Section 5 of the European Communities (Amendment) Act 1993

Nic Dakin Excerpts

Tuesday 24th April 2012 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

It is pleasure to follow the hon. Member for Bury North (Mr Nuttall), who has dealt with one side of this issue—how the documentation goes to Europe—with his usual rigour and care. I wish, however, to focus on the appropriateness of the Budget Red Book for the UK economy.

The Red Book has created a cacophony of confusion. We have had the pasty tax, the granny tax, the caravan tax, the churches tax and the tax on philanthropy—the list goes on and on. This is an omnishambles, if ever we had one. This Budget is neither fair nor effective. Indeed, Frank and Shirley, two pensioners, came to see me at my recent surgery and told me that they are really concerned about the impact of this Government’s policies on them. They are worried about the pensions move from the retail prices index to the consumer prices index and the effect of the granny tax. At the same time, they see their energy prices, fuel prices and other costs rising. That is what is happening to real people in the real world.

This was a Budget in which millions were asked to pay more so that millionaires can pay less: 14,000 people earning £1 million or more get a tax cut of more than £40,000 a year, while the average family lose £511 as a result of tax rises and cuts this year. A family with children earning just £20,000 lose £253 a year—that is in addition to the VAT rise, which is costing families in my constituency up to £450 a year. This Budget also includes a £3 billion tax raid on pensioners for the next four years.

This is not a fair Budget, so the issue becomes whether it is an effective one. The Government promised change. They promised that things would get better, but things have got worse. Their policies are clearly failing on jobs, on growth and on the deficit. We have 1 million young people unemployed—that is a shocking statistic—and women’s unemployment is at a record high. The economy has stalled, and there is speculation about tomorrow’s growth figures—not about how much the economy has grown, but about whether the economy is merely flatlining or is going back into recession. By contrast, in the United States, where investment is taking place in infrastructure, the economy is growing, albeit slowly. Our Government are set to borrow £150 billion more than they had planned because of this slower growth, so this Budget is not fair and it is not effective.

I represent Scunthorpe and the surrounding villages, where manufacturing is key. There is not enough in this Budget to address the needs of manufacturing; it does not contain an industrial policy. A promise was made about introducing a commitment for intensive energy users. The promise remains but that is still not happening; it is still in the long grass. Likewise, infrastructure spending and getting construction going, so that construction can drive the economy forward, are not happening although they need to happen. This Budget, as set out in the Red Book, which we are considering sending to Europe tonight, is neither fair nor effective. It is certainly an omnishambles. It is both heartless and hopeless, and I hope that the House votes against it.

Rural Bank Closures

Nic Dakin Excerpts

Tuesday 21st February 2012 Westminster Hall

[Roger Williams]

The hon. Gentleman anticipates a theme that I intended to expand later in my remarks. I value the work done by credit unions, but in the area of Wales with which I am familiar, they do not seem to enlarge and extend their capacity to provide facilities for businesses, or even mortgages, but work only at microfinancial level. The hon. Gentleman makes a good point, and in these extreme circumstances it may be that the mutual model will once again establish itself and become more important in our communities, which I would welcome.

The Presteigne chamber of commerce has a very active chair, Rosamund Black. She fears that the closure of HSBC will cause extreme inconvenience and hardship and seriously damage the structure of the town. She said to me that people use the bank for more than simple financial transactions; the staff provide a vital service in offering advice and helping to solve the banking queries of many residents, particularly the elderly, whom they help with bill payments and other financial transactions.

However, despite the efforts of the community—I pay particular tribute to the mayor of Presteigne, John Kendall, to the Assembly Member for Brecon and Radnorshire, Kirsty Williams, and to the chair of the chamber of commerce—they appear to have been unsuccessful in persuading HSBC to maintain the bank. Indeed, that closure will follow other closures.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate the hon. Gentleman on securing this timely debate. The HSBC branch in Kirton in Lindsey, in my constituency, announced recently that it was closing. The situation mirrors exactly what the hon. Gentleman is describing in terms of the role of the bank in the community. It is one of the key pillars of the community. Taking the bank away unsettles the whole community infrastructure in the way he describes, and that is not driven by customer preference. It is driven by the mission of the bank. In the case of the Kirton in Lindsey bank, it means that constituents will have to travel 9 miles to the nearest banking facility, so this is clearly an issue that needs addressing. I congratulate the hon. Gentleman on airing it today.

[Roger Williams]

The hon. Gentleman makes a very good point, because public transport in rural areas is difficult at the best of times. Requiring people to travel distances of 9 miles or, in an example from my constituency, 14 miles makes it very difficult for people to obtain the advice and support that they need in making financial decisions. There have also been a number of closures by HSBC in Wales. The closures in Llandysul, in Ceredigion, and in Llanrhaeadr-ym-Mochnant in Powys, in the constituency of my hon. Friend the Member for Montgomeryshire (Glyn Davies), have been among six closures in Wales since September. I think that there has been a total of 17 closures across Wales by HSBC since 2009, although I should add that not all of those have been in rural areas.

However, this debate has not been called to highlight cases in my constituency or to single out HSBC. A recent report from the Campaign for Community Banking Services produced a breakdown by region and country of the number of communities dependent on one or two banks, together with a report on the situation for individual banks. The latter revealed the halving of HSBC’s share of one-bank communities in England and Wales to 10% as it continues significantly to reduce its network coverage. Perhaps the case of Presteigne and other closures explain why there is no mention of HSBC’s popular slogan, “The world’s local bank”, in its January 2012 television advertising campaign.

Figures from last year show that since 1990, 44% of all banks, including converted building societies, have been closed. That equates to 7,555 fewer retail banking branches nationwide. That has left the UK with only 190 bank and building society branches per million inhabitants, which is very poor in comparison with the 940 branches per million inhabitants in Spain, 560 per million in Italy and 470 per million in Germany. There is a better geographical spread throughout those countries and they have retained far more locally owned branches. Granted, they generally make modest charges for operating personal as well as business accounts, but at least they have the face-to-face services that so many people still want.

The report of the Independent Commission on Banking, the recommendations of which the Government have pledged to implement in full, stresses the need for a challenger bank and increased competition in high street banking. The German model, for example, provides for excellent competition and a much more community-focused approach. Lowering the barriers to entry and facilitating greater competition could allow for banks specialising in lending to small and medium-sized enterprises, as the Federation of Small Businesses has suggested, for banks that have a more local or community focus or perhaps even for banks that specialise in providing facilities for groups that are normally hard to reach, such as rural communities.

2011 showed no sign of a slowdown in the number of closures. A Campaign for Community Banking Services report that came out earlier this month showed that the number of rural communities with only two banks remaining is 446.

--- Later in debate ---

[Roger Williams]

I thank the hon. Gentleman for that intervention. One reason why I called for the debate is that I am not prepared to allow the closures to go unnoticed. By bringing the issue to the attention of the Government and right hon. and hon. Members, I intend to bring it to the attention of the big four banks, and a number of other banks. These large organisations have a social duty to which they should attend, but it would be useful if the Government could kick things off with an initiative and call for a summit, as the hon. Gentleman said.

When a bank has the last branch in town, it often makes a pledge of some sort to keep it open, but those pledges are often difficult to define; that creates a lot of uncertainty, which can be fuelled by such comments as those made last year by the British Bankers Association. It said:

“Branches will remain open if they are being used. But if the number of customers…coming into the branch falls, then the bank—like any other retail outlet—will need to look carefully at whether it is…viable to keep it open.”

Well, the bank in Presteigne was being used, but a different target was imposed on it, relating to the selling of financial products such as mortgages, pensions and loans. The population of Presteigne is rather stable; it may have made use of those products in the past, but it still expected services from the bank. However, the bank has decided to withdraw from the community.

[Nic Dakin]

Is it not true that banks are encouraging—indeed, almost forcing—customers to go down the route of internet and telephone banking, often against customers’ wishes? That is having an impact on the footfall in branches such as those that the hon. Gentleman describes. These changes are being driven by the determinations of producers, rather than customers, which is a great shame.

[Roger Williams]

I thank the hon. Gentleman, who raises an important point. Information provided to me indicates that two thirds of customers between the ages of 25 and 45 will use internet banking facilities, while only a third of people over 65 have the aptitude to take advantage of such opportunities.

Banking (Responsibility and Reform)

Nic Dakin Excerpts

Tuesday 7th February 2012 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

I had not intended to speak in the debate, but Lloyds TSB has today announced 300 job losses in Scunthorpe, as part of 1,000 job losses across the country. That is on top of the 30,000 job losses that have been announced by that organisation over the past three years. I want to talk about the importance of the banking sector in our communities as a provider of jobs and services at local level. Too often, the debate is about the banks and bankers at national level, and that has been well covered in today’s debate, but it is important that we also remember the value of the banking sector within the communities that we represent. Another case in point in my constituency is the announcement by HSBC that it is to close its branch at Kirton-in-Lindsey. It is the only branch for 9 miles, and its closure will have a significant impact on the way in which that community manages its business.

The hon. Member for Halesowen and Rowley Regis (James Morris) made a thoughtful and insightful contribution to the debate. He drew on his experience of the disconnect between the banks, on the one hand, and the small and medium-sized enterprises and the communities of which they are a part, on the other. He said that it was possible to be anti-bonus but pro-business. There is unity across the House on that point. We need a better and more responsible capitalism that better serves the people of this country. Excessive pay and rewards for failure are bad for shareholders, bad for the economy, bad for society and bad for business. I hope that the people listening to the debate, in the banking community and in the communities that we serve, will recognise the importance of banking as a provider of services and jobs in our communities, and as an engine of the growth of this proud nation.

Financial Services Bill

Nic Dakin Excerpts

Monday 6th February 2012 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

The hon. Member for Vale of Glamorgan (Alun Cairns) referred to what he thought was the regrettable negative public opinion towards bankers, but we have to accept that over a considerable period the banking industry has changed so dramatically that perhaps it needs greater regulation.

My mother-in-law remembered that when as a student she went overdrawn, the bank would write to her father, and that when she got home for her summer holidays, she would be in big trouble. In contrast, my children were automatically given a £1,000 overdraft as soon as they presented their new student cards at the bank. Before I could say, “Hang on a minute, perhaps that isn’t terribly wise,” they found themselves unable to refuse this largesse. That demonstrates the change that has taken place over a couple of generations. To that extent, the banking industry has to look to itself, not just to external regulation, and ask where things have gone wrong.

At the beginning of this debate, when things were a bit livelier—they are often livelier at the beginning than near the end—much was made of whose fault it was, who did not regulate, and whether the Opposition would apologise for failing to regulate and for the financial collapse. That is rich coming from a party that, even when the financial crisis was beginning to crash around us, spent so much time saying that there was too much regulation. There are clear quotations to that effect, with the current Prime Minister saying in 2008:

“As a free-marketeer by conviction, it will not surprise you to hear me say that a significant part of Labour’s economic failure has been the excessive bureaucratic interventionism of the past decade…too much tax, too much regulation, too little understanding of what our businesses need to compete in the modern world.”

There are many other quotations like that. It is not just that the then Opposition were not standing up and saying that we needed more regulation; it is that they were going beyond that and saying that there was too much regulation.

We all have to reflect on that. I have no hesitation in saying that I believe the last Government did not sufficiently regulate the financial services industry and should have done more. We have seen many of the difficulties caused by that. The FSA has been roundly criticised by many of the victims of financial collapses. My hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) talked a lot about Arch Cru and how it worked. Many of us in have had people come to us affected by the Equitable Life collapse, which was due to the failings of both the FSA and its predecessors. We know how people’s lives can be affected. It is extremely important that the new regulatory architecture, as it seems to be called, should grapple with the kind of situations that have arisen and how they affect people.

We also need regulation that looks at the most vulnerable, which is particularly important. Citizens Advice, which deals with a lot of people’s problems, has suggested that the FCA be placed under an explicit duty to be proactive in preventing and responding to consumer detriment, and to have particular regard to the needs of low-income and otherwise vulnerable consumers. Earlier we heard about high-cost credit and what it does to people, but Citizens Advice has suggested that the problem goes much further. It includes, for example, the way that cheques have been phased out of the banking system, with little regard for the needs of those with little choice but to use them, and the way that people have perhaps been encouraged to bank online and not otherwise, which could be to the detriment of those who cannot do so. Indeed, it might even include the way that banking itself works. Many of us think it is wonderful to have free credit for having a current account and not to have to pay fees. However, there is a downside to that, in that it is often funded by what those who become overdrawn—not necessarily because they are wholly irresponsible; rather they may simply be hard up and experiencing difficulties—have to pay for that. Those are all things that we should be considering, but if the new body does not have an explicit duty to consider such matters, they might simply not be dealt with properly.

We have heard, too, that some of the things that the Office of Fair Trading does on consumer credit—things that most of us probably feel it has not done very well over the years—will be transferred to the new organisation. Again, we need to know as much about that as possible, and as soon as possible. It is not good enough to say, “That will all come along in due course.” There have been clear failures in the system to look at the issue in enough depth, to act quickly enough and to ensure that people are not faced with poor banking and credit practices. Basic bank accounts is another area. The current Government appear not to want to place an obligation on banks to provide a right to a bank account, for which the previous Government had proposed to legislate. I hope that the Minister might take this opportunity to reconsider the position that he expressed when I had a Westminster Hall debate on this very subject some months ago, and to decide that he will go ahead with such a proposal, because the position on basic bank accounts has deteriorated since that debate.

[Nic Dakin (Scunthorpe) (Lab)]

My hon. Friend is making a clear and powerful case for regulation in appropriate places, and I would be grateful if she continued her exposition.

[Sheila Gilmore]

Although it is widely believed that regulation for the poorest is particularly important, those of us who have witnessed the kind of financial failure that so many people have had to put up with are aware that it is important not just to the poorest, but to a number of those with reasonable incomes. Our Work and Pensions Committee has been discussing pension auto-enrolment. One of the fears expressed was that people would not want to save because they did not trust the financial services industry. If we want people to save properly we must ensure that they feel that trust, and it could be re-created through proper regulation.

Business, Innovation and Skills

Nic Dakin Excerpts

Tuesday 20th December 2011 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

Thank you, Mr Deputy Speaker, for calling me to speak in this Christmas special.

Thanks to the vision of a Labour council supported by a wide range of stakeholders and community groups in north Lincolnshire, Scunthorpe now has a fantastic new performance venue, the Baths hall. On Sunday, the Scunthorpe choral society joined forces with the award-winning Scunthorpe junior co-operative choir to give their annual carol concert in that state-of-the-art venue. Their performance was fantastic. However, many people booking tickets for the cover price of £10 found themselves paying an additional £1 of credit or debit surcharge—a hidden cost not seen until the purchase was in progress. That is just one illustration of the widespread use of surcharges, which I want to highlight today.

It is estimated that 94% of the UK adult population holds a debit or credit card. Debit and credit card users are facing increasingly high surcharges when purchasing goods and services. Rip-off surcharges are often hidden until the end of the payment process, so it is impossible to tell how high the charges will be until the final payment is made. The argument is made that these charges cover transaction costs. In truth, it costs companies only about 20p to process a debit card payment and no more than 2% of the transaction value for a credit card payment.

In March, Which? asked the Office of Fair Trading to investigate the charges for paying by card. It is not only individuals and businesses that suffer from the practice of excessive surcharge, but retailers too. The British Retail Consortium representing retailers believes that Which? was right, in its super-complaint, to draw attention to excessive charges levied on customers using debit or credit cards. Retailers themselves face significant difficulties when handling card payments. The widely varying fees that banks levy on retailers for processing the different payment methods is a big issue for them.

Results from the British Retail Consortium’s most recent cost of collection survey show that, on average, the banks’ charges for processing a credit card transaction are 15 times higher than for cash, but responsible retailers protect card-using customers from the banks’ excessive charges on them. Responsible retailers have been engaged in a long-standing campaign to bring those fees down to levels that reflect the actual, very low, costs of processing transactions. The BRC believes that banks should play fair by their customers, as responsible retailers do with theirs.

In times of austerity, when as a nation we must all find ways to save money and tighten our belts, tackling excessive surcharges seems a fair and reasonable way to put money back in the pockets of consumers, squeezed family budgets and businesses. Action has already been taken in order to try to tackle excessive surcharges. The Which? super-complaint, challenging the practice of excessive surcharging, was upheld in June by the Office of Fair Trading. Over 43,000 members of the public pledged their support for the campaign. The OFT recommended that businesses make payment charges transparent by including the price of transaction fees in headline prices.

The OFT also recommended that the Government take regulatory action on surcharges. There are two options: the Government could wait until 2014 and implement the consumer rights directive that has recently been passed by the European Parliament. That will place a limit on the amount of a surcharge. However, that will only cap surcharges, not eliminate them altogether, and nothing will happen until 2014. Two years is a long time to wait, and we need a solution now as surcharges are hurting family pockets and businesses now. An alternative and, I believe, preferable option would be to amend existing UK law, namely the payment services directive. An amendment to article 52(3) would not only control surcharges, but could eliminate them completely. As the hon. Member for Cambridge (Dr Huppert) said earlier, it is important that action is taken now.

In closing, I reiterate that these rip-off surcharges are just that—a rip-off. They rip off individuals, families and businesses. At a time when we want to cut costs and save money, I urge the Government to take urgent action. I urge Ministers to think clearly and act swiftly. Let us not wait for the EU directive to take effect in 2014. Let us show the public that we as a Parliament can act speedily and responsibly in the interests of our people, and end these rip-off surcharges as quickly as possible by using the powers available to us in this House.

The Economy

Nic Dakin Excerpts

Tuesday 6th December 2011 Commons Chamber

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

The plan of the Prime Minister and the Chancellor had been fiscal austerity coupled with an evacuation from the public sector, and it was initially assumed that that plan would by itself provide private sector growth. The plan has clearly failed because of its flawed logic and odd priorities. Under that flawed logic, more spending was planned for Post Office mutualisation than the original English regional growth fund.

Forecast growth has consistently been downgraded, while borrowing has been consistently revised upwards, from £46 billion extra to more than £158 billion extra and rising. While deficit reduction is highlighted by the Prime Minister, private sector growth was assumed, reliant upon foreign consumption at a time of international downturn in all consumption. That international downturn is nowhere more evident than in the eurozone, which the Government are at pains to attack politically at a time when the eurozone needs political union more than ever in order to provide fiscal credibility. Counter-intuitively, however, the Government undermine the required confidence, and in so doing only succeed in bad-mouthing the very export markets we so desperately need to retain in the interim until new market partners are developed.

Not until last week’s autumn statement did we hear an acceptance by the Chancellor that private sector investment requires confidence and a reduction in risk via the injection of public investment. That is either achieved directly by underwriting projects or, as we have seen, by off-balance-sheet lending on an unprecedented scale. That lending is, of course, premised upon Britain’s own position in respect of a now highly likely eurozone bank failure if no political union is established to reinforce fiscal union. The consequences of that will be extraordinarily grave for our financial institutions, given the potential for contagion. What is even more troubling is that the Office for Budget Responsibility believes the effect of the autumn statement’s attempt to rectify this situation is negligible.

The Chancellor will also be aware that the Bank of England has purchased 42% of gilt issuance, owning 30% of total gilt stock. Britain’s interest rates have been made lower as a result. That has been achieved by the independent Bank of England’s purchasing policy, not because of the Chancellor’s fiscal measures. It is interesting to note that this self-given “safe haven status” by the Chancellor has not led to increased international market ownership of British gilts. Indeed, international market ownership of gilts has not changed from 2008 levels.

Quantitative easing is also a reason for that. When the independent Bank of England buys gilts from banks and pension funds, some of the money is re-channelled into the sterling corporate bond market. That is great for the City, sterling and London property investment, but as yet there has been no trickle-down for regional small and medium-sized enterprises or regional high streets despite the much-hailed Project Merlin.

What have been the consequences of the Government’s counter-intuitive policy for manufacturing and industry? I should state that the Government’s aim to address our deteriorating balance of trade in order to create the surpluses we need is admirable. However, our balance of trade has deteriorated in the last 18 months under the Prime Minister’s and Chancellor’s watch. Last month’s Markit and Chartered Institute of Purchasing and Supply index slumped to 47.6, the lowest level since June 2009. Any figure below 50 is usually an early indicator of contraction.

In the EEF’s last quarterly survey of more than 450 manufacturers the growth forecast for 2012 has been cut to 0.9% from 2.5%, a figure it predicted only a few months ago. There is obviously a contraction, and a contraction that prefigures the eurozone crisis. This contraction undermines the Government’s valid ambition to pursue export-led manufacturing growth. There is no manufacturing growth, and also an interim skills mismatch as any private sector manufacturing roles are being supplied with surplus labour from mass public sector redundancies and retail redundancies. In the 1980s there was the cultural phenomenon of mass long-term male unemployment due to a politicised attack upon unionised, largely male, manufacturing sites, and we now face the proposition of mass female unemployment as the public sector and retail sector shed employees, again in the public sector’s case due to a largely anti-trade union, dogmatic narrative mirroring the diatribes from the Conservatives in the 1980s.

[Nic Dakin (Scunthorpe) (Lab)]

My hon. Friend is giving a powerful analysis of the situation the country faces. Does he agree that we desperately need demand in the economy from somewhere, whereas what he is describing is a situation of contraction, rather than demand to fuel economic growth?

[Tom Blenkinsop]

My hon. Friend will know the consequences of the policies so far. We have seen massive job haemorrhages at Scunthorpe steelworks, and there was the recent announcement about Llanwern, where nearly 200 steelworkers face unemployment as a result of the mothballing of that site. Another site in Scunthorpe, next door to the steelworks, has decided to move to a short-time working agreement. Those are the consequences of these economic policies.

Culturally and economically, these policies are counter-intuitive to the needs of the economy. We need not just to rebalance the economy per se, but to rebalance structural unemployment, which requires as large an investment as that proposed for the infrastructure. For example, in the steel industry, becoming a waterman—probably the most important job on a blast furnace, involving as it does ensuring that water does not mix with molten steel—requires a minimum of two years’ training. That is a considerable cost for the industry.

Unemployment is predicted to pass 9% next year, according to the “optimistic” estimate of the Office for Budget Responsibility—and at what cost to the Exchequer? Such estimates actually predate the autumn statement, which increased public sector unemployment by 200,000—from 500,000 to more than 710,000. My major concern, as the son of a British expatriate family that sought a future in Qatar during the early 1980s, when the previous Tory Government ratcheted up unemployment on Teesside, is another diaspora of British skilled manufacturing labour moving to other, far-flung nations. The promise of warmer climes and job certainty will be hard to resist for many, especially as a recent Experian study for BBC’s “Newsnight” showed that Redcar and Cleveland, and Middlesbrough are among the top three areas hardest hit by the Chancellor’s autumn statement.

It is not just the public sector cuts. The proximity of the north-east, which has no regional development agency, to Scotland is having severe consequences for our regional economy, as Scotland, which has its own RDA, is absorbing that manufacturing.

Women are losing their jobs at twice the rate that men are, and the Chancellor’s decision to freeze the working tax credit will hit women hard, especially working single mothers. That move, coupled with his decision to claw back money that would have been spent on the child tax credit, will have a significant impact on the well-being of the 36% of single mothers who claim working tax credit, and their families. What will happen to their incentive to work?

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

I thank you, Mr Speaker, for calling me to contribute towards the end of this debate. I have had the privilege of hearing much of the debate. What has struck me is the unanimity on all sides of this Chamber that the Government’s policies are hurting people in the world outside. The question is whether the policies are working. My constituents and constituents across the country want to know whether the policies are right and whether they are working. At the moment, the early indications are that they are certainly not working according to the plans that were set out by the Government 18 months ago. We have youth unemployment above 1 million and women’s unemployment at the highest ever level. The borrowing figures are £158 billion higher than expected to pay for unemployment and benefits, and not to pay for investment or jobs. At this mid-term point of the Government, that does not appear to be a positive step forward.

Businesses across the country are struggling. In my own constituency of Scunthorpe, an agreement was reached between the trade unions and the management at Caparo Merchant Bar to close early for the Christmas period so that the company can better reshape itself for the challenges of 2012. The demand for global steel is very low, which is causing a great challenge for steel companies in my constituency.

One of the arguments that concerns me is that the public and private sectors are somehow different. The public sector carries an element of risk while the private sector provides innovation and drive and those two sectors need each other. A local businessman said to me, “What we need, Nic, is demand in the economy. We need things done that drive demand.” I welcome the infrastructure projects that were outlined in the Chancellor’s autumn statement. Frankly, those projects should have been in place 18 months ago. It is not a matter of too little, too late but that there should be more. Consumer confidence is at an all-time low and dropping, and that is of great concern.

I want to focus on individuals because they are at the heart of this. A police officer in my constituency wrote to me, drawing my attention to the threats to his pay, his conditions of service and his pension. In a heartfelt way, he asked, “How much more pain do we have to suffer and how much more money does my family have to lose before enough is enough?” We should be listening to the words of the people out there. We owe them a stimulus and a direction forward and we should deliver them today.

Northern Rock

Nic Dakin Excerpts

Monday 21st November 2011 Commons Chamber

[Mr Hoban]

My hon. Friend is absolutely right. If we measure this deal against the values at which other banks are trading at the moment, it is very clear that it is good value for money for the taxpayer. Rather than carping and criticising, Labour Members should welcome the fact that at a difficult time for the global economy we have been able to sell Northern Rock and get such good value for money.

[Nic Dakin (Scunthorpe) (Lab)]

Has the Financial Services Authority expressed a view on the use of £240 million of Northern Rock’s own money by the buyers for the purchase of this scheme?

[Mr Hoban]

As I said earlier, the FSA will go through its normal process of approving the transfer and sale of this business.

Fuel Prices

Nic Dakin Excerpts

Tuesday 15th November 2011 Commons Chamber

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I want to address this debate from the perspective of a low-paid part-time worker. Working families will be told to earn at least £212.80 a week or face having tax credits removed. In my constituency, particularly in places such as rural east Cleveland, as well as suburbs such as Hemlington and Coulby Newham in Middlesbrough, many women work part-time at or just above the minimum wage. After recent public transport cuts by the Government affecting over 90% of local authorities outside London, those women are forced, in the main, to travel by private car. This will become even more the case next year when the Government remove the subsidy for bus fares, further increasing by 20% the cost to the customer of public transport in the form of buses.

[Nic Dakin (Scunthorpe) (Lab)]

Does my hon. Friend agree that women are particularly badly affected by fuel prices?

[Tom Blenkinsop]

That is precisely the point I am making. The lack of a Government growth strategy is making it even more difficult for women to exist within or get into the labour market.

Those women and other workers, particularly in my constituency, need affordable transport, and the Chancellor’s 20% VAT rate is counter-intuitive to that requirement. The economic climate is such that growth in private sector jobs is flatlining, and such jobs are mainly part-time and low paid. The problem is that people who want to work full-time can only get part-time jobs. Part-time employment cannot fund the everyday necessity of a car, and part-time workers are increasingly reliant on a diminishing—

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

Let me begin by thanking the many constituents who have contacted me to express their concern about fuel prices. The debate has covered a wide range of issues. Having listened to all of it, I have concluded that there is a unanimous view throughout the House that higher fuel prices are hitting people hard at a time when household budgets are being squeezed as a result of rocketing energy prices and rising food prices. As was pointed out by the hon. Member for Harlow (Robert Halfon), whom I congratulate on securing the debate, mums, ordinary families and small businesses are being affected by the level of fuel prices. It is now clear that the Government’s decision to increase VAT to 20% in January, pushing up the price of petrol and the cost of living, was a serious mistake.

[Jim Shannon]

Does the hon. Gentleman agree that transport is the single biggest item of expenditure for most households, ranking above food, power and housing, at a time when the level of inflation is also increasing? Does he believe that a decrease of 1p, 2p, 3p or more on the forecourts would make a difference?

[Nic Dakin]

I think that a decrease on the forecourts would be very welcome to ordinary families and businesses.

The Tory tax of choice, VAT, is a regressive spending tax, and I welcome the recognition on the Government Benches that that regressiveness is damaging household incomes. New EU growth figures have been published today. They show that the UK’s economic growth is slower than that of all the other EU countries except Greece, Portugal and Cyprus. It is therefore essential that there is action now. We urgently need action to get the economy going again. That is why organisations such as the Federation of Small Businesses are supporting Labour’s five point plan for jobs, including cuts in VAT, tax breaks for small businesses that take on extra workers, and taxes on bankers’ bonuses to create 100,000 jobs for young people.

I want to focus on young people, as these fuel taxes are creating difficulties for them in getting to learn and getting to work.

[Lisa Nandy (Wigan) (Lab)]

My hon. Friend makes a powerful point. Does he agree that young people in rural areas, including in my constituency, often have to travel long distances to get to college or apprenticeships, and that they have been particularly hard hit by the abolition of the education maintenance allowance and other measures, which have squeezed their incomes disproportionately at the same time as fuel prices have risen?

[Nic Dakin]

My hon. Friend very clearly makes a point that I, too, was going to make. We fear that the number of young people who are unemployed will rise to over 1 million this week. If that happens, it will be desperate for the people of this country.

Fuel duties and fuel taxes are a barrier to young people getting to learn and getting to work. That is why, in this Chamber last week, the Youth Parliament identified transport as its major concern.

Finally, I wish to draw attention to the absurd increases in the Humber bridge tolls for local people, including those in my constituency. The tolls have risen from £2.70 to £3 for a single journey. They are therefore the highest tolls in the country. I am pleased that the Economic Secretary is present on the Treasury Bench, and I welcome the interest the Government are taking and the review of the Humber bridge tolls. Whatever happens to fuel taxes, I hope we will also look at the Humber bridge tolls, which are a tax on local businesses and local people. We must give them a better deal.

Public Service Pensions

Nic Dakin Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

My hon. Friend is right to remind us of the context in which 13 million workers in the private sector have no pension provision at all. That is something that will be taken care of as the NEST—National Employment Savings Trust—scheme is introduced. These will remain gold standard pensions. It is quite right that public sector workers who make a lifetime of contribution to serving this country should get the best pensions available, but the proposal will ensure that the costs are brought under control and that it is affordable to the taxpayer—not just now, but in the decades to come.

[Nic Dakin (Scunthorpe) (Lab)]

I very much welcome the tone of the Chief Secretary’s statement. In line with the principle of transparency, which he underscored in his statement, will he make sure that there is an independent valuation of the teachers’ pension scheme?

[Danny Alexander]

I am grateful for the hon. Gentleman’s welcome of the tone we have taken. I hope that, in due course, he will welcome the substance as well. As to valuation information, it is being provided in the context of the scheme-by-scheme discussions. The trade unions have put forward many requests for information to be provided so that alternatives can be costed. All that work is going on in the context of the scheme-by-scheme discussions, but the valuation that was going to take place has been suspended on the basis that changes have been made, not least to the discount rate, which make that work invalid. It is best to wait until a new scheme is in place before we carry that work forward.

Summer Adjournment

Nic Dakin Excerpts

Tuesday 19th July 2011 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

I declare my interest as a former college principal. As such, I am well aware of the need for local practitioners to make sense of the impact of decisions taken here on real people in the world out there. At least in the skills Minister we have someone who is truly committed to and genuinely cares about learning and learners. Unfortunately, the original decision regarding eligibility for free access to ESOL learning was probably taken to make the high level numbers add up, without the consequences being properly thought through.

The Minister’s written statement yesterday, however, makes it clear that he intends to take steps to address the shortfall in the equality impact assessment also published yesterday. I welcome this and thank him for contacting me this morning to ensure that I was apprised of the context of both documents.

A reasonable proportion of ESOL learners at North Lindsey college in Scunthorpe are currently working and already pay for their courses, so they will be unaffected by the changes. However, a significant number of North Lindsey’s adult ESOL learners, who are in low-skilled, poorly paid jobs in local factories, currently benefit from free tuition, but will not do so in future. Many of the college’s ESOL learners are highly motivated parents who learn English in order to help their children with homework and to not be reliant on them to be translators when accessing public services, such as the health clinic. Many of these mainly women learners will not be able to access ESOL and could therefore become isolated, rather than more integrated into our local community.

The Department for Business, Innovation and Skills published the equality impact assessment yesterday, just in the nick of time to deliver the Minister’s promise that it would be published before the recess. Paragraph 53 of the assessment indicates that the policy changes

“may have a disproportionate impact on some groups or sub-groups of learners.”

Paragraphs 30 and 35 confirm that there are more minority ethnic groups and women studying ESOL than there are among FE students as a whole.

I ask the Minister to consider delaying the removal of fee concessions until a major change in the benefits system—the reclassification of claimants on to employment support allowance—is completed. The Government’s target timetable for this change is four years. The delay would allow current ESOL students on income support to remain in free provision, rather than be at considerable risk of dropping out of education for several years.

To ensure that parents are enabled to give the best possible support to their children, the Government might also consider giving all parents with children aged 0 to 7 fee concessions, regardless of their benefit status. This is essential if we want to prepare them to take an active part in their children’s education and be ready for work later on. These changes would not impact on Government budgets this year as the funds are already allocated to colleges. It is the restrictions and the changed policy in relation to ESOL that is preventing colleges from meeting those needs.

None the less, like my hon. Friends the Members for Nottingham South (Lilian Greenwood), for Leicester South (Jon Ashworth) and for Sheffield Central (Paul Blomfield), I welcome the Minister’s commitment to work with the Department for Communities and Local Government on developing new forms of community-based learning of English and working with the Association of Colleges to determine how best to target funds at settled communities where language barriers prevail. The involvement of Lord Boswell and Baroness Sharp, who are well respected and have much expertise, is also welcome.