Finance Bill

Jim Cunningham Excerpts

Monday 2nd July 2012 Commons Chamber

[Sheila Gilmore]

We have very different views about how to stimulate and boost the economy. The Government have run demand into the ground, for example by raising VAT to 20%, which has had an effect on fuel. Ministers are reluctant to talk about that in any detail. It has to be remembered that prior to the election, the Conservatives were going around telling us that there would be no increase in VAT, and their coalition partners liked to stand in front of huge billboards saying that they feared there would be a VAT bombshell but were completely against it.

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

Has my hon. Friend noticed that oil and petrol prices have dropped by 28% over the past three months? That is not reflected at the petrol pumps, and surely the Government should do something about that.

[Sheila Gilmore]

My hon. Friend makes an important point. When the raw product goes up in price, the pump price goes up very quickly, but a downward turn seems to take a great deal longer to reach the consumer. We have made similar arguments about other energy price rises.

The hon. Member for Argyll and Bute (Mr Reid) suggested that it was all right for the Government to make U-turns such as this, because they had found savings elsewhere. That is nice to know, but if such savings could be found so easily, maybe the Government could have avoided some of the other things they have done. After all, we spent a lot of time in the Budget debate and before talking about the plight of couples who were losing tax credits because they were deemed not to be working enough hours. That change affects a small number of people—from memory, I believe it is about 500,000. We were told that if it were not implemented, it would cost the Treasury £500 million. We were told that it was impossible to go back on that decision, because money was so tight.

Like all Governments, the current Government are making choices. In the past two years, they have said that certain things have to be done and are not choices. They have said that they have been forced into them. However, all Governments make choices—that is part of governing.

--- Later in debate ---

[Cathy Jamieson]

I welcome the fact that it will make a difference for constituents, but once again, unfortunately, the way it was done did not suggest a Government who were organised or knew that they were going to make the announcement at that particular time. That is important in the context of how it will be paid for, but I shall come to that.

At the time, we expressed concern that the Chancellor’s Budget plan would mean a 3p hike in fuel duty in just five weeks. Previously, we had called for the Government to cut VAT, which would have knocked 3p a litre off fuel prices, as well as helping hard-pressed household budgets in other ways. We called for the August rise to be dropped because we believed that increasing the fuel duty at this time would have sent the wrong signal to retailers, who would have had to pass every penny on to drivers and put prices up just when they should have been cutting them.

We also made the point that with Britain now in a double-dip recession, the last thing our economy needed was another tax rise adding to the squeeze on household budgets and to the difficulties faced by many small businesses. The Government’s priority should have been to boost the economy, rather than to clobber families, businesses and pensioners just when they were feeling the squeeze the most. That is why we called on the Chancellor to stop the August fuel duty rise, at least until next January. We said that we would put that issue to a vote in Parliament, and that is why we tabled new clause 11.

[Mr Jim Cunningham]

One question that has never been answered is why the fuel duty decision was not taken in the Budget. Does my hon. Friend agree that the Government rushed into this without thinking about the consequences?

[Cathy Jamieson]

Indeed; my hon. Friend makes a good point. The way in which the decision was announced, and the aftermath of that announcement, does perhaps suggest that the Government were rushed into this. Also, many Government Back Benchers agreed that the fuel duty increase should be dropped. A number of them made that clear in a good Westminster Hall debate, and others publicly signed up to support the FairFuelUK campaign.

We tried to be helpful. We suspected that Ministers might say—as, indeed, they did—that they could not afford to stop the increase, even though they had found the money to give a tax cut to millionaires. As has been suggested, if there is money available, it ought to go to those whose household budgets are being squeezed the most. It is still astonishing to me that the Government seem intent on punishing families—especially those with children—while at the same time giving a massive tax cut to millionaires. [Interruption.] Government Back Benchers can shake their heads and look at the ceiling, but real people are being affected by this Government’s Budget, and those who are benefiting are the best off.

We suggested some ways of raising the necessary funds. We said that the Government could perhaps consider closing the tax loopholes that the Prime Minister had been condemning, and stopping hundreds of millions of pounds being lost through offshore tax havens. We also suggested that they might want to reverse the pension tax relief boost that they have given to people who are already well off—namely, those earning more than £150,000—and that they might want to use the £500 million underspent in the Olympics budget.

We were not being opportunistic. We understand that difficult decisions have to be made if we are to get the deficit down, and as a responsible Opposition we looked at the figures. We also recognised that, at difficult times in the past, Labour had put up fuel duty. On many occasions, however, we also delayed or cancelled planned fuel duty rises in the light of the circumstances at the time—including at the height of the global financial crisis —because it was the right thing to do to give assistance to the people who needed it most and to ensure that we balanced and grew the economy.

We know—and more and more commentators are agreeing with us—that raising taxes and cutting spending too far and too fast have backfired. Britain has been pushed into a double-dip recession, more people are out of work, and the result is a bigger benefits bill and £150 billion of extra borrowing. That is why we need a fairer and more balanced plan for our economy that will get people back to work, and why we are calling again for the Government to change course and put their efforts into tackling youth unemployment, as well as using the skills of people who have been made redundant, and who have something to give back, to support young people into the jobs market.

We agree with the Government that stopping August’s 3p rise in fuel duty is the right thing to do for British businesses and families. I do not know whether the Prime Minister and the Chancellor have ever had to worry about the cost of filling up their cars in the way that the nurse in my constituency does. She works night shifts, and she does not know whether she will have enough money left at the end of the month to fill up her car so that she can get to work. In response to the hon. Member for Dover (Charlie Elphicke), we are glad that the Government have at last started listening to those who face those difficulties, and we will therefore be supporting the Government tonight on this issue. As I said earlier, however, the manner in which the announcement was made raises a number of questions. It looked as though the issue had brought about the quickest U-turn in politics. The new benchmark for “a long time” in politics is no longer a week but overnight, with changes being made 24 hours after the initial announcement.

--- Later in debate ---

[Cathy Jamieson]

That is absolutely true. As I said earlier, that is exactly what happens to those who cannot work for the extra hours that would increase their working time to the 24 hours that would entitle them to maintain their working tax credit. These are people who want to work and pay their way—they want to do the right thing—but for some reason the Government have chosen to clobber them the hardest at the same time as giving millionaires a tax break. That makes no sense to me, although Government Members may say that it is a point of principle.

A commentator—I think that it was Fraser Nelson of The Spectator—recently suggested that the best definition of “Osbornism”, if there can be such a definition, had been provided by Groucho Marx:

“These are my principles. And if you don’t like them—well, I have others.”

I hope that the Government have received the message loud and clear from the Opposition and from the British public. We do not like the principles that are at the heart of the Government’s economic policy. We do not like, or accept, the principle of asking millions to pay more so that millionaires can pay less. That is why we are giving the Government the opportunity to put their well-practised U-turning skills to good use once again.

[Mr Jim Cunningham]

Should they not go further than that? Should we not deal with the amendment to existing legislation allowing the use of foreign countries as tax havens to avoid paying the debts of the developing countries, which can cost £4 billion a year?

[Cathy Jamieson]

My hon. Friend has made a good point. We will have an opportunity to discuss that subject in more detail tomorrow.

The Government once made much of their commitment to fiscal responsibility. Deficit reduction was to be their defining mission. Today, however, that task has been made even harder by the failure of their own economic plans, which involve £150 billion of extra borrowing. Their pledge to clear the deficit by the end of this Parliament has been blown to pieces, yet they still find the money for a tax giveaway to the top 1%.

Oral Answers to Questions

Jim Cunningham Excerpts

Tuesday 26th June 2012 Commons Chamber

[Mr Osborne]

My hon. Friend is right and I commend him and his group for the interesting ideas, many of which I agree with, that they are promoting. He is absolutely right to point out the increase in employment, including in manufacturing employment. An interesting recent statistic from an independent international body on the British economy showed that the share of manufacturing in the UK economy is increasing for the first time in a very long time, having almost halved under the previous Labour Government.

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

Why did not the Chancellor cut fuel duty sooner? Why has it taken him all this time? He has done about 33 U-turns as far as I can see.

[Mr Osborne]

Last year we cut fuel duty and froze it. This year, we have frozen it again and the hon. Gentleman should welcome that. I know that he is in a slightly difficult position in that he was one of the Labour MPs who voted for the increase that we have now delayed, but he should just get up and welcome these moves.

Budget (Coventry)

Jim Cunningham Excerpts

Monday 21st May 2012 Commons Chamber

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

Thank you, Mr Speaker, for granting this Adjournment debate, which I very much appreciate. I wish to speak about the impact of the Budget and the Government’s policies on Coventry, and I might touch on issues that affect the west midlands. My purpose in doing so is twofold.

First, many issues arising from the Budget will have a significant impact on the people of Coventry and should be debated properly. My constituents’ serious concerns regarding the effect of Government policies deserve to be raised. It is easy to discuss Budget policies in abstract terms, but we would do well to take the time to consider what they will mean for the regions and for people.

Secondly, there is a distinct pattern to the Government’s policies and rhetoric: they are far too London-centric, as some people would say. Therefore, it is vital that we hold debates that focus on the regions and cities across this country in order to draw attention to their concerns, which the Government frequently ignore. I am sure that much of what will be discussed tonight applies to other regions and cities hit by the Budget. The Government show not nearly enough understanding of regional issues or appreciation of just how much places such as Coventry are hit by their policies.

With that in mind, I want to outline why the Government’s optimism is misplaced, certainly as far as Coventry is concerned. We must not underplay the high level of unemployment currently being suffered. On Wednesday the Prime Minister assured us that overall unemployment was down and that the number of claimants of jobseeker’s allowance had decreased. Figures from the Office for National Statistics, which were published last week, reveal that there are 10,321 unemployed jobseekers in Coventry—three fewer than were counted in March.

The Prime Minister’s complacency about the employment crisis shows an unrealistic approach to the stagnation we are witnessing in Coventry, where 4.9% of 16 to 24-year-olds are out of work. That is similar to the figure for the west midlands overall but significantly higher than that for Great Britain, which is 4%. That is particularly clear when we look at the percentage of male jobseeker’s allowance claimants. Nationally, the figure is 5.3%, which is already shockingly high, but Coventry is suffering from having 6.7% of the male population claiming jobseeker’s allowance. It is clear that the slight improvements the Government are celebrating simply do not apply to Coventry.

Against the background of high unemployment, I wish to highlight the crucial role of the public sector in the growth of Coventry’s economy. Since the millennium, Coventry has benefited from significant redevelopment and regeneration, and the public sector has been crucial in that process. The concern now is that the Government’s public sector cuts will return Coventry to the hard times of the late ’70s, and certainly the ’80s, that many of us remember. It was a ruinous time in Coventry’s history and led to a whole generation struggling to reach their potential for decades after.

Every public sector employee who loses their job through the Government’s public policy cuts is simply one more person without an income to spend on the local economy—one more person who will stop spending on businesses that in places such as Coventry are essential for stimulating growth in the local and national economies. Our public sector workers are a crucial part of our society and economy, and they do essential work for communities. It is ludicrous and poorly substantiated to claim that their work can be swiftly replaced by the private sector. There is certainly little evidence of that in Coventry.

The Government have said that they intend to rebalance the economy, and they aim to do so by cutting the public sector and replacing it with the private sector. They have certainly achieved the former, but there is little evidence visible in Coventry of the necessary investment in the private sector. The Chancellor needs a clear and vigorous industrial strategy to encourage the private sector growth that he hopes will replace the public sector.

That should be combined with a full jobs strategy, working on aligning the money going into the city with the people out of work, and targeting it at getting people back into work. That is particularly true of Coventry’s young people. Coventry saw an 87% increase in long-term youth unemployment last year, but there was nothing in the Budget to encourage any hope that this would be reversed.

The Chancellor promised that the Budget would deliver a great deal for businesses such as those in Coventry, but the Coventry and Warwickshire chamber of commerce was greatly disappointed. The chamber’s chief executive, noting that the Budget’s rhetoric on the promise for business was not matched by any content, said:

“If we’re honest, it was quite London-centric in many regards and that obviously wasn’t particularly welcomed. There were lots of small announcements that picked away around the edges but many of the things that weren’t mentioned caused most angst, such as empty property rate relief and the fact that business rates are going up.”

People throughout the country were hopeful about the prospect of a Budget that would offer real support to local businesses to allow them to grow, but they were generally disappointed by the reality, which gave little practical encouragement to allow Coventry businesses to expand, and that is likely to get a lot worse as the year progresses.

Coventry is famous for car making, but public sector workers drive much of the local economy. As we know, Becta and the Qualifications and Curriculum Development Agency are being abolished. It might seem an easy option to get rid of those education quangos, which employ a combined total of almost 800 people, many of whom are former teachers, but the relocation of the QCDA cost the Government more than £44million and came at a personal cost to many staff who relocated from London.

We cannot, furthermore, ignore the strain that these cuts put on the private sector. Friends Life, previously Friends Provident, announced that it plans to close its offices in Coventry by the end of the first half of 2012, and 428 staff are employed there. Owing to those cuts, Coventry city council will be forced by the Tory-led Government to cut more than 500 posts, possibly, over the next 18 months. The amount that the council spends in the local economy will also be reduced dramatically, and that will impact on council staff.

The front-loading of cuts means that staff losses will be required at an early stage of the spending cuts, and that will affect families throughout Coventry. This is the overall impact: Coventry city council is expected to lose about £45 million over the next two or three years; and all of that will have a significant knock-on impact on local businesses and employment in the region

We can see what is happening in other sectors as the cuts and reforms begin to bite. For example, there are cuts of more than 20% in West Midlands police, equating to 2,500 jobs, and there are two parts to the Department for Communities and Local Government’s cuts for Coventry city council: formula grant, losing over £19 million; and specific grants, losing over £17 million. The council will not be able to continue to provide services at the same level. There will be far fewer grants, with a lower overall value, and the great concern is that many grant streams will end.

In the light of these destructive cuts, many people are extremely concerned about the proposed cuts to regional pay in the public sector. I cannot condemn this policy strongly enough. We in Coventry accept that living costs are far higher in London than they are in Coventry, but that is the reason for the London allowance and London stipend made available to many employees working in London. This is far removed from the idea that public sector workers should earn less for the same work because they live in places such as Coventry.

The Treasury says that public sector pay is 18% higher than in the private sector in some parts of the UK, but that argument demonstrates a flawed approach by which the Office of National Statistics continues to compare private and public sector workers on a like-for-like basis. They are not directly comparable, and it is wilfully blind and evasive to pretend that they are. Two thirds of public sector workers are women, compared with about 40% of those in the private sector. Public sector workers tend to be older and more highly qualified. Professions such as nursing and teaching entail workers remaining in their profession for a long time, building up skills and salaries. None of those are characteristics that the public sector should be ashamed of. The private sector, by comparison, includes workers at the other end of the economy such as those in retail, catering and leisure. Industries in the private sector often pay their workers very low wages, and that skews any fair comparison of the sectors.

The public sector makes up roughly 20% of the work force, while the financial sector makes up 20% of the economy. More meaningfully, public sector wages are far from high by comparison with those in the private sector. I have always believed in lifting people up rather than lowering them down. Public sector workers are already being hit very hard with frozen salaries, higher pension contributions, and higher living costs. We cannot overestimate the negative impact on Coventry’s economy that would result from local public sector workers earning lower salaries. That would take money out of the regional economy, and the stunting effect on growth would outweigh any benefits to the Treasury. I therefore call strongly on the Government to allay the fears of those in Coventry who are worried about the prospect of regional pay cuts.

Against those fears for the regional economy, let me touch on the impact of the Government’s policies on the vulnerable people of Coventry, who will be hit from many directions by their deficit reduction plan. Pensioners have been dealt a blow by the Government as the winter fuel payment has been slashed by up to £100. According to the BBC, family fuel costs have risen by about £1,250 over the past two years, and mortgage interest rates are starting to creep up, which will affect many families. Disabled and ill people are suffering from the removal of the mobility component of the disability living allowance. Coventry’s poorest residents are being undermined in the justice system by the removal of face-to-face legal advice in favour of a cheaper phone line. These are but a few of the policies that are having a huge negative impact on vulnerable individuals, who are now having opportunities to turn to public services taken away.

I am deeply concerned about the local provisions for our young people. In June, £335 million was taken from the council through the abolition of Building Schools for the Future, which has yet to be replaced despite many promises about announcements. The Government cannot simply remove this vital investment from Coventry without even suggesting an alternative, let alone funding one. The Budget bore no reference to allocations of funding for school buildings. Aside from the obvious implications for Coventry schools, the Government are missing a great opportunity to stimulate the construction industry. I understand that the Government’s private building scheme is expected to rebuild between 100 and 300 schools nationally, but they have been dragging their feet on this issue for 20 months. Coventry city council has made it clear that some schools are in dire straits and urgently in need of investment. Without details of the Government’s plans, the council is unable to make its own plans.

As of April, the Connexions careers service has been operating on a budget more than 70% smaller than in April 2010. That service gives young people the skills and confidence they need to get in to the workplace, and its downsizing will no doubt contribute to the high youth unemployment that we experience as a city and as a region.

The children, learning and young people’s directorate has announced the loss of a further £1.2 million as a result of the 5% cut to the standards fund. The council had been relying on those crucial retention funds, but they will not be transferred to the next financial year.

On that note, the Friargate development, which will revitalise and transform Coventry city centre, was going ahead on the expectation that Coventry would be one of the eight core cities to benefit from the tax incremental financing scheme. The Deputy Prime Minister told the local authority in 2010 that Coventry would be a recipient of that scheme. Not only is Coventry excluded, but the pot of money has been reduced to £150 million. The council was relying on that money, which was to be paid back on a tax basis, to allow the development to go ahead.

The abolition of the funding from regional development agencies means that there is little funding to lever in private sector investment for large-scale redevelopment projects. Some colleagues will remember that Coventry and Warwickshire were led to believe that they would get an enterprise zone. Once again, they lost out. I therefore call on the Minister to reconsider the use of tax incremental financing to allow the city to grow. I understand that the council is also looking to take part in the city deals initiative. The city’s project is urgently in need of that money.

All of that will have an irreversible effect on the economic growth of the region and of Coventry. The leader of Coventry city council estimates that up to £25 million will be taken out of the local economy. The public and private sectors will not be able to invest in regeneration and infrastructure in the region. With the loss of the £355 million schools programme and the missed opportunity for the building industry, it is clear that the Government are wilfully blind to the devastating effect of their policies in Coventry. In addition, Coventry university hospital has to find an additional £28 million over the next year or two. The Government need to stop thinking only of London and think more about the other regions and cities that make up this country.

Oral Answers to Questions

Jim Cunningham Excerpts

Tuesday 24th April 2012 Commons Chamber

[Miss Smith]

The top 20% of earners in this country continue to make the biggest contribution to reducing the deficit, as has to be the case. The hon. Lady knows as well as anybody in the House that under the previous Government, spending on tax credits was out of control, with nine out of 10 families being eligible. Six out of 10 families will still be eligible for tax credits after our reforms.

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

14. By what means his Department determined which core cities would participate in the tax incremental finance scheme; and if he will make a statement.

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

The main tax increment financing scheme will be available to all local authorities in England from April 2013 as part of the business rates retention scheme. We will set out more details on how it will work shortly. A second pot of longer-term funding will be allocated to the core cities—the eight largest cities outside London—on a competitive basis. We will invite applications from those cities for that pot soon.

[Mr Cunningham]

Why was Coventry left out of the eight core cities, against the promise of the Deputy Prime Minister in 2010? Does the Chief Secretary realise that that will have a bearing on the Friargate scheme in Coventry, which will employ a lot of people when it is finished?

[Danny Alexander]

The eight core cities are a well-established group that have a proven role in driving economic growth in England. As I said, the main tax increment financing scheme will be available to all local authorities in England, including that of the hon. Gentleman, from 2013. We will set out the details of that shortly as part of the business rates retention scheme. Other pools of funding, such as the Growing Places fund, may be able to help with the scheme that he mentioned. The local enterprise partnership allocates those funds.

IMF

Jim Cunningham Excerpts

Monday 23rd April 2012 Commons Chamber

[Mr Osborne]

The European Central Bank is of course a very important part of the equation, but one of the problems facing Ireland, Portugal and, indeed, Greece was that they were also shut out of international debt markets, and when countries are shut out of international debt markets they usually—almost always—turn to the IMF for assistance, so it would be very odd if the IMF were not there to help them.

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

I am glad that the Chancellor has realised—it has taken him four years to do so—that there was a world economic crisis which started outside this country. Yes, Labour in government in the past has supported the IMF, and we still do, as we know that we have to do something to help Europe, but, following what my hon. Friend the Member for Bolsover (Mr Skinner) said, I must ask why are the British people paying for it through one of the most punitive Budgets ever levied? On the one hand they understand that we have to help Europe, but on the other we have one of the most punitive Budgets that has ever been levied on the British people.

[Mr Osborne]

I have never denied that there was an international economic crisis; what I said was that those problems were not visited upon Britain from abroad. Britain was at the epicentre of the crisis, with the biggest bank bail-outs, the most indebted households, the most over-leveraged banks and one of the largest deficits going into the crisis. That is what I complain about, and I complain in particular about the man who was responsible for most of those economic policies giving us lectures on them afterwards. I welcome the fact that the hon. Member for Coventry South (Mr Cunningham) supports the IMF and an increase in its resources, but the money does not come out of the public spending cuts that we have had to make in order to deal with that mess; it comes out of our foreign exchange reserves. We are exchanging one asset for another, and as I have said, every country that has lent money to the IMF has got its money back.

Amendment of the Law

Jim Cunningham Excerpts

Monday 26th March 2012 Commons Chamber

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

I will try to be as quick as I can, but I want to highlight some of our concerns. In response to the right hon. Member for Bath (Mr Foster), who flung out a challenge about where the economic crisis started, I am sure he knows that it started in the United States. People will remember Fannie Mae and Lehman Brothers, for a start. How he thought the then Labour Government could tell the American Government what to do beats me. He should also remember that George W. Bush, the outgoing American President, who would be a Conservative in our terms, pumped $260 billion into the American economy.

I remind the right hon. Gentleman of that, but more important to me is the effect of this Budget and previous Budgets on the west midlands, where one in 10 people are unemployed. There has not been any coherent effort or real strategy from the Government to do anything about the restoration of manufacturing. If the Government point to what is happening at Jaguar, let me make it clear that that was well and truly under way under the Labour Government. At that time, we had a stimulus and we also had a scrappage scheme. That set Jaguar on the road and enabled it to recover. Incidentally, Jaguar is not doing very well in this country, but its exports are doing very well, as are those of other motor car companies. That is not a result of anything that the Government are doing here.

The Government’s new idea of driving down regional pay is a concern to many west midlands colleagues. I always thought it was a good thing to lift people up, not to take people down. The measure reflects the Government’s thinking on economic policy and the regions. At the same time, they are cutting public sector salaries and they are cutting pensions. Salaries have already been cut by inflation and workers will be hit very hard. The Government are also reducing the money going to local businesses, which rely on pay increases to revamp the local economy. From the perspective of Coventry and the west midlands, there is no change in the policies of this Government. The policies pursued by their predecessors in the 1980s have been dressed up with a different veneer, but it is the same old approach.

Police and fire services in the west midlands have been cut. It is difficult to get information about what the police and the Government mean by outsourcing. As I have always understood it, outsourcing means buying in goods and services. Leaving the police aside, does that mean that other services are to be privatised? We cannot get a clear answer on that. Over the next four or five years we are going to have a 25% cut in the fire brigade. That raises questions about the quality of services that will be delivered.

A large number of families in my constituency will be hit hard. More than 12,000 families claiming child benefit will either lose it or be affected by the freeze. There are 360 families who will lose their tax credits. Tax credits cut, child benefit taken away, and fuel duty rising—before the general election, this was the Government who were going to do something about fuel duty. Instead, they have started to increase it, which may affect the purchasing power of pensioners and families up and down the land. That means, in effect, that their standard of living will be drastically cut as the increase feeds through to food prices. The latest gimmick is VAT on hot food. Will that be extended in next year’s Budget to VAT on clothes and other goods that people buy? I am worried and chary when the Government start to go down that road.

In Coventry, we saw an 87% increase in long-term youth unemployment last year, and slapping VAT on regular purchases sends out a very sinister signal indeed. I have tried to cut my speech down as much as I can, so there are some issues that I shall not raise. The granny tax has been well documented, and I shall not go into it again tonight. In the west midlands, there are 390,000 income tax payers over the age of 65. Whatever did the pensioners do to the Tory party—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

Banking (Responsibility and Reform)

Jim Cunningham Excerpts

Tuesday 7th February 2012 Commons Chamber

[Mr Umunna]

I completely agree with my hon. Friend.

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

The Conservatives always tried to rewrite history when they were in opposition, but the truth is coming out now. Even Polly Toynbee, who was the biggest critic of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), has now forgiven him and wishes he were back.

More importantly, if the man or woman in the street who goes to work every day fails in their job, they get the sack. No one but a banker would ever be rewarded for failure, but we now have a culture in this country of rewarding failure. Surely that must be wrong.

[Mr Umunna]

I agree with my hon. Friend and I shall come to that precise point shortly.

Arch Cru Compensation Scheme

Jim Cunningham Excerpts

Wednesday 19th October 2011 Westminster Hall

[Tom Greatrex]

I agree wholeheartedly with the hon. Gentleman and I will go on to develop the point about marketing to independent financial advisers.

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

A number of my constituents have written to me voicing their concern about this issue. Does my hon. Friend think that there should be an urgent inquiry into the matter? On the basis of what he has just said, the situation is more serious than a lot of people realised.

[Tom Greatrex]

I agree with my hon. Friend and I will make some of those points later in my remarks. We are only at the beginning of uncovering what went on, and the situation is worrying for many other funds. There are also questions for regulators that I will go on to address.

Road Fuel Duties

Jim Cunningham Excerpts

Tuesday 13th September 2011 Westminster Hall

[Mr Donohoe]

I agree entirely. It is interesting to note that Shetland has some of the highest petrol prices in Scotland, although half the United Kingdom’s total oil supply flows through two pipelines there. Another instance is Grangemouth, where the refinery for Scotland is based. The price of fuel there is also among the highest in Scotland. That does not stack up.

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

I was interested by the intervention of the hon. Member for Newton Abbot (Anne Marie Morris), because not far from Newton Abbot is the Devonshire coast. I was down there about 12 months ago or more, and it was amazing to see the number of tankers lined up that were not being unloaded. Does my hon. Friend not think that there might be a case for an investigation into oil companies and hoarding to force up prices? Price is as much an element of the problem as taxes.

[Mr Donohoe]

I thank my hon. Friend for that intervention. I am sure that the Economic Secretary will address that issue when she sums up, along with the points made by other hon. Members.

My third point concerns the social and economic consequences of the situation. Everybody can see that many kinds of damage have been done to consumers and businesses, particularly small businesses. As I have mentioned, the erosion in the number of forecourts is obvious, particularly in rural areas, and it will lead to fuel deserts in many parts of the UK. A vital immunity for low-income families, pensioners and the disabled has been lost. Journeys to fill fuel tanks are longer, increasing carbon emissions needlessly. Consumer choice has been reduced. There are fewer facilities for HGV and van users, as supermarkets do not cater for them. The impact on the UK’s ability to cope with emergencies has also been massive. Perhaps most importantly, jobs and job opportunities are being lost.

--- Later in debate ---

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

This is the first time I have taken part in a debate that you have chaired, Mr Hancock, and so far you have been handling the discussion very well.

I want only to make one or two points of emphasis because I am conscious that all hon. Members present represent constituencies that are under the cosh in certain ways regarding fuel prices. I congratulate my hon. Friend the Member for Central Ayrshire (Mr Donohoe) on securing the debate. I know that there is high feeling in the country about fuel prices because I get regular letters about the subject. I also note one of the points that he made earlier: so far, we have not seen the lorry drivers demonstrating. I do not know and would not like to say whether that will happen, but I would not like it to. I would prefer to think that the Government will take action, as they promised in the run-up to the general election when they were condemning us for the fuel price escalator.

It is worth noting and reminding the hon. Member for Argyll and Bute (Mr Reid) that the fuel price escalator was introduced by a Conservative Government—in fact, it was the previous Conservative Government. I was also interested to note that the hon. Gentleman mentioned that the Government had taken action to try to stabilise fuel prices. I think it was 1p or something that they knocked off so, frankly, they did not take very much action.

[Mr Reid]

As well as knocking 1p off, the Government did not go ahead with the increase that the previous Chancellor’s fuel price escalator would have caused.

[Mr Cunningham]

I welcome the hon. Gentleman’s response because he is only apologising for the Government of whom he is part. When he was in opposition, he said the opposite; but never mind, we shall carry on.

Although we cannot broaden the debate, I would like to mention that one of the major implications of the fuel price increase is its impact on the wider economy. We could talk about pensioners who are on fixed incomes, one-parent families or people who rely on transport—whether it is the motor car or the bus. I need to check this out, but I think that, a couple of weeks ago, National Express announced that it may have to reconsider off-peak fares for pensioners because of the subsidy situation. That is something that the Minister may want to investigate.

[Anas Sarwar (Glasgow Central) (Lab)]

I join my hon. Friend in congratulating our hon. Friend the Member for Central Ayrshire (Mr Donohoe) on securing the debate. My hon. Friend the Member for Coventry South (Mr Cunningham) mentioned the impact on pensioners. In the city of Glasgow, 100,000 pensioners face cuts to their winter fuel allowance this year as well as increases in the cost of fuel and of living. Sadly, too many pensioners right across the country will have to choose between putting food on the table, heating their homes and getting out and about around the country. Would he like there to be some real Government action to support pensioners?

[Mr Cunningham]

The previous Government certainly went a long way to try to address some of those problems. Some Labour Members did not necessarily think that they went far enough, but that is another argument. We now have the present Government. If they want to talk about the big society, they must get a grip of the issue and try to do something more positive. It is no good relying on a pilot scheme somewhere and a double-tier price index for fuel. We must tackle the problem in a proper way. Someone mentioned the European scheme, which may well be something that the Government can consider.

I return to the issues that affect the economy. Haulage prices must be affecting businesses, particularly small businesses—for example, in relation to builders. We rely on builders to generate much of the economy. There are one or two examples of that. In addition, small businesses cannot always get credit and have cash-flow problems, which impacts on small and other businesses and therefore on the economy.

It is also worth noting that this Government, like the previous Conservative Government, changed the retail prices index; we now have a new invention called the consumer prices index. Such an approach shows that the Government are concealing the real impact of their policies, particularly in relation to inflation. I hope that the Minister will address that because the retail prices index is a way in which the public can get a good measure of what is happening in the economy in respect of inflation. If we consider current inflation levels, the public are not sure whether they are getting a true measure. The household budget is mucked around with, to use an expression, but the real cost cannot be measured. I hope the Government will look at that.

In relation to the islands, I know a lot more about Cornwall. Some years ago, I sat on the Trade and Industry Committee. We discovered to our surprise that one of the poorest areas in the country was Cornwall. Like the highlands and islands, Cornwall relies on the tourist trade, as everybody knows; a lot of its jobs depend on the tourist trade and a lot of them depend on public transport. That has an impact on public transport and bus fares. That is bound to affect the poorest areas in Britain, whether we are talking about the islands, the south or the south-west.

I remember one scheme where the post office used postal vans as a method of public transport in order to pick people up. There have been cuts in public transport in the south-west; the frequency of buses, that public mode of travel, has been reduced drastically. I wonder what has happened to what we used to call the transport subsidy.

I have covered some of the main points that I thought needed emphasis. My hon. Friend the Member for Central Ayrshire has covered the major areas, so it was worth pointing one or two other things out. The seriousness of the situation has now developed, whether we talk about inflation measurements or the impact on ordinary people who have been encouraged to take part in what is called the big society.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing this important debate, a debate that is in my ears every week of the year. I think the hon. Member for Coventry South (Mr Cunningham) used the words, “under the cosh”—and we are certainly under the cosh.

Road fuel in my constituency is at ridiculous rates, and has remained at ridiculous rates in the lifetime of this Government and the previous one. Road fuel is between £1.50 and £1.57 a litre. My constituency has the highest fuel poverty in the UK. In Stornoway, at the north end, fuel is £1.50 a litre. At a small fuel station in South Uist, where I stopped on Friday in a rush to the ferry—I was almost late, as usual—I paid £1.57 a litre for diesel for my car.

In the Faroe Islands, which are halfway between the Hebrides and Iceland, the price of fuel is usually 50p a litre less. That was confirmed to me this morning: it is £1.06 a litre in Torshavn in the Faroe Islands. The price is not a function of geography; it is a function of Treasury taxation. [Interruption.] The hon. Member for Strangford (Jim Shannon) asked me whether I wanted to move. Given how we are taxed from London, as Scotland does not yet control fuel tax, we may have to move to all sorts of strange, weird and wonderful places to avoid the Sheriff of Nottingham tax behaviour from the London Treasury, regardless of which sheriff is in charge. Be it the red sheriff or the blue sheriff, the prices are much the same from London.

Iceland has prices that follow the Faroese model. It is interesting to note, and probably no coincidence that, despite its problems three years ago, Iceland has bounced back better. Its unemployment is lower than that of the United Kingdom and its GDP per capita is higher—Iceland is moving on and putting the past behind it far better than the UK. In my constituency, higher fuel costs are bleeding the economy dry.

Unlike in Iceland, which is able to move on, we are still being bled dry and left in a very weakened state. Higher fuel costs are pulling money from councils, health boards, the police, the fire service, small businesses, pensioners and families. The hon. Member for Coventry South made that point very well. He also mentioned rural postal vans. My father used to drive one of those postal vans. They were certainly a crucible of politics when passengers came on from whichever part of the island of Barra, where I lived when I was younger, and where I still live.

When I spoke in the House of Commons on 7 February —I went back over Hansard this morning—I said that Alec MacIntosh at Benbecula airport was haranguing me about the price of fuel and telling me to sort them out in London. He said the same thing yesterday morning as I boarded the plane from Benbecula to Glasgow. Fuel in Benbecula is about 10p a litre higher than it was when I spoke in the House of Commons on 7 February 2011; it is 19p a litre up on the price it was in Stornoway last year. Orkney, Shetland and the islands of Argyll are suffering the same, and Northern Ireland is probably suffering the same.

That is all the more galling when we think of the oil around the islands of Scotland. Shetland, of course, is pumping oil at the moment, as is Orkney. West of the Hebrides, we apparently have 25% of the UK reserve of fossil fuels—$1 million for every man, woman and child in the Hebrides—but we are paying 50p a litre more than the Faroese, who have no proven or found reserves at all.

When the Government came to power, they talked about a rural fuel derogation, and that was welcome. We are having problems, of course, because the Scottish Government do not control this issue and we are left with the red sheriff or the blue sheriff in London. The previous sheriff played Pontius Pilate to the issues of rural fuel. They were not interested in the rural fuel derogation; spurious and ridiculous reasons came about why they could not do anything. They sat on their hands. There was no fair fuel stabiliser, absolutely no rural fuel derogation, daft excuses and—still dafter—they had no apologies. There is still no apology from the previous Labour Government for their inaction.

This Government came in and their words were like a fresh breeze. Being the fair and earnest fellow that I am, I welcomed their words and their stated intentions. They blamed Europe for the slow progress of the rural fuel derogation and, being the fair and earnest fellow that I am, I was minded to believe them and accept them at their word. Then, of course, the green light came from Europe. The Government are now in danger of eclipsing the previous Government in their cynicism.

Treasury rules are now so cumbersome that they might actually cause small rural fuel stations to go out of business. The Government are looking for every device to slow this down when we know that in rural France, 10 km from a main population centre, people enjoy rural fuel derogations. What is the difficulty? Please get it into place. I warned the Liberals in February—in the House of Commons, as recorded in Hansard—that if the rural fuel derogation was not in place before May, they would suffer at the polls for the Scottish elections. They did suffer in rural areas and they are now known as the “not so famous five” in the Scottish Parliament.

There is a good argument, as I think the hon. Member for Central Ayrshire or the hon. Member for Coventry South said, for fixing fuel across the country, just as the prices of newspapers are fixed. If we are to have any fairness, we will have people across the UK paying the same amount of tax; my constituents, and probably those in Argyll, Orkney and Shetland, are paying the highest tax per litre of any part of the United Kingdom.

[Mr Jim Cunningham]

Does the hon. Gentleman agree that one of the best ways to try to sort the problem out—it is becoming like a ping pong game between the political parties—is to have a proper public inquiry into the price of fuel and fuel hoarding?

[Mr MacNeil]

I have some sympathy for what the hon. Gentleman says, and I will come on to distribution in a second, but we have played the patient game long enough. I think it was Martin Luther King who said that it was not the time for the “tranquilising drug of gradualism”. This is a time for action. At £1.50 and £1.57 a litre, people are hurting and hurting badly.

I am aware that I have taken six or seven minutes, Mr Hancock, and that others want to speak. I would finally like to mention fuel distribution. I have asked the Secretary of State for Scotland, the right hon. Member for Berwickshire, Roxburgh and Selkirk (Michael Moore), about distribution from refineries to retailers, and he has assured me that he is looking into the issue.

--- Later in debate ---

[Kerry McCarthy]

I thank the hon. Gentleman for that clarification. It seems that the briefings from people lobbying on the issue are slightly out of date.

In conclusion, the Government’s efforts to reduce the burden of high fuel bills on households and businesses seem to have run out of steam, rather like a car running out of petrol. Ministers continually try to ignore the fact that their VAT rise has had the greatest impact on petrol and diesel prices by adding almost 3p to the price of a litre of petrol and £450 to the average family’s annual bills. As we know, VAT has a disproportionate impact on those who can least afford it, and evidence shows that that is harming the economy. The Treasury is happy to ask the EU for a derogation on fuel duty for the remote Scottish islands but, as we have heard today, people’s budgets all over Scotland and around the UK are being put under pressure by the cost of petrol and diesel, and the Government refuse to listen.

[Mr Jim Cunningham]

Does my hon. Friend recall that after the 1997 election, the first thing the Labour Government did was cut VAT on fuel? That helped fuel poverty.

[Kerry McCarthy]

I recall that, and there are various other examples. Hon. Members are keen for the Minister to respond so I will not elaborate on that point, but the fact is that the Government have not even tried to get a derogation from the EU on fuel prices. Opposition Members argue that the rise in VAT earlier this year is having a seriously damaging impact on the economy and, at least in the short term until the economy recovers and economic growth returns, that it should be reversed.

I have posed a number of questions to the Minister, and I look forward to hearing not only a recognition that fuel prices are impacting on families and warm words about how the Government appreciate that people are being hit by the cost of fuel, particularly in rural or remote areas, but something clear about what the Government intend to do. The 1p cut in duty is incredibly insignificant in the grand scheme of things, and the Government must act because people and businesses are suffering. It is time for action.

Public Spending (Coventry)

Jim Cunningham Excerpts

Tuesday 12th July 2011 Westminster Hall

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

I apologise for having been a minute or two late, although the debate might have started early. My hon. Friend and my right hon. Friend make a valuable point. For a long time, the rape crisis centre in Coventry has struggled, to say the least, to get resources, and the cuts will make the situation worse. Do the figures for women who are abused or raped in Coventry—or anywhere else for that matter—not call into question the Government’s policy on cutting legal aid and funding for citizens advice bureaux, because vulnerable people, and particularly women, will often use those agencies?

[Mr Robinson]

My hon. Friend is exactly right. Perhaps I may take a second to say that I think my hon. Friends want to say a word, if they are able to catch your eye, Mrs Riordan, and if we have time, about the wider aspects of the issue. After all, if more women are trapped in violent relationships there will be greater mental, physical and sexual health problems for them as a result, with an increased cost to the taxpayer. The NHS will have to cope when it is already under tremendous pressure and its budget is being dramatically cut. The issue is wider than just the reduction, although the Minister needs to explain how anyone can justify cutting the number of Coventry’s specialist domestic abuse officers from eight to two and reducing rape support resources, at the same time as other measures will clearly increase the likelihood of the problem that those staff and resources are meant to deal with. It seems crude and harsh, and we wonder whether it is strictly necessary to go along that path.

I want to mention the women’s voluntary organisations. Overall, the council, in line with other councils, faces cuts of about £38 million in its grant from central Government. A number of streams from that are for voluntary organisations, and those are due to end; some have already ended. Those voluntary organisations face increasing demand from the communities they serve, for the reasons we have been analysing. As hardship increases and cuts bite in all the areas I have mentioned, demand will increase. As resources are cut there will be greater pressures on hospital services and the police, which are also being cut. There will be a double whammy—cuts on one hand and increased need on the other.

Women’s voluntary organisations appear from the study to be particularly vulnerable, with some expecting cuts of up to 70% of their funding next year. I can inform the Minister, if she wants to deal with them individually, of the types of voluntary organisations that are particularly badly affected. Can that be looked at again? We do not expect answers to everything today, but we would like some undertaking from the Minister to check out the research funding and reconsider Government policy in the light of that. She could then tell us, “Yes, that is indeed our policy, and although we did not intend the consequences, those are the consequences and you will have to live with it.” If that is the Government’s message, they should be straightforward with the people of Coventry—the women of Coventry—and say, “This is the price that we are asking Coventry women to pay to put right the faults, and the massive irresponsible financial borrowings.” That is all, of course, in the context of reducing the deficit caused by private sector bankers.

That seems a pretty harsh message to send to the women of Coventry, and if that is the best the Government can offer, I warn them now that the people of Coventry will not be impressed. They will in due course have occasion to express their own opinion about a Government who have been as hard-hearted and indifferent to the cause of women and children as the present Government appear to be.