Oral Answers to Questions
Rushanara Ali Excerpts(11 years, 6 months ago)
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Gavin Shuker (Luton South) (Lab/Co-op)
7. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of long-term unemployment.
Rushanara Ali (Bethnal Green and Bow) (Lab)
9. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of long-term youth unemployment.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
15. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of long-term youth unemployment.
Sajid Javid
I think it is the hon. Gentleman who should be apologising. He is probably having a hard time explaining to his constituents why the number of young people on jobseeker’s allowance in the last five years of the previous Government went up by 45%. I have some good news for him, however. Under this Government, that number is down, and under this Government the number of vacancies in his local jobcentres is up by 30%.
Rushanara Ali
All other Olympic boroughs received a much-needed economic boost from the Olympic games, but the Office for National Statistics figures show that youth unemployment increased in my constituency between June and October, not to mention the 141% increase in long-term youth unemployment in the past year. Does the Minister agree that tackling this problem requires action from the Government, with a bank bonus tax to fund 100,000 jobs for young people, and action locally by the council, to take this issue seriously?
Sajid Javid
I know the hon. Lady takes this issue very seriously, which is why I believe she took her right hon. Friend the shadow Chancellor to Queen Mary university recently to discuss it with young people. I hope that they told young people that under the previous Government youth unemployment was created as a problem—up 72% in 10 years. I hope she also told them that youth unemployment has fallen by 62,000 in the last quarter because of the Youth Contract, the Work programme, investment in apprenticeships and other Government policies.
VAT on Air Ambulance Fuel Payments
Rushanara Ali Excerpts(11 years, 10 months ago)
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Rushanara Ali (Bethnal Green and Bow) (Lab)
I, too, congratulate the hon. Member for Hexham (Guy Opperman) and my hon. Friend the Member for York Central (Hugh Bayley) on securing this debate. I also want to echo the congratulations to Ken Sharpe on working so vigorously to get so many people to sign up to the campaign.
I want to focus on the contribution of the London air ambulance service, which is based at the Royal London hospital in my constituency. It was established in 1989 and does incredible work across London, providing critical care to those with serious injuries. The London air ambulance service has completed 26,000 missions since 1989. In March, I visited the service and heard about the amazing work it does. In 2006, the last Labour Government committed £1 billion of much needed funding to rebuild the Royal London hospital in Whitechapel, which included renovation of the helipad. In December 2011, the London air ambulance service moved to its new base, on the 17th floor of the refurbished hospital building.
Last Saturday we marked the seventh anniversary of the 7/7 London bombings, when terrorists detonated bombs on three underground trains, including one near Aldgate in my constituency, and a London bus. We remembered the 52 innocent people who lost their lives in the London bombings and the many more whose lives were changed for ever. It is difficult to forget the harrowing scenes of devastation and chaos across London that day. I would like to use this opportunity to pay tribute to our emergency services, whose response and professionalism following the 7/7 attacks saved the lives of many. In particular, I would like to focus on the work of London’s air ambulance service. Following the attacks, London’s air ambulance staff, who had been attending a monthly clinical governance day, were deployed immediately. London’s air ambulance service flew 26 helicopter missions to deliver urgent medical care and supplies to the scenes of the incidents across London, and the service’s medical teams treated or triaged more than 700 people. The service rightly received praise for its incredible work and quick response in the wake of the attacks.
At the coroner’s inquest into the 7/7 London bombings, Lady Justice Hallet recommended that London’s air ambulance should have its “funding and capacity” reviewed and said:
“Despite current financial constraints, London’s Air Ambulance has, since its formation, provided an invaluable service to the capital.”
The service has been deployed to numerous major incidents in London, including not only the London bombings but the Bishopsgate and Aldwych terrorist attacks, as well as the Southall, Paddington and Potters Bar rail crashes. Yet despite those recommendations, the London air ambulance service has received no increase in major incident funding. The service believes additional funding for major incidents to be a necessity, which would enable it to expand major incident cover.
However, responding to major incidents is just one aspect of the service’s work. It also provides pre-hospital emergency care to victims of serious injuries, attending road traffic accidents, industrial accidents, and stabbings and shootings. The service treats more than 2,000 critically injured patients on the streets of London each year. Without it, patients would not receive the critical care they need.
Mary Macleod
I applaud the hon. Lady’s enthusiasm for the London air ambulance service, which I share. The service is also supporting the Olympics and the Paralympics, on top of its normal work load, serving and supporting so many individuals—more than 10 million within the M25—as compared with many other air ambulances, which support far fewer people.
Rushanara Ali
I could not agree more with the hon. Lady. She has been working with me to highlight the work of the London air ambulance service. I will talk about the demands in the run-up to, and during, the Olympics in a moment.
The London air ambulance service has a doctor-led team that provides advanced medical procedures and leadership in situations in which a patient might otherwise die before reaching hospital. As London’s only helicopter medical emergency service, the team works incredibly hard to provide 24/7 emergency care services to the 10 million people who live and work in the capital.
Despite the incredible work of the London service, its funding is limited. Many people do not realise that it is a charity, as are many of the other air ambulance services around the country. At a time when it should be expanding its operational capacity, a lack of funding means that it is unable to do so. That will have an impact across London, and, as the hon. Member for Brentford and Isleworth (Mary Macleod) has mentioned, that is deeply worrying in a year in which millions of visitors will come to the city for the Olympics.
Compared with other cities in England and Wales and around the world, London’s air ambulance service lacks resources. It has just one helicopter and one team to serve 10 million people, compared with an average of one helicopter per 1.5 million people across the rest of the UK. Internationally, Paris has 12 teams and at least three helicopters, and Sydney has six helicopters.
London’s air ambulance service is currently funded through private donations and an NHS contribution, but much more work must be done to raise funds if it is to provide the level of service required to meet London’s growing needs. In these tough economic times, it is even more challenging for the service to achieve its funding objectives. As a charity, it relies heavily on donations from the corporate sector, and in 2011 donations and sponsorship made up 45% of the service’s overall income. The donations from organisations, charities and companies are welcome, and donors include organisations such as Virgin, Coutts and the London stock exchange. At a time of economic uncertainty, however, that funding is not stable, and it does not meet the funding needs of the service.
Contributions from the private and corporate sectors play a large part, but it is vital that the Government should meet their obligations to support the charity. The London service has received a long-standing donation of £1.2 million from the NHS, which represented 40% of its overall income in 2011, but I believe that the Government must do more. The impact of the Government’s VAT increase to 20% is being felt by services such as London Air Ambulance, which receives no support to cover the cost of VAT on aviation fuel payments. We are calling on the Government temporarily to reduce the rate of VAT from 20% to 17.5%, which would lessen the VAT bill for charities, including air ambulance services.
The London air ambulance service needs an estimated £3.9 million if it is to enhance and expand the service that it provides in the coming years. The necessity for the service to do that will only increase, and it is important that we take action now to ensure that the service can cope with future demand. The extra funding would enable the service to acquire and maintain a new helicopter in order to achieve 100% “up time”, so that if one helicopter required maintenance, another would still be operational. It would also allow the service to maintain medical and rescue equipment, fund medical innovation and invest in staff training, research and the charity’s infrastructure. That type of expansion would greatly enhance the service, benefiting Londoners and ensuring a sustainable model for the future.
The London Air Ambulance is a service that many of us take for granted. It is a service that many of us do not think of as a charity, and one that we would expect to assist us in an emergency. This is a call to the Government to reduce VAT to 17.5% and give charities such as London’s air ambulance service the support that they need. It is also a call to the private sector and the business community, in London and elsewhere, to invest in the air ambulance services and support their incredible work of saving people’s lives.
The Financial Secretary to the Treasury (Mr Mark Hoban)
I congratulate my hon. Friend the Member for Hexham (Guy Opperman) and the hon. Member for York Central (Hugh Bayley) on securing this debate, and the more than 150,000 who signed the e-petition that triggered it.
I thank my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), the hon. Member for Bethnal Green and Bow (Rushanara Ali), and my hon. Friends the Members for Leeds North West (Greg Mulholland) and for York Outer (Julian Sturdy) for speaking. When the right hon. Member for Wentworth and Dearne (John Healey) spoke, I was waiting to find out whether he looked at this issue when he was a Treasury Minister, but he did not share that insight. My hon. Friends the Members for Rugby (Mark Pawsey), for South Dorset (Richard Drax) and for Hendon (Dr Offord) also spoke.
The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) showed remarkable restraint in speaking for nine minutes before mentioning the five-point plan. Perhaps she should have shown more restraint and mentioned that this Government are deferring the fuel duty increase for which her Government legislated. She should be careful about the comments that she makes on this matter, because her Government’s record in introducing the fuel price increases that we have deferred or cancelled is nothing to boast about.
This is a good opportunity to explain the Government’s position on an issue that has generated a great deal of public interest. First, I want to reaffirm how much the Government appreciate the commitment of air ambulance charities. Since every other Member has named their local service, I will mention the excellent work of the Hampshire and Isle of Wight air ambulance service. We can all agree that, whether it is in Hampshire, Yorkshire, London, Cornwall or elsewhere, air ambulances play an important role in our society and we are very lucky to benefit from the valuable service that they provide.
I shall remind the House of the current position on VAT. It is a broad-based tax levied on final consumption, and businesses can recover VAT charged on supplies that will be used to produce products that will carry VAT. If a service is not charged for, the provider cannot claim back VAT, and that is the position of air ambulance charities.
Throughout the debate, hon. Members have mentioned their concern about the impact of VAT on air ambulance fuel and asked how it can be mitigated. One suggestion is that we seek an exemption from VAT for that fuel. Members, including the hon. Member for York Central and my hon. Friends the Members for Leeds North West and for Hendon, have drawn a comparison between air ambulance services and the provisions that apply to lifeboat services. The analogy between the critical life-saving services that both provide is clearly strong, but the relief from which the RNLI benefits relates not to charities or to life-saving services but to international transport. The RNLI makes good use of that, but it is not about life saving.
There is no equivalent provision for air ambulance services, or indeed for any other rescue services, and rectifying that would require a change to EU law. That would need unanimous approval by all 27 member states, and I am sure it will not surprise the House if I make the point that that is exceptionally difficult to achieve. The most recent discussions on reduced VAT rates took six years of charged negotiation to conclude. For that reason, I believe that there is little prospect of agreement on new zero VAT rates in the medium term, and the Government cannot legally introduce new zero rates without that agreement.
As my hon. Friends the Members for York Outer and for South Dorset noted, the air ambulance service comes in many shapes and sizes, and the VAT system supports different operating models in different ways. Charities that purchase their helicopters outright benefit from full VAT relief on the purchase cost, saving about £600,000 on the cost of a £3 million helicopter, whereas charities that lease their helicopters benefit from a similar relief on their leasing costs of about £86,000 a year for each helicopter. If the helicopter contractor makes no separate charge for fuel, the whole leasing cost is covered by the zero rate.
That situation has been likened to a zero rate on fuel for some charities and an unfair charge on others, but I disagree. Each charity is free to decide on the commercial operating arrangements it thinks best, so I would not describe the situation as an anomaly. Different operating models have different costs and benefits, and organisations of all kinds often lease their equipment because it is difficult, costly or risky to make a large up-front investment. I have seen no evidence to suggest that significant investment decisions are taken purely for tax purposes, given the many other substantial considerations that go into them.
The majority of air ambulances use aviation fuel rather than diesel, and aviation fuel for commercial flights is exempt from excise duties and taxed at a reduced VAT rate of 5% on each occasion when less than 2,300 litres is purchased. Although that is not specific to air ambulances, it represents a significant reduction in the cost of services for the majority of air ambulance charities, which use aviation fuel in their helicopters rather than diesel.
My hon. Friend the Member for Chatham and Aylesford came up with the typically ingenious suggestion of using the Value Added Tax Act 1994. However, I have to disappoint her, because the exemption to which she referred relates to relevant goods and accessories for ambulances. Relevant goods cover parts and accessories, but not fuel, as fuel is neither a part nor an accessory. It was an ingenious idea for dealing with the matter, however.
The motion suggests that there should be an investigation into what should be done. There are many merits to reviewing the position of air ambulances to see whether some consistency can be achieved, and in that context it is useful to consider two separate reviews that the Government have already conducted. First, on the London air ambulance, which was raised by the hon. Member for Bethnal Green and Bow and my hon. Friends the Members for Hendon and for Brentford and Isleworth (Mary Macleod), the Department of Health is working with other bodies to undertake a review of the capability and funding of emergency medical care of the type provided by the London air ambulance service. That follows the publication of the coroner’s report into the 7 July bombings. It is likely that the outcome of the review will have implications for other air ambulance services operating across the country. I can confirm that my officials will engage with the Department of Health on the review.
Rushanara Ali
Will the Minister indicate on what date we can expect the outcomes of the review and the publication of the report?
Mr Hoban
I do not have that information available but I will ensure that either my colleagues in the Department of Health or I write to the hon. Lady with it.
The second review that is being undertaken looks at the tax position of health care charities. The Secretary of State for Health is required by the Health and Social Care Act 2012 to lay a report before Parliament on matters that might affect the ability of providers of NHS services to carry out their activities. That report is expected to cover the full range of different providers, including charities, and will include taxation issues. Treasury officials will be actively involved in the review.
I therefore suggest that, rather than having a separate, Treasury-led review, the most efficient way forward is for the existing engagement to continue, and for the Department of Health and the Treasury to work collaboratively to consider the tax impacts of different funding models as part of the wider work already in hand.
Finance Bill
Rushanara Ali Excerpts(11 years, 10 months ago)
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Graeme Morrice
I agree. I am sure that many Members have been contacted by SMEs based in their constituencies who are desperate because they cannot attract as much lending from the banks and other financial institutions as they enjoyed a number of years ago. While many are critical of the lending banks, they are also critical of Government policy. Members on the Government Benches may not agree with that, but it is the reality, and that is why people are approaching us with these complaints and concerns.
The continued failure on lending is making a mockery of the Chancellor’s promise to link the pay of the chief executives of each bank with performance against SME lending targets, but there is now another chance for Members on the Government Benches to demonstrate to their constituents that they are genuine about making bankers pay their fair share. Labour’s bank bonus tax raised about £3.5 billion, as confirmed by the independent Office for Budget Responsibility. As my hon. Friend the Member for Wansbeck (Ian Lavery) said, even on a cautious estimate, we believe that this year alone it could raise at least £2 billion, over and above what is already in place. The Government could use those funds to introduce the real jobs guarantee for young people who are long-term unemployed, potentially helping 100,000 into work. It could also be used to build thousands of much-needed new affordable homes.
In conclusion, by supporting the new clause hon. Members can show that we are serious about holding bankers to account and ensuring that they pay their fair share, while also raising additional funds to address the people’s priorities—youth jobs and affordable homes—and make a real contribution to turning around our ailing economy.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I support the new clause because today more than 1 million of our young people—one in five of them—have no job. That is not because they are not trying to find work and it is not because they are not working hard to get experience and skills; it is because in this flagging economy—in this double-dip recession created by this Government’s failed economic policies—the jobs just are not there. Yet, at the same time, we see the banks paying out huge bonuses to some of those responsible for the economic mess we are in. Britain is now bottom of the pile for social mobility, and that is due to this Government’s failures. The top 1% of our society now control a greater share of the national income than at any time since the 1930s. Despite these crippling inequalities, this Government’s priority has been to give tax breaks to millionaires while building their austerity programme on the backs of some of the poorest in this country.
The current labour market is a bleak place. The hardest hit by unemployment remain women and older people, who face discrimination in the labour market, and of course young people. Long-term unemployment is at its highest since 1996. As my hon. Friends have already said, youth unemployment has increased by more than 100% in the past year. That is a travesty, because it means that we have failed to help young people live up to their ambitions and find the jobs they want—or, indeed, find any jobs at all. It also means that a great wealth of talent and productivity is being lost. That is a travesty, too, and one this Government should be ashamed of. According to a recent Association of Chief Executives of Voluntary Organisations report, that will cost the Treasury £4.8 billion this year and it will cost the economy £10.7 billion in lost output. I support the new clause because the Government’s plans are driving a wedge through our society, leaving too many people behind.
Social mobility in this country has ground to a halt, and as I represent one of the most deprived areas of London, I see that all too clearly; it has always been hard, but now we are moving backwards. Every week, I meet young people in my constituency who are losing out. My area has one of the highest rates of youth unemployment, at more than 8%. The loss of the education maintenance allowance is making it harder for these young people to stay on in school. The lack of jobs makes it seem like the rising cost of university or education is just not worth it. Georgia Rowe, a student at one of the colleges in Tower Hamlets, recently said to me:
“I thought about university but it doesn’t guarantee a better job. You might as well not be in debt.”
This is the generation of young people who are being left behind.
That is why Labour has proposed the real jobs guarantee to help give our young people a chance, as we know the scarring effects that long periods of unemployment can have. People need work experience, training and to learn the skills that make them more employable in today’s difficult labour market. I know what a massive difference it can make to a young person’s chances if they get a little experience. Programmes such as Job Ready, which is hosted by Futureversity in my constituency, and Skillsmatch, and those of the Adab Trust and City Gateway, along with access to a job, can help people overcome the psychological barriers to economic opportunity, and build ambition and confidence. They connect business and young people, opening up new opportunities and partnerships, but those programmes are all struggling without adequate support.
The Work Foundation has rightly called the Government’s approach to youth unemployment “piecemeal” and “fragmented”. The Government’s headline plan to get young people back into work through the Work programme and youth contract is failing. They have managed to get only about a third of those on the programme into jobs, and in this age of austerity that is not good enough. Recent figures in my constituency showed that at least 15 people were chasing every job vacancy. The Government should be looking for real ways to help solve these problems and not continuing to kill off jobs and growth prospects through their draconian austerity measures.
Young people in my constituency can see the opportunities a short distance away in Canary Wharf and the City of London. They want to know how to get jobs there. They see bankers in the city getting tens of thousands of pounds in bonuses while unemployment soars. This is what happens when social mobility grinds to a halt. Those kids in my constituency, who are as talented and aspirational as any others, simply do not have the same opportunities, so it does not seem like such a bad idea to ask those who have so much to pay a little more.
When I consider the behaviour of the banks and some of their employees, I do not always see shining examples of socially responsible companies. The finance sector is a vital part of our economy and many companies and their staff behave responsibly, but too many of the highest paid behave the worst, as we have seen with the Barclays bank scandal. Such behaviour is at best reprehensible and at worst criminal and requires inquiries and investigations as soon as possible, yet those people are some of the highest paid in the country. Bob Diamond earned 600 times more than the average income in my constituency, so a tax on the excessive bonuses received by people such as him is only too fair. But instead the Government are reducing the tax paid by banks, with the bank levy raising just over half as much in 2011-12 as Labour’s bank bonus tax would have raised this year.
Mark Lazarowicz
I was interested to hear my hon. Friend say that Bob Diamond’s bonus and salary were 600 times the average wage in her constituency and want to highlight that point. Most of us understand that top bankers will probably be paid a lot more than most people in the country under any system, but such a discrepancy is obscene. That is what people find so disgusting and what they want to see tackled.
Rushanara Ali
I thank my hon. Friend for his intervention and hope that the Government are listening. They must understand how serious the matter is and the deep resentment and anger that are felt in constituencies such as mine. The borough that contains my constituency is also the borough in which Canary Wharf is based and the injustice of some of the behaviour and the worst abuses in the banking sector must be addressed. The Government must take responsibility.
Bob Stewart
It is very decent of the hon. Lady to give way. When she refers to figures that are 600 times a normal wage or to huge bonuses, at least there is compensation. If those sums are declared, quite a lot—perhaps 40%—will come back to HMRC, which we could then redistribute. It is better that way than if it is hidden offshore.
Rushanara Ali
The hon. Gentleman should perhaps look at the tax records of Barclays bank, as he will find that it has not paid the taxation that it should have paid. His Government should do more to ensure that the taxes that should be paid are paid. I also think that his Government has a poverty of ambition in not accepting our amendment to make a massive difference to unemployment in constituencies such as mine. I urge the Government to think hard about the impact on the 1 million young people—a sizable number of whom are in my constituency—and consider what could be done to address the problem rather than trying to defend bankers’ bonuses.
Mel Stride (Central Devon) (Con)
The hon. Lady is being very generous in giving way. The notion of very high bankers’ bonuses is nothing new, of course, as it has been going on for an awfully long time. Her party was in office for 13 years. Could she explain exactly what it did about that?
Rushanara Ali
After the financial crisis, as part of the deal, my party introduced the bankers’ bonus tax and we raised £3.5 billion that went towards the attempt to get people back into work that was so successful in constituencies such as mine. I urge the hon. Gentleman’s party to consider what works, and that did work. Instead of being partisan and ideological, his party should look at what works and enforce it. The people of this country will not forgive his Government for not acting, for creating a double-dip recession and for leaving so many people out of work. It is a disgrace and he should apologise, with his party, for presiding over two years of being in government in which they have caused a double-dip recession and much more unemployment. That is what his party should be focused on and addressing, not trying to score party political points. You are in government. Do something.
Madam Deputy Speaker (Dawn Primarolo)
Order. Has the hon. Lady given way or has she concluded?
Madam Deputy Speaker
Good. May I remind everybody that I am not in government?
Mel Stride
It is a great shame that you are not, Madam Deputy Speaker.
Will the hon. Member for Bethnal Green and Bow (Rushanara Ali), by the same token, apologise for the doubling of unemployment under the previous Government?
Rushanara Ali
When my party was in government, we cut unemployment. We got a million young people into work. After the financial crisis, when unemployment started to increase, we did something about it. I urge the hon. Gentleman’s Government to do something about unemployment, instead of looking backwards. Do something about the unemployment rate which is causing so much damage to our country, instead of doing what his party did when it was in power in the 1980s, which was to go around telling people that unemployment was a price worth paying.
The hon. Gentleman’s party is demonstrating that the nasty party is back with a vengeance. That is devastating for people in constituencies such as mine. They do not want to see the nastiness of the party. They want jobs. I suggest that his party focuses on creating jobs and growth. That is what people want.
Rushanara Ali
I should like to conclude my speech. I have given way enough, but if the hon. Gentleman wants to hear more about the issues affecting our country and my constituents—[Interruption.] I give way.
Gordon Birtwistle
I am very grateful to the hon. Lady. Would she concur with the noble Lord Mandelson when he said that the Labour party was intensely relaxed about people being filthy rich?
Rushanara Ali
The noble Lord Mandelson said that those people should pay taxes, and when my party was in power we brought unemployment down. That is what I urge the hon. Gentleman’s party to act on. I urge the Government, instead of defending bankers’ bonuses, to think about the 3 million people who are out of work. That is the responsibility of his party and his Government. He should talk to them about solving the current problems, instead of looking backwards.
Mark Durkan (Foyle) (SDLP)
When we are talking about banksters—to use a term that was coined as far back as 1932 by an Irish-American radio priest—we are talking not just about people who are filthy rich, but about people who are filthy rich by foul means. They have engaged in rackets, they get paid in packets. Why do they deserve a cut in their taxes?
Rushanara Ali
They do not deserve a cut in taxes. I hope the Government will take serious action, otherwise the public, who already feel this way, will rightly believe that this Government are not for them but for the vested interests and the millionaires who make so much money and are not willing to pay their dues or to make the appropriate contribution. I am sure the Government do not want to be on the side of people who are milking the system and making so much money and not making the appropriate contribution.
I call on the Government to pay attention, to listen not just to my party, but to the millions of young people who want a job and an opportunity to make a contribution to this country. We have a plan that could help get them get into real work and would reward those who work hard—a plan that is costed and paid for by asking some of the wealthiest in our society to contribute just a little more. With the economy back in a double-dip recession and economic confidence so low that investment growth has virtually ground to a halt, job opportunities for these young people desperate to find work will not appear without help. I hope the Government will see sense and give young people in Britain the much-needed support that they deserve, by supporting the new clause.
Alison McGovern
I would like to begin my remarks on new clause 13 by agreeing with much of what has been said today by Opposition colleagues. I want briefly to take the House back a couple of years to 2010, when I was lucky enough to secure an Adjournment debate on young people and unemployment, the first such debate I led in the House. For me, it could not have been on a more important subject than the position of young people in the labour market in my constituency. I do not wish to put myself forward as some kind of Cassandra or some awful foreseer of what has come about, but I warned the Minister then that the swift withdrawal of some of the more successful things the Labour Government had been doing to tackle young people’s unemployment would lead to more young people being on the dole. Sadly, that is what has happened. In fact, two years later the ONS tells us that an extra 65,000 16 to 24-year-olds are now without work. That is not just a waste of talent and funds, but a moral shame.
I want to say a few words on that subject and why new clause 13 is so important to young people facing that difficult situation. The Government have had two years to tackle the problem, yet all of us here have to admit that the problem is getting worse, not better, and that action is needed more today than it was in 2010. The Government would not listen then; I beg them to listen now.
Business and the Economy
Rushanara Ali Excerpts(12 years ago)
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Rushanara Ali (Bethnal Green and Bow) (Lab)
This Government have no vision: no vision for a better future for our country; no vision to deliver economic growth; and certainly no vision to create jobs. We saw that in the Budget, and we certainly saw it in the Queen’s Speech last week. With some 3 million people unemployed, including 1 million young people, that isn’t good enough. We are wasting talent, drive and ambition simply because the Prime Minister and Chancellor cannot admit that their plans are not working. It is not good enough for the people in my constituency, who are losing their jobs left, right and centre, while at the same time the Government are giving tax breaks of over £40,000 a year to millionaires. It is not good enough for the millions of people across the country who are working so hard to make ends meet and need a Government who will stand up and work for them. Instead, they have a Government who seem happy to leave them behind and to cast aside their hopes and aspirations.
We are now officially back in recession—something many knew was coming and about which the Labour party has been warning the Government for two years. It is the double-dip recession the Government promised would not happen. Under Labour, the country had started to move out of recession, and progress was being made in creating jobs through programmes such as the future jobs fund and apprenticeships with job guarantees. Now youth unemployment alone is up 7.7% on last year, to more than 1 million. That equates to an extra 73,000 young people who want to work but cannot find the jobs they so desperately need. Also, more than 700,000 public sector jobs will be lost by 2017, with little or no sign that the private sector will be able to absorb those people.
These are tough times to be unemployed. With rising energy and food prices and the benefit changes coming this year, this Government are hurting families, young people, pensioners and public servants—to name just a few—and penalising or demonising those who cannot find work in a labour market that this Conservative-led Government are doing nothing to grow.
That is particularly apparent in places such as my constituency, which has high levels of deprivation, including one of the highest levels of child poverty in the country. The consequences of the Government’s failure on the economy are much more keenly felt in such places. Unemployment in Bethnal Green and Bow stands at almost 12%, which is well above the national average, and youth unemployment is over 9%. I frequently meet parents who are astounded that their university-educated children cannot find jobs, so I echo the point made by my hon. Friend the Member for Huddersfield (Mr Sheerman) about rising graduate unemployment. It is scandalous that even though they have such qualifications, this Government are doing nothing to support them into work.
When I speak to local business owners—the businesses that are at the heart of our local economy and employ thousands of people—they tell me how hard it is to make ends meet given the Government’s VAT rises, which have stifled their potential. In my constituency, the VAT increases are hitting sectors such as technology, the creative industries and restaurants particularly hard. The Government’s failure to do anything substantial to enable them to borrow is also hurting them hard. We need a plan to support small businesses; I echo the comments made by many Opposition Members about the need to support small businesses in order to encourage and enable the economy to grow. SMEs will be a vital part of that story.
We also need programmes to help people into work—programmes that help them develop their skills and thus enable them to compete in today’s labour market. The massive difference such programmes can make in constituencies such as mine is illustrated by the work of, for example, Job Ready hosted by Futureversity, Skillsmatch, the East London Business Alliance, the Adab Trust and City Gateway, a charity in my constituency. Such groups are working very hard, but they are suffering as a result of the impact on charities of the Budget’s tax measures. We must support organisations that develop soft skills and provide training for young people to get into work, but such organisations are being hit hard by this Government’s measures.
My constituents need this Government to step up and take action to address the very real, everyday problems they face. We need to create real jobs for young people, not enforced work programmes that do not offer any chance of employment at the end. Labour promised to introduce a tax on bank bonuses to deliver these jobs—real jobs, with real wages for our young people, who are trying so hard to find work.
This Government have no vision to create jobs and to foster economic growth. Now is the time we need a Government with the vision and aspiration to take radical and ambitious actions, yet that is precisely what is lacking. We need a Government to work for the majority of this country, not a small minority—not the 1% who will gain from tax breaks. I hope this—
Madam Deputy Speaker (Dawn Primarolo)
Order. Time is up. I call Esther McVey.
Oral Answers to Questions
Rushanara Ali Excerpts(12 years, 3 months ago)
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Danny Alexander
That is a very wise quote. Of course, the policy of the Labour party is in increased confusion since the shadow Chancellor made his speech. It is a little-known fact that when he made it, he also signalled his opposition to more than £20 billion of this Government’s deficit reduction measures, and since he made that announcement, his party in the House of Lords has opposed a further £2 billion of welfare reforms, which rather suggests that the conversion to fiscal credibility is skin-deep at best.
Rushanara Ali (Bethnal Green and Bow) (Lab)
T6. My constituency now has one of the highest youth unemployment rates in the country, and the highest level of child poverty at 51%; that is compared with 7% in the Prime Minister’s constituency. Will the Minister admit that his Government are not serious about child poverty, and have completely failed to tackle youth unemployment?
Danny Alexander
No, I will certainly not say that, not least because youth unemployment rose by 40% when the Labour party was in government. I hope that the hon. Lady will welcome the youth contract that we announced, which is a great deal more ambitious than the package put forward by her Front Benchers; the Work programme, which is delivering real results for people up and down the country; and the investment in child care that will help women to go out to work, as well as men. Those are all things that help people to find work in these very difficult times.
Oral Answers to Questions
Rushanara Ali Excerpts(12 years, 8 months ago)
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Danny Alexander
I can certainly confirm that the Office for Budget Responsibility is responsible for these matters and is independent. We certainly do not go in for the political fiddling of the figures that my hon. Friend described.
Rushanara Ali (Bethnal Green and Bow) (Lab)
14. What recent assessment he has made of the potential effects on the rate of inflation of recent trends in domestic energy prices.
The Economic Secretary to the Treasury (Justine Greening)
The Office for Budget Responsibility assesses the prospects for inflation, which of course factors in any changes in prices from Budget 2011. It will update its forecast this autumn.
Rushanara Ali
I thank the Minister for her answer, but with rising energy prices, stagnating real-terms income and rising unemployment, I ask her again what specific actions will be taken to help the more than 4 million households in England and one in seven households in my constituency that will face fuel poverty this year?
Justine Greening
We have already taken action in previous Budgets, not least by taking people out of paying income tax altogether by raising the personal allowance. As we have heard, we reduced fuel duty, in contrast to the previous Government’s plans to increase it. More than that, we are making sure that we target help at vulnerable people through the Warm Homes discount and next year, of course, we will introduce the green deal to help everybody to make their homes more energy-efficient.
Mr Osborne
I certainly will visit Great Yarmouth and Lowestoft—and on a couple of occasions during this Parliament, I hope. I am delighted that the bid for an enterprise zone from Great Yarmouth and Lowestoft was successful. It was a very impressive bid, involving intelligent use of East Anglia’s offshore energy resources, and I look forward to seeing how work on that is progressing when I visit.
Rushanara Ali (Bethnal Green and Bow) (Lab)
T7. Given stagnating economic growth in the UK, US and much of Europe, and with forecasts predicting slow to no growth, will the Chancellor acknowledge that his economic plans are hurting but not working, and can he now tell us what his plan B is for driving growth in the UK?
Mr Osborne
I think that question involved a contradiction in that the hon. Lady pointed out that there was either slow or no growth in the United States and Europe and then somehow blamed my economic policies for that situation. That points to a broader observation: until the Labour party has some cognisance of what is happening in the world and how our policies are protecting the country with the largest budget deficit in the G20 from being caught in the firestorm that some other European countries have found themselves in, frankly it is not going to be at the races.
Finance Bill
Rushanara Ali Excerpts(13 years, 10 months ago)
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Rushanara Ali (Bethnal Green and Bow) (Lab)
Thank you, Mr Speaker, for giving me the opportunity to speak in this debate. I should like first to congratulate my fellow new Members, from all parties, on their maiden speeches. I am also grateful to Opposition Members for their passionate speeches in this debate.
The Bill represents only the tip of the iceberg when it comes to the regressive impact of the Government’s plans. I want to focus on the effects of the Finance Bill on constituencies such as mine, which falls in the London borough of Tower Hamlets. Although we recognise the need to reduce the Budget deficit, the depth and speed of the cuts and some of the tax rises, such as the VAT rise—all under the euphemism of fiscal consolidation—mask an inherently unjust, unfair and unequal Budget, of which the Bill is a significant part. It will hurt the poorest and most vulnerable in our society and leave hard-working families and small businesses around the country in constituencies such as mine high and dry.
The Bill will have a detrimental effect on the life chances of families on modest incomes. It will increase suffering and deprivation. I welcome the increase in capital gains tax, one of the few progressive aspects of the Bill, but for many in constituencies such as mine it is small comfort given that their homes, jobs, local schools and the very services on which they rely to thrive will be devastated. It makes a mockery of the notion that we are all in this together.
I turn now to the impact of the Bill on poverty. Unlike Conservative Governments of the past, the coalition Government have claimed to be progressive. That is how the Bill should be judged, and that is how the country will judge it.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Does the hon. Lady accept that under the last Government the gap between the richest and the poorest grew? I feel that what she is saying now is a contentious way of suggesting that somehow the Conservative-Liberal coalition is attacking the poorest.
Rushanara Ali
We all know that income inequality rises in periods of boom. It is not acceptable, and personally I would rather that we had been able to do much more. As under previous Governments, income inequality increased. However, social inequality decreased. Like many Opposition and Government Members I worked passionately to reduce poverty and we did reduce child poverty nationally. I regret that we did not manage to achieve comparable reductions in child poverty in London.
The Government’s cuts will be judged on the measure of progressivism, and it is a great shame that the Bill is not progressive enough. Using VAT to raise £13 billion is a regressive choice. Save the Children estimates that the poorest families in Britain will face VAT bills of about £1,600 a year. The Treasury’s own figures show that the poorest are affected three times as much as others by changes in VAT. Many have argued that that is offset by the exempted expenditure on food and children’s clothing, but it is quite the opposite. The poorest 10% of households already spend a higher proportion of their disposable incomes on VAT—about 14% compared with about 5% for the top 10%.
These changes, combined with announcements in the Budget such as those on housing benefit, disability living allowance and other kinds of fixed income, alongside the removal of some £3 billion of support to families, will devastate many of the vulnerable families in constituencies such as mine and many others. Ministers and Government Members have been quick to say that restoring the link between earnings and the basic state pension is an important achievement, but unfortunately some 10,000 pensioners in my constituency will suffer from the VAT rise alone.
The VAT increase will reduce consumption. It will hit small businesses, including almost 4,500 in my constituency, very hard. I do not accept the argument that it will be good for the economy. About 70% of those businesses in my constituency have fewer than four members of staff working for them, and there is no doubt that a reduction in consumption will affect them negatively.
The Conservatives have been out of power for 13 years, and the first thing they now do is raise VAT. What does that say about their idea of progressivism? Those of us who were brought up in modest income households, like many millions of people in this country, have not forgotten the pain and suffering inflicted on families through VAT hikes in the past, and I simply do not accept that this is the right path now. I appeal to Liberal Democrat friends and to true compassionate Conservatives —I hope there are still a few left—who know in their heart of hearts that this VAT increase is bad for the British economy, does nothing to create fairness and social justice and does nothing to protect the most vulnerable in our country to think again and to vote with us.
People on modest incomes in constituencies such as mine will have to make terrible choices between heating or feeding and clothing their families, or between new pairs of shoes for their children and taking the bus to work. Sadly, those are the kinds of choices that some people will be forced to make because they are already on low incomes, struggling to cope in this difficult economic climate. We know that in periods of recession people turn to loan sharks because they find it difficult to get other loans, and end up heavily indebted and trapped. We also know that despite efforts by the previous Government, many of the poorest people in this country still suffer from being in a poverty trap. Despite those efforts, child poverty still has not been reduced by as much as we would have liked. I believe that this Budget, particularly the VAT increase, will continue to damage vulnerable families. In Tower Hamlets, in constituencies such as mine, the Budget cuts have already amounted to about £9 million, and a further £55 million of cuts are proposed over the next three years.
Although I welcome the bankers levy, where is the justice and fairness in raising just £2 billion, with no provision being made to tax bonuses? We may contrast that with the £6 billion of bankers’ bonuses and with the billions of pounds of public service cuts for ordinary families and workers, and it just does not seem adequate. I am not saying that the public do not want to see the deficit cut, but where is the justice in such a comparatively small levy compared with what the public have to pay?
Toby Perkins
My hon. Friend is making a powerful case. Does she share my view that any Budget that is supposed to have us all in it together but leaves the bankers and the super-rich feeling tremendously relieved and the most deprived people in our communities horrified by what they are facing cannot possibly achieve any measure of fairness?
Rushanara Ali
I agree completely. My constituency is situated between the City and Canary Wharf, and although I and many people in my constituency are grateful for the contribution that responsible bankers make through local community work and so on, the reality is that a small but significant minority have brought the economy almost to a standstill. That is not acceptable, and bankers ought to be asked to make a bigger contribution than ordinary members of the public.
Over the past decade, constituencies such as mine have struggled to get to a position in which people can reach their aspirations, and unemployment was high even during the boom period, particularly among graduates. In the current climate the situation is ever more difficult. I do not believe that punishing ordinary families and people who are struggling to make ends meet is the way forward, or that it will help to create the big society that members of the Conservative party claim to want to create. It does not highlight compassionate conservatism. We heard a lot about that before the election, but I see no sign of it. I hope that some of our friends on the other side of the Chamber will reconsider the matter and think about how they can support families in this difficult climate.
Economic Affairs and Work and Pensions
Rushanara Ali Excerpts(13 years, 11 months ago)
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Rushanara Ali (Bethnal Green and Bow) (Lab)
Thank you, Mr Deputy Speaker, for giving me the opportunity to make my maiden speech in this important debate, particularly as employment was one of the central themes of my campaign.
It is an amazing privilege to be standing here as the Labour MP for Bethnal Green and Bow, a place described as the heart and soul of this great country, of which I am incredibly proud to be a citizen. I feel just as proud to be one of the first three Muslim women MPs ever to be elected to this Parliament, and the first person of British-Bengali heritage to be elected to this House.
I thank the people of Bethnal Green and Bow for giving me the honour of representing them. At a time of great national scepticism about this institution, I can assure the House that for millions of people in Bangladesh, where I was born, this Parliament has always been a beacon of democracy and self-determination. The power of this House to inspire and to do good is undimmed.
It is customary to pay tribute to one’s predecessor—in my case, the inimitable George Galloway. Where do I begin? Perhaps I should begin with his long service in this House, and his rather shorter stay in the other house. His great oratory was admired by many, even when they passionately disagreed with him. While the people of Bethnal Green and Bow chose unity over division, and while my politics could not be more different from Mr Galloway’s, we have one thing in common, which I know that the House passionately shares—a deep commitment to a lasting settlement in the middle east. For me, that is impossible without ending the blockade of Gaza and a viable independent Palestinian state alongside a secure Israel.
I would also like to pay tribute to my Labour predecessors. Oona King was a hard-working, dedicated MP for almost a decade, who fought for people who suffered enormously from the appalling housing conditions in the east end of London. She fought relentlessly to tackle poverty and inequality, both in this country and in developing countries.
We remember the late Lord Shore of Stepney who worked tirelessly for the people of my constituency. He has a special place in the hearts of Bengalis, especially among my parents’ generation, for the way in which he led Members on both sides of this House to speak up for the fight for democracy in the war of independence in 1971 in Bangladesh. I am only sorry that he is not here today to see someone born in the country he supported, brought up and educated in the constituency he represented, elected to this Parliament.
My passion for Bethnal Green and Bow is about the place, the people and our political heritage. I would urge hon. Members to go east and visit places such as the Whitechapel gallery, Columbia Road flower market, and Spitalfields market near Brick lane. Brick lane has iconic status in this country, both for its vibrancy and cultural activity and for its extraordinary history: for being the place that provided a home for many waves of migrants, including the Huguenots, Jews, Irish, Pakistanis, Bengalis, Somalis and many others, manifested poignantly in the Brick lane Jamme Masjid, which was built by the Huguenots for Christian worshippers, later became a synagogue and is now a mosque, reflecting the different contributions of so many to our great country.
In other parts of my constituency I come across people who remind me of the courage and determination of so many in the east end. I think of the elderly lady who survived the blitz but overnight lost her family, and the many other stories of sacrifice and loss, such as the Bethnal Green tube disaster, when 173 people lost their lives seeking shelter from air raids in 1943.
We owe it to those east enders never to forget that freedoms are never easily won. For me, it is an honour to stand here, as a successor, I hope, to the great social reformers of the past, who took ideas born in the east end, developed them and changed this country for the better. It is no exaggeration to say that the east end inspired men and women to make history and fight for social justice. I think of the trade union movement, the suffragettes and the welfare state.
My constituency sits between the glittering towers of the City of London and Canary Wharf and is a stone’s throw away from the Olympic village. The Olympics have the potential to deliver huge opportunity and a sea change in attitudes towards our country, our pride and our sporting ability, yet many in my constituency remain unconvinced that they will benefit. I hope that the job opportunities and the legacy that we wish to create will benefit them, and I am acutely aware that it is an extraordinary opportunity for an historically poor part of London.
I want to speak on behalf of those who face the rough few years ahead. Already, unemployment is incredibly high in my part of London. The east end has been in that situation too many times before, and for us wasted talent is never a price worth paying. In the recessions of the ’80s and ’90s I saw families, friends and neighbours lose their homes, jobs and livelihoods overnight. That was the time when the Liberals controlled the council and the Conservatives ran the country. Any community that does not provide useful work for its people risks falling apart.
It is not that people in the east end lack resourcefulness; on the contrary, it is impossible to walk the streets without seeing the energy, dynamism and drive that take whatever resources are available and turn them into success. But when programmes such as the future jobs fund are shut down, the Government send a message to thousands of people, saying, “You’re on your own. We wash our hands of you.” That is why I shall fight to create jobs in the east end and work hard and tirelessly to serve the people of this great constituency.