Women and the Cost of Living

Jim Cunningham Excerpts

Tuesday 19th November 2013 Commons Chamber

[Gloria De Piero]

There have never been more women saying that they are working part time and cannot get the hours to work full time. The female employment rate is lower than it was under Labour before the crash.

[Mr Jim Cunningham (Coventry South) (Lab)]

Does my hon. Friend agree that there are more women than ever before on low wages, more women than ever before who cannot get jobs, and more women than ever before who have to deal with the high cost of living?

[Gloria De Piero]

My hon. Friend is absolutely right. I will discuss some of the measures that a Labour Government would introduce.

Interest Rate Swap Derivatives

Jim Cunningham Excerpts

Thursday 24th October 2013 Commons Chamber

[Guto Bebb]

My hon. Friend makes an important point, which those on the Front Bench need to take seriously. These businesses have been unable to invest because they simply do not know whether they are financially feasible. Time and again, I have heard stories of people with investment plans who, rather than implementing them and growing their businesses, have been closing elements of their businesses, making staff redundant and just trying to survive.

[Mr Jim Cunningham (Coventry South) (Lab)]

The hon. Gentleman mentioned the situation facing small businesses. Does he agree that some small companies are afraid to challenge their banks because their loans could be cancelled?

[Guto Bebb]

That concern has certainly been raised, but I keep receiving assurances from the banks that that is not the case. I want to take those assurances at face value and would still recommend that anybody who has been sold one of these products should undoubtedly go and talk to their banks. If the banks are unsympathetic, they should come and talk to their MPs, because we can and should intervene.

Money Transfer Accounts

Jim Cunningham Excerpts

Wednesday 17th July 2013 Westminster Hall

[Simon Danczuk (Rochdale) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bayley. I also place on record my appreciation of my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali), not only for securing the debate, but for championing the cause—raising awareness, expressing concern and bringing MPs of all political parties together to ensure that the issue reaches a far wider audience. I genuinely appreciate that. She said much about this banking policy and how it will affect people in Somalia and other countries, and I want to concentrate my comments on the impact in my constituency and similar towns in the United Kingdom.

As long ago as November last year, I wrote to HSBC about one of my constituents, Mr Shamshad Ali—I have the letter with me. He has a money service business called Sterling Currency Exchange Ltd and is the general secretary of the remittance association of the United Kingdom. HSBC decided unilaterally to close his bank account, because it no longer wished to operate in the sector. I worked with Shamshad to get the bank to change its mind, but to no avail. He and I then worked together to find an account with another bank, again to no avail. As Shamshad pointed out, we tried the Royal Bank of Scotland and NatWest, both funded through the public purse and in receipt of much public money, but they too refused him. He now has to operate his business in conjunction with another business, which still has an account with Barclays—but time is running out, and that might well end as well.

The Government need to know about the serious consequences, which include the closure of good businesses, as my hon. Friend pointed out, at the cost of many thousands of jobs throughout the United Kingdom and certainly of a number of jobs in Rochdale. There is also a direct impact on people in my community. Migrant workers, many of them professionals, many on whom the Rochdale economy relies, depend on those independent businesses to be able to send money back to their country of origin. Those workers are being turned off working in towns such as Rochdale, which concerns me.

[Mr Jim Cunningham (Coventry South) (Lab)]

I thank my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) for securing the debate and I thank my hon. Friend the Member for Rochdale (Simon Danczuk) for giving way. I, too, have many people from Somalia and other parts of the world living in my constituency. The important thing, which we often learn, is that the family back home rely on the money being sent to them to survive. If they are not allowed to survive in that way, they go underground and are driven to other means. The sooner the Minister takes the matter up and talks to the banks in this country, the better, because not only are people in Somalia affected, but Somalians and other people who have businesses in this country, through transactions and jobs.

[Simon Danczuk]

That is exactly the point that I am leading on to. People in my community send money back to their families—in this instance, in my constituency, to Pakistan, Kashmir and Bangladesh. At this important time of Ramadan, as my hon. Friend the Member for Bethnal Green and Bow pointed out, people rely on the businesses that we are discussing to help them send charitable contributions to the countries from which they originate. We should not underestimate that. Friends and families out in other countries may be exceptionally poor and reliant on such charitable donations, in particular at this important time of year of Ramadan, to help them to celebrate Eid and to buy new clothes, so that they can have a reasonable time at a key point in the Islamic calendar. As a result of the changes, my constituents, instead of being able to use a good, local and independent firm, which complies with all the regulations, will have to use one of the banks, Western Union or MoneyGram.

Corporate Structures and Financial Crime

Jim Cunningham Excerpts

Thursday 4th July 2013 Commons Chamber

[John Mann]

The hon. Lady makes a valuable point about the importance of compliance and how that must take place at senior level. Everyone at senior level in a bank must take responsibility and be held accountable for the structures within it.

This is not simply a banking problem. Money laundering and some aspects of criminality are the biggest problems in terms of the volume of money involved, but there is also an issue of percentages and actuality of individual companies. Banks are not setting up opaque structures to create criminality; they are turning a blind eye while their structures facilitate criminality. Others are using weaknesses in corporate structure to create criminality.

Of the half a million companies that struck themselves off the UK corporate register in 2010, 40% had never filled in accounts with Companies House, and 33% had paid no corporation tax that year. If large numbers of companies are not submitting accounts and returns to Companies House, we have a fundamental problem. Our problem in dealing with this issue is demonstrated, rather ironically, if we look at the two Front Benches. The hon. Members present are excellently and diligently representing their parties, but one notes that they come from different Departments. That is part of the problem when it comes to Companies House, and I hope the Minister will clarify—we hope on behalf of the Government —who is responsible for Companies House and who should be holding it to account in Parliament.

Companies House is underfunded, under-resourced and perhaps under-specialised, and such opaqueness in our country has grown dramatically, allowing the creation of opaque corporate entities. That encourages criminality and discourages transparency for the general public, decision makers in Parliament and others.

On the impact of such actions, valid estimates indicate that Africa is losing twice as much in tax it cannot collect because of opaque corporate structures as it gets in development aid. In other words, if we cracked this problem, the amount of development aid required from the west to Africa would diminish dramatically because the tax base itself would be generating income, which is, of course, a key component of a vibrant democracy.

[Mr Jim Cunningham (Coventry South) (Lab)]

I have never understood why successive British Governments have not tightened up in this area. I understand that there needs to be international agreement, but at least in America there would be some accountability; we only have to look at Lehman Brothers and others to see that. I do not understand why we allow tax havens not too far from these shores to exist.

[John Mann]

Let me come on to that. In Davos in 2010, the Prime Minister said that he wished to “shine a light” on corporate ownership. In the Lough Erne declaration, the calls were for more transparency, more international co-operation and stopping firms shifting profits to avoid tax.

What needs to be done by Government in these areas? On transparency, it is essential that the Government follow up their G8 commitment and create a UK register of beneficial owners, making things transparent and traceable and deterring people from using this country for illegal purposes. All major countries—not least those in the G8 and the EU—need to collaborate. I note that Italy is already suggesting that it will not collaborate, and we need to tackle those countries that are suggesting that they will not co-operate even with the modest proposals emanating from the G8.

We need effective enforcement with, as we have heard, clear sanctions for law breaking; we need criminal sanctions; we need the collecting of fines. On the corporate structure, I suggest that raising the cost of setting up a company from the current £15 and hypoth—[Interruption]—and using that money explicitly and exclusively to ensure better regulation and policing. Hon. Members know which word I mean but I will not try to spit it out; we might be here for the rest of the afternoon. Hypothecating is the word. [Hon. Members: “Hear, hear.”]

Firms that have not filed up-to-date tax returns need much greater sanction for not doing so. The fact that so many choose not to do so and get away with it is a fundamental and major weakness. This is where this House needs to put its beady eye on what is going on at Companies House. Is it properly resourced? Are its powers great enough? Is it doing the job properly? I would suggest that out of those, at least two must be at issue; perhaps all three. We must get on top of this in the near future.

The question of tax liabilities and of how much liability and responsibility are needed for directors in relation to the law needs to be reconsidered. As a specific micro-proposal that I think could have a huge impact, it should be illegal for anyone to set up a bank account outside this country without informing HMRC and Companies House first. In other words, if people are using British corporate structure, we should stop letting them set up overseas operation without anybody knowing what is going on.

We need legislation relating to the Crown dependencies. I have made this point on many occasions and I will make it again briefly now. It is unacceptable that our taxpayers provide defence and legal structures for those countries when they have an opaqueness that, whatever tax system and regime they end up having, does not allow anyone to know what is going on. The football industry in this country provides a good example. In vast numbers of football clubs nobody, including the spectators and those who are owed money when the clubs go bust, has a clue who owns what bit and where and how. These major institutions are an example of how deep the problem has become and how we have failed to deal with it. We need to look to our regulations, such as those being introduced on banking, and think about how they can be applied to UK dependencies. Leaving them as they are is simply unacceptable, and it is becoming increasingly counter-productive for this country.

--- Later in debate ---

[Keith Vaz (Leicester East) (Lab)]

It is a pleasure to follow the hon. Member for Daventry (Chris Heaton-Harris) and I associate myself with his remarks about my hon. Friend the Member for Bassetlaw (John Mann), who is an assiduous campaigner on this and so many other issues.

My small contribution will be about the way in which proceeds of crime have found their way into the financial sector, and I will seek assurances from the Minister that the Government are doing everything they can to deal with the issue of proceeds of crime within our financial structures. Some £675 million is owed by 178 criminals who were each ordered to pay back £1 million or more after their conviction. Prosecutors are unable to force repayment by 45 offenders whose debts to the taxpayer total £225 million. Clearly, the law as currently written and the existing structures are not sufficiently able to deal with the way in which these proceeds are kept by the Mr Bigs who, having committed horrendous crimes, are able to continue with their life after prison and are not asked to pay back what they owe.

I am glad that the Government are proposing changes to the law. I recently had a letter from both the Metropolitan Police Commissioner and the Director of Public Prosecutions about a wish to examine default sentences, changing the definition of “confiscation” in the Proceeds of Crime Act 2002, amending the Bail Act 1976 to prevent absconding—once somebody is out of prison, there is no way in which they can be made to pay this money—implementing the EU Council framework decisions on the execution of orders freezing property or evidence, and making sure that agencies work together so that if someone has committed an offence, they do not rush out of the country because the Passport Office has given them a passport.

On money laundering, as the House knows, 85% of drugs profits are earned by distributors in the United States or Europe. The current estimate is that global drugs profits are £380 billion, the majority of which enters the financial system. Antonio Maria Costa, the former head of the UN Office on Drugs and Crime, has said:

“I cannot think of one bank in the world that has not been penetrated by mafia money.”

Banks with British bases, such as Coutts and HSBC, have been found guilty of money laundering.

As the Home Affairs Committee said recently, until these companies hear the rattling of handcuffs in their boardrooms, they will not take seriously the issue of drugs money within our financial systems. Indeed, we recommended new legislation to extend the personal criminal liability of those who hold the most senior positions in banks and are found to have been involved in money laundering. As my hon. Friend the Member for Bassetlaw said, it is hoped that the new Financial Conduct Authority will be much tougher than the Financial Services Authority, which in our view did not do enough to deal with the issue.

Yesterday the Home Secretary reclassified khat as a class C drug because she believes that sales of it have entered our financial systems and fund Islamic extremist groups such as al-Shabaab. In January the Advisory Council on the Misuse of Drugs said there was “insufficient evidence” that khat caused health problems. The panel found “no evidence” that khat, made from the leaves and shoots of a shrub cultivated in the horn of Africa and the Arabian peninsula, was directly linked with serious or organised crime. The problem is that once these drugs are banned, they go underground and the drugs barons are able to launder even more money.

[Mr Jim Cunningham]

The hon. Member for Daventry (Chris Heaton-Harris) has raised the issue of Coventry football club. I do not want to go too far down that road, except to say that the parent company should be investigated. It set up two sub-companies, one of which went into administration and was then given by the administrator to the other company. It is a ludicrous situation for the people of Coventry to find themselves in: the fans are up in arms, they do not know where they are going to play next season and all sorts of threats are being made.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Before the right hon. Member for Leicester East (Keith Vaz) responds to that point, I remind Mr Cunningham that the courtesies of the House indicate that he should not enter a debate at the end and immediately intervene, because he has not been present at any stage during the debate.

[Mr Cunningham]

rose—

[Madam Deputy Speaker]

We will not discuss this now, but I am sure Mr Cunningham will remember it for the future.

Recession (Standards of Living)

Jim Cunningham Excerpts

Tuesday 2nd July 2013 Westminster Hall

[Mr Jim Cunningham (Coventry South) (Lab)]

I think this is the first time you have chaired an Adjournment debate that I have secured, Mr Walker. I am pleased to have been able to do so. As politicians, it is easy to find ourselves speaking about statistics and general trends, but it is important that we take stock and reflect on what it is like to live in our country. What sort of lives are people living? What sort of hardships are they suffering? We have to put ourselves in the position of the poorest and most vulnerable in our society to remind ourselves how much more work needs to be done. We should judge our society on how we treat the worst-off, not on how we treat our millionaires, and we are failing that test.

A key issue that I am keen to stress is that monthly expenses have been bloated by debt repayments and rising transport and fuel costs, leaving families with less spending power. For the fourth consecutive quarter, monthly expenditure by UK families has grown, with current typical outgoings up by 3% since August 2012 and by 22% since November 2011. The rise in living costs has been clearly visible over the past 12 months. Since 2008, the consumer prices index has risen by 17%, but other measures suggest that inflation over that period has been much greater. The minimum income standard used by the Joseph Rowntree Foundation indicates that the cost of a standard basket of goods and services has increased by 25%.

Based on those figures, the minimum earnings required to secure an adequate standard of living would be £16,850 for a single person, £19,400 for a working couple and £25,600 for a lone parent. All those are well above the salary of a job that pays the national minimum wage, and they are dangerously close to the average income level in the UK. Although it is true that the average income in the UK has increased in recent years, those figures show that the increase has been accompanied by a disproportionate rise in the cost of crucial commodities. The obvious effect is that standards of living are falling, as people cannot purchase as much of a commodity as previously, meaning that less is spent on luxury items, personal items and leisure goods. The biggest declines in the percentage of people spending on a certain items between November 2011 and January 2013 involve furniture, appliances, clothing, sports equipment, make-up and the motor industry. I am concerned about the broader impact on the economy, as British industry finds that demand in the consumer base is low.

[Mr Iain McKenzie (Inverclyde) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does he agree that pressures on families result not only from the rising cost of food and fuel, but from the fact that most families up and down the country are taking an average £1,200 reduction in their salaries?

[Mr Cunningham]

I am outlining the consequences of the reduction to which my hon. Friend refers, and I want to look more closely at some of the rising living costs.

The most basic expenditure to affect living standards is surely food. Despite the growth in the popularity of own-brand food labels and budget supermarkets during the recession, outgoings on food shopping are still rising. Inflation of 3.13% means that a typical family now spends £234 more on annual food bills than they did in November 2011, which puts significantly more pressure on the earnings required to secure an adequate standard of living for the whole family.

An inability to respond to that pressure has left families with an unacceptable standard of living. There is evidence of that across the country, including in my constituency and surrounding areas. Research has shown that about one in five people in the west midlands have to skip meals and go without food to feed their family. Some 70% of families who are suffering from food poverty have to rely on food supplied by schools in the form of free school meals, breakfast clubs and other school clubs. As a result, more than a quarter of families suffering from food poverty are unable to provide all the meals for their children during school holidays. I am sure that we all agree that that situation is unacceptable. If we judge our society on the basis of the situation faced by the worst-off, it is clear that something needs to be done to improve the ability of families to provide meals for their children without having to go without food themselves.

Another significant section of expenditure is on travel. Average rail fares increased by 5.9% in January 2013, combined with inflation of 4.96%. Expenditure on everyday travel has grown more than any other costs since November 2011. The typical UK traveller spends £341 more every year, and the fact that there was a further average price rise in January 2013 means that such rises are likely to continue.

I have raised my objections to high-speed rail elsewhere, so I will not get into that today. After a previous Secretary of State for Transport, the right hon. Member for Runnymede and Weybridge (Mr Hammond), described high-speed rail as “a rich man’s toy”, I have not been assured that we will not see transport costs rise even further to pay for high-speed rail. Travel costs do not appear to be a real concern for the Government.

The increasing prices applied by utility providers are putting significant pressure on households. The resulting energy bills have drained an extra £221 from their budgets every year since this Government came to power. Such increases have caused the cost of living crisis that afflicts millions of families across this country, reducing their ability to secure an adequate standard of living. Those issues are compounded by the fact that, according to a study by the Institute for Public Policy Research, 5 million homes are overcharged by energy suppliers. Yet the Government have backed “business as usual” in the energy market, with energy companies having paid out £7 billion to shareholders, which is a clear refusal to challenge the practices, pricing and structures in the energy market that are causing such difficulties for families and individuals alike.

I believe that it is our responsibility to ensure that energy bills are kept at a manageable level for families. When Labour left office, there were 1.75 million fewer households living in fuel poverty, including 500,000 fewer vulnerable households, because our policies—such as winter fuel allowances, cold weather payments and improvements in energy efficiency through the Warm Front scheme and tough requirements on energy companies —ensured that they could spend the amounts of money required to secure an adequate standard of living, rather than having to overspend on energy bills.

Housing expenditure, and specifically rent, makes up a considerable portion of families’ overall expenditure. As a result, the cost of rent can have a huge impact on a family’s standard of living. The greater the proportion of total expenditure taken by rent, the less the family’s ability to spend in areas that would secure it an adequate standard of living.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend on securing this massively important debate. May I point him to a comment made by Donald Hirsch, the author of the recent Joseph Rowntree Foundation report on living standards, who stated that

“the next election is likely to be the first since 1931 when living standards are lower than at the last one”?

Does that not represent a failure of the current UK Government?

[Mr Cunningham]

I agree with my hon. Friend, and I have just outlined the consequences of that.

If the issue about rent is taken as a reflection of the overall situation across society, there is serious cause for concern. On top of that, the Prime Minister promised 100,000 new homes under the NewBuy scheme, but there were just 2,000 by May 2013. Indeed, home ownership has fallen from 64% in November 2011 to 59% in January 2013, which is the result of families increasingly shifting to rented properties. The increasing trend towards renting means that 25% of UK families are now in rented accommodation, which is a significant rise from 19% in November 2011. Meanwhile, rent in the social housing sector has gone up by 26%, and the number of families using social housing, including council housing, has increased from 11% to 15% in January 2013.

According to the debt charity StepChange, the combination of those factors has caused the proportion of its clients with rent arrears to increase significantly— from 5.6% in 2010 to 8.6% by the end of 2012. I would describe rent prices as one of the most pressing problems affecting living standards today, and I believe that it needs to be urgently addressed.

StepChange’s findings about rent arrears bring me to another key element of expenditure that is rising—debt. Between November 2011 and January 2013, average debt repayments increased by almost £20 a month or £240 a year. That is accompanied by a dramatic rise in the number of families seeking help for utility bills and with council tax and rent arrears.

Although overall debt levels have decreased, households are now struggling with priority debts that many were previously able to meet. More than a third of those seeking help from StepChange are in arrears on at least one household bill. I find it particularly striking that clients over 60 have the highest overall levels of arrears and single parents have the highest levels of rent, council tax and water arrears. The sad result is that 78% of StepChange’s clients felt that debt problems had undermined their self-confidence and their ability to support both themselves and their family.

There are plenty of other examples. According to research by Consumer Focus, the number of households in debt to their electricity supplier has increased by more than 25% to 850,000, and the number in debt to their gas supplier has risen by 20% to more than 700,000. We all know how debt can be extremely destructive: being in debt can affect someone’s quality of life and financial stability. That matter requires urgent Government attention.

That leads me to the related issue of payday loans, which, thankfully, has been debated a good deal recently, so I will speak only briefly on it. Last year, there was a staggering rise in the number of people seeking help with payday loans. More than twice as many people—360,413—contacted StepChange for help with payday loan problems in 2012 than during the previous year. The data show that, on average, a client’s payday loan debt is up more than £400 on last year, and now exceeds their monthly income.

[Mr McKenzie]

My hon. Friend is being generous with his time. Like me, does he have an increasing number of constituents coming to his surgery who have got into debt? Does he also see an increasing number of shops on his high street offering payday loans?

[Mr Cunningham]

Like every other MP, I have increasing numbers of people coming to see me about debt. My hon. Friend is right to say that we are seeing more and more of those shops opening up on our high streets but, more importantly, nothing is being done about the television advertising that is leading people up the garden path. Payday loans can have a profoundly negative impact on people’s finances, but the problem is wide as well as deep. In March 2013, a compliance review by the Office of Fair Trading estimated that up to 8.2 million payday loans were made in 2011-12, and that a third either could not be paid back on time or could not be paid back at all. We are talking about some 2.7 million loans that could not be paid back on time, which demonstrates the difficulty and the strain felt by the public with regard to payday loans, and that pressure affects people’s standard of living. I fully support any action the Government take to tackle that problem.

Let me comment now on the backdrop of public sector pay freezes. In the spending review last week, the Chancellor announced yet another cap on public sector pay. He said wage rises would be limited to an average of up to 1% in 2015-16, thereby extending the clampdown by a further year. He also announced plans to seek savings by reforming the system of pay progression in the public sector. The incomes of millions of teachers, nurses, firefighters, council workers and civil servants will be squeezed even further in future.

Furthermore, the long-established and simple principle of pay progression based on experience looks to be the next target. That will be far more complex and potentially damaging to services. I am particularly concerned about the disproportionate impact that the measure will have on equality. Those who will suffer the most from such a freeze in increments will be low-paid women, who tend to have shorter service and not to have reached the full rate for the job. Given the sheer numbers of public sector workers affected by the pay squeeze, the effect on the economy cannot be ignored. Each public sector worker who suffers a continued pay freeze, combined with the rising cost of living, will have a much squeezed budget indeed. If we limit the spending power of such a large sector of the country’s work force that will be sorely felt in other industries.

The Government’s cuts are being felt in many other areas. However, they are perhaps most keenly felt in local government. Local authority services can have a significant impact on people’s lives, and they are being hit very hard by the cuts. In the spending review last week, the Chancellor confirmed that a further 10% in local government funding will be cut. Coventry city council has already lost £24 million of Government grant funding in the last three years and will lose a further £19 million next year. Last week’s announcement made it clear that councils will lose a further £18 million in resources. This year’s budget means that the council can spend £200 less on each resident than it could three years ago. I know that the council is working hard to minimise the impact of such cuts on front-line services, but however hard it works, the cuts will be felt by those who need help the most, and that is the case up and down the country.

No discussion of current living standards would be complete without reference to the bedroom tax. It has been discussed at length in the House, so I do not wish to dwell on the matter now. The Government estimated that 660,000 claimants will be affected by the removal of the spare room subsidy in the social rented sector, and the average loss in benefit is £14 per week. Those affected include 60,000 working-age housing benefit claimants living in the social rented sector in the west midlands at the time of its introduction in 2013-14.

The Government say that if people do not want to face the housing benefit cut, they can simply move into a smaller property, but where are those properties? There are simply not enough smaller homes available in the housing market. Tens of thousands of people throughout England are being forced to suffer a cut in housing benefit because they are unable to downsize. Like many other MPs, I have heard greatly distressing stories from constituents about how they are being hurt by the bedroom tax. I want to make it clear that I am extremely saddened by the tax and very much hope that the Government will review it in future. We should take every opportunity to make the Government aware of the hardship that they are putting many people through as a result of the under-occupancy penalty.

With children spending almost seven hours a day at school, the quality of the school environment has, without doubt, a key impact on their standard of living. In May 2012, the Government announced that work would begin immediately on the priority school building programme, which was welcome. However, of the 261 schools promised, only one has been started. Although the completion of that programme would undoubtedly improve the quality of the school environment for children, delays stand as a considerable barrier to progress on securing a better standard of living for children in our society. Perhaps children’s standard of living could be better secured and enhanced by investing more realistically, and in other ways, in schools.

Finally, let us consider for a moment what should happen to people who come into contact with the law. Unfortunately, that is something that happens to many people during the course of their life and, often they are totally unprepared. Equality before the law is fundamental to our society. Quite simply, we do not want to live in a society in which the rich can win legal disputes by hiring lawyers, and poor people lose because they have to represent themselves. The Government’s cuts to legal aid threaten that basic equality. Funding has been removed for private family law such as divorce and custody battles; personal injury and some clinical negligence cases; some employment and education law; immigration where the person is not detained; and some debt, housing and benefit issues.

Access to justice through judicial review will be restricted, as lawyers will be more reluctant to take on such cases due to the threat of not receiving payment should the case not get past the permission stage. That also restricts consumer choice for the public. The focus on the quantity of cases, rather than the quality, will lead to more miscarriages of justice, as providers will become motivated by case volume and efficiency, rather than the right to see justice served correctly. There is a good chance that the quality of legal service provided will deteriorate, as the lower fixed fees paid to lawyers under the new proposals cause them to focus on the quantity of cases that they take on, rather than the quality of each case. I am raising the issue of legal aid in the context of living standards because I see treatment before the law and access to justice as an integral part of our quality of life.

Finance Bill

Jim Cunningham Excerpts

Monday 1st July 2013 Commons Chamber

[Sheila Gilmore]

When the debates took place on whether the 50p tax should be changed, Government Members were keen to tell us that we could make up a lot of what was lost, and perhaps make even more, through various forms of property taxation. They obviously had in mind changes in stamp duty, ways of dealing with companies that buy very expensive houses and so on. We were told how much better a property tax would be than a tax on income, and that we would get far more money from it. However, when we follow that train of thought and suggest that there is merit in considering a mansion tax, we are suddenly told, “No, no, that would be terrible.” We are told either that it would be terribly expensive, and people would not be able to afford it, or that it would simply be the wrong thing to do. It seems that when we come to talk about something real, the Government run backwards as fast as they can.

We have had some figures thrown at us that are not mentioned in our new clause. They come not from anything that we have said but from what the Government have said, yet we are being told that we have to justify them. We are being told that figures such as a £2 billion yield and 55,000 houses are correct, which will mean people having to pay £36,000. I do not know whether 55,000 houses is the correct number of those that would be affected, but I do know that at the moment, according to Zoopla, there are 3,847 properties on the market for £2.1 million or more in London. That is not all the properties of that price but just those that are for sale. On that basis the figure of 55,000 is perhaps a conservative estimate, but the whole debate has been based on that figure.

[Mr Jim Cunningham (Coventry South) (Lab)]

In relation to the mansion tax, does my hon. Friend not think that there is too much looking at London and not enough looking at how the rest of the country would fare? It often strikes me that debates on legislation apply only to London, even though they matter to the rest of the country. I agree with a mansion tax, but the Government are split on it—the Conservatives do not support it; the Liberals do.

[Sheila Gilmore]

We had certainly always understood that the Liberals supported a mansion tax, but every time the opportunity comes up to consider it, vote on it or even speak about it, they seem conspicuously absent.

The differences between London and the rest of the country, on property prices and other issues, are a serious matter. The gap is increasing, and we should all be seriously concerned about the impact of that on the whole UK. It has happened during nearly all previous recessions, after which Governments of all parties have sought to restore some balance and encourage economic growth in places outside the south-east. We always seem to be running to stand still. The situation is serious, and we should consider it.

Jobs and people are being sucked southwards in quite a big way, and local government finance now works in such a way that there are huge differences. In many areas, for example the north-east of England, the loss of public sector jobs and income for local government means that there are no jobs for people who have just qualified as teachers, for instance. All the jobs are in the south-east. We should be worried about that. We should not wait for three, five or 10 years and then say that we have to do something to redress the balance.

Property taxes do have significant advantages over income taxes. We hear a lot about the mobility of income. One argument that has always been made against raising income tax rates—it was made against the 50p tax rate when it was introduced and has been made in favour of reducing it—has been that people will leave the country or not come here. It has been argued that, faced with that tax, people will simply move elsewhere and we will not attract people here. The one advantage of a property tax—it has been an advantage of council tax and its predecessor the rates—is that it is much harder to evade or avoid, because the property is actually there. There is a significant place in our fiscal balance for property taxation.

--- Later in debate ---

[Sheila Gilmore]

I was looking through the property pages of The Sunday Times yesterday, and interestingly it was full of descriptions about valuable houses and how property prices are rising. Since property prices at the top end were rising so much—driven partly by investment from abroad—it was argued that that would be good for everyone because it would lever up property prices for all. The argument is that high property prices are always beneficial, but those who tried to buy homes up and down the country long before the credit crunch know that high property prices are a double-edged sword because many could not get on the property ladder at all. In many parts of the country, not just in London, the amount that must be earned to buy even an average-priced house is more than people can earn in that area.

[Mr Jim Cunningham]

As property prices go up, rents also start to go through the roof. That has been reflected up and down the country and it will make it more difficult for people to rent property.

[Sheila Gilmore]

There has undoubtedly been a huge increase in the private rented sector. When I was elected as a councillor and became interested in housing, all the housing authorities and textbooks said that the private rented sector had become a residual sector and was disappearing. It might perhaps be there as a niche for young professionals or students, but it was not expected to be an important part of the housing mix. Within a short period—probably 10 to 15 years—we have seen an explosion in the private rented sector and in private sector rents. That is another issue for young people, particularly those who might wish to settle permanently. They cannot afford to buy a home because house prices are too high or they cannot get a mortgage. In the meantime they pay very high rents, which makes it difficult to save. I am not entirely convinced that high property prices are always a great bonus, and we should be looking for a more stable property market.

Investing in Britain’s Future

Jim Cunningham Excerpts

Thursday 27th June 2013 Commons Chamber

[Danny Alexander]

There has been a strong cross-party campaign on the A63, and I am pleased to have been able to make the announcement today. We will certainly to listen to the hon. Gentleman’s representations on the other subjects he mentions.

[Mr Jim Cunningham (Coventry South) (Lab)]

We should obviously welcome any investment in the economy, but the Government should not have cut it in the first place. The Chief Secretary has mentioned on one or two occasions, as have other Ministers, that some of that investment will be financed out of efficiency savings. Are there any efficiency savings left?

[Danny Alexander]

This is the first Government who have made a serious effort to look for efficiency savings. I mentioned in my statement the excellent work of the efficiency and reform group in the Cabinet Office under my right hon. Friend the Minister for the Cabinet Office, which has yielded up a view that there are more savings yet to be had in Departments. That is why I announced today a rolling programme of efficiency reviews across major Departments to unlock yet further savings over the next two years.

Oral Answers to Questions

Jim Cunningham Excerpts

Tuesday 25th June 2013 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

How many jobs will high-speed rail create?

[Mr Gauke]

Over time, tens of thousands.

Financial Transaction Tax and Economic and Monetary Union

Jim Cunningham Excerpts

Tuesday 18th June 2013 Commons Chamber

[Chris Leslie]

Why on earth then does the Minister not engage in the process, change people’s minds, get a better design, deal with this residence principle properly and let us have a financial transaction tax that is in all of our best interests, particularly across those global centres?

The Minister talked about not having objections to an FTT on equities, but he did not say anything about bonds or derivatives in that context. So I challenge him again on the principle: is he absolutely against any sort of FTT on bonds or derivatives? It sounded as though he was, but I say to him that he has to start waking up and engaging with other jurisdictions on these particular points rather than trying to stop it.

[Mr Jim Cunningham (Coventry South) (Lab)]

May I apologise to the Minister for coming in a little late? The same argument was used about the minimum wage. I recall that when this Government were in opposition, they were telling us that the minimum wage would cost a couple of million jobs.

[Chris Leslie]

The public are sick and tired of hearing more of the same from the Government—no solutions, just reasons for not doing anything differently. It should not need to be restated—although it clearly does for Government Members—that the global financial crisis and the collapse of many organisations in the financial services sector required an enormous bail-out from the public purse. That collapse in revenues led to an extra £300 billion on the national debt. As the Government have failed to turn things around, we can see that many of the consequences are still being felt today by our constituents and that we need to do something different.

--- Later in debate ---

[Chris Leslie]

The hon. Lady knows very well that millions and possibly billions of financial transactions take place every day of the week—almost every hour—and it is a question of whether there is a social benefit that we should look at as a recompense to society at large, which should not see those financial transactions as totally disconnected from our economy and our society. We know that excessive risk taking and many of the problems that arose from the attachment to the derivatives trade and others got us into the problems of the global financial crisis. Rather than turning its back on it and not engaging, as the Government are doing, the financial services industry should engage in that and think about the design. Let us get it right and do it on our terms, rather than waiting to play catch-up.

[Mr Jim Cunningham]

Is not the answer to the Minister that Government Members want to protect the bankers? They do not want to make the bankers pay for what they did to the British economy and the world economy.

Economic Growth

Jim Cunningham Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. Last year, employment in the UK grew faster than in the US, France, Germany, Japan and the eurozone as a whole. Employment in the UK is now above its pre-recession level. Of course we must go on taking the difficult measures necessary to get our deficit under control, and make sure we support businesses that want to hire people to support the private sector recovery. The path being offered by the Opposition, however, would lead to complete disaster.

[Mr Jim Cunningham (Coventry South) (Lab)]

When the Chancellor’s party was in opposition, the right hon. and learned Member for Rushcliffe (Mr Clarke) took the credit, before the banks collapsed, for the economic prosperity, claiming he had created it when he was Chancellor. How does the current Chancellor answer that point?

[Mr Osborne]

The hon. Gentleman is saying that somehow we have a responsibility for the financial crash or for the problems in the banking industry, but he neatly skips the fact that not only was Labour in office for 13 years, but the shadow Chancellor was the City Minister. He did not have any old job in Government —he was the City Minister when Northern Rock was selling those 120% mortgages and the Royal Bank of Scotland was thinking of taking over ABN AMRO. He is the architect of the tripartite regulation, which failed so catastrophically. He is, literally, the last person to have any credibility on this subject.

--- Later in debate ---

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

As always, I listened carefully to the Queen’s Speech with the intention of examining how the new measures would affect my constituents. I was also looking for measures that would ease the strain on the families in my constituency who are worried about unemployment and the rising cost of living. I was sadly and expectedly disappointed.

Before listing my concerns, I will place on the record a couple of observations on how we got into the deep economic difficulty that is causing desperate hardship for many families in my constituency. The fundamental error of this stagnant coalition Government was to assume that they could clear the deficit in four years. Their plan was to use the final year in office to hand out sweeteners to the electorate, who would be so overwhelmingly grateful that they would elect a Conservative majority.

Dealing with the deficit is the defining issue facing this country. However, that should never have been conditional on or linked to the outcome of the next election. That was a political fix that was destined to fail. Everybody could see that it was politically too far-fetched, except for the opportunistic Liberal Democrats who disregarded their electoral mandate and traded their principles for government office.

The UK economy is 9% smaller today than was expected when this stagnant Government took over. In 2009-10, the deficit was £159 billion. It is now forecast to be down to £121 billion. However, the public debt overall is rising from £795.5 billion to a predicted £1.1 trillion.

On any reasonable analysis of our economic situation, two significant themes scream out loud and clear. The first is the continual anaemic economic performance and the second is our ability to pay off the debt, which is becoming increasingly strained as a consequence of the first point. While those two heads travel in opposite directions, our economy will never recover. The policies simply have to change. It is time that this stagnant Government chose to put the national interest first and their party political interests second.

Ordinary hard-working people and their families are struggling. Rents and mortgages have to be paid, as do ever-increasing energy and water bills. Families who spent £600 a month to cover those costs in 2005 now spend more than £800 a month. We have record fuel prices and record amounts of people in fuel poverty. We have 1 million young people out of work and left behind. Lending to businesses is continuing to fall. We have soaring unemployment. We have a Chancellor who has to borrow £245 billion more than he planned, who has failed his own economic test of retaining our triple A credit rating and who, over the course of this Parliament, will have delivered growth of a mere 1.7%. Ordinary working people are paying the price of this out-of-touch Government’s economic stagnation.

[Mr Jim Cunningham]

Does my right hon. Friend agree that one of the methods that the Government are using to make ordinary people pay for their incompetence is the bedroom tax?

[Mr Clarke]

My hon. Friend raises a very important point. While we witness the introduction of the second home subsidy, the effects of the bedroom tax are being seen in my constituency, where an estimated 2,128 individuals will be affected, two-thirds of whom are believed to have disabilities. Citizens Advice Scotland has revealed that nearly 800 victims of the welfare axe are desperately seeking its support. Welfare recipients are an easy target, but we should not point the finger too quickly because no job is safe in this economy.

To get our economy moving again, we need investment—investment for jobs, investment for the future and investment in the ordinary hard-working people of our country. We have been treated to a more-of-the-same economic plan, with no change on anything of importance. The Government are cutting taxes for millionaires while cutting support for our economy. Led by the Prime Minister and the Chancellor, this stagnant Cabinet of out-of-touch, upper-class millionaires has run out of ideas and run out of steam, while our country is running out of time. What a way to run Britain.