this Government are delivering. [Interruption.]
Cost of Living
Chris Leslie Excerpts(10 years, 5 months ago)
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Chris Leslie (Nottingham East) (Lab/Co-op)
I beg to move,
That this House notes that the Government has failed to meet its own economic goals over the last three years with prices rising faster than wages for 40 out of 41 months, average earnings for working people £1,600 a year lower in real terms than in May 2010, economic growth far slower than expected, the Government’s pledge to balance the books by 2015 set to be broken and the UK’s credit rating downgraded; further notes that growth of 1.5 per cent is needed in every quarter between now and May 2015 in order to catch up the lost ground from three damaging years of flat-lining growth; believes the Chancellor of the Exchequer’s Autumn Statement should take action to tackle the cost-of-living crisis which means that for most families there is still no economic recovery and to ensure recovery delivers rising living standards for all, is balanced and built to last; and calls on the Government to bring forward measures including an energy price freeze and long-term reforms to the energy market, an extension of free childcare for working parents of three and four year olds, action to boost long-term housing supply and a compulsory jobs guarantee for young people and the long-term unemployed.
On Thursday next week the Chancellor of the Exchequer will address this House in his autumn statement. My hon. Friends will know that we have come to expect a tin ear from this Chancellor, who in last year’s autumn statement cut tax credits and child benefit in the face of millions of people struggling to make ends meet while sticking firmly by his decision to deliver a millionaires’ tax cut for the richest 1%. This year, the time has surely come for the Chancellor to wake up to the chronic and unremitting cost of living crisis facing millions of households across the country. Never before have so many worked so hard for so little, working week after week only to find that their pay packet has shrunk in real terms and that they are unable to buy as much as the month before, with wages failing to keep up with prices and the pound in their pocket diminishing in value as everyday costs—rent, the weekly shop, child care, and gas and electricity bills—get higher and higher.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Does the hon. Gentleman welcome the fact that the Government have taken many people out of income tax, such that next April 4,041 people in Suffolk Coastal will no longer pay income tax, alongside the freeze in council tax that they have enjoyed for the past few years?
Chris Leslie
The hon. Lady makes her point. Unfortunately, a lot of Conservatives like to pretend that they are giving with one hand, yet they are taking away so much more with the other—not just the tax rises that they pretend never happened but the unremitting rise in the costs that people face daily.
Mr Jim Cunningham (Coventry South) (Lab)
My hon. Friend is right to say that the Government give with one hand and take with another. Does he agree that of the £14 billion of tax adjustments last year, £11 billion was inflicted on women and their cost of living?
Chris Leslie
Absolutely. In last week’s Opposition day debate, my hon. Friend the Member for Ashfield (Gloria De Piero) correctly highlighted not only the impact of the cost of living crisis on households up and down the country but how it is particularly hitting women.
Christopher Pincher (Tamworth) (Con)
On the subject of giving and taking, is the hon. Gentleman aware that in 20-odd years of Labour control of Staffordshire county council, Labour hiked council tax time after time, whereas this year the Conservative-controlled county council has cut the tax? Does that not show that Tories give money back and Labour takes it away?
Chris Leslie
The trouble for the hon. Gentleman is that an awful lot of Conservative councils have metaphorically stuck two fingers up to the Secretary of State for Communities and Local Government and, indeed, the Chancellor by deciding to increase council tax because the Government’s approach to local government finance has squeezed services. Even Conservative councils and authorities are finding themselves in a position where they are raising council tax.
Sheila Gilmore (Edinburgh East) (Lab)
The Social Mobility and Child Poverty Commission has stated that the fiscal consolidation has been regressive. Does my hon. Friend think that that should be taken into account?
Chris Leslie
My hon. Friend is correct. The fiscal consolidation is not only regressive but entirely the opposite of what the hon. Member for Spelthorne (Kwasi Kwarteng) shouted from a sedentary position, because it has not worked. I will be talking about him in a moment as I have given him a special place in my speech; several hon. Members will know why. The notion that fiscal consolidation has been successful is disproved by the fact that we now have an inordinate level of borrowing thanks to the lack of economic growth.
Kwasi Kwarteng
I am very grateful to the hon. Gentleman and touched that he specially mentions me in his opening remarks. If the fiscal consolidation has not worked, why is the UK currently growing faster than any other country in the G7 and in the OECD?
Chris Leslie
The hon. Gentleman should be shamefaced even to mention economic growth when for the vast majority of his esteemed time as a Member of Parliament growth has flatlined and he has failed to deliver. He needs to recognise that unless we get some serious and sustained economic growth, we will never deal with the deficit issues we have in this country.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Is my hon. Friend as surprised as I am by the amnesia among Government Members, bearing in mind that we were coming out of recession in 2010 but have since been flatlining and that they have failed to explain why prices have risen faster than wages for 40 out of 41 months?
Chris Leslie
This is the problem that Government Members, who seem to think it is funny that we have not had any growth for such a long time, do not understand. They think, “Oh, the cost of living—that’s nothing to do with the economy, it’s a completely separate issue.” Not only my hon. Friends but my right hon. Friend the Leader of the Opposition have relentlessly called on Ministers to act now to alleviate the pressures that are facing many families’ household budgets. They do not just need to make the case for a living wage and a 10p starting tax rate; they need to act now to stand up to the large corporations who know that customers have little choice but to cough up and pay higher prices for life’s essentials.
Robert Flello (Stoke-on-Trent South) (Lab)
My hon. Friend is being extremely kind and generous with his time. Returning to Staffordshire, is he aware that a Money Advice Service report shows that in Stoke-on-Trent the number of people in debt has now reached the 35% mark? More than a third of people in Stoke-on-Trent are now suffering in debt because of this Government’s policies.
Chris Leslie
The report published by the Money Advice Service, which the Government trumpeted as an organisation that was set up some while ago, is very startling. Certainly, the number of people in my hon. Friend’s constituency who are suffering from indebtedness is exceptionally high. In my constituency, over 40% of people are struggling to make ends meet when faced with these crippling burdens and debts.
Robert Halfon (Harlow) (Con)
Whenever the Government introduce fundamental measures to help with the cost of living, such as freezing council tax, freezing fuel duty and cutting it in 2011, and cutting taxes for lower earners, why do you vote against them?
Chris Leslie
I do not know whether you voted against those measures, Mr Deputy Speaker, but we appreciate any efforts to help alleviate the cost of living. Does the hon. Gentleman believe that when people fill up their tank at the petrol station, they think, “How grateful we are to the Conservatives for the cost of petrol today”? When it comes to the cost of living—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Gentleman has been very generous so far, but he cannot give way to six people at once. Let us get our act together and try to get through the debate. There are 21 Members who want to speak, and I am sure that other Members will want to hear them.
Chris Leslie
Thank you, Mr Deputy Speaker. I am still on the first page of my speech. I remind Government Members that the profits of the energy companies, which in many ways are the drivers hurting many of our constituents, have risen astronomically in recent years. Since the general election, energy company profits are up from £2 billion to £3.7 billion. Members will have read in The Independent yesterday that profits were £30 per household at the time of the general election, that they rose to £53 per household in 2012 and that they are now expected to be £105 per household this year, and yet the Government continually cower in trepidation of the big six gas and electricity corporations. They are not just recoiling from any willingness to challenge their behaviour, but in their cowardice the Government defend the status quo as though nothing can be done.
Labour says that energy bills can and should be frozen while Parliament legislates to reset the energy market to one that provides true competition, reduces scope for excessive profiteering and offers reductions for customers when wholesale prices fall.
Chris Leslie
I will give way to Government Members if they can answer this point: what was the Government’s reaction to our call to take action on energy prices? They dithered and argued among themselves, frozen like rabbits in headlights, flailed around and attacked us for daring to stand up to excessive profiteering and then, finally, No. 10 Downing street said, “Wear a jumper.”
Chris Leslie
I will give way to one of the woollier Members on the Government Benches.
Mr Newmark
Fuel prices would be 13p a litre higher if Labour were in power. Consumers have saved £170 on average, which is a saving on the cost of living. That is one area in which the Government have done a lot to help motorists.
Chris Leslie
When the public faced difficulties, the previous Government took action to freeze prices and duty for petrol and diesel. The hon. Gentleman mentions a fictional 13p and seems to think that when people fill up their petrol tanks they say, “Thanks goodness these prices are so low; I must thank the hon. Gentleman.” He is living in cloud cuckoo land. The Government are not just out of touch; they are out of ideas and they are running out of time.
Mr Deputy Speaker
Order. Everybody else has sat down, but somehow the hon. Member for Vale of Glamorgan (Alun Cairns) feels he can hang around for another five minutes. I assure him that he cannot. The Minister will give way when he wishes to, not when the hon. Gentleman demands. [Interruption.] I do not need help from others, either.
Chris Leslie
I think that shows that we have touched a nerve. We know that the best we can expect from the autumn statement—[Interruption.]
Mr Deputy Speaker
Order. Did somebody shout out something about cowardice? No; okay, carry on.
Chris Leslie
I did not catch what was said, but we will see what Hansard records.
We know what will be in the autumn statement next week. The best we can expect is that the Chancellor will probably transfer about £100 or so off people’s energy bill and on to their tax bill instead. That is a ruse.
Mr Deputy Speaker
I assure the hon. Gentleman that that is not a point of order. He has made that point on many occasions and I did not need reminding.
Toby Perkins (Chesterfield) (Lab)
My hon. Friend is being incredibly generous in taking interventions. May I encourage him to continue taking them, because every time he does so he utterly destroys the weak arguments made by Government Members? Does my hon. Friend recognise, like the 5,000 people who signed the “freeze that bill” petition in Chesterfield, that the Conservative party has nothing to say on energy prices because it is utterly beholden to the very energy companies that are impoverishing my constituents?
Chris Leslie
My hon. Friend is correct. The Government are afraid of the energy companies. We are not yet sure why they are so afraid to stand up to the big six, but it is clear that the Chancellor’s solution of simply shifting £100 or so off an energy bill and on to the taxes of all our constituents will not convince people that they have the answers. The switch is so obvious it can be seen in the dark. It is a palliative that merely shunts the costs from a bill payer to a taxpayer. It fails to tackle the root cause of the problem, which, as my hon. Friend has said, is the excessive profiteering of the utility companies. Government Members are going to have to try a lot better than that next week.
Alun Cairns (Vale of Glamorgan) (Con)
I am grateful to the hon. Gentleman for giving way. He makes an extremely important point on the need to freeze bills, which is largely what has happened over recent years to council taxes in England. In Wales, however, where the Labour party runs the Welsh Government, there have been council tax increases of nearly 9% over recent years. That is a bill that can genuinely be frozen by politicians. Will the hon. Gentleman stand up to the Labour party in Wales to ensure that my constituents are not forced to pay 9% increases in council taxes?
Mr Deputy Speaker
Order. We can all make a judgment about that, but it might be helpful to remind Members that there are many speakers to come, so if we are going to have interventions they have to be short and not speeches. I will be honest with Members: anyone on my list of speakers who makes a long intervention will go down the list accordingly.
Chris Leslie
The hon. Member for Vale of Glamorgan (Alun Cairns) is short in his contributions on most occasions. I note that he wanted to change the subject from energy prices. The problem is that, time after time, the Conservative party has no answers for the public, who want politicians—their elected representatives—to take action on the cost of living, particularly on energy prices. As long as the hon. Gentleman and all his colleagues let the rip-off merchants and unfair profiteers continue with business as usual, the public will take exception to the deceitful claim that we are all in it together.
Chris Leslie
I want to make some progress.
For most people life is getting harder and for most people there is still no economic recovery, but that is not what they were promised. Before the election, the Prime Minister said:
“Our plans don’t involve an increase in VAT”
and
“I wouldn’t change child benefit”.
He also said that tax credits would be cut only “for families on £50,000” and that his party would
“not scrap the Education Maintenance Allowances”.
Those are the promises the Conservatives made before the general election. They famously airbrushed a poster of the Prime Minister and in their efforts to cover up their website pledges they are trying to airbrush the past.
Mr Ellwood
I urge the hon. Gentleman to be cautious about questioning whether this subject is being taken seriously by Government Members, because the record should note that there are more Government Members than Opposition Members present to debate this important issue. On energy, will he now concede that Labour failed to ensure that the lights will be kept on in this country by failing to invest in nuclear energy? More than six nuclear power stations have closed down. That is why energy prices have gone up—because we are not making our own energy.
Mr Deputy Speaker
Order. I asked for short interventions. Please shorten them, Mr Ellwood, or we will not take any more from you. I am sure you will want to get another one in later.
Chris Leslie
There are only another 18 months during which there will be more Conservative Members than Labour ones in this Chamber. I hope that the hon. Member for Bournemouth East (Mr Ellwood) is watching the clock, because they are running out of time.
The Prime Minister has broken not only that list of promises, but more records than most Prime Ministers over the decades, and not in a good way. How has he been a record breaker? Since entering No. 10 Downing street, he has delivered a record-breaking cost of living crisis, with wages failing to keep pace with prices for an unprecedented 40 out of his 41 months in office. That is the longest period of diminishing real wage values since records began.
A record-breaking number of people now rely on food banks just to get by—it has tripled in the past year alone—with more than 350,000 families requiring food parcels in the past six months.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
On the cost of living crisis that is driving people to food banks, does my hon. Friend share my shock at the hon. Member for Vale of Glamorgan (Alun Cairns) saying that people use food banks because they are drug addicts and cannot manage their money, rather than because of the cost of living crisis?
Chris Leslie
I am happy to give way to the hon. Member for Vale of Glamorgan if he wants to explain.
Alun Cairns
On a point of order, Mr Deputy Speaker. The hon. Member for Cardiff South and Penarth (Stephen Doughty) has inadvertently misled the House in that the quotes attributed to me are wholly inaccurate. I ask him to withdraw what he said.
Chris Leslie
I will happily give way to my hon. Friend in a moment, so that he can relay the quote that he has to the House. Perhaps a journalist wrote it down incorrectly, but I am sure that there is an explanation.
The point about food banks is that the crisis is so bad that the Red Cross has launched an emergency food appeal right here in the United Kingdom, something that has not happened since the second world war.
The Prime Minister’s broken records include real-term wage levels plunging to a new low and average weekly earnings at their lowest level since the Office for National Statistics started to record the figures in 2001. Not only has he hit record lows on incomes, but he has delivered record fuel bills and average household energy costs—
Stephen Doughty
On a point of order, Mr Deputy Speaker. I am sorry to raise another point of order, but the hon. Member for Vale of Glamorgan suggested that I may have misled the House—
Mr Deputy Speaker
Order. Let me reassure both hon. Gentlemen that I am not going to decide who is right. You have each claimed that you are right and that the other is wrong. It is on the record, and people can make up their minds tomorrow. I want to continue with this debate.
Chris Leslie
My hon. Friend the Member for Cardiff South and Penarth may have time later to elaborate on the quote. It may be incorrect, and we will see whether journalists want to look into that.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is absolutely right to list this Government’s catalogue of broken promises on the cost of living crisis, but the crisis is far worse than the spiralling energy bills and the rising cost of living. He was moving on to make the serious point that, at the same time as prices are increasing, people’s wages have plummeted since 2010 by about £1,600. Is that not the real cause of this cost of living crisis?
Chris Leslie
Absolutely. This is an unprecedented period—we can characterise it as record breaking—during which wages have not been able to keep pace with the costs our constituents are facing.
James Morris (Halesowen and Rowley Regis) (Con)
Will the hon. Gentleman give way?
Chris Leslie
In a moment.
Let me give another example, private sector rents are at a record high. Average rent rises across England and Wales have just hit the highest level ever recorded, at £757 a month.
Chris Leslie
Will my hon. Friend allow me to make a little more progress on housing? The Prime Minister is also a record breaker because he is presiding over the lowest net supply of housing since records began. The Government’s own figures show that the number of dwellings added to our housing stock fell by 8% last year, which is the lowest level since such statistics were first collected. That is quite some achievement. It does not bode well for the affordability needed by many first-time buyers in this country. By the way, a record number of people are seeking help from the housing charity Shelter, which has reported an all-time high of almost 175,000 calls in the past year, up 10% on the previous year.
Government Members even like to portray the jobs market as wholly positive, but a record number of people are working part time because they cannot find full-time jobs. Nearly 1.5 million people say that they need to find full-time work, but cannot, which is the highest figure since records began.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I have done some work on this subject. Is not a consequence of the number of part-time jobs advertised not just in my constituency but across the country that wages have dropped to today’s level?
Chris Leslie
That is precisely what baffles Government Members so much: they cannot understand the ingratitude of the British people, who somehow seem not to recognise the work that the Government are supposedly doing. The reality is that these are the pressure points—the points of stress and anxiety—faced by so many people up and down this country.
James Morris
It has taken the hon. Gentleman 20-odd minutes to talk about one of the keys to solving the cost of living crisis, which is the creation of new jobs. I presume he welcomes the 11% fall in unemployment in his constituency during the past year, with a 15% fall in youth unemployment. Is that not absolutely key to our recovery and to solving the cost of living crisis that he has taken so long to talk about?
Chris Leslie
The hon. Gentleman, whose name is sometimes mixed up with that of others, should do better than to pick on my constituency of Nottingham East, where unemployment has been a persistent and long-running problem. Of course there have been fluctuations in the past few months, but I must tell him that the number of young people out of work for more than a year on jobseeker’s allowance has rocketed astronomically in this country: it is up 127% since the last general election. The number of long-term unemployed, who have been out of work for two years or more—we must turn our attention to that persistent problem—has gone up 374% since the last general election.
Chris Leslie
I just want the House to hear a few more record-breaking facts about the Prime Minister. Do my hon. Friends remember, from a Budget some time ago, the Chancellor of the Exchequer’s poetic declaration that he would create
“a Britain carried aloft by the march of the makers”?—[Official Report, 23 March 2011; Vol. 525, c. 966.]
We now have a record-breaking trade deficit with the European Union of £6 billion, which is a sign that the rebalancing of our economy has tilted in the wrong direction. The “Guinness Book of Records” is already familiar with the Prime Minister’s achievement in delivering the slowest ever, snail’s pace recovery out of an economic downturn since records began, taking Britain longer to claw our way back than after the great depression. That record-breaking performance is thanks to the drag anchor policies that have held back growth for the past three years.
The record-breaking let-down on growth has of course led to the Prime Minister’s biggest failure of all—more borrowing than any peacetime Government in history. The Prime Minister and the Chancellor have added £430 billion to our national debt in the three years since May 2010, which is more than the last Labour Government did in 13 years and more than any previous Government have done in peacetime. They are record-breaking borrowers, because no Government have ever neglected economic growth quite like this one.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Is it not a fact that the economy will have to grow by 1.5% every quarter to make up for the lack of growth since 2010?
Chris Leslie
Government Members see what they regard as green shoots for our economy. They hope that the public will just forget what has happened for the past three and a half years, but the public have long memories and will remember the harm and anxiety that the cost of living crisis is now causing them. Perhaps those record-breaking extremes from this Prime Minister and Government reflect the new extremism in the Conservative party and the drift away from the centre ground of British politics.
Chris Leslie
I will come to the Liberal Democrats in a moment. I am talking about the Conservative party.
The Conservatives and the Prime Minister like to pretend that they understand the concerns of hard-working people. When they finally realise the strength of public opinion, they will grudgingly come up with a half-baked effort on energy bills, just as they finally caved in with a long overdue cap on payday loans. The trouble is that they just don’t get it, because their hearts aren’t in it. As with the action on payday loans and banking reform in this week alone, why does the Chancellor always have to be pushed into doing the right thing?
The forces of moderation in the Conservative party—I am looking around desperately to see them; perhaps there are a couple of them here—complain that they are seen as the party of the rich and that voters do not trust their motives. Twenty-five of the dwindling number of those anxious Conservative Members of Parliament had a meeting with the Prime Minister to express their concerns, although that was before some of them announced that they were standing down from Parliament.
The moderates—there is one opposite me—are right to worry, because the Prime Minister’s pretence that he represents the middle of British politics has finally stretched beyond belief, as time and again his true instincts shine through. In the lord mayor’s banquet speech a fortnight ago, the mask slipped as the Prime Minister proclaimed the need for permanent austerity and the shrinking of public investment in perpetuity. The true ideological intentions of the Conservatives are there for all to see. Perhaps that is why the party’s Free Enterprise Group published its plans—
Chris Leslie
I will give way to the hon. Gentleman because he is in the Conservative Free Market Group. He wrote the pamphlet. Will he tell us what it was about his pamphlet that hit the headlines?
Kwasi Kwarteng
I have no idea what the hon. Gentleman is talking about. I am very pleased and somewhat flattered that he should be referring to the Free Enterprise Group on the Floor of the House. What was the size of the deficit when his party left government in 2010? What was the absolute size of the deficit and what was the proportion of the deficit—
Chris Leslie
The national debt was about £800 million. The national debt—[Hon. Members: “The deficit.”] I know what the hon. Gentleman said. I could hear what he said. I am giving him the figures. The national debt—[Interruption.] It seems that Government Members do not want to talk about the national debt. The national debt was about £800 million. It is now £1.2 trillion. As Brucie might say, “Higher, higher!”
Mr Deputy Speaker
Order. I will let that go. It is up to the shadow Minister how he wishes to answer the question. It is not for you, Mr Newmark, to waste the House’s time on an irrelevant—[Interruption.] Order. On an irrelevant point of order. If you do not mind, we will have no more.
Chris Leslie
I have not even said a word in response to the point of order. I will do so if the hon. Gentleman will allow me. It just goes to show that the Conservatives will do everything they can to distract attention from the cost of living crisis that is facing this country. As Corporal Jones might have put it, “They don’t like it up ’em!”
The hon. Member for Spelthorne (Kwasi Kwarteng)—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. You also want to speak, Mr Davies. You are constantly on your feet. I want to hear Mr Leslie. I also want to hear what the Government have to say. I will not hear either of them with the amount of time we have taken so far.
Chris Leslie
That is a good point, Mr Deputy Speaker, so I will be brief in talking about the hon. Member for Spelthorne and the Free Enterprise Group. The Free Enterprise Group published plans to slap a 15% increase on essentials such as food and children’s clothes through VAT and to triple the tax on heating bills. A number of hon. Members who are in the Chamber today are members of the Free Enterprise Group. They might be shuffling away from the hon. Member for Spelthorne now.
Chris Leslie
Perhaps the hon. Gentleman wants to account for that plan. Does he agree with charging VAT at 15% on food and children’s clothes and increasing the tax on heating bills—yes or no?
Charlie Elphicke
What was the size of the deficit at the time of the general election in 2010? Was it £150 billion-plus—yes or no?
Chris Leslie
There is no answer to my question from the hon. Gentleman. I have given him the figures for the national debt.
The extremism and rightwards shift in the Conservative party are visible for all to see. As we can tell from the tactics that they are using, the Prime Minister, the Chancellor and all the Conservative Back Benchers are scraping the barnacles off the 1992 election strategy. They have a barely disguised plan to fight the next election in the gutter. Their tactics are visible for all to see.
The Prime Minister once spoke fondly of environmentalism while hugging the huskies. Perhaps I should ask this on a point of order, Mr Deputy Speaker, but is it using unparliamentary language to quote No. 10 when it allegedly said that it wanted to cut out all of the “green crap”? I know that that is appalling language, but it is a quotation from No. 10 Downing street. The Government are certainly cutting some things out: 578 Sure Start children’s centres have been cut, 76 NHS walk-in centres have been cut, 48 accident and emergency departments have been shut, 200 ambulance stations have been axed and 6,000 nurses have gone from the NHS, but 707 food banks have opened. Perhaps Government Members regard that as a success.
Helen Jones (Warrington North) (Lab)
Does my hon. Friend realise that the reason why some of us worry about the proposals of the Free Enterprise Group is that they are all of a piece with what the Tories have done already, including a drop of £35 a week in real wages in my constituency, the imposition of the bedroom tax on the poorest people and, contrary to what they say, increases in council tax for the poorest people? The reason Tory Back Benchers worry about being seen as the party of the rich is that they are the party of the rich.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I am concerned because the debate has been going for 36 minutes already. The time limit on Back-Bench speeches is due to be five minutes. I do not want it to go below that. At this rate, a lot of Members will drop off the list.
Chris Leslie
I want to draw my remarks to a close, so I will not take any more interventions.
In a moment, my hon. Friends will be subjected to the Minister claiming that the Government alone are responsible for the long overdue return of economic growth. What he cannot grasp is that growth is appearing despite his policies, not because of them. As the Nobel prize-winning economist, Paul Krugman, said of the Government’s attitude just the other day,
“It’s like hitting yourself over the head with a baseball bat for years. Then, you stop hitting yourself with the baseball bat and say, ‘See? I feel much better now—hitting myself with a baseball bat was clearly the right thing to do’.”
That sums up their view perfectly. They do not understand that only the return of strong economic growth will tackle the deficit in any meaningful way. Three years on, they still have not cottoned on.
The reason we have a cost of living crisis is that the historic connection between economic growth and household wealth has been severed. Even though it looks like we are finally seeing some growth in some parts of the economy, that growth is not being shared fairly. Indeed, GDP per capita remains flat. I pay tribute to the companies and households that have managed to keep it together despite the Chancellor’s inaction. What we need now is help for those who are trying to do their best—the people who never complain, who never say that they should be at the front of the queue, who go to work and who manage as best they can. Those people need real help with their energy bills and child care costs. They need us to tackle low pay and to freeze business rates for small firms.
The challenge for the autumn statement is to take action now on the cost of living, not to use sleight of hand to pile more burdens on the taxpayer. We need long-term reforms that ensure that there is a balanced recovery that is built to last, not short-term, knee-jerk flip-flopping. We need fairness for the many, not tax cuts for the few. The Government are out of touch with the mood of the public—the wealthy elite are looking after the wealthy elite and are all in it together. They are timid in the face of excessive profiteering from big energy companies, while the rest get broken promises on the economy and the deficit from a Government who are lurching to the right and reverting to type. The British people cannot afford this Government any longer. Britain deserves better.
Chris Leslie
The Minister, who worked for Deutsche Bank before the general election, might wish to explain and answer a specific question on borrowing, the deficit and national debt. Can he tell the House how much the Chancellor has borrowed and added to the national debt since the last general election? What is that amount of money in cash terms?
Sajid Javid
We know that if we had continued the plans recommended by the Labour party, the country would be borrowing a lot more. According to the independent Institute for Fiscal Studies, Labour plans to borrow at least £200 billion more, which would push up borrowing costs for many hard-working families up and down the country.
Sajid Javid
My hon. Friend raises a good point, but he will know that I am not in the best position to answer his question in detail. Perhaps the shadow Chief Secretary will rise to his feet to do so. I understand that he is a Labour and Co-operative Member and receives money from the Co-op. I am happy to give way if he would like to answer the question.
Chris Leslie
I am proud to be a Co-operative Member and a supporter of mutuality—I thought Conservative Members supported that, too. Will the Minister tell us the number of occasions on which his Treasury had meetings to discuss the Co-op Verde deal and the takeover of those Lloyds branches? How many times did Treasury Ministers have those meetings after the general election? Can he give us that fact now?
Sajid Javid
I am sure that question will be looked at further during the Co-op inquiry. The number and nature of meetings between the Leader of the Opposition, the shadow Chancellor and Co-op representatives will also be looked at—[Interruption.]
Richard Fuller
My hon. Friend is absolutely right to point out the chasm between reality and certain things promised by Labour. There is also an absence of a basic understanding of economics. It is nice to see the shadow Chief Secretary in his place again. It was not clear from his opening speech whether he understood the difference between deficit and debt, which is quite an important thing to know for someone who wishes one day to hold an important Treasury position.
Richard Fuller
I am very happy to give way. I recognise that the shadow Chief Secretary has been for his economic tutorial, so perhaps he can enlighten us.
Chris Leslie
That is very funny and droll, but does the hon. Gentleman know that borrowing accumulates and forms at the stock of national debt? Has he figured that much out? If he has, will he tell us whether it is true that, during his time in Parliament, his party has presided over the accumulation of £430 billion of borrowing? Is that not right?
Richard Fuller
Boy, has the hon. Gentleman picked the wrong person with whom to have an argument about debt and the Labour party’s record on debt. Let me enlighten the hon. Gentleman on that record. He will never be Chancellor of the Exchequer, but were he ever to achieve that position—
Richard Fuller
I am answering the question. I know it is hard for the hon. Gentleman to follow the argument, but I will put it in bite-sized pieces so that he can keep up. It is important for a Chancellor of the Exchequer to look at not just the indebtedness of the Government, but at the way in which the entire economy is accumulating debt, which is one of the things that the previous Labour Government signally failed to understand.
If we look at the United Kingdom’s debt in the mid-1990s and take into consideration Government debt, household debt and corporate debt, we will see that that total indebtedness was, like that of many other OECD countries, two times the size of our national economy. Over the intervening 15 years—which in this country were spent mostly under a Labour Government—other OECD countries saw their total debt go from about two times to about three times the size of their economy, and that includes all of the impact of the financial crisis. One country in the G8—and only one—increased its total debt from two times to five times the size of its economy, and that was the United Kingdom under the previous Labour Government. It is the consequence of that pervasive debt in the economy that is the real cost of living crisis in this country.
Every family knows that when they have significant debts that they cannot avoid and that they have to pay, their monthly income will be less because they will have to pay back the debt of the past. They are paying the consequences of the Labour party’s failure when in office.
Oral Answers to Questions
Chris Leslie Excerpts(10 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Order. That has nothing to do with the responsibilities of the Chancellor. [Interruption.] Order! In the name of respect for parliamentary process and the traditions of the House, I ask Ministers not to behave in that way. We deserve better.
Chris Leslie (Nottingham East) (Lab/Co-op)
I shall return to the actual question of duties. Has the Chancellor found the £750 million that is needed to pay for the freeze? At the party conferences, he also promised to spend a further £700 million on school meals, a further £300 million on his Work programme, and a further £600 million on a marriage allowance. That is £2.3 billion of promises. Let us be clear about this. Is the Chancellor going to raise taxes or cut services to pay for those promises, or is he planning simply to borrow even more? Which is it?
Mr Osborne
What a question from a Labour Front- Bench team that wants to spend £27 billion more, and to borrow every penny of it. If this is the hon. Gentleman’s debut performance as shadow Chief Secretary, I am afraid that he will have to do a lot better. His job should be to control the promises that he makes. As for our side, we are paying for the commitments that we are making to the hard-working people of this country.
Mr Osborne
I will tell the right hon. Gentleman how: by sorting out the mess that he created.
Chris Leslie
Despite all that hot air, it seems that there are still £2.3 billion of unfunded promises. Would it not be far easier if all those promises were fully costed and funded and independently checked by the Office for Budget Responsibility, just to ensure that the Chancellor’s sums add up?
We have proposed that all the main political parties should be able to submit tax and spending plans to the OBR ahead of the election manifestos. Surely we can all agree that—as the Chair of the Treasury Committee has suggested—an independent audit by the OBR for all the main political parties would be good for the democratic process, so will the Chancellor now join us in a cross-party consensus on that?
Mr Osborne
As to a cross-party consensus, I remember when I was speaking from the Opposition Dispatch Box and the hon. Gentleman’s party was in government that it opposed the creation of the OBR—opposed it time and again. I believe it is important that we preserve the independence and integrity of this new body, which is working well but is entrusted with the very important task of providing the economic forecasts for whoever is in government. That should be its primary purpose and the changes to the primary law that the hon. Gentleman is proposing are not very practical.
National Insurance Contributions Bill
Chris Leslie Excerpts(10 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Gauke
My hon. Friend makes a good point. I want to turn to the employers’ national insurance contributions holiday, because I suspect it will feature in the speeches of Opposition Members. They will make the point that take-up was not as high as we had anticipated. [Interruption.] Let me give the numbers: 26,000 employers and 90,000 employees have benefited from it. Our expectation was that take-up would be much higher. [Hon. Members: “How much?”] Don’t worry; I am going to set it out.
We said that 400,000 businesses and 800,000 employees would benefit from the scheme. I think that the reason why that did not happen is closely aligned to what my hon. Friend has just pointed out: a scheme that was, essentially, quite targeted and required businesses to apply—even though we worked hard to try to make the application process as simple as possible—simply meant that fewer businesses applied for it than we had anticipated. Take-up was lower than expected and there are lessons to be learned from that. We should be open about that.
We need a system that is simple and that can be applied easily. Under the new proposal, no application process is needed as such. Businesses will receive the benefit of the employment allowance simply by using up-to-date payroll, and the introduction of real-time information makes that much easier to apply. We believe that this is a much-improved policy. It contrasts with the employers’ NICs holiday, because that was a targeted regime. It also contrasts both with the policy advocated by Labour in its five-point plan, which was even more targeted, and with the policy we heard about yesterday on the living wage. Complicated, temporary schemes requiring applications are likely to have disappointing levels of take-up, whereas permanent schemes automated through the payroll system will, we believe, apply much better.
Chris Leslie
I am grateful to the Exchequer Secretary and I also welcome the new additions to the Government Front Bench. He will remember that we both sat on the National Insurance Contributions Bill Committee—I think it was one of his first Bills as a brand new Treasury Minister—and Labour said at the time that the proposal was very complicated. We said that he needed to be very careful with the convoluted regional design that he put in place and that the scheme would not get the anticipated take-up, which evidently it did not. It is sometimes invidious to say these things, but we told you so. Will the Exchequer Secretary go a little bit further, accept that we were right and he was wrong, and be big enough to say sorry?
Mr Gauke
If I remember correctly, that was in autumn 2010, when the next leader of the Labour party was saying that 1 million jobs would go missing. The hon. Gentleman says that the NICs holiday was too complicated. One of the lessons that can be learned from the NICs holiday is that the simpler the scheme, the better. Perhaps the Labour party has not been listening to him because since that debate, it has proposed two NICs schemes, both of which are more complicated than the one that we had in place. If he is making the case for keeping NICs schemes simple, perhaps he ought to have a word with his party leader.
Living Standards
Chris Leslie Excerpts(10 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Greg Clark
My hon. Friend makes a very good point. Of course, it was the ordinary working people who were struggling to get by who were penalised by that change. We have not had an apology for that. [Interruption.] The hon. Member for Nottingham East (Chris Leslie) talks about raising VAT. It would be interesting to hear from him whether the Labour party would reverse the rise in VAT.
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the right hon. Gentleman explain how much the rise in VAT has cost the typical family?
Greg Clark
It is 20 months before the election and the Labour party cannot say whether it would keep or reverse the rise in VAT.
The Labour party established the beer duty escalator, the council tax escalator, the fuel duty escalator and the biggest escalator of them all—the deficit escalator. The deficit trebled in its last two terms in office and that all has to be repaid by the hard-working people of this country. The facts are stark: the deficit that we inherited equates to about £6,000 per household every year. Of course it is painful to find an average of £6,000 per household in revenues and savings, but that is the effect of the previous Government’s profligacy.
Gavin Barwell
I cannot give way again.
There is also the crucial issue of wages. I have talked about the national minimum wage already, and there were some interesting reports in the media recently about the Government perhaps looking at what they can do on the minimum wage. As a Conservative, I would worry very much about a uniform increase, which might price some people out of the labour market. However, there is a case for asking whether larger companies or those that are making healthy profits should not be paying their staff more, because at the moment we are subsidising some employers to pay low wages, through the tax credit system that the previous Government introduced. I very much hope that the Government will look at how we tackle the issue of quality of life for people on low pay from both ends, by raising the personal allowance, so that we do not tax them so much, but also seeing whether we can ensure that they are paid a fair wage for the hard work they do.
One Opposition Member who talked about this issue implied that it was just Labour councils that are passionate about a living wage. My local authority, Conservative-controlled Croydon council, pays all its staff the London living wage, while the Mayor of London has guaranteed that that will apply to all staff working for the Greater London authority as well.
Gavin Barwell
I am afraid I cannot give way again.
That is a big issue, particularly in London and the south-east, where pay costs are highest.
I also want to raise with my right hon. Friend the Financial Secretary to the Treasury, who gave an incredibly thoughtful speech, the issue of public sector pay. We have been quite right to restrict increases in public sector pay, because high increases would simply have meant more joblessness, but there is a limit to how long that policy can be continued. I hope that as wages increase in the wider economy, those who work in the public sector are not left out of that process.
Finally, if we want a high-wage economy, the long-term solution is to ensure that we have people with high skills who can command high wages in our globalised labour market. That is why I am so proud to work as the Parliamentary Private Secretary to the Secretary of State for Education, whose work, building on what the former Prime Minister and Lord Adonis achieved, is transforming standards of education in our country. Ultimately, if young people in Croydon Central want to command high wages in our economy, they need the qualifications and skills that will enable them to secure those jobs. We should not pretend that there is not a problem, but the Government are doing much to deal with it, and I hope they will do more still.
Chris Leslie (Nottingham East) (Lab/Co-op)
First, I commend my right hon. and hon. Friends for holding the Government to account on the cost of living crisis. My hon. Friend the Member for West Dunbartonshire (Gemma Doyle) made a powerful speech about the cases that Opposition Members see in our constituencies, with hard-pressed families struggling to make ends meet. She talked about not just the crisis that they face but the difficulty of even getting advice and support, including from the citizens advice bureau, as local authorities are scaling back their grants to voluntary organisations.
The crisis is exceptionally significant, so it is sad that there has been scant interest in the debate among Conservative Members and zero interest among Liberal Democrat Members, who have been completely absent from the debate for the past three hours. What better way could there be for hon. Members to see the complacency and lack of interest among Government Members in one of the most pressing and significant issues for our constituents?
We have had not just inaction from the Government for the past three years but policies that are actively making the cost of living worse for most people. Month after month, year after year, the Prime Minister and the Chancellor have presided over prices rising faster than wages. No other Prime Minister since records began has come close to the disaster in family living standards that the current Prime Minister and Chancellor have overseen. For 37 of the Prime Minister’s 38 months in office, real wages have shrunk in value. The pound in the pocket, the pound that someone has earned, does not go as far as it used to—it is diminished in value and worth less than it was before. No wonder people are working longer hours just to stand still.
Three years of suspended animation have created a treadmill economy in which millions are struggling just to stay where they are. My hon. Friends the Members for Wigan (Lisa Nandy) and for Inverclyde (Mr McKenzie) made that point exceptionally coherently. To listen to Government Members, however—those who took the trouble to take part this afternoon, possibly because reshuffle season is coming up—one would think that the way things are going is their idea of economic success.
Average hourly wages have fallen by 5.5% since the middle of 2010, but millionaires have never had it so good. Living standards for most people are falling, not rising, and as the Financial Times has pointed out, real wages have dropped back to their 2004 level.
Gavin Barwell
The hon. Gentleman said that millionaires had never had it so good. Will he remind us what the marginal rate of tax on millionaires was under the Labour Government, and how that compares with today?
Chris Leslie
For a moment during the hon. Gentleman’s speech earlier, I thought he was a little embarrassed about the cut in the top rate of tax from 50p to 45p, which happened in April. I was on the verge of intervening on him to ask whether he regretted voting to give priority to such a cut at a time when living standards are under the most stress. Does he regret doing that? Does he think it was the wrong thing to do?
Chris Leslie
I will give way to the hon. Gentleman one more time if he wants to say sorry to the House.
Gavin Barwell
The whole House will have noted that the hon. Gentleman is unable to answer the question, but I will set a good example and answer his question. I do not think very wealthy people need a tax cut in terms of living standards, but I think that when attracting wealthy people to locate to this country, high marginal rates of tax are a bad idea, and therefore I voted for change.
Chris Leslie
I said it was reshuffle season. We nearly got an apology; the hon. Gentleman does not think rich people need that tax cut, but he voted to give it to them anyway because he is that sort of generous guy. I say to him, and to other Members, that the Office for Budget Responsibility, which the Government created, predicts that by the next general election in 2015, annual incomes will be £1,520 lower than they were in 2010 in real terms. That is lower wages. Just think about that statistic for a moment. Five years of Conservative and Liberal Democrat administration will have left a legacy for working people in which they are actually worse off, and significantly so.
Chris Leslie
I will give the hon. Gentleman another little statistic. If we add up the five years of the falling wages predicted by the OBR, a typical working person will have lost an amazing £6,660. Imagine the difference that could make to ordinary working people. It is the equivalent of a year and a half’s grocery bill for the average family; they could even have bought a small car for that amount. Those diminishing wages are in addition to the tax and benefit changes since 2010, which are costing families an average of £891 this year.
Chris Leslie
I would like to make a little progress in the time I have left. That is what people have lost thanks to the Prime Minister. That is the scale of the cost of living crisis, and those are the costs of the Government’s failed economic policies.
Mr Russell Brown
Those sums of money would make a great difference to households, but it is not only that. It is about what those sums when multiplied would do in the economy. We are starving the economy of much-needed money to make it vibrant.
Chris Leslie
Of course my hon. Friend is right, and he understands that having that level of activity in the economy would have helped us get a better growth rate than we have had under the flatlining record of Government Members. Think of the different course the Government could have chosen. They could have tackled soaring energy bills with tougher regulation to pass on wholesale price cuts to ordinary customers, as my hon. Friend the Member for East Lothian (Fiona O’Donnell) suggested. They could tackle rip-off rail fares for commuters with an enforceable cap on train fare rises, they could protect tax credits for working people by reversing the millionaires tax cut, and they could cut income taxes with a new 10p starting rate to be paid for by a mansion tax on properties worth more than £2 million. However, they will not go that extra mile. Why? Because they do not understand the pressures that household budgets are under. After all, how could they? Government Members think that everything in the garden is rosy. They are either ignorant of the pressures on most households, or in their complacency they are ignoring the issue.
After three wasted years of a flatling economy, it is about time we had some economic growth. This growth, however, comes despite the Government’s economic policies, not because of them, and as everybody knows, growth is still falling short of what we ought to be seeing by now. Deficit reduction has stalled because the Government are borrowing more to pay for the costs of economic failure.
Chris Leslie
No, I will not give way but I will ask the hon. Gentleman what sort of economic recovery this is. So far, it has all the hallmarks of a recovery for the few, not the many. It is no wonder that the Prime Minister has abandoned the fiction that we are “all in this together.” The lucky minority of the already wealthy are doing very well thank you very much, but that is not much solace for everyone else who is working harder just to stand still. The Government have failed spectacularly to put in place conditions for a balanced recovery, and instead have fuelled a lopsided escalation in the cost of living, without a simultaneous focus on capacity or affordability, as my hon. Friend the Member for Coventry North West (Mr Robinson) said.
The Chancellor needs to act now to guard against escalating prices, inflation and interest rates, but he is not building broad-based growth in every region. He is not focusing on long-term, sustainable investment; he is putting short-term, debt-fuelled, business-as-usual economics first. His housing policy is all demand and no supply.
Business investment is thwarted by banks that are still not serving the real economy. How nice it is for bankers who can stave off their bonuses until the new tax year kicks in and pocket the Chancellor’s generous tax cut. No wonder there was a record-breaking bonus bonanza—bonuses soared by billions at the exact moment the Chancellor cut that 50p rate.
It is not looking like a recovery for ordinary people. It is a recovery for the rich, an unbalanced and narrow recovery, and a recovery for millionaires but not working millions. Times are tough, and, for most people, life is getting harder, with the cost of child care, the daily commute, the family shop, school uniform costs, the rent and the mortgage. People are taking on more hours if they can or, worse, joining the rise of the zero-hours economy. No wonder people are driven increasingly to payday lenders and extortionate credit. As my hon. Friends will have seen in the news yesterday, Wonga is lending as much to consumers as some of our major high street banks, such as Nationwide. Does that not say it all? It is not a recovery for those struggling to make ends meet; it is the Wonga recovery, benefiting those at the top at the expense of the majority.
Those are the consequences that flow from three years of economic stagnation. The cost-of-living crisis is felt in middle and lower-income households across the country. Enough is enough. We need action now to help ordinary taxpayers, commuters and householders to fight back against those rising prices. Ensuring that wages rise faster than prices should be a central objective for the Government. The Prime Minister and the Chancellor are out of touch. Working people up and down the country are out of pocket as a result. We cannot go on with this cost-of-living crisis year after year. Every day it becomes clearer, especially to ordinary working people in our constituencies, that we cannot afford this Government.
Money Transfer Accounts
Chris Leslie Excerpts(10 years, 10 months ago)
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Chris Leslie (Nottingham East) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Bayley. I join my hon. Friends in congratulating my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) on securing this important and very timely debate: we are coming up to a period when the clock is ticking and those who might be affected are facing the prospect of significant anxiety and a change in the circumstances. It is an incredibly important point that she and others who have participated, on a cross-party basis, have been making.
Given the realities of internationalism these days and the crises that some families can encounter, the ability for people to support their family is part and parcel of the warp and weft of much of society. The role that legitimate small and medium-sized remittance and money transfer companies play should not be ignored; it is absolutely crucial. However, it is no surprise, given what has been happening in financial services in the past couple of years, that a lot of the agenda of the anti-money laundering reforms to deal with particular concerns is beginning now to bite. As my hon. Friend the Member for Cardiff West (Kevin Brennan) commented, it is more than ironic that it tends to be the smaller firms that end up being punished most of all, when the anti-money laundering reforms that we require and some of the changes need to be made particularly by the larger organisations. They are the ones where, in my view, there is a significant risk.
My hon. Friend the Member for Ilford South (Mike Gapes) made a pertinent point in the speech preceding mine about the fact that we should not see this only as a commercial matter—we should not take a laissez-faire approach and let the market decide—because ultimately, regulators and public policy are very much part and parcel of what is happening here. It is also not only a UK question, but a global matter, which requires leadership from UK Government authorities to do something now to sort out the problem.
Of course, it is vital that strong steps be taken to deal with the risks of money laundering. Nobody is arguing against that, but we cannot turn a blind eye to the impact that crude, blanket attitudes to these issues might have on real lives and businesses. We do not want to find ourselves with perverse consequences occurring in the endeavour to solve a very real problem. As my hon. Friend the Member for Bethnal Green and Bow said, particularly in this month of Ramadan, when so many of my constituents and hers are making charitable donations—small sums of money—and sending them abroad, it is a good time to be thinking about the solution.
The points that many hon. Members have made about Somalia and Somaliland are very relevant. There is the need to ensure that this is not seen only as a Treasury concern, but as one that touches on policy questions in the Foreign and Commonwealth Office and the Department for International Development. We need to see all those branches of Government working together in co-ordination on the issue. My hon. Friend the Member for Rochdale (Simon Danczuk) made a number of strong points, particularly on the dangers of ending up with a less competitive market here, especially where fees and exchange rates would be higher for the consumer and where access to those services is potentially at risk.
I would be the last person to voice concern for some of the big banks on this one. They can and should do much more, but it would not be right simply to pin this on one banking institution, which might be at the end of a queue on this issue. However, I would like the Minister to say what conversations he has been having with Barclays bank, in particular, about the imminent decision. To me, it seems not only that a long-term problem must be resolved, but that we are facing an immediate short-term crisis. Will the Minister address the discussions with Barclays, in particular, about the grace period and the extent to which there needs to be a different time frame to the approach being taken?
We have to focus on solutions now, and it is important that we give the Minister ample time to address those, so that we can cross-examine him and scrutinise the Government’s attitude. I just want to raise a number of points with him. Does he agree that it should be incumbent on the banks, as well as the regulators, to tell the industry—those small firms—what due diligence, improvements and audit checks they feel are necessary to overcome some of the hurdles and concerns? They would be the first to want to put beyond doubt any concerns that might exist about them.
As well as the Minister saying whether he has been able to talk to Barclays, will he address the questions that go beyond the United Kingdom? Clearly, the United States has a slightly different regulatory attitude, which is impinging very much on the larger banks and Barclays in particular. Therefore, we need to know what conversations have happened so far and ought to be happening with the American regulators and with the US Treasury Department and the State Department. Can we have some co-ordination with those other authorities? We do not want to see money laundering risks any more than the Americans do, but they will also be facing their own problems internally in the United States on some of these questions, because they are also a diverse society and a diverse community. Can we align ourselves to ensure not only that we have a gold standard of anti-money laundering practices, but that we do not throw the baby out with the bathwater?
What conversations has the Minister had with the Department for International Development and the Financial Conduct Authority? The FCA is a brand-new regulator, which has been operating for several months. It has a consumer remit and a competition remit. It seems to me that the FCA needs to be firmly involved in the issue and that it may have some expertise to bring to bear.
Suggested solutions have involved guarantees from the state or some sort of underwriting. Should the state-owned banks take that on their shoulders? The Bank of England has been mentioned perhaps as a way to do that in the short term. I am a little wary about the taxpayer ending up always being the one who must bear the burden of the solution; but clearly, as my hon. Friend the Member for Bethnal Green and Bow pointed out, the issue cuts across our international aid and development policies in another bit of the Government. We do not want to see Somalia, for example, retrench in development terms because of something that has been happening in another branch of the Government. I wonder what the Minister’s attitude is to those aspects and, in particular, to whether some aid agencies might be part and parcel of a solution in the interim, until we get some of the regulatory issues ironed out.
Can we have a round-table discussion with the whole sector and particularly with small and medium-sized businesses, involving not just the regulators but the Treasury, the Department for International Development and the FCO, and can we have that quickly? We are coming up to the summer holidays, but that is no excuse. The deadline is expiring very soon, and all hon. Members will want action taken, particularly on the issues that my hon. Friends the Members for Brent North (Barry Gardiner) and for Cardiff South and Penarth (Stephen Doughty) and others have talked about in their contributions.
As I said, I want to give the Minister time to respond, so that we can question him on policy. In summary, this cannot just be left as a commercial decision. We cannot say, “We are walking away from this. We don’t care about it. This is just one company making a particular call on this matter.” It is not just a market question. There is a downstream consequence from public policy, and it is therefore incumbent on us to get public policy right—to go the extra mile and ensure that we spend the time and effort necessary to find a solution. I just do not believe that having strong anti-money laundering policies is anathema to having proper facilities for diaspora communities to provide decent family support on an international basis. That is the sort of society that we need to support at this time.