Transparency and Public Trust in Business

Lisa Nandy Excerpts

Tuesday 8th April 2014 Commons Chamber

[Lisa Nandy (Wigan) (Lab)]

Six years after the peak of the global financial crisis there should surely no longer be disagreement among any of us that businesses are bound by the same ethical and social responsibilities that bind us all. As the financial crash showed, business transparency is absolutely essential to society. The lack of it in the financial sector in recent years continues to have huge repercussions for people in my town of Wigan, in the UK, and across the world.

We saw in the recent horsemeat scandal that lack of transparency can have major implications for consumers in the UK, but it can have even greater implications for the lives of people across the world, as in the horrific loss of life in Bangladesh with the collapse of the Rana Plaza complex. As business has become increasingly complex, it is very hard for consumers to know, first, whether they can trust the product they are buying, and secondly, whether the business they are supporting is operating ethically. Little wonder, then, that there is increasing public appetite for action. I was surprised to hear recently that the Edelman Trust Barometer found that the public want greater regulation of business by a margin of 4:1.

But it is not just the public who want action; companies and business leaders are also behind the call for higher business standards. The Minister will be aware of the B Team, an alliance of thinkers and business leaders, including Richard Branson and Paul Polman, the chief executive of Unilever, who are calling for a plan B that, in their words, puts

“people and planet alongside profit”.

At the World Economic Forum in Davos, they called for companies to implement the highest standards in their core operations and across their supply chains, including greater transparency as a matter of course and as good business practice.

There is good reason for this. Business needs to command the support of the public, of investors and of shareholders in order to survive and to grow. However, public trust is low. Last year, an Ipsos MORI poll found that only 34% of the people questioned trusted business leaders to tell the truth. We need to see this in context; I would hate to think what they had to say about politicians. Research by Goldman Sachs and KPMG has shown that companies that have implemented responsible business practices such as transparency throughout their operations often lead on stock market performance and attract a wider and more loyal investor base from investors who are increasingly looking at these issues and want to invest in companies that have a long-term, not a short-term, outlook.

There are many examples of business leading the way in this field. As chairperson of the all-party parliamentary group on corporate responsibility, I have been pleased to meet and work with many such business leaders over the past four years. However, the Government need to play their part too, because, as many of these business leaders have told me, operating transparently is not always easy. They do so in the glare of public attention, they sometimes get it wrong, and it is incredibly complicated. Companies are often involved in extremely complex supply chains. That was brought home to me and to the wider public after the Rana Plaza disaster, where some of the multinational companies involved did not even realise at first that they had been contracting from suppliers who were based in the complex. It was only after campaigners and the media got involved that they realised they had been doing so.

Some companies are making efforts to operate to the highest ethical standards in terms of human rights and the environment—and to be open about it—but their problem is that they are in competition with businesses that do not do that. Many such businesses are based in the UK and listed on the London stock exchange, but they face no penalties whatsoever for breaching the standards the Government say they want them to meet. Like so many others, I believe it is time that the playing field was tilted in favour of those that are operating to high ethical standards, not against them.

[Jim Shannon (Strangford) (DUP)]

I asked the hon. Lady beforehand for permission to intervene on her. Does she agree that greater transparency of who owns and controls companies is necessary and that, in addition to addressing the issues she has mentioned, any new measures must address tax evasion, money laundering and the financing of terror?

[Lisa Nandy]

That is absolutely right. This goes to the heart of public trust in business, which is about transparency and a commitment to tackling such issues.

The business and human rights action plan was published jointly last September by the Foreign Office and the Department for Business, Innovation and Skills. The UK was one of the first countries to breathe life into the United Nations’ guiding principles on business and human rights. I am proud of that and congratulate Ministers for taking a lead on it. “Good Business” sets out the standards it expects companies to uphold, but so far it does nothing to demand those standards of them. We have had a decade of voluntary corporate social responsibility. Given the experience of the past year and previously—when John Ruggie set out the guiding principles, which were unanimously endorsed by the UN—it is time for the Government to take a more proactive approach.

First, I have been deeply concerned by reports from non-governmental organisations and others that companies have been given conflicting messages by different parts of Government. Although the Foreign Office has consistently warned about the dangers for UK-based companies in knowingly or unknowingly breaching human rights overseas, it appears from anecdotal evidence that BIS has been acting in direct conflict with the commitments made in the action plan.

I want to draw the Minister’s attention to one concrete example where there is evidence of that happening. The Kiobel case was brought by a group of Nigerian activists who claimed that Shell had helped the Nigerian military to systematically torture and kill environmentalists in the 1990s. The cases against Shell were filed under the US alien tort statute, which applies extraterritorially, so it enables non-US plaintiffs to bring claims against foreign companies in the US courts for acts that occur in a third country. Shell challenged that use of the alien tort statute and the UK Government intervened to support the company’s position. The court then ruled in Shell’s favour, which limits the ability of communities in developing countries to challenge corporate malpractice in the US courts in future. The Government’s intervention ran contrary to the commitment made by the Prime Minister to implement the UN guiding principles on business and human rights, which were unanimously endorsed by Governments in 2011.

Will the Minister give an assurance that her Department is completely committed to upholding the principles in the action plan, without qualification, and that it will commit to the same openness in its dealings with business as the Government say they want to see from business itself? In particular, will she ensure that businesses receiving export credit support or development partnership funding have to show that they are meeting the standards of the UN guiding principles?

Secondly, the entire action plan is predicated on the principle of transparency—none of it can be monitored or enforced without it. Nowhere is that more true than in one of the central pillars of John Ruggie’s principles, namely the access to remedy. Without transparency, people whose lives and communities have been destroyed have no effective way of getting justice. As we saw with the South African miners who took a case against Cape plc, companies will often seek to cover the impact of their actions, creating enormous difficulties for communities and their lawyers in gaining the evidence they need to put before the courts.

I must tell the Minister that without transparency requirements, there is no way to prevent such injustices. I recently met representatives of the Afro-Colombian Community Council of Opoca in Colombia. After an 11-year struggle to acquire a collective land title, it was finally granted the right to 73,000 hectares of collective land titles in September 2011, which affected about 17,500 people. They had an 11-year struggle only to discover that a mining concession, covering approximately 55,000 hectares of their ancestral territory, had been granted to AngloGold Ashanti, which is a company registered on the British stock exchange. A proactive duty on companies to disclose information would prevent such harm, while a greater commitment to transparency and—crucially—penalties for those who do not comply is the only way to enable people to access justice.

Finally, I want to tell the Minister:

“To no one will we sell, to no one deny or delay right or justice.”

That principle in Magna Carta has formed the basis of law, liberty and rights in this country for centuries. In this area at least, we are falling well short. Will the Minister commit to improving transparency and access to justice for communities harmed by the actions of British businesses abroad? At present, I and many other hon. Members in the Chamber are approached by so many people who have such a different story to tell. This is an issue of morality, good business and consumer confidence, but above all of national reputation. We should promote not the worst but the best of British business to the world. I look forward to the Minister’s response.

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[Jenny Willott]

I reassure my hon. Friend that the UK’s requirements already go beyond a lot of the voluntary principles that have been in place. We have agreed in the EU stronger mandatory reporting requirements for large companies to disclose their policies in a number of areas, including in their supply chain, which my hon. Friend highlighted and in which I know the hon. Member for Wigan is interested. That is a huge step in enhancing transparency, and for many member states of the EU it is the first time that they have had such broad requirements. The UK has traditionally been further ahead in mandatory requirements on businesses. I personally feel strongly about the issue, and it was one of the first that I raised in the Department when I took on my role. I will come in a minute, if my hon. Friend the Member for Cheltenham (Martin Horwood) will bear with me, to some of the reasons why I believe there is a driver in the UK economy for businesses to act voluntarily.

The requirement to report on human rights issues is in line with the Government’s implementation of the UN guiding principles on business and human rights, which the hon. Lady highlighted. The first annual reports under the new requirements are just being published, and early signs are encouraging. I am proud that, as I have just said, the UK is leading the way in high-quality company reporting, which will really make a difference. For example, the clothes retailer H&M now not only publishes a list of all its suppliers but sets out the standards and codes of practice that it expects them to meet. Marks and Spencer uses a social enterprise technology provider, Good World Solutions, to gather feedback directly from 22,500 workers in its clothing supply chain in India, Sri Lanka and Bangladesh, ensuring that they can raise concerns without fear of reprisals or discrimination. There are companies in the UK that are doing a significant amount to tackle some of the problems that exist.

As I highlighted to my hon. Friend, we have been negotiating with our EU partners on a related proposal to improve companies’ reporting in general. The EU non-financial reporting proposals have now largely been negotiated and broadly mirror our own regulations, and I hope that they will be adopted before the European parliamentary elections in May. They will start to drive behaviour change in the EU more generally, which will provide more of a common platform for companies operating in the EU. British domestic regulations led the way and have given our companies and shareholders a head start.

[Lisa Nandy]

As the hon. Member for Cheltenham (Martin Horwood) said, the problem is that although some companies are leading the way, there are also companies that, frankly, are not paying this the blindest bit of notice. Will the Department commit to monitoring the impact of those tougher regulations to see whether they produce the results that we seek, not for those companies that are already doing it but for those that are not?

[Jenny Willott]

Absolutely. We have the firm basis of mandatory requirements because it is important that companies provide such information. I have mentioned the measures that impose compulsory requirements and, as the hon. Lady said, it is extremely important that those measures are enforced and monitored. However, we cannot change business culture through legislation alone, which is one reason why I actively encourage businesses to go beyond the regulatory requirements and consider what more they can and should be doing.

The hon. Lady highlighted that there is real consumer demand for this approach. There is increasing awareness of the power of the money that we spend in shops and on services, and of the broader impact that that spending can have across the world. Consumers have the power to influence company behaviour. People choose not to purchase clothes that they believe to have been made in a sweatshop and instead spend a bit more money somewhere else, which drives company behaviour too.

The voluntary approach is also important. Last year, we carried out a consultation to assess what Government, business and others should and could do to realise the full benefits of good corporate responsibility. One of the key findings from that consultation was that businesses increasingly see corporate responsibility as a source of competitive advantage because consumers are driving that behaviour. Businesses see corporate responsibility as essential to managing long-term success, which is positive.

Initial reporting of performance was limited, being produced by just a few pioneering companies, but that has now been replaced by more substantial reports with clearer business relevance. There has been huge growth in the number of organisations that are reporting and taking responsibility for the impact of their activities. There is a balance to be struck between ensuring that we have a solid baseline of mandatory reporting with which all companies must comply and encouraging businesses that want to go further. It is good that businesses see reporting as a competitive advantage and that there is a strong business case for reporting because it encourages more businesses to act in that way. Progress has also been driven by the work of international organisations such as the OECD and its guidance for multinational enterprises.

The hon. Lady talked about the business and human rights action plan, and the importance of business impacts on human rights is increasingly recognised, not least through the action plan. As she said, the UK is the first country to publish an implementation plan for the UN guiding principles in this area. The Foreign and Commonwealth Office and the Department for Business, Innovation and Skills are working together to deliver that implementation plan, and I reassure her that BIS is completely committed to the plan and is working closely with the FCO to ensure that we deliver. The implementation plan is important to me and to the Department, and in it we encourage UK companies to adopt due diligence policies to identify, prevent and mitigate risks to human rights, to understand the full extent of their supply chains in the UK and overseas, and to emphasise to businesses the importance of behaviour in their supply chains that is in line with the guiding principles to ensure that we see progress throughout the supply chain.

Supply chain relationships are just one example of where businesses can take positive action that will have a greater impact than UK or even EU regulations. The hon. Lady highlighted how badly things can go wrong with the absolutely shocking example of the Rana Plaza fire. The British public’s awareness of the importance of such action has increased. The business and human rights action plan provides a framework for businesses to engage with their supply chains overseas, and it equips UK companies to give their suppliers both the information they need and the commercial incentive to act in accordance with UN guiding principles, which is important for driving behaviour.

I am proud of the Government’s record on transparency. The UK company reporting framework is proving to be an example to others. When the EU non-financial reporting proposal is finally adopted, we will implement it to improve company reporting still further. Those reforms will need time to prove their worth. We will continue to engage with businesses and civil society in the debate on transparency and reporting, so that we continue to anticipate events rather than react to them. At the same time, we will continue to work with businesses that choose to go beyond regulatory requirements in taking responsibility for the wider impact of their actions, including the activities of their supply chains.

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[Lisa Nandy]

Before the Minister finishes, will she commit to look at export credits? If she cannot answer now, I will be more than happy if she writes to me later.

[Jenny Willott]

I am happy to write to the hon. Lady on export credits.

I agree with the hon. Lady on access to justice. That is a key plank of the Foreign and Commonwealth Office and Department for Business, Innovation and Skills action plan on human rights. We support access to an effective remedy for victims of human rights abuses involving business enterprises within UK jurisdiction—that is the wording. We are working with the FCO and will report on progress by the autumn. That is an important element of the action plan.

I have asked businesses, business organisations such as the CBI and the British Retail Consortium, and Which?, Business in the Community and other non-governmental organisations and consumer groups to work with BIS to make it easier for businesses to do more and go further, as the hon. Lady highlighted. Together, we will consider what further steps will enable UK businesses to engage with their global supply chains, act on human rights issues and report on the action they are taking to make it more transparent.

The Government remain fully engaged—I hope the hon. Lady is reassured by my commitments this evening—and will continue to take action. I look forward to updating the House on progress later this year.

Question put and agreed to.

Sixth-Form Colleges (VAT)

Lisa Nandy Excerpts

Tuesday 17th December 2013 Westminster Hall

[Lisa Nandy (Wigan) (Lab)]

My constituency is home to two excellent sixth-form colleges, St John Rigby college and Winstanley college. Like so many of the 94 sixth-form colleges in the country, they do an excellent job, not only for their students but for the wider community. It is deeply unfair that they must pay VAT while school and academy sixth forms do not. In other types of free 16 to 19 education provision, funding is diverted to the front line. Why not for students in sixth forms?

Following recent changes to the funding formula, the anomaly has become unjustifiable. That view is shared by at least 74 other Members of Parliament, including the Chairman of the Select Committee on Education and my hon. Friend the Member for Barrow and Furness (John Woodcock), who wanted to highlight the case of Barrow-in-Furness sixth-form college but unfortunately cannot be here due to illness.

This unfair situation is exacerbated by the cuts made to sixth-form colleges in recent years. In 2010, enrichment funding was reduced from 114 to just 30 hours a year. Subsequently, the new 16 to 19 funding formula cut their budgets further—the average was 6%, which masks much more serious cuts for some. Last week, out of the blue, sixth-form colleges were told that 18-year-olds would no longer attract the same level of funding. Ministers argued that it was because those students have already received two years of funding, which completely misses the point that they are often the young people who most need and benefit from the additional help that we can provide.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The hon. Lady is making a strong case. On behalf of the three sixth-form colleges in my constituency, I absolutely agree. Will she comment on the fact that the sixth-form colleges in Brighton disagree with the Government’s position that VAT costs are taken into account in the up-front funding allocation made to colleges? If she agrees, will she join me in saying to the Minister that surely that means schools and academies are effectively being double-funded, because they are getting that as well as the VAT rebate?

[Lisa Nandy]

Absolutely. Issues of a level playing field are at the heart of this debate and I hope that the Minister will respond to that in his closing remarks.

Taken together, in the worst cases, the funding cuts have left some sixth-form colleges reeling from a staggering 30% overall budget cut. We should consider the issue against that backdrop.

Civil servants originally estimated that creating a level playing field for sixth-form colleges in relation to VAT would cost £20 million. They have since revised that upwards on several occasions, arriving most recently at a figure of £150 million, which includes other institutions. I say to the Minister that it seems completely the wrong approach, given that the Government have accepted in principle that treating sixth-form colleges differently is wrong, to refuse to right that wrong for them because they do not want to do so for others.

The problems for sixth-form colleges are exacerbated by the fact that, unlike school sixth forms, they cannot cross-subsidise their 16 to 19 work with funding from pre-16 provision, which is more generous. Principals and teachers across the sector are taking agonising decisions about dropping courses, cutting staff or reducing activities. A survey last year found nearly half of colleges had had to drop courses, eight out of 10 had had to cut staff and an astonishing 71% had removed or reduced enrichment activities such as sport, music, drama and dance. That is a loss for all young people, but it is devastating for young people who have never had such opportunities open to them.

[Mr Mark Spencer (Sherwood) (Con)]

I congratulate the hon. Lady on securing this debate, but will she acknowledge that sixth-form colleges are often able to offer courses that school sixth forms cannot, because they have the ability to draw in expertise? Ultimately, we need a level playing field, so that all those offering sixth-form education are playing by the same rules.

[Lisa Nandy]

Absolutely. The issue of the level playing field has come up time and time again. The hon. Gentleman is absolutely right about courses and the staff that sixth-form colleges can use. I am concerned that that loss of staff has also meant a loss of expertise. If the sector is hit by anything else, we will struggle to get it back.

[Kerry McCarthy (Bristol East) (Lab)]

This issue has certainly been raised with me by St Brendan’s sixth-form college in my constituency. Another issue is the fact that the VAT situation does not allow adults to use the building for more than a short amount of time. Otherwise, that incurs VAT as well. The academy schools in my constituency lobbied me about that in the past, but thankfully we managed to overturn the situation for them. In terms of community engagement, does she agree that not being able to use the buildings in the evenings is a wasted opportunity?

[Lisa Nandy]

Absolutely. I am grateful to my hon. Friend for raising that point. There is also a wider point: sixth-form colleges benefit not only their students but the wider community. I know from my constituency that they are institutions rooted in the wider community, and they play a much more beneficial role across our town than it would appear from looking only at their core activities.

It is galling for my sixth-form colleges that while they are struggling with the impacts of the cumulative funding cuts, the Government are creating new free schools and academy sixth forms, with which they are required to compete but which are VAT exempt. Many people contacted me before the debate to point out, rightly, that a market does not function if competition is not fair. Many new free school sixth forms are struggling to fill their places, yet those places are funded too. Ministers are paying for places in new institutions to lie empty while successful and established sixth-form colleges are struggling to afford the students that they have.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate my hon. Friend on securing this debate and putting the case so strongly. She puts her finger on it: new institutions are being funded for phantom students who are not there, while existing institutions are not only not being funded for this year’s students but taking a 17.5% cut in funding for next year’s students, based on an existing 20% difference in funding. VAT is yet another anomaly. Does she not agree?

[Lisa Nandy]

Absolutely. I pay tribute to the work done by my hon. Friend and many of the other Members present. The fact that there are so many Members here for such a short debate should tell the Minister that there is huge strength of feeling throughout the House on this issue.

All of this would make more sense if the sector were failing, but taken as a whole, sixth-form colleges are not only lean and efficient institutions, according to the National Audit Office; they are also among the best existing provision for 16 to 19-year-olds. Some 80% of them are rated as good or better, and they consistently rate higher than other types of provision in terms of added value. I know that St John Rigby college in my constituency does tremendous work with young people from deprived backgrounds and outdoes almost every other type of provision in getting those young people to university.

[Caroline Nokes (Romsey and Southampton North) (Con)]

I congratulate the hon. Lady on securing this important debate. Does she agree that 16 to 19 provision in further education colleges—outside a school setting—can sometimes provide the impetus that 16-year-olds who might not have done well at school need to enable them to achieve their GCSEs and then go on to A-levels?

[Lisa Nandy]

The hon. Lady is absolutely right. I am grateful to her for raising that issue. The culture in sixth-form colleges is enormously beneficial to such young people, and the staff are obviously passionate and determined to ensure that those young people reach their potential.

In conclusion, Ministers have accepted that this situation is unfair, so will the Minister who is here in Westminster Hall today take steps to create a level playing field for sixth-form colleges?

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend may be interested to know that my very first debate in Parliament, 16 years ago, was about sixth-form colleges and took place in this room, but that is beside the point. At that time, I described sixth-form colleges as the geese that lay golden eggs; I think she has made that point today. Of course, one other thing that sixth-form colleges do is to bring together young people from different schools and different communities. They are often situated in areas of diversity and they are a tremendous force for social cohesion. Does she accept that point?

[Lisa Nandy]

My hon. Friend is absolutely right, and his expertise on sixth-form colleges is well known; not only does he sit on the governing body of a local sixth-form college but he is chair of the all-party group on sixth-form colleges, which has done so much good work on this issue. I have to say to him that when he was first raising issues about sixth-form colleges in this place, I was actually at a sixth-form college in the constituency of the hon. Member for Bury North (Mr Nuttall). That shows that nothing changes.

As I was saying, Ministers have accepted that this situation is unfair, so will the Minister take steps to create a level playing field for sixth-form colleges? Will he make this important sector a promise that there are no more of these cuts to come? And will he join me in paying tribute to the extraordinary contribution that sixth-form colleges, such as my local one, make to young people and communities across the country?

[Mr Graham Stuart (Beverley and Holderness) (Con)]

rose—

Women and the Cost of Living

Lisa Nandy Excerpts

Tuesday 19th November 2013 Commons Chamber

[Gloria De Piero]

My hon. Friend makes a fantastic point.

What is the Government’s response? It is to hit women harder. Of the £14.4 billion George Osborne has raised through direct taxation and benefit changes, about £11.4 billion—79%—is coming from women. David Cameron is asking women to pay more than three times as much as men to bring down the deficit, despite the fact that women still earn and own less than men. Scratch the surface, and we see that some of the most vulnerable women are being hit.

[Lisa Nandy (Wigan) (Lab)]

Will my hon. Friend give way?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before the hon. Member for Ashfield (Gloria De Piero) progresses, I gently remind her that one does not refer to Members of the House by their names. The Prime Minister is “the Prime Minister” and the Chancellor of the Exchequer is “the Chancellor of the Exchequer”.

[Gloria De Piero]

I give way to my hon. Friend.

[Lisa Nandy]

Will my hon. Friend also highlight the impact of the cuts on the voluntary sector and therefore on women who use those services? The charity Women’s Aid said yesterday that domestic violence refuges had had to turn away 180 women a day, many of whom were going back to violent relationships. The impact on those women and their children will surely be immense.

[Gloria De Piero]

That is an extremely powerful point. If as much has been cut from local government finance as this Government have cut, it shows the reality of what we see. If we scratch the surface, we see that some of the most vulnerable women have been the hardest hit. Low-paid new mums lost nearly £3,000-worth of support during pregnancy and in their baby’s first year. Couples with children lost 9.7% of their disposable income and single mothers lost the most—15.6%. The Prime Minister just does not get it. Why would he, when only four out of the 22 in his Cabinet are women? When it comes to women, it is out of sight and out of mind from this out-of-touch Prime Minister.

Living Standards

Lisa Nandy Excerpts

Wednesday 4th September 2013 Commons Chamber

[Rachel Reeves]

Of course, since the Government came to office, 400 children’s centres have closed and the child care element of the tax credit has been cut, making it harder and harder for ordinary families to afford child care.

Under this Government, the situation is getting worse for families such as the one I mentioned and those in my hon. Friends’ constituencies. One in 10 people who want to work more hours cannot get more shifts; 700,000 people are working more than one job, most of them out of desperation rather than choice; and 1 million people are thought to be on zero-hours contracts. Incidentally, zero MPs from the Government side turned up to the Westminster Hall debate on zero-hours contracts organised by my hon. Friend the Member for Sunderland Central (Julie Elliott).

[Lisa Nandy (Wigan) (Lab)]

My hon. Friend is making a strong case. The workers at the Hovis factory in my constituency recently rejected the replacement of full-time staff with agency workers on zero-hours contracts, but does she share my concern that so few people are able to stand up against that and that increasingly it is young people who are trapped in insecure, low-paid work, which means they have no ability at all to plan their lives or to budget?

[Rachel Reeves]

I thank my hon. Friend for that intervention; she is absolutely right. The Resolution Foundation produced an excellent report, published this morning, warning about low pay becoming entrenched. It does not just affect workers at the start of their careers; low pay this year results in low pay the next year and the year after that, which is particularly worrying.

Zero-hours contracts often mean that workers are vulnerable. As my hon. Friend the Member for Wigan (Lisa Nandy) said, they are unable to plan for the future and unsure of their ability to pay the rent or the bills each month. Let it be remembered that no Tory MPs or Liberal Democrats, apart from the Minister responding, could be bothered to turn up to debate that issue.

As my hon. Friend the Member for Westminster North (Ms Buck) mentioned, we learnt today that 4.8 million people are now earning less than the living wage. Figures I commissioned from the House of Commons Library show that almost 60% of new jobs created since the spring of 2010 have been in low-paid sectors. This is the economy that the Tory-led Government are building: low-paid, part-time and insecure, making life tougher for families.

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[Lisa Nandy (Wigan) (Lab)]

I do not need to tell most Opposition Members about the crisis unfolding for individuals, families and whole communities, including in my constituency of Wigan. It is not just that unemployment has hit communities like mine hard and had an impact on people’s living standards, it is that the unemployment figures mask the reality facing many families of cuts to pay and hours, which have had a devastating impact on their daily lives. Many Opposition Members are also familiar with the picture we are seeing in Wigan, where payday lenders have sprung up to fill empty shops on the high street and are charging extortionate rates of interest, and where the queues at food banks, such as the Brick in the centre of my constituency, are lengthening by the day. In the past eight weeks, the Brick has given out more than 1,000 food parcels—it is running out of food.

We are now in a situation where one in five children in Wigan arrive at school too hungry to learn. Across Greater Manchester and Greater London, that figure rises to nearly 50%, leaving teachers having to feed children out of their own fridges and their own pockets.

[Kwasi Kwarteng]

rose—

[Lisa Nandy]

I will give way to the hon. Gentleman. I would be grateful if he told me what he thinks his Government should do about it.

[Kwasi Kwarteng]

I am grateful to the hon. Lady for giving way. Does she not recognise that if over 10 years a Government consistently spend a lot more than they get in and leave a huge deficit, any attempt to deal with that deficit will be difficult? Does she not accept that basic point?

[Lisa Nandy]

I find the hon. Gentleman’s comment alarming. Perhaps it is time for Government Members to attend an economics course or, more pertinently, a history lesson. If we fail to learn what happens when considerable deregulation causes a global financial crisis—supported and egged on by Conservative Members—we will be condemned to repeat it.

I was telling the House about the indignity, anguish and anxiety that afflict many of my constituents, and that daily grind people down. There are a number of things the Government could do, and I want to address them in the short time that I have. First, the Government should and could take immediate action to create jobs by investing in infrastructure. We badly need new schools, we badly need new homes and, in some areas, we badly need new hospitals. Constituencies like Wigan, where the construction industry has always been important to the local economy, need that investment, not just because we will get the buildings we need but because it will provide jobs and apprenticeships for young people.

Construction used to be one of the key routes for young people leaving school to get into the labour market and learn skills that could take them beyond the sort of low-paid work that hon. Members have described. If the Government were to take action immediately, it would be a huge relief not just to me but to the 1 million young people who are out of work and who ought to be a national priority. We know that this should be a national priority, because we know what happens when young people are left out of work: they suffer prolonged periods of unemployment, insecure employment and wage-scarring effects well into their 40s. What we are seeing at the moment is limited action to create apprenticeships. I am seeing young people in a revolving door of apprenticeships, taking on work experience, internships and apprenticeships over and over again. These do not lead to a real, paid, lasting job. Government Members heavily criticised the future jobs fund for being expensive, but I say to Ministers: please recognise that investing money in young people up front is repaid in droves. It is the right thing to do morally; it is the right thing to do economically.

Many young people are on zero-hours contracts and I want to say something about the increasing casualisation of the work force, something that the workers in the Hovis factory in my constituency are rightly standing up against at the moment. People on zero-hours contracts tend to earn lower wages as a whole, and we have seen compelling evidence of widespread exploitation. I would be grateful if the Minister paid some attention to what I am saying, because this is something that affects people across the country, including, perhaps, in his constituency.

[Andrew Bridgen]

The hon. Lady speaks passionately about youth unemployment. If the Opposition have all the answers on youth unemployment, why did it rise by 40% under the previous Labour Government?

[Lisa Nandy]

Again, I would really like to send the hon. Gentleman on a history course. If he looks more closely at what happened under the previous Government, he will see not only that youth unemployment fell, but that at the one point in the mid-2000s when it rose it was because there were more young people compared with the number of jobs. It was due to an increase in the number of young people, not a shortage of jobs. The previous Government immediately took action to reduce youth unemployment, something I hope Ministers revisit and learn from in view of the problems we have now.

I was talking about the widespread exploitation of people on zero-hours contracts. Whole sectors are now dominated by this. I represent women in my constituency who work in the home care sector, and I have heard appalling stories about the way they are treated. One woman was forced to take eight hours of shifts on no notice whatever. She has two young children and had to take them with her and lock them in her car while she tended to older people. I would be really grateful if the Minister stopped laughing for a moment, because this is very serious. When the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), responded recently to a debate in Westminster Hall packed with Labour MPs raising similar concerns, she did not say very much. However, it cannot be beyond our wit to bring in some kind of statutory code or regulation and ensure that it is enforced. I take the Minister’s point that some people like zero-hours contracts, but, given the widespread exploitation of people in that situation, surely it is time to take action.

[Lilian Greenwood (Nottingham South) (Lab)]

Will my hon. Friend give way?

[Lisa Nandy]

I am sorry but I will not, because I have only a short time left.

Women, in particular, are affected by zero-hours contracts. We should take this seriously, because women are increasingly important to low-income households. In 1968, men in low-income households contributed 71% of the household income. By 2008, that was just 40%. The contribution made by women had doubled, yet female unemployment remained stubbornly high. We lag eight percentage points behind OECD leaders such as Iceland, Norway and Sweden in the re-employment of women with children. We should celebrate a fall in unemployment whenever it occurs, but we need to look seriously at what is happening to women; otherwise we will fail to solve the problems for families.

We should also take seriously the fact that for many women part-time work is not a choice. One third of women with children were found recently to be in part-time work through lack of choice. We should first address the high cost of child care, which is rising by 5% a year. As my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) pointed out, that far outstrips affordability, especially for those on the minimum wage.

Finally, we should take immediate action to tackle low pay. We have seen a long-term trend of falling pay and rising profits. There is no pressure from the Government to take action against multinationals such as Tesco, which made huge profits last year. It employs many women in my constituency on below the living wage. I say to Ministers that low pay is not a ladder for most people. They are trapped in low pay, which is why we need action on the living wage. It is not just important for individuals and their families; it is important for the local economy. If people are not spending, small and medium-sized enterprises fold and the cycle continues. I ask Ministers this: where is the pressure? Condemn those multinationals, implement a living wage and refuse to do business with companies that will not take action. It is time for us to take concrete action. Our families and our young people simply cannot afford for us not to do so.

Finance Bill

Lisa Nandy Excerpts

Tuesday 2nd July 2013 Commons Chamber

[Mr Raynsford]

My hon. Friend makes a very good point that again illustrates just how dire the consequences of current policies are for people in need of housing.

If the current housing policy and current housing market are bad news for people in housing need, they are also bad for the economy. As my hon. Friend the Member for Birmingham, Erdington rightly emphasised, there would be huge economic benefits from an expanded house building programme. Not only would we see an increase in employment and demand for materials, most of which are sourced within the UK, but there would be huge impacts on the supply chain.

[Lisa Nandy (Wigan) (Lab)]

I agree with what my right hon. Friend is saying. Does he agree that there would be a particular impact on young people? There are more than 1 million young people in this country who are desperately in need of a job. Many young people in Wigan were employed in the construction industry and on apprenticeships before this Government came to power, so they would experience a very positive effect from the changes he is describing.

[Mr Raynsford]

I entirely agree. I happen to be the president of Youthbuild UK, which is one of the bodies that has been campaigning specifically for more effective opportunities for young people, in particular disadvantaged youngsters, to get the training and skills necessary to secure employment in the construction industry. I wholly endorse what my hon. Friend says.

There are benefits in terms of the economy. There are benefits in terms of employment. There are wider supply chain benefits. I am thinking in particular of all the industries that provide the materials, furniture, furnishings and equipment that go into houses when they are built. When people move into a house, they need carpets, furniture and various fittings, and all of that additional demand will be good for the UK economy. There is therefore a real multiplier effect from an expanded house building programme.

It is not just about new homes. As has been said, it is also about retrofitting existing homes that are in poor condition. Here the Government have got themselves into another mess, but not through lack of a good idea. The idea behind the green deal is a sound one: that we try to put in place a mechanism that enables people to borrow the money required to fund improvements in the energy efficiency of their home and they can then pay for that out of the savings they make through reduced bills because the home demands less energy. That is in principle a very good idea. The problem is that the scheme the Government have managed to come up with after quite a long gestation period has proved so complex, opaque and financially disadvantageous that it is at present struggling to get any takers.

I admire the ambition displayed by the Minister responsible for the scheme in trying to get it off the ground. He has put a huge amount of effort into trying to promote it, but as it is currently constituted it is simply not attracting the interest of the British public, and without doing that it will not fly, so we will have a continuation of the problems of energy inefficient homes that are bad for the environment because they pour out unnecessary carbon emissions. That will be bad for the fuel poor who end up paying more for fuel than they need to, and it will be bad for the construction industry because all those potential jobs in retrofitting existing homes will not be taken up.

The Economy

Lisa Nandy Excerpts

Tuesday 11th December 2012 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

May I say what a pleasure it is to follow the maiden speeches by our new colleagues, my hon. Friends the Members for Rotherham (Sarah Champion), for Croydon North (Steve Reed), and for Middlesbrough (Andy McDonald)? I think that I speak for everyone on the Opposition Benches when I say that they were superb contributions and that the arrival of six new Labour MPs, in all, has given us a tantalising glimpse of what life will be like in 2015 when Labour again has a parliamentary majority.

There is no doubt that the economy is the defining issue of this Parliament and that the deficit reduction plan is the defining measure by which this Government will be judged. In that context, last week’s autumn statement showed us that it is shocking how far they have fallen short, on the basis of their own yardstick, in terms of the progress they have made so far. In the emergency budget after the election, the Chancellor told us that he would need, first, four and then five years to sort the deficit out. He said that we could not afford to do it any slower and ease the pain, as Labour wanted. He said that it would be painful but it would be worth it. Last week, two and half years in, with hundreds of thousands of people made unemployed and the stripping out of the Army, the police, council services and everything else, he told us: “I need another five years.” He told us that we have almost nothing to show for the pain our constituents have endured so far.

Whether people are supporters of the Chancellor or not, the fact is that every time he comes to the House to report on his progress, he has to tell us that the economy has not grown as he had hoped since the last time he was here; that he is planning, more often than not, to borrow more than the last time he was here; that spending on public services will be cut more than the last time he was here; and that future growth will be less than he expected the last time he was here. Crucially, we now know that without the Treasury’s accounting tricks, borrowing would be higher this year than last year. This is a Chancellor who has failed, but it is our constituents who have to pay the price of that failure.

[Lisa Nandy (Wigan) (Lab)]

Austerity has wreaked havoc in areas such as Wigan precisely because the public and private sectors are so interdependent. The huge cuts to the public sector have had an appalling impact on the private sector as well. Does my hon. Friend share my disappointment that the Chancellor has refused to acknowledge that and refused to change course, as we have urged him to do? Having listened to the hon. Member for South Dorset (Richard Drax), it seems to me not only that the Government refuse to acknowledge that, but that they simply do not understand it.

[Jonathan Reynolds]

I completely agree. It is self-evident. The economy has grown by just 0.6% in the past two years and this year it has shrunk by 0.1%, with talk of the UK yo-yoing back into recession for the third time as the recovery continues to falter.

Without any significant growth, the Chancellor will fail to meet his own targets. Borrowing is only lower this year because the Chancellor has included on the balance sheet the £3.5 billion from the auction of 4G. That would make sense if the 4G mobile spectrum had indeed been sold for that amount, but the auction has not taken place yet. That means that the Chancellor has balanced the books with money that he simply does not have. If I asked my bank manager to accept that I had paid off a chunk of my mortgage as long as she factored in the sale of my car, but that I had not actually sold it yet, she would laugh at me. We should be no more convinced by the Chancellor’s actions.

Without the addition of the estimated windfall from the 4G auction, borrowing this year would actually be £2 billion higher than last year. Despite the promises that the austerity measures would stabilise the economy, this year the Government will borrow more—£212 billion more—than they had planned. Coalition MPs frequently warn us of the dangers of borrowing too much, but they never seem keen to take their own medicine. The Government’s deficit reduction plan is not working and it is simply mismanagement to pretend otherwise.

Deficit reduction is not the only promise that the Chancellor has broken. As well as telling us that austerity would be the solution, he famously promised that we are all in this together. We are not all in this together. The Government have given a £3 billion handout to the richest people in the country, yet a family with two children where one parent earns a relatively modest income of, for example, £20,000 are the ones who lose out.

Furthermore, the Government’s claim that the 50p tax rate meant that millionaires fled the country does not stand up to scrutiny. A simple look at the figures shows that the overall number of taxpayers remained almost unchanged between 2009-10 and 2010-11. Following the introduction of the 50p rate, there may have been a deterioration in declared incomes above £1 million, but that was without doubt the result of the wealthy forestalling their income from one tax period to another. The Government should have kept the rate for the next tax year to ascertain exactly what it brought in, because, goodness knows, we needed the money.

It is the same unequal story right across the country: it is Labour-run councils, particularly those in the north of the country, that bear the brunt of the cuts. On average, Labour-run authorities have seen their budget cut by £107 per person, which is three times higher than the figure for Conservative town halls. Councils will not receive detailed information for their 2014-15 budgets until later this month, but nationally they know that they will face cuts of £445 million in that financial year. Councils such as Tameside face an anxious wait to see whether that reduction will be applied equally or whether councils such as ours will again have to suffer disproportionately.

The situation in adult social care in particular is of great concern to me. I meet people in my surgeries who are in severe need of help, but simply not enough money is provided for social care in this country to meet that need. I have met people with caring responsibilities for adults and children who have told me of their sheer desperation at the prospect of their respite care being taken away. We need to do something urgently to properly support those people.

On unemployment, in my constituency 10 jobseekers are now chasing every advertised vacancy. A good portion of them are over 50 years old and starting to wonder if they will ever work again. Long-term unemployment is rising across the country and nearly 1 million young people are out of work. That is the principal cause of the Government’s borrowing problems and the OBR forecasts that the claimant count will continue to go up.

The Work programme was the Government’s attempt to get people off welfare and into work, but a successful welfare-to-work programme is not possible if there is no work available. According to the Government’s own statistics, just two out of 100 participants were still in work after six months, which means that the chance of getting a job was higher if people did not take part in the scheme. Members should contrast that with the success of the future jobs fund, run by the previous Government and spearheaded by the former Member of Parliament for Stalybridge and Hyde, James Purnell. Unlike the job-hunting support offered through the Work programme, the future jobs fund provided six months’ real work for every participant. It also had long-lasting results: in Tameside, half of those who took part went on to secure permanent employment. Of course, if we are to cut the deficit, we need to get people back into work—that is vital—but the turnaround is not just about the nation’s finances; it is also about an individual’s pride. I therefore urge the Government to look again at the success of the future jobs fund as they try to move forward from the failure of the Work programme.

For those who want to work, but have been failed by the lack of jobs and the impotence of the Work programme, there was even worse news last week. The Chancellor announced that they will be made poorer in real terms because their benefits will not be increased in line with inflation. That will cause hardship not just for the unemployed, but for a great many people in work. We heard today in Treasury questions that the majority of the people who will be affected are in work.

If that had been done as part of the Chancellor asking us to tighten our belts, it would be one thing, but the autumn statement in its totality represents a net giveaway for the next three financial years. It was not the Chancellor asking for more from the British people. The Chancellor can afford a tax cut for millionaires and a cut in corporation tax, but he asks people who get out of bed and go to work on low wages to pay for it. That is a disgrace.

The autumn statement is proof that the economic policies of the Conservative Government are simply not working. We cannot cut the deficit effectively unless the economy is growing, and the Government are not doing enough to foster economic growth. Today, while we talk about taxes, growth, double dips and triple dips, let us not fall into the trap of thinking that this is a debate purely about numbers; this debate is and should be firmly rooted in the increasing struggles of the people we all represent: the growing number of people who are accessing food banks, those who are choosing between eating and heating, and those who live with the fear that their homes may soon be repossessed. Those people are the economic reality of our country and we owe it to them to run our economy better than we are doing at present.

Financial Services Bill

Lisa Nandy Excerpts

Tuesday 22nd May 2012 Commons Chamber

[Lisa Nandy (Wigan) (Lab)]

After that exchange, I rise to speak to amendment 45, which stands in my name and that of other Members, with some trepidation. I shall try to keep to the point.

The amendment places a duty on the Financial Conduct Authority, in its role as the UK listing authority, to require all applicants to the stock exchange to report on the human rights and sustainable development impacts of their operations. The Minister has said that the FCA needs to be a single-minded regulator. The amendment would not distract the FCA from its strategic objective, but would serve to uphold the integrity of the market and the London Stock Exchange in the fullest sense of that term. As the hon. Member for Hereford and South Herefordshire (Jesse Norman) has said, we must uphold honour and morality in the markets, but we must also maintain Britain’s international competitiveness. The amendment will achieve both objectives.

Conveniently, the amendment is also in line with the Government’s policy commitments. In June last year, the UK, along with every other member of the United Nations Human Rights Council, endorsed the UN framework on human rights and transnational corporations, which for the first time provides a framework for business and human rights. It was an historic agreement, and the Government are very supportive of it. The Foreign and Commonwealth Office has been particularly enthusiastic in its support for its principles, but so far the Government have not spelled out how they intend to fulfil them. Listing requirements specifically relating to human rights and sustainable development will be a very strong first step. As some Members may be aware, the LSE is currently host to a number of companies that have been found guilty of gross violations of human rights, particularly in countries that are in conflict or deemed high risk, yet very few companies have been held properly to account for such actions.

Last June, Richard Lambert, former director general of the CBI, wrote an opinion piece for the Financial Times. He said:

“It never occurred to those of us who helped launch the FTSE 100 index 27 years ago that one day it would be providing a cloak of respectability and lots of passive investors for companies that challenge the canons of corporate governance such as Vedanta…Perhaps it is time for those responsible for the index to rethink its purpose.”

Our amendment would clarify rather than rethink the purpose of the stock exchange, allowing the FCA to take into account an applicant’s respect for human rights and sustainable development, in protecting the integrity and respectability of the exchange. That has been done elsewhere, such as in Hong Kong, and Istanbul, Brazil, Indonesia, Shanghai, Egypt, Korea and South Africa have all taken steps in that direction.

Such regulation would not be burdensome on applicants. Publicly listed companies already report on their social and environmental impacts as part of the requirements under the Companies Act 2006. This amendment would simply make explicit the requirement to include human rights and sustainable development in their reports and demonstrate to applicants that the Government do not tolerate or accept failure to respect human rights.

Apart from the moral argument, there is a strong business case for such requirements. There is increasing recognition that environmental and social factors can have a material impact on business returns and a wider impact on reputation. The gulf of Mexico oil spill—which forced BP to cancel its dividend for the first time since the second world war and to report its first annual loss in 19 years—should have removed any doubt that environmental and social issues can be vital to company success.

One of the virtues of London’s financial services sector is its sustainability, security and stability, yet we are falling behind other countries in our commitment to sustainability. The Bill provides a great opportunity for Ministers to get on the front foot in respect of this agenda. The FCA’s purpose is to uphold the integrity of the markets. I ask Ministers to consider that term in its fullest sense in respect of companies’ environmental and social impacts.

This is a probing amendment, so I shall not press it to a Division, but I will listen very carefully to the Minister’s response.

[John McDonnell (Hayes and Harlington) (Lab)]

I apologise, Madam Deputy Speaker, for coming and going from the Chamber during the debate; I have been chairing another meeting.

I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on the way in which she has promoted the debate on the issue and on her amendment. She has approached the matter articulately and with considerable compassion. She has demonstrated that ability to the House on a number of issues, and I congratulate her on her promotion to the Labour Front Bench.

--- Later in debate ---

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I am grateful for the opportunity to reply to this debate. The hon. Members for Wigan (Lisa Nandy) and for Hayes and Harlington (John McDonnell) have raised some very important issues and there is a lot of truth in what they say. The reputation of the UK listing regime depends partly on the behaviour of companies, and we need to think about that quite carefully. However, there are other forums in which these issues should be explored—I do not believe that the Financial Services Bill is the place for it. In the regulatory reforms we have brought forward, we have tried to be very clear about the responsibilities and focus of the new regulators, the Financial Conduct Authority, the Prudential Regulation Authority, and the macro-prudential body the Financial Policy Committee.

Matters of stewardship and corporate behaviour are predominantly the responsibility of the Financial Reporting Council, which is responsible for the stewardship code and corporate governance issues. I encourage both hon. Members to engage with the FRC on this issue. Of course, it is not only the FRC that is relevant. The hon. Member for Hayes and Harlington talked about the mining sector, and the Government are engaged in that debate. We are a strong supporter of transparency in the extractive sector and we are pressing for requirements to be placed on EU extractive companies to disclose the payments they make to Governments. That is flowing from the accounting and transparency directives. We are also very supportive of the extractive industries transparency initiative, under which companies publish the payments they make to companies in resource-rich countries, so we are aware of the need to increase transparency.

[Lisa Nandy]

I am grateful to the Minister for giving way, but I urge him to speak to his colleagues, particularly in the Foreign and Commonwealth Office, because this amendment is supported by a wide range of organisations. They include investors and members of the business community, as well as non-governmental organisations that represent those whose lives have been so appallingly blighted by some of the companies that my hon. Friend the Member for Hayes and Harlington (John McDonnell) and I have been discussing.

[Mr Hoban]

The hon. Lady makes a good point, and if my colleagues in the Foreign and Commonwealth Office are not reading this debate carefully I shall certainly raise the matter with them and ensure that they think carefully about their role. I encourage her to speak to the FRC about these issues.

Static Caravans (VAT)

Lisa Nandy Excerpts

Thursday 26th April 2012 Commons Chamber

[Mr Stuart]

My right hon. Friend is right. He and many other Members on the Government Benches who would not dream of opposing the Government’s general strategy, or even most of the specifics, have such profound doubts about this one policy that they are asking the Treasury to think again.

[Lisa Nandy (Wigan) (Lab)]

Does the hon. Gentleman agree with the point made to me by Pemberton Leisure Homes in my constituency that the measure will also have a profoundly damaging effect on apprenticeships? That firm employs 160 people, but it also has many apprentices. I know that the Government are keen to boost the number of apprenticeships. Does the hon. Gentleman agree that this measure could be problematic for that policy objective too?

[Mr Stuart]

The hon. Lady is right. I may have a chance to get to that issue later in my speech.

Youth Unemployment and Bank Bonuses

Lisa Nandy Excerpts

Monday 23rd January 2012 Commons Chamber

[Danny Alexander]

No, I will not.

I mentioned the Financial Policy Committee of the Bank of England and its comments. That is why the FSA will scrutinise all proposed bonuses to make sure that they are not paid at the expense of rebuilding capital. There has already been some progress, with levels of bonus payment down significantly. Hon. Members should consider how far they have fallen. When the shadow Chancellor was a City Minister in the Treasury, bonus levels were £11.6 billion, whereas last year they were almost half that, at £6.7 billion. We fully expect them to fall further this year.

[Lisa Nandy (Wigan) (Lab)]

May I ask the right hon. Gentleman to consider one more fact before he concludes on this subject? When youth unemployment rose under the previous Government, that was largely due to increases in labour supply, but since his Government took over, the massive increases in youth unemployment have been due to a collapse in labour demand. That is why the Opposition are so desperately asking his Government to change course. If the hon. Gentleman cares about this issue, as he has said that he does, will he confirm today that he will change course and prioritise growth over jobs?

[Danny Alexander]

I am not sure that one can prioritise growth over jobs—and that is the first explanation I have heard from Opposition Members of the reason why youth unemployment rose during Labour’s time in office. I do not know whether that opinion is shared by those on the Front Bench.

As I have made clear, we are prioritising tackling youth unemployment. We do not want to see young people blighted by long-term youth unemployment as they were in the 1980s. That is why the youth contract, our investment in apprenticeships and the Work programme are all necessary to help young people back into work.

--- Later in debate ---

[Lisa Nandy (Wigan) (Lab)]

I want to make the case as to why, at a time when not everything can be priority, this subject really ought to be one. It is not just because in my constituency of Wigan, one in four young people is not in education, employment or training, and it is not just because I have begun to detect a sense of hopelessness among them that really frightens me. It frightens me because for nearly a decade before I came to this place, I worked with some of the most disadvantaged children and young people in this country, and what I am detecting in my constituency is a ripple effect: the sense of hopelessness is spreading outwards from the most disadvantaged to groups of young people who previously had strong hope for the future and strong resilience within themselves and their families. It is because young people cannot wait that I want to make the case for the proposal in the motion.

We heard from my hon. Friend the Member for Leeds West (Rachel Reeves) about the wage-scarring effect, and we heard a powerful speech from my hon. Friend the Member for Leeds East (Mr Mudie) about the impact that youth unemployment has on young people’s confidence. I have seen for myself the levelling-down effect when jobs are scarce: graduates leave university with a sense of despair because they have to take jobs that they could have got three years earlier; 18-year-olds leave college with a sense of despair because they have to take jobs that they could have got two years earlier; and 16-year-olds are left with literally nowhere to go. That is why the issue should be our top priority: it is different, and it cannot wait.

I worked for five years for the Children’s Society, which has spoken out very powerfully about child poverty this week, and I saw what happened to young people who were put out of work in the 1980s. They never recovered resilience in the labour market and were forced to bring up their children in workless households. Twenty years later, we were still dealing with the impact of that, so I say to Ministers that they are storing up trouble for future generations if they do not take action now.

I am concerned about what I have heard, because the Government are tinkering when what we really need is a step change in approach to the wider economy and to this issue. Young people have a very, very strong sense of fairness, which is why the starting point that my hon. Friend the Member for Leeds West has chosen is exactly the right one. More than anyone else whom I represent, young people understand the concept of something for something. They have seen the education maintenance allowance, which they worked hard to get, axed; they have seen Aimhigher, which raised the number of young people in my constituency going to university by 40% in six years, axed; they have seen tuition fees hiked up way beyond anything they could even conceive of paying; and they have seen the future jobs fund, which was making a dramatic difference to their confidence and to their friends’ confidence, axed. At the same time, they see bankers’ bonuses and pay continue to rise, so it is no wonder that they are angry.

[Meg Hillier]

Does my hon. Friend agree that there may be poverty among young people—my constituency, unfortunately, was shown to have a high level of poverty by the excellent work that she referenced—but there is no poverty of aspiration, certainly not in my constituency? Will she comment on whether that is the case in hers?

[Lisa Nandy]

I share that sentiment, but I am concerned. Those young people are turning to a Government who said, “If you work hard and try hard, we will support you” but they see poverty of aspiration from the Government. They are angry, because the Government have broken the deal and the pact that, if young people tried hard, they would have the chance of a better future.

[Duncan Hames (Chippenham) (LD)]

The hon. Lady is making a typically impassioned and impressive speech. On the question of whether the Government broke the deal, would she not, given her experience before coming to the House, acknowledge that youth unemployment has been rising consistently since 2004? In my constituency, unemployment trebled in the previous Parliament, so the Government need to be prepared to look at proposals and solutions other than those that did not work in previous Parliaments.

[Lisa Nandy]

I am afraid that the facts do not bear that out. I agree, however, about the stubborn problem of structural youth unemployment, which I shall come on to.

I want to use the last few minutes of my speech to discuss what more must be done if we are serious about giving young people hope for the future. I have made the case that, although the Work programme is a welcome step, it is tinkering when we need fundamental change in the system. Job preparation, while worth while and extremely important for some of my constituents, who need support, confidence and help to get a job, is not enough if there are no jobs to go to.

That is why I believe that growth, growth and growth have to be the Government’s priority. In my constituency, and across the country, as we have heard from my hon. Friends, there are simply no jobs to go to. I have argued that increases in youth unemployment under the previous Government were caused by an increase in labour supply. The increase in youth unemployment under this Government is the consequence of a collapse in labour demand. The focus on youth unemployment masks a rapid fall in youth employment, which is partly accounted for by the abolition of full-time education places. If Ministers are serious about this issue, they must speak to their hon. Friends in the Department for Education, and make the point that it does not make any sense to cut education places at a time like this.

Will Ministers commit today to using every lever at their disposal? There are so many things that a Government can do, and it is distressing for young people to hear that the economic situation dictates inaction, when in fact we could have action and we could have it now. The Government could use their procurement power to ensure that young people have apprenticeships—it is immoral to award public contracts to firms that will not give apprenticeships and opportunities to our young people. The Government could also use their procurement power to make sure that those contracts go to firms that provide real, lasting, paid jobs with a decent career structure, to give those young people the resilience in the labour market that they need. That is why I urge Ministers to think again about the future jobs fund. I know that that has become a political issue, but I and my colleagues have seen the dramatic long-term difference that it was beginning to make for young people in our constituencies.

Structural youth unemployment remained stubbornly at around 10% under the previous Government, despite huge efforts, particularly by my right hon. Friend the Member for Morley and Outwood (Ed Balls), to do something about it. The only way to tackle structural youth unemployment is through partnership working, with the public, the private and the third sectors. I have seen recently some attempts to focus on the most disadvantaged young people—for example, in young offenders institutions—and a focus on education to lead young people into employment.

Ministers should be very careful about how they set targets and measure progress. For some of the young people with whom I have worked, with the extremely serious problems that they have had, simply getting up in the morning and eating breakfast has been a challenge. Ministers must be careful not to throw away real progress for some of the most disadvantaged young people in this country, or they will not tackle the structural problem of youth unemployment, which we tried so hard to deal with. Ministers know that some young people—disabled young people, young carers, those with transport difficulties—need extra help. I am sure Ministers know that, and I hope that help will be forthcoming.

Inaction on this issue is a moral choice with lasting consequences for a group of young people whom those on the Government Benches may never meet, but to whom they owe a heavy responsibility.

The Economy

Lisa Nandy Excerpts

Tuesday 6th December 2011 Commons Chamber

[Mr Osborne]

I have given way to both hon. Members, and I know that many people want to speak in this debate.

The permanent savings we have made reaffirm Britain’s commitment to dealing with its debts. Who backs this commitment? The international organisations do. The OECD says that

“the ambitious fiscal consolidation has bolstered credibility and helped maintain low bond yields”.

The head of the IMF, whom the shadow Chancellor was talking about, said when she came to the UK that

“strong fiscal consolidation is essential to restore debt sustainability”,

and that the Government’s “policy stance remains appropriate”.

During Treasury questions, the shadow Chancellor was, I think, quoting The New York Times. What he did not quote was the Financial Times, where he actually worked. It said that

“the Government’s plans for fiscal consolidation have allowed Britain to regain the confidence of investors at a time when all too many countries have forfeited it”.

That is the kind of editorial he would have written when he was a leader writer there. The Economist says that the credibility the Government have achieved is “priceless”. The CBI has supported what we have done. The Institute of Directors said that we did the right thing. The Federation of Small Businesses, which the shadow Chancellor often quotes, and the British Chambers of Commerce have both welcomed the measures we announced for business.

[Lisa Nandy (Wigan) (Lab)]

We have heard a lot about what the Chancellor thinks about the Labour party. How many of the 100,000 additional children now growing up in poverty under his watch also support his plans, and what is he planning to do about that?

[Mr Osborne]

On the same measure that the hon. Lady uses, child poverty rose by 200,000 in the last Parliament. [Interruption.] She says, “We took those children out.” Child poverty in the last Parliament rose by 200,000 on the exact same measure that she is using. What we are doing is investing in nursery education provision for the poorest children, which never existed before, in a pupil premium, in free schools and in new school places—that is exactly what we are doing to tackle the causes of poverty as well as the symptoms.