Finance (No. 3) Bill

Jim Cunningham Excerpts

Monday 4th July 2011 Commons Chamber

[Neil Parish (Tiverton and Honiton) (Con)]

I rise not to support the new clause but to say to Ministers that I would like to hear exactly what they intend to do about doorstep lending. The hon. Member for Solihull (Lorely Burt) mentioned Wonga, which can charge up to 4,500% interest on its loans. Uncle Buck can charge 2,500% and PaydayUK can charge 1,200%. With a base rate of 0.5%, how can charging such inordinate interest be justified? These companies—I call them all loan sharks, to be blunt—travel around our poorest areas. I would be the first to admit that my constituency is not the most deprived in the country, but I have many poor and vulnerable constituents, and I think that Members on both sides of the House are concerned about what action we should take.

I know that Ministers are not keen on dealing with this problem through regulation, but perhaps we should consider our approach to smoking: we do not stop people smoking—although we have banned it in public places—but we put large health warnings on cigarette packets. The Financial Services Authority, or whichever body will be responsible, should at the very least take action so that there are serious health warnings for those considering taking out these loans.

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

Does the hon. Gentleman agree that one aspect that should be looked at is television advertising?

[Neil Parish]

The hon. Gentleman is right that the advertising and promotion of these products is a great concern. These products can seriously damage someone’s financial health, because they not only get them into huge debt, with huge interest to pay, but can often prevent them from securing mainstream credit, which can affect them enormously.

I am not greatly in favour of regulation, but I do not think that we can stand idly by and let some of the most vulnerable people in the country be exploited. They are desperate for money, and people knock on the door and offer them it. In fairness, many of them do not look at all the details or consider the fact that they will have to pay such high interest if they do not repay the loans. They do not realise that they will probably be charged even more interest if the loan is renegotiated, and that if they do not pay on time the loans company is likely to impose huge fines. That is unacceptable in this day and age and we must do something about it.

About 50% of the population in Ireland are involved in credit unions. In the US and Canada, the figure is about 40%, in Australia and New Zealand it is about 25%, but in the UK it is only 2%. I know that the Government are looking into increasing the availability of credit unions across the country, but we need to act much faster. In the meantime, we have to act against these companies, the loan sharks, because people who take out the loans sometimes have to pay back 10, 20, 30 or 100 times as much as they originally borrowed.

If the loan sharks’ argument is that they lend on those terms because the people to whom they lend are a security risk, we must question whether they should lend the money in the first place, and certainly at such massive amounts of interest. They must take the view that if 25 of the 100 people to whom they lend are forced into bankruptcy they will make enough money from the other 75 to make a profit. Is that moral and right? The answer is certainly not. Regardless of one’s political persuasion, that cannot be right in this day and age.

I have mixed views on the new clause, but I do not want Ministers to wring their hands and say that there is nothing they can do. In fairness to the Government, I should point out that the Opposition cannot hold their heads high, because they had 13 years in which to do something about this issue. It is right for the coalition Government to take the issue on. Instead of wringing our hands and saying we can do nothing, let us do something.

--- Later in debate ---

[Neil Parish]

The hon. Lady is right that parts of the population cannot borrow elsewhere, which is a problem. That is another reason for clear warnings, if not restrictions, on the rates of interest charged.

The problem is not just that there is a population who cannot borrow from anywhere else but that many companies and loan sharks knock on people’s doors. Credit is often dished out in cash, which is very tempting. Some people could, if they went to a great deal more trouble, secure money from proper lending companies at a competitive rate.

[Mr Jim Cunningham]

People also borrow against their wages, which puts them on a financial treadmill that is hard to get off when there are such extortionate interest rates.

[Neil Parish]

The hon. Gentleman refers to payday loans, which also incur huge amounts of interest.

I am not against people being able to borrow. In a capitalist system, people need to be able to do that, but we must stop companies exploiting people’s vulnerability and lending at such vast rates of interest. That can be achieved either by legislation or by companies having to provide a clear statement of what a loan will cost when their representatives arrive on somebody’s doorstep and try to lend them money. If someone who borrows £100 will end up paying £2,000 back, that should be absolutely clear. That is the very least I should like the Government to do.

I have made, I hope, many good points, and I hope too that the Government will not just wring their hands but do something to help vulnerable people and stop legal loan sharking companies taking money from people in a way that I believe is theft.

Budget (Coventry)

Jim Cunningham Excerpts

Tuesday 3rd May 2011 Westminster Hall

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

This is the first time, Ms Dorries, that I have been involved in a debate chaired by you; it is a pleasure to see you in the Chair.

Coventry has had a long and significant economic history, which continues to shape and influence the performance of the local economy and could provide the foundation for its growth. The steady waning of coal mining after the second world war, together with the more rapid decline of our motor industry in the 1970s and 1980s, hit Coventry particularly hard. Coventry’s economic output is now 8.5% lower than the national average, and for Nuneaton and Bedworth it is now 35% below the average, yet Warwick performs 17% better than the national average.

Since the millennium, Coventry has benefited from significant redevelopment and regeneration, and the public sector has been crucial in that process. Coventry has a particularly youthful age profile, and scores well above average in measures of economic adaptability. Rates of growth were increasing before the recession, which suggests that the structural change is largely complete. The city holds many competitive advantages for research and development, engineering and niche manufacturing. However, unemployment is a growing worry. The latest figures from the House of Commons Library reveal that Coventry has 10,324 unemployed job seekers, and things are likely to get worse as the year progresses.

Coventry is famous for making cars, but it is public sector workers who drive much of the local economy. As we know, Becta and the Qualifications and Curriculum Development Agency are being abolished. It may have seemed the easy option to get rid of these education quangos, but they employ a combined total of close to 800 people. Many are former teachers. The relocation of the QCDA cost the Government more than £44 million, and it came at a personal cost to many of the staff who relocated from London.

We cannot ignore the strain on the private sector. Friends Life, formerly Friends Provident, recently announced that it plans to close its offices in Coventry by the end of the first half of 2012. There are 428 jobs at stake, and staff will be badly affected. That brings total job losses in Coventry to around 3,000.

I turn to the scale of the grant reductions that Coventry faces. Because of the cuts, the city council is being forced by the Tory-led Government to cut as many as 500 posts over the next 18 months. The amount of money that the council spends in the local economy will also be dramatically reduced. That, too, will have an impact on council staff. The front-loading of cuts means that staff losses will be required in the early stages of the spending cuts. That will affect families throughout Coventry. The overall impact is that Coventry city council is expected to lose about £45 million over the next few years.

The cuts will have an impact on the economy of the west midlands. They 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, cuts of more than 20% to the West Midlands police equate to 2,500 jobs.

There are two parts to the Department for Communities and Local Government cuts for Coventry council. It will lose formula grant of more than £19 million, and specific grants in excess of £17 million. The city council will not be able to continue providing services at the same level. Because of the latter cuts, there will be far fewer grants and they will have a lower overall value. It is a matter of great concern that many grant streams will end.

The vulnerable people of Coventry will be hit a number of times by the Government’s deficit reduction plan. Pensioners were dealt a blow by Government when the winter fuel payment was slashed by up to £100. How can those who are disabled or who live in care homes take part in the Government’s big society once the mobility component of the disability living allowance has been removed? Has the Minister considered the effects of reduced local government budgets on the cost per placement of patients on independent care providers such as Southern Cross? Notwithstanding the burden on the NHS, local hospitals will be expected to deliver far-reaching reforms to patient care as their budget decreases and demand increases. How can the Minister justify removing the provision of face-to-face legal advice for the poorer residents of Coventry in favour of a cheaper phone line?

I am deeply concerned about local provisions for our young people. Building Schools for the Future is to be abolished. That will result in a loss of £300 million to the local economy in construction, which can be added to the cuts in the council’s budget We await the James review—it has been a long time coming—but that is of no comfort to schools that are in desperate need of repair. From this year, the Connexions careers service will operate on a budget that is more than 70% smaller than in April 2010. The service gives young people the skills and confidence to get into the workplace. Its downsizing will doubtless contribute to the high youth unemployment that the region has experienced.

The coalition Government admit that Sure Start will suffer real-terms cuts. Ministers refuse to deny that this will result in the closure of Sure Start centres. However, Sure Start centres in Coventry will lose nearly £600,000, which will be a great blow to young families. Services for young people face other financial pressures. Coventry’s children, learning and young people’s department has announced a further £1.2 million loss because of the ending of the 5% standards fund.

Crucial retention funds that the council had relied upon will not be continued in the next financial year. The largest proportion of JSA claimants in Coventry are aged between 18 and 24. Given what I said about the Coventry’s youthful profile, there is no reason why our young people should not be given the opportunities that they need as it will strengthen Coventry’s regeneration.

All these changes will have an irreversible effect on the economic growth of the region. 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 the regeneration of the region and its infrastructure.

There is an urgent need to address infrastructure issues. We need an increase in train travel between Coventry and Nuneaton, and Coventry and Leamington. The go-ahead for a new station at the Ricoh arena is vital to Coventry’s economy. Equally, we are waiting for the Friargate development to go ahead; again, it could have a big impact in revitalising the city centre. Revitalising the city will obviously create jobs.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

I raise the question of what I fear is the impending sale of the strategically important land at Ansty. If a developer gets hold of that land, the possibility is that it will sit on it, waiting for the maximum return. That will probably be through housing rather than what it was meant for, which was job creation in the high-tech manufacturing sector.

[Mr Cunningham]

My right hon. Friend anticipates me, as I was just coming on to that.

The abolition of RDA funding means that there is little to lever in private sector investment for large-scale redevelopment projects. Although the prospect of 10,000 jobs in the enterprise zone is welcome, questions arise on the implications for other employment sites such as those at Ansty and Browns lane. In answer to my right hon. Friend, I am sure that he will remember, as will my hon. Friend the Member for Coventry North West (Mr Robinson), that we lobbied hard to get the Ansty site as a technological centre, and the city and the west midlands invested a lot of money in it—if my memory serves me correctly, the investment for the infrastructure was somewhere in the region of £5.9 million. It is vital that the Minister clears up the future of that site. A lot of taxpayers’ money has been invested in it and some companies are operating from it at the moment. How does the development of that site square up with the proposal to create 10,000 jobs at Coventry airport? Although my hon. Friends and I do not deny that such jobs are needed, we need the issue to be sorted out one way or another. The public in Coventry want to know why some of those jobs cannot be located on the Ansty site. My right hon. Friend, therefore, raises a vital point, which is of interest to a lot of people, particularly those in Coventry.

My next point relates to the impact of the Localism Bill. Local people seek assurances from Government that there will be no fire sale of employment sites in need of overhaul, such as the Ansty and Browns lane sites, to help address the deficit. I have dealt with the Ansty site, but of equal importance is the Browns lane site, which was once a manufacturing site for Jaguar in Coventry—let me just say in passing that my hon. Friends and I are glad to see that Jaguar is reinvesting in the west midlands and in Coventry.

The Localism Bill also applies to the Coventry airport site, which is a proposed enterprise zone. Some major environmental issues will arise from the development of that site and the Severn Trent site. People will be testing the Localism Bill to see whether the public will have a major say in any development initiatives. Many people in Coventry are worried about the use of greenbelt land for example. We will soon find out whether the Government mean what they say about localism.

The Government need to address the balance of housing and employment. The highest rates of unemployment are generally found in the neighbourhoods that were based around the mining and manufacturing industries of the past. That highlights the key role that places can play in creating and sustaining unemployment. Areas housing large numbers of unemployed, low-skilled and vulnerable residents cannot generally attract business investment.

I will finish here because I know that my hon. Friend the Member for Coventry North West wants to speak and we obviously want to give the Minister time to answer our points.

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[Mr Jim Cunningham]

Can the Minister talk to her colleagues in other Departments about one issue that I do not think her Department—the Treasury—actually handles? That issue is the future of Ansty. A list of sites has been published. In particular, we are talking about Advantage West Midlands, which is the regional development agency. On that list of sites, Ansty is not mentioned, so we do not know what is happening with it. That is one of the points that I made in my speech. A lot of taxpayers’ money has been invested in the site and a lot of effort has been put in by myself and my colleagues to get it developed. We and the public want to know what exactly will happen to it. I do not expect the Minister to answer me directly today, but perhaps she could go away and consider that matter.

[Justine Greening]

One of the things that the hon. Gentleman has been able to do very effectively in his speech is to raise a number of issues—such as transport and infrastructure, which I will come on to shortly—that are not necessarily a concern of the Treasury, but that doubtless have been recognised by the Departments concerned. I will ensure that I pass back his specific comments about the Ansty site to my colleagues in the Department for Business, Innovation and Skills and I will write to him in more detail about that specific site.

As I was saying, enterprise zones are another opportunity to bring some genuine benefits to the hon. Gentleman’s area. In his speech on the Budget debate and again today, he has expressed the hope that Coventry will benefit from inclusion in an enterprise zone in the future. I welcome his enthusiasm for the enterprise zone policy. Of course, the Coventry and Warwickshire local enterprise partnership is welcome to bid to be part of the second tranche of 10 enterprise zones. Regarding timelines, I have no doubt that his local LEP will be working on its proposal already. We expect to take some decisions within Government in the summer about where the next tranche of enterprise zones will be. We do not intend to spend a long time making those decisions. We are aware of the urgent need to get on with this policy, because we believe that it can make a real difference.

The Government have also established the regional growth fund, which is worth £1.4 billion overall, to help to grow a private sector-led economy in England. Of course, Coventry will benefit directly from the first round of awards from that fund, with Jaguar Land Rover having won support for a project to undertake design engineering for a new small common vehicle platform that will be developed in part in its Whitley centre.

There have been other signals that the private sector sees Coventry as being “open for business” and that it has real confidence in the future of the city. Only last week, it was announced that the overhaul of Coventry airport will go ahead, creating new infrastructure and business opportunities in a £250 million development.

The second round of the regional growth fund, in which we are aiming to allocate the remaining £950 million of funding available, is now open for bidding. The second round closes on 1 July and I look forward to seeing many more exciting proposals, including from businesses in Coventry.

Hon. Members have raised concerns about local government funding. As I have already made clear, the last Government left an appalling financial mess behind them and we have a moral obligation to ensure that we pay down our debts as quickly as possible. Tough decisions have been necessary across all areas of public spending. Local government, which makes up a quarter of all public expenditure, has its part to play in that process.

The Government have delivered a challenging but fair settlement for local government to ensure that the most vulnerable communities are protected. Although financial settlements have been tight, local authorities will still receive £29 billion in grant next year. It is also worth noting that formula grant in Coventry will be nearly £500 in 2011-12, which is more than twice what it will be in west Oxfordshire, precisely reflecting the higher levels of need in Coventry. I know that Coventry council is getting on with calculating how it will make the savings that it needs to make. In fact, its deputy leader, Councillor George Duggins, has said that the council was in a “good position” compared with other councils, because it has taken early action.

There is no doubt that these are difficult decisions to make and of course they should be made at the local level by local authorities, to ensure that the priorities of local people, including those of people in Coventry, are reflected in those decisions. Ultimately, however, there is no doubt that the worst thing that we could do is to ignore the huge deficit that our country faces and the need to tackle it.

The hon. Gentleman rightly mentioned the issue of infrastructure in his speech and I want to refer to it briefly. During the spending review period, the Government will actually spend slightly more on infrastructure than the last Government had planned to spend. Of course, investment across the board has already been announced by my right hon. Friend the Secretary of State for Transport, but I have no doubt that the points that have been made today about the regional transport infrastructure in the west midlands, including rail, will also be taken on board by him. Hon. Members are right to point out that high-speed rail is a strategic project that can bring benefits not only to the west midlands but nationally. However, there is still the need to ensure that we get investment in the existing track. Of course, that existing track has a clear role to play in the coming months and years, by helping Coventry and other areas to regenerate their economy.

Finally, I will mention the Building Schools for the Future programme. I recognise the concerns that the hon. Gentleman set out about that programme—they are concerns that I face in my own constituency. It says everything about the BSF programme that a Government who were in power for 13 years could come to the end of their term and still have existing schools in the sort of state that the hon. Gentleman and his colleague, the hon. Member for Coventry North West, described.

However, I have no doubt that such considerations are being taken into account by the James review and I assure both hon. Gentlemen that, as we go through the coming years, we want to ensure that parts of the country outside the south-east, such as Coventry, benefit to the maximum from the next period of economic growth.

Amendment of the Law

Jim Cunningham Excerpts

Monday 28th March 2011 Commons Chamber

[Mr Pickles]

My hon. Friend is absolutely correct—so much so that I am delighted to tell him that I will refer to that in a few moments.

The regional bureaucratic approach is not only costly but does not do the job it is supposed to do. Instead, we want to see business men and business women playing a leading role in the debate about their local economy, helping all parts of the country to live up to their full economic potential.

More than 90% of people in England now live in areas with local enterprise partnerships. These partnerships are a new approach to economic development, putting local councils, local communities and local business in the driving seat. The partnerships established so far have already set out plans that are high on ambition and low on bureaucracy—plans to attract investment, boost tourism and strengthen transport links. Local enterprise partnerships are going for growth, not handing out grants. The 21 new enterprise zones are an opportunity for leading partnerships to take their work to a new level. In exchange, we will let them keep all business rate growth in their zones for at least 25 years.

Businesses in the enterprise zones will benefit from a discount of up to 100% on rates and access to superfast broadband. We will work closely with local partners to make sure that the zones do not simply displace jobs and business. For example, the Boots campus in Nottingham will be a centre for science and medical research and innovation, the Manchester airport zone will be ideally placed to make the most of the local science and engineering expertise and international transport links, and Liverpool Waters will keep up the momentum of economic growth in that resurgent English city.

It is not just enterprise zones that are being helped: the Budget extends the doubling of small business rate relief for a second year. This will help small firms and small shops across the country, given that business rates are the third biggest outgoing for firms after staff and rents.

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

Can the Secretary of State say whether Coventry is going to be part of these enterprise zones, and if not, can he give me the reason why?

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

It is well documented that the west midlands has been one of the worst hit regions during the recession. That is one reason why I raised the issue of enterprise zones in an earlier intervention. Those zones would certainly affect Coventry in a major way.

There is widespread concern in the west midlands about these cuts, but it is important to remember how this started. Some of us were here when the economic crisis blew up. It blew up in America. I realise that Government Members are probably in denial about this, but the fact remains that it started with Lehman Brothers in America. As Members who have followed these events will recall, there are still some charges against them. A Senate investigation took place into why Lehman Brothers collapsed. Some believe that the American Treasury could have done a lot more to help Lehman Brothers out. Be that as it may, it did not happen. We should all remember how this started.

People might have short memories, but the situation became so bad that even a Republican President and tax cutter like George W. Bush ended up pumping billions of dollars into the economy in the last month of his presidency. He realised the seriousness of the situation. It is not true to suggest for a moment that the Labour Government created this problem. It was an international problem, and that has been demonstrated.

It is equally important to say that we were never in the same position as Greece or Portugal—or Ireland, for that matter. We kept our triple A credit rating, although people tend to forget that. If we cast our minds back, we will remember that we had to restructure the banks. Anyone who watched the collapse of Northern Rock night after night on the television would know that there could have been a major run on the banks. The previous Government acted decisively and quickly. The last Prime Minister flew out to America in an attempt to secure international agreement on how to control the banks. The widespread absence of such agreement was one of the major problems. The Prime Minister tried to secure it in Europe as well. To say that we created the present problem is to deny the truth, in my view at least.

As I have said, we had at least 14 years in which to repay our debt—unlike Greece, and unlike other European countries such as Ireland. If we can underwrite Ireland’s debt, or help Ireland and promise to help one or two other countries, that suggests to me that our country has not been as badly off financially or economically as the Government parties have tried to make out. There certainly were economic problems, as I have demonstrated, but not to the extent that the Government’s solution suggests. We said that we would probably halve the deficit over about four years, but the present Government want to eradicate it, and I cannot think of any United Kingdom Government in recent history who have eradicated a deficit. Governments have tried, but they have not been able to do it.

We should bear in mind that when Labour came to power in 1997, 50p in every pound of taxpayers’ money was used to pay off debt. People also tend to forget that, after consultation with industry and the trade unions, we introduced the car scrappage scheme, which brought the motor car industry out of the doldrums. That was a long, hard-fought battle. We would certainly have reduced the deficit over those four years.

Coventry has benefited from significant redevelopment and regeneration, and the public sector has been crucial to that process. What concerns us now is the possibility that the Government’s cuts in the public sector will cause it to return to the days of the late 1970s and 1980s. Members may recall that, during the 1970s and the 1980s in particular, the motor car industry in Coventry and manufacturing in the west midlands were almost annihilated. The Government talk of balancing the economy. The last Conservative Government were balancing the economy at the time, but they were balancing it in favour of the service sector. The present Government criticise the excessive emphasis placed on that sector, but the Conservatives started it.

Rising unemployment is also a growing worry. The latest figures from the House of Commons Library reveal that there are nearly 10,000 unemployed jobseekers in Coventry, and the position is likely to worsen in future years. Coventry is famous for car manufacture, but public sector workers are driving much of the local economy under the present Government.

As some Members will recall, one of the Government’s first actions, last June or thereabouts, was to abolish the British Educational Communications and Technology Agency and the Qualifications and Curriculum Development Agency. They also abolished Advantage West Midlands, which was one of the most successful regional development agencies in the country and had created hundreds of thousands of jobs throughout the midlands. It created Ansty technological park, of which the Government are now very proud. What a strange coincidence. When we created a business park at the university of Warwick at the same time, we were told that we had no business to be in the area, but later the Government tried to take the credit.

I will end my speech now, because I know that others wish to speak. There is a time limit anyway.

Oral Answers to Questions

Jim Cunningham Excerpts

Tuesday 21st December 2010 Commons Chamber

[Danny Alexander]

I am grateful for that comment. I hope that the hon. Gentleman will welcome the decision that we took in the spending review to end the PFI credit system. Departments now have to look at the best way of funding projects within their own budgets; effectively, the PFI credit system meant that they could top-slice local government funding for local authority projects. The change that we have made means that Departments will have to make a proper comparison between PFI costs and the sorts of costs that the hon. Gentleman has described. I am sure that the House will have heard what he has said.

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

As my hon. Friend the Member for Luton North (Kelvin Hopkins) said, PFI was an invention of the previous Tory Government, who were having difficulties building new hospitals. Is it beyond the wit of the Chief Secretary, who knows that most of those PFIs were local negotiations and have break clauses in them, to use his imagination and look into the break clauses?

[Danny Alexander]

The hon. Gentleman makes an important point. As for the politics of the matter, it was, of course, the previous Government who oversaw a massive expansion of PFI. It does not come well from the hon. Gentleman and other Opposition Members to be criticising an approach that ballooned under the previous Government.

Equitable Life (Payments) Bill

Jim Cunningham Excerpts

Wednesday 10th November 2010 Commons Chamber

[Nadhim Zahawi]

The hon. Gentleman would be right if the date were purely arbitrary. However, the ombudsman stated that the malpractice occurred in 1991, so the date is not quite as the hon. Gentleman puts it. It has not been plucked out of the air.

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

Leaving aside the economic difficulties that we face, is not the central problem that when we put a cap on something, we have to make it work? Therefore, we have to arrive at a certain formula to make the cap work, because we are largely in the hands of the Treasury, as my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) said earlier. Unless we get a grip on the Treasury, we will find ourselves in similar situations, and it is my guess that the Treasury has imposed the cap.

[Nadhim Zahawi]

The hon. Gentleman makes an interesting point. What I would say is that, in contrast to the quotation from Winston Churchill earlier, my observation as a new boy to this House over the past six months is that the Treasury has behaved positively. We must remember that we will be administering public money. The Government have no money of their own; rather, we collect money on behalf of the people and then we administer it. It would be foolhardy and perhaps even foolish for us to say, “Let’s have somebody else administer public money.” At the end of the day, people have to have someone who is accountable, and we are accountable, as is the Treasury.

Amendment 7 seeks to ensure that the Treasury takes into account a proper evaluation of the total relative losses when determining payments—that is, the figure should not be £4.3 billion, but could be much higher. I strongly disagree with that. Many EMAG members have written to me, lobbying me to see the matter differently, but I have to say that I disagree. Given the current economic hardship, we all face an incredibly difficult situation, in which we are all having to tighten our belts. To deliver compensation of £1.5 billion at this time is entirely fair.

Amendment 2 is in the name of the hon. Member for Leeds North East and all I would say to him is that I understand the thrust of his argument that we should consider what the ombudsman says about the behaviour and actions of the coalition Government in dealing with the issue. However, I would rather get things done and dusted, and have something delivered to the victims than procrastinate further and wait for longer.

European Union Economic Governance

Jim Cunningham Excerpts

Wednesday 10th November 2010 Commons Chamber

[Chris Leslie]

I shall deal with the nature of the changes in a moment—and there are changes. It would be a bit disingenuous to suggest that nothing is changing in this regard.

From our point of view, eurozone stability and a sensible crisis mechanism are worth while, and it is clearly in our national interest to engage strongly in discussions and reforms that promote economic stability across Europe. We will support sensible changes that benefit the United Kingdom. The core idea of improving the rescue mechanisms for eurozone countries facing severe economic difficulties makes logical sense, and it is also wise to find a permanent footing on which to base any new rules rather than relying on temporary arrangements that might either expire or be subject to legal challenge. However, the Prime Minister and the Government are protesting just a little too much that this is entirely a matter for the eurozone, and absolutely nothing to do with us. In fact, there are indirect implications for our economy because of changes that might affect economic growth in the eurozone, as well as direct policy implications that could change the way in which we operate in the United Kingdom.

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

My hon. Friend will recall that the previous Prime Minister and his Government drew up five economic tests. Had it not been for him, we would not be debating the motion today, because we would be part of the eurozone.

[Chris Leslie]

It was certainly worth punctuating the debate with that point, which my hon. Friend made forcefully and well.

Savings Accounts and Health in Pregnancy Grant Bill

Jim Cunningham Excerpts

Tuesday 26th October 2010 Commons Chamber

[Mr Hanson]

I shall not take lessons from the Liberal Democrats on tuition fees given the outcome that they have got in that regard. The hon. Gentleman needs to recognise that the trust funds are an investment to tackle inequality among people at the age of 18 and to give poor people in society a chance at the age of 18. Not every will have a trust fund at the age of 18: some of the Cabinet’s will, but not everyone’s. He should recognise that poor people need that help and support at the age of 18.

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

Does my right hon. Friend agree that the comments of the hon. Member for Cheltenham (Martin Horwood)s are a bit rich given the Liberal Democrats’ current position on tuition fees after they campaigned against them for years? The Government claim to be very interested in eliminating child poverty, but how will what has been announced tonight do that? It is sheer hypocrisy.

[Mr Hanson]

My hon. Friend is correct in the sense that there are ways in which we can tackle child poverty, such as by ensuring that people have an equal opportunity at the age of 18 to make progress in their lives through jobs, training and university. One way in which we were doing that was through the child trust fund.

Equitable Life (Payments) Bill

Jim Cunningham Excerpts

Tuesday 14th September 2010 Commons Chamber

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

Is not the fact of the matter that Members who are now in government knew what the economic situation was when they were campaigning in the general election, yet still signed those pledges?

[Stephen Timms]

That is precisely what happened.

I just wish to tell the House the main amendments that we will table in Committee. I hope that the first will meet no opposition, because it directly picks up on a point in the EMAG pledge. It will require that the payments scheme be independent of government. The Bill does not say that, but our view is that it should; indeed, the Minister has confirmed that he intends it to be independent.

The Minister made a slightly puzzling point in his statement to the House on 22 July, when he said:

The ombudsman…concluded that the design of the scheme should be independent of the Government.”—[Official Report, 22 July 2010; Vol. 514, c. 577.]

That is of course true, but the ombudsman concluded that the scheme itself should be independent—that is the point that should be in the Bill, and it is crystal clear in the EMAG pledge. We will doubtless see lots of wriggling by those on the Benches opposite about exactly what was meant by the phrase “proper compensation” in the pledge once the figures are announced on 20 October; many Members will explain that they did not think it meant what EMAG members think it meant. But on scheme independence there is no wriggle room in the pledge, so we will table an amendment to make that a requirement.

Oral Answers to Questions

Jim Cunningham Excerpts

Tuesday 13th July 2010 Commons Chamber

[Mr Hoban]

It is interesting to hear about views expressed after the election, which were kept silent before the election. We took the difficult decision in this Budget to lay the foundations for growth in the future and make sure that we pay the bills of the past. Sadly, that included the increase in VAT.

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

How does the Minister expect increases in VAT to help employment?

[Mr Hoban]

By tackling budget deficits, we will be in a better position to keep interest rates lower. Serious concerns were expressed before the Budget about the ability of the previous Government to tackle the deficit. The tough action we have taken has been welcomed across the world and by rating agencies. It lays the right foundation for future growth. This Government are prepared to take the difficult decisions that the hon. Gentleman’s Government ducked before the election.

Finance Bill

Jim Cunningham Excerpts

Tuesday 6th July 2010 Commons Chamber

[Mr Byrne]

One of the great flaws in the Budget is that the Government are relying on a bounce-back in private investment, for which there is barely a precedent, and nor is there any evidence from the business community that it might happen.

Make no bones about it, since the Chancellor sat down a fortnight ago, the gloom has grown. However, the Finance Bill does not adjust the Government’s strategy. All we have heard from the Chief Secretary this afternoon is a very clear economic credo: where there is worry, let us spread fear, and where there is risk, let us bring danger. Whereas the Labour Government planned to halve the deficit in four years—a plan that the Chancellor’s own independent advisers said we were on track to deliver, and which the G20 said met its timetable—this Chancellor has added nearly £40 billion in new tax rises and spending cuts. He has locked us on a course to slash away come what may, and, in a world full of risk, he is now preaching to others to do the same.

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

Do the recent figures for the motor car industry not show that the previous Government were on the right course for an economic recovery, and does my right hon. Friend not agree that a £360 million cut in Coventry’s schools programme will have a devastating effect on the schools and construction trade there? I am sure he knows that the construction trade always leads economic recovery.

[Mr Byrne]

My hon. Friend is right. One reason the British supply chain is now so worried about the Government’s intentions is that it has seen these knee-jerk reactions, such as yesterday’s decision, of which the Chief Secretary was so proud he did not dare come to the House to say a word about it.

I want to make a point that follows on from what my hon. Friends have said. Rather than balancing spending over the economic cycle, we now have, in the Budget, a plan to eliminate in just five years the structural deficit. However, the Finance Bill ignores the question of what happens if growth is weaker than expected. It is worth for a moment the House exploring the economic consequences of this Chancellor’s proposals. If growth fails, the structural deficit as a percentage of our economy goes up, yet the timetable for its elimination remains unchanged, so the Chancellor’s only course of action is to cut deeper and deeper. If growth falters or the economy shrinks, the Chancellor cannot stimulate the economy, but can only respond with cuts. It is not a plan to manage the economic cycle; it is a plan for an economic death spiral. Like some kind of self-flagellating penitent who believes borrowing is so morally wrong, he responds to any new urges with another bout of whipping. He might feel it gets him to heaven a little faster, but I am afraid it is no way to run an economy.