Summer Adjournment

Jonathan Ashworth Excerpts

Tuesday 19th July 2011 Commons Chamber

[Jon Ashworth (Leicester South) (Lab)]

Let me begin by congratulating my hon. Friend the Member for Inverclyde (Mr McKenzie) on his eloquent and passionate maiden speech. Having made a maiden speech myself only two months ago, I can imagine the relief that he is feeling now that he has got through it and sat down, but his speech was excellent. I am also pleased that I am no longer the new boy in the House.

I welcome the equality impact assessment that was published yesterday. I think that some Opposition Members would have preferred it to have appeared a little earlier, but we are none the less grateful for its publication in time for this debate. I also thank other Members who have secured debates on English for speakers of other languages—commonly known as ESOL.

As many Members will know, Leicester is a richly diverse city, and for that reason the changes in ESOL provision are causing much concern in areas throughout the city, including my constituency. Five thousand learners in Leicester, 2,000 of them in Leicester South, have benefited from ESOL provision in the past year, with some degree of fee remission. A total of 1,500 learners were enrolled in the Leicester adult skills and learning service, 84% with fee remission, of whom 75% were not receiving work-related benefits. As the equality impact assessment showed, many of those people are women. That does not surprise me, because when I visit providers, such as Highfields youth and community centre, I am particularly struck by the number of low-income women, usually from Asian or African—particularly Somali—backgrounds, who are benefiting from ESOL provision.

Women have told me moving stories about how they would never leave the house before they went on ESOL courses, but had to wait for their husbands to come home. Other women have told me of wanting to help their children at school. Given that Leicester has one of the highest levels of child poverty in the country, I think that the ability of a mother to help her child at school is vital. As we know, education is the fastest route out of poverty for many of those children.

I have also heard stories of men and women who have moved into work, and even started their own businesses, after taking ESOL courses. As a result of the state’s investment in them, they are now investing in the local economy by employing people. Although I understand that ESOL provision will be maintained for those receiving jobseeker’s allowance and other active benefits, colleges and providers fear that following the cuts they will no longer be able to sustain courses this September.

For example, on the St Matthew’s estate there is a course just for Somali women. Its providers are worried that the course will have to end this September if the Minister does not change his mind. Although I have not met the Minister directly, I know he has met many Members, and I appreciate that he has listened on this topic. In his statement yesterday he made some concessions, such as saying he wanted to provide more support, but there is still a lack of detail, so will Minister say more today about how he expects the new changes he is working on with the Department for Communities and Local Government to develop? Also, will the new scheme be unveiled by September or August?

We talk a lot about community cohesion. Indeed, when the Home Secretary launched the Prevent strategy a few weeks ago she said that this Government would

“do more than any Government before us to promote integration”—[Official Report, 7 June 2011; Vol. 529, c. 53.]

I therefore ask the Minister this: has he discussed the impact of his ESOL changes with the Home Secretary? In cities such as Leicester ESOL is absolutely vital to community cohesion and integration. I am worried that the ESOL changes would not serve to back up the Home Secretary’s grand statement that this Government will do more than any other to promote integration. Will the Minister give us more detail in his summing up, and will he at least delay the changes in ESOL provision planned for this September? If not, I will be worried about the consequences for my constituency.

[Madam Deputy Speaker (Dawn Primarolo)]

I am looking around at a very quiet Chamber, with no Members standing to indicate they wish to speak.

Finance (No. 3) Bill

Jonathan Ashworth Excerpts

Monday 4th July 2011 Commons Chamber

[Justin Tomlinson]

The hon. Lady may shake her head, but my interest lies in ensuring that people get the clearest information and the cheapest possible price. I will not defend any organisation that is going to exploit the most vulnerable people.

Unsurprisingly, the final item on my tick-list is the need for financial education. I chair the all-party group on financial education for young people, and I thank the 224 Members who are now signed up to the group. People do not understand APR and, as I have argued, it needs to be removed and replaced by a transparent approach. In addition, we need consumers to be able to understand the implications of what they are signing up for, its true cost, how to source alternatives and the best way to address the situation if they get into difficulties.

I am conscious of the time so I will conclude. We are all agreed that action is needed—nobody, from either side of the House, disputes that. I welcome the consumer credit review, but we must not fall into the trap of a quick fix to chase political headlines which simply makes matters worse. We need a measured and wide-ranging response that puts the vulnerable consumer first. Let us not chase a fix that makes things a hell of a lot worse for the most vulnerable people.

[Jon Ashworth (Leicester South) (Lab)]

May I commend my hon. Friend the Member for Walthamstow (Stella Creasy) for her tenacity in pursing this issue and say that her speech was a tour de force? Equally, I commend her for getting this issue discussed on Twitter, as this must be the first new clause on a Finance Bill to have generated this much interest on that site.

I wish to make only a few brief remarks, because a lot of what I wanted to say has been covered by my hon. Friend the Member for Darlington (Mrs Chapman), in particular, and by some Members on the Government Benches. Early on, I want to pick up on one point made by my hon. Friend the Member for Walthamstow in her speech and at business questions last week, which is the suggestion that some funny business is going on and that the Government are deliberately delaying making a decision to help the Deputy Prime Minister at the party conference—[Hon. Members: “Rubbish!] Some hon. Members are shouting from a sedentary position, so I would be grateful if the Financial Secretary, who will, I presume, respond to the debate, could guarantee that the Deputy Prime Minister will not make an announcement on this matter in his conference speech. That would help Opposition Members—[Interruption.] I invite the Financial Secretary to make a few remarks on that point in his closing speech.

There is some consensus on this issue on both sides of the House. I was not a Member of Parliament when it was debated in February, although I have read many of the speeches. Many Members, on both sides of the House, take the issue very seriously—and rightly so. Before the general election campaign, the then Leader of the Opposition took it very seriously. When he was rebranding the Conservative party, he did not only hug hoodies and huskies. The party launched a campaign about resisting—I hope this is not unparliamentary language—your “inner tosser”, which encouraged people not to fall into the trap of personal debt that we have discussed. At the time, the current Prime Minister said that—and I paraphrase—although the campaign was provocative, we needed to do something about personal debt. The Opposition agree.

Today I visited a money advice centre in my constituency to talk about some of the issues faced by many of my constituents who are getting themselves into trouble. I was told stories about how Wonga and quickquid.com target many vulnerable people in my constituency. Members might not be aware that my constituency contains some of the most deprived estates in the country and we have had many examples of such companies targeting people such as single mothers, as in the cases mentioned by my hon. Friend the Member for Darlington, when they have no choice but to sign up to such deals. Such people end up in great difficulty.

Another issue mentioned at the centre, although it does not fall within the narrow confines of the new clause, was illegal loan sharking. The problem is that many people who find themselves in deep trouble through legal loan sharking feel that they have no alternative but to turn to illegal loan sharks. I hope we will be able to debate that in future. I was told many tragic stories about people who have fallen foul of illegal loan sharking. Such people might be in work—it is not always a matter of gangs preying on vulnerable out-of-work people on estates. One example involved somebody who took out a loan from an illegal loan shark for £7,000, which soon became £70,000.

[Lorely Burt]

I agree with the hon. Gentleman about illegal loan sharking, which is a scourge of this country. Does he welcome the fact that despite the cuts the Government have made in other areas, we have increased the amount of money we are using to fight illegal loan sharks?

[Jon Ashworth]

My hon. Friend the Member for Nottingham East (Chris Leslie) tells me that the Government have cut the financial inclusion grant. I always welcome action to tackle illegal loan sharking, so I would be very disappointed if the money going into those funds was cut.

This is an important issue, which particularly affects my constituents. As my hon. Friend the Member for Walthamstow said, it is not just the constituents we would traditionally think of as the most vulnerable in society who are being hurt. Increasingly, the money advice centre I visited today is finding examples of people from lower and more middle income-backgrounds getting themselves into trouble and falling prey to such organisations.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Does my hon. Friend accept that that income group—some of whom claim housing benefit and will be hit by the housing benefit changes and will have to find a lot of additional money to pay their rent out of their own pockets—could well fall victim to both official and unofficial loan sharks simply to meet their rent?

[Jon Ashworth]

I know that my hon. Friend has a good track record in raising such issues, particularly those to do with homelessness, and she is right to bring that matter to the attention of the House.

I want to focus on the point made by my hon. Friend the Member for Walthamstow about lower and more middle-income people being hit. Increasingly, such people are turning up at the money advice centres in my constituency in a way that they had not in recent years. That might reflect our economic climate, with inflation running at twice the rate of earnings and with the cost of living, food and utilities putting a great strain on the budgets of many people in my constituency. Those issues came up time and again in my by-election campaign and the Asda income tracker, which my hon. Friend mentioned, shows that families are some £165 a month worse off than they were a few years ago.

The final point raised with me today concerned credit unions. Labour Members have always been huge supporters of credit unions—the co-operative values on which they are based are values that we share—and I concede that Government Members support them, too. If we simply say, however, that credit unions can step up and fill the gap, we are somewhat mistaken. They do not have the capacity to compete with organisations such as wonga.com and quickquid.com. I would welcome it if more resources went into credit unions so that they could compete, but realistically they cannot carry out the door-to-door activity that wonga.com and so on can. Although we are great supporters of credit unions, I do not think they are the answer, although they are part of it.

In conclusion, I would welcome it if the Government could give us some indication of what is happening with the review, if they will not support the new clause. We need some regulatory reform of the sector. People in my constituency, in particular, are being hit. The situation is getting worse and unless the Government take action, I am worried about the future.

Finance Bill

Jonathan Ashworth Excerpts

Tuesday 28th June 2011 Commons Chamber

[Toby Perkins]

This is not the first time that I have been involved in passionate debate at 12.50 am, but under normal circumstances it has taken place in a rather less rarefied environment than we are currently enjoying. I shall speak to new clause 10 and the need to assess the impact of VAT on a range of things. We should remember that the Bill follows the Budget for growth, as it was described at the time. One has to ask whether that has been investigated by the Advertising Standards Authority, because since the Budget for growth we have seen growth continuing to flatline.

We saw three months of negative growth at the back end of 2010, which was blamed on the wrong kind of snow. In early 2011, we were expecting a huge boom, with all the people who had been unable to get out to the shops in December rushing out in January and getting the economy moving, but of course it did not happen. The Chancellor’s Budget for growth was a damp squib.

At every level the Chancellor has demonstrated that he just does not get it. He does not get the challenges facing working people or the challenges facing business. He does not understand the cause of the banking crisis and the collapse of the banking model. He does not understand the need for growth and how the Government can stimulate it. Most importantly, he does not understand that the public and the private sector need to co-exist and depend on each other in a constructive economy.

There is no taxation that does not have knock-on effects. The knock-on effects of VAT are phenomenal. The Institute of Economic Affairs described the VAT increase as “bad economics”. If people do not choose to listen to the Institute of Economic Affairs, perhaps they want to listen instead to the economic genius who was advising Norman Lamont when we were led into black Monday. In January this year, the Prime Minister said about VAT:

“If you look at the effect as compared with people’s income then, yes, it is regressive.”

That was at least consistent—it was exactly what he had said in opposition. But what about the Deputy Prime Minister? We all remember him. Back in the old days, when he was still pretending to be a progressive, we remember him with his giant Tory tax bombshell. We have been told tonight that those signs did not mean that he was against a VAT rise, or that the Liberal Democrats would not introduce such a tax bombshell; he was simply warning us that it was coming and that we should beware. A lot of Liberal Democrat leaflets were delivered in Chesterfield, and I thought at the time that they were describing the impact of the VAT increase as a bad thing, but today those of us who have never visited Planet Clegg have been put straight. The impact of VAT on the cost of living is significant, and increasing the cost of living has a dramatic impact on people’s capacity to spend money and support the economic growth that we need.

[Jon Ashworth (Leicester South) (Lab)]

One of the effects of the VAT increase is its contribution to inflation, which is currently running at twice the rate of earnings growth. The Bank of England has suggested that inflation will hit 5% later this year because of increases in utility prices, which are a result of the VAT increase. Many of my constituents are feeling particularly hit by that. Is that also the case in Chesterfield?

[Toby Perkins]

Absolutely. My hon. Friend makes an important point. The impact is being felt on the cost of everything, even items on which VAT is not charged, because businesses and members of the public are having to spend more on others items. There is the impact on fuel and heating costs and the downward pressure on wages, as we see the failure to achieve economic growth and the public sector being told that it will have no wage increases for two years and that pension contributions will increase. All those impacts are contributing to people spending more on VAT and having less money.

Oral Answers to Questions

Jonathan Ashworth Excerpts

Tuesday 21st June 2011 Commons Chamber

[Mr George Osborne]

As my right hon. Friend will know, the supply-side reforms that were set out in the growth review, including the reduction in corporate tax rates, are key. At the same time, as banks’ balance sheets inevitably contract after the credit crunch and after the dramatic increase in the size of balance sheets over recent years, we need to ensure that we try to protect small and medium-sized businesses from the effects of that. That is why we concluded the Merlin deal with the banks.

[Jon Ashworth (Leicester South) (Lab)]

The Minister will be aware that the claimant count has continued to rise in the past three months and that unemployment in many inner-city constituencies such as mine remains stubbornly high. Why will he not consider taxing the banks sufficiently to fund an inner-city youth jobs programme to help the young people on the estates in my constituency?

[Mr Osborne]

We have introduced a permanent bank levy that applies each and every year. There was a bank bonus tax for one year of the 13 years of the Labour Government; other than that, there were no charges on the banks. The former Chancellor of the Exchequer—my immediate predecessor—said that we could not repeat that because the bankers would find a way round it. We therefore looked to the advice of international bodies such as the IMF, and we introduced a bank levy that will raise more each and every year, net, than the Labour Government raised from the banks in any one year. That shows that we are asking the banks to make a decent contribution to the economy.