Chuka Umunna MP

Bank of England Monetary Policy Committee member Adam Posen has voiced concerns about the government’s fiscal austerity measures during a hearing of the Treasury Select Committee.

Dr Posen was asked my Chuka Umunna MP to confirm whether the current fiscal contraction was the most severe in any developed country. He replied by describing it “rare that an austerity programme is this large”, adding that “it is unusual for an economy to be contracting this much when it is not yet under crisis”.

Chancellor George Osborne has ruled out altering his fiscal consolidation plan if growth remains stagnant and it is widely believed that a further round of quantitative easing is the Chancellor’s backup plan if growth remains stagnant.

Following the US Federal Reserve’s injection of $600billion (£370bn) into the US economy through a round of quantitative easing earlier this month, Mr Osborne hinted that a further round of quantitative easing could be in the pipeline, telling the Treasury Select Committee on November 4:“The Governor of the Bank of England has observed that robust fiscal policy gives more flexibility to monetary policy, and that is the principle I take to economic policy-making”

Business secretary Vince Cable said in an interview with BBC Radio 4’s Today programme on Monday 25 October said: “There is flexibility already built into government policy, certainly in fiscal policy, to go to five rather than four years; there’s an opportunity to use monetary policy to maintain demand.”

Given that interest rates remain at a record low level, using monetary levers to stimulate the economy would strongly imply a further round of quantitative easing.

Under questioning from Chuka Umunna MP on the Treasury Select Committee today Monetary Policy Committee Adam Posen was asked: Is there any size of fiscal contraction in the current climate which couldn’t be compensated for by quantitative easing?

Dr Posen replied:

“It is my personal assessment that the short-term effects of the government’s fiscal plans will be quite contractionary. That is why in my statement to the committee and in the last minutes of the inflation report I differed from the majority forecast of the committee.

“Could monetary policy fully make up for this through quantitative easing? Probably, but not certainly. We all have different choices about where we think the uncertainty lies.

“I am less certain than some of my colleagues about the impact of quantitative easing. I believe it is helpful but I do not have full confidence that if we go full bore from here on it it will be as effective as it has been in the past.”

Commenting after the hearing, Mr Umunna said:

“Today, a leading member of the Monetary Policy Committee has highlighted the serious questions which remain on the Chancellor’s Plan B and whether the government can rely on quantitative easing as a backup if its austerity package produces sluggish growth.”

Today is White Ribbon Day, marking International Day for the Elimination of Violence Against Women.

Chuka gathered with parliamentary colleagues to support the white ribbon campaign this week – picture below:

Recently, Chuka has made a number of visits including to Streatham Library on Streatham High Road, St Francis Xavier College, and King’s College Hospial. He has also been on a estate walkabout on Roupell Park estate in Brixton Hill.

Below are some pictures from the visits:

Lambeth’s Your Borough, Your Budget, Your Choice consultation allows local residents to decide how the council spends £250,000 inviting ideas from local community groups across four different categories.

Wellfield Community Centre in Streatham, nominated in Band 2, has applied for funding for substantial repairs ensuring that the centre can continue its fantastic work  such as skills classes for children, homework clubs for young carers and support groups for disabled people.

The Music4Children project, based in Streatham, is seeking funds to develop a programme of free after school arts and media projects for young people and is nominated in Band 3. This project would create a new community radio station, an organic community roof garden and new shared meeting spaces for local groups.

Please vote in support of these two excellent projects by voting online here.

Chuka appeared on BBC Radio 4′s weekly panel debate on Friday.

Also on the panel were: Margot James MP, Leader of UKIP Nigel Farage, and RMT general secretary Bob Crow.

To listen again to the broadcast, please follow this link.

Chuka Umunna, Member of Parliament for Streatham, has spoken in Parliament to oppose the governments cuts to housing benefit, highlighting the devastating affect which they will have on Streatham.

Speaking in a debate on the housing benefit changes, Mr Umunna said: “This is particularly pertinent to my constituency. The constituency that I represent is diverse not only ethnically but in regard to the socio-economic demographic of the people who live there”.

Mr Umunna recounted a recent conversation he had with a constituent on the doorstep who, although he did not receive housing benefit himself and fell within the top 1% of earners, was “horrified” at the likely impact of the housing benefit cuts on the local area: “One of the reasons he likes living in my constituency is the diverse nature of the streets and the different parts of the area. He said that he did not want to live in a street where all the people were like lim. He liked the fact there were different people living there.”

The government announced sweeping cuts to housing benefit in both the June Budget and last month’s Comprehensive Spending Review. These include caps relating to different sizes of property and a general cap of rates at the 30th percentile of local market rates, as well as cutting housing benefit for those who have been unemployed and searching for work for over a year.

Mr Umunna also spoke of the pressure which already exists on local housing stock, with a waiting list of over 22,000 in Lambeth for social housing and argued against the reduction of housing benefit for those seeking work for more than a year. According to DWP statistics, there are 865 people in Streatham who fall into this category and who would lose out as a result.

With property prices and rent levels being higher in inner London than elsewhere, the cuts will have a disproportionate affect on areas like Streatham and it is feared that they could lead to many being forced to leave the area entirely.

The housing benefit cuts announced in the June Budget will affect 5,470 households in Lambeth, including 1,520 two-bedroom households seeing their housing allowance fall by an average of £25 a week – totalling £1,300 a year.

Organisations and charities including the National Housing Federation have raised concerns over a potential increase in homelessness as a result of the government’s plans. Commenting on the changes, the NHF’s chief executive David Orr said: “Unless ministers urgently reconsider these punitive housing benefit cuts, we may see more people sleeping rough than at any stage during the last thirty years.”

Crisis chief executive Lesley Morphy, who Mr Umunna recently met with to discuss the housing benefit changes, said:

“Nearly half of those on LHA already face a shortfall between their benefit and their rent of an average of £23 per week, meaning tough choices between rent, food, heating or falling into a vicious spiral of debt.

“These cuts are huge and deadly serious and will affect people across the country, not just in London. We are calling on the Government to look at the facts and impacts and rethink the cuts now.”

Commenting, Mr Umunna said: “Our area will be disproportionately hit by what the government is doing to housing benefit.

“Ministers claim that they are cutting spending in a way which is fair to all parts of society, but these cuts to housing benefit will hit the poor and vulnerable hardest.”

Yesterday Chuka made a speech in the House of Commons chamber, speaking out against the government’s cuts to housing benefit and highlighting their disproportionate affect on the Streatham constituency and areas like it.

A shortened version of the speech is below – to read it in full, please follow this link.

“I want to pick up on some comments made by Paul Uppal and my hon. Friend Roberta Blackman-Woods. They referred to the tenor of the national debate on this issue, which I have found deeply worrying, and how our newspapers in particular show unemployed people being divided from employed people, benefit recipients being divided from those who are not claiming benefits.

“We saw that division of rich and poor at the weekend with the headlines in some newspapers reflecting announcements from the Department for Work and Pensions. The Mail on Sunday said “New IDS blitz on the workshy”; the News of the World said “Work gangs for shirkers”; and The Sunday Telegraph said “Workshy will have to take unpaid jobs”.

“Today, we read that the Department has released figures showing that every family will have to pay more than £1,500 a year in taxes to fund the housing benefit system. As ever, it seems that a particular section of society has become a target. Has the Treasury released figures to show how much each family in this country loses as a result of tax evasion and avoidance by wealthy individuals and companies? It is extremely important that we do not allow the tactic of divide and rule to succeed.

“This is particularly pertinent to my community. The constituency that I represent is diverse not only ethnically but in regard to the socio-economic demographic of the people who live there. I spoke to one of my constituents about these issues last weekend. He and his wife live in one of the more leafy parts of Clapham common, an area known as Abbeville village, and he works for a private equity company. He is undoubtedly in the top 1% of earners. I asked him what he thought about the Government’s changes to the housing benefits regime. Given that they will not have a direct impact on him, I was surprised to find that he had strong views about them, and that he was horrified at their likely impact on his community.

“One of the reasons that he likes living in my constituency is the diverse nature of the streets and the different parts of the area. He said that he did not want to live in a street where all the people were like him. He liked the fact that there were different people living there. I mention this because it is important to understand that these changes will be an issue not only for people claiming housing benefit but for the community as a whole.

“Given the impact that the changes will have on my constituents, I do not feel that I am whipping up hysteria or unduly disturbing my community. I am simply looking at the facts. There are 5,470 households in Lambeth that will face huge cuts in housing benefit next year. For example, 1,520 households in two-bed properties in Lambeth will see the contribution to their rent reduced by an average of £25 a week. That is £1,300 a year, and those people simply cannot afford it. The changes will undoubtedly cause an increase in poverty in my constituency. Shelter is predicting that they will affect many of the claimants who live just above the poverty line, and they will undoubtedly lead to deep anxiety and stress among people who are already struggling to get by.

“I have outlined some of the effects on my community that we are able to discern, but there will be others that it is difficult to quantify at the moment. We are going to be faced with people moving from inner London to our part of Lambeth, seeking private rented accommodation. We have 22,000 people on social housing waiting lists in Lambeth, but we have no idea of the number who will seek social private rented housing in our area as a result of the changes. I mention that figure to demonstrate that we are already under huge pressure. There has been a lot of talk about introducing these measures to reduce the benefits bill, but we are told that rents will inevitably fall as well. London Councils, a cross-party organisation, has carried out a survey of landlords in London. I make no apology for talking about London, by the way; it is my area, and it is where my constituency is based. The survey found that 60% of landlords letting properties to housing benefit tenants in London said that they would not reduce their rents, even by a small amount, to accommodate the changes, and Shelter has found that 43% of such landlords will simply scale back their operations in this sector.

“I want to finish by mentioning a matter that I have already raised with the Chancellor of the Exchequer-the proposal to reduce by 10% the housing benefit of jobseeker’s allowance recipients who have been receiving JSA for more than 12 months. I challenged the Chancellor about this at a Treasury Committee hearing in July and asked him to provide me with evidence that that measure would produce increased work incentives, given that he said that that was why he was introducing it. Funnily enough, he quoted the Institute for Fiscal Studies back at me. It is funny how the coalition Government choose to ignore the IFS when it tells them things they do not want to hear, only to quote it back at me when they find it helpful. The Chancellor quoted an IFS report that found that “welfare benefits can have substantial effects on the work behaviour of unskilled and even for men with high school education”. Be that as it may, I do not see how there can be an incentive for people to work when there are no jobs for them to go into.

“In the past few weeks, information from the Chartered Institute of Personnel and Development has shown that 1.6 million people are going to be out of work as a result of the measures being introduced by the Government. We already know that there are five people chasing every vacancy in the economy, and research shows that that figure is not going to fall.

Chuka is chairing a People’s Question Time on the issue of house conversions this week, taking place on Thursday November 11 at English Martyrs RC Church, Mitcham Lane SW16 6NN at 7.30pm.

Lambeth Head of Planning Les Brown will be on the panel along with specialist planning officers. The meeting will give local residents an opportunity to put forward their views on the issue and to put questions to representatives from Lambeth’s planning department.

Streatham MP Chuka Umunna has questioned Chancellor of the Exchequer George Osborne and Chief Secretary to the Treasury Danny Alexander on upcoming cuts to child benefit which will affect 250,000 families in London alone.

The Chancellor and Chief Secretary to the Treasury appeared before the Treasury Select Committee, on which Mr Umunna sits, to answer questions on the impact of the Spending Review.

At the Conservative Party conference in September, Mr Osborne announced that those in the higher income bracket, earning above £43,875, will no longer be able to claim the benefit. He said the measure was ‘tough but fair’.

However, an anomaly soon became apparent: a single mother earning £45,000 stands to lose her child benefit, while a two-parent family, with each parent earning £43,000 – totaling a household income of £86,000 – will still be able to claim it. Under the current system, mothers are paid £20.30 per week for their first child and £13.40 for any children thereafter.

Mr Umunna took Mr Alexander to task on the fairness of the child benefit cut, saying the Conservative-Liberal Democrat government had made a ‘dog’s dinner’ of the changes. Mr Umunna also cited the comments of the government’s new joint director of the Office of Tax Simplification John Whiting. Mr Whiting had warned that the cost of clawing back child benefit from taxpayers through the tax system would be “intrusive” and involve lots of form-filling.

On June 7, the Prime Minister made a speech in which he said that spending cuts would affect “our whole way of life. The decisions we make will affect every single person in our country.” Referencing these comments, Mr Umunna asked Mr Osborne how the Comprehensive Spending Review had affected his way of life

Mr Umunna questioned the fairness of the change. Earning roughly £134,565 a year, a cabinet minister like Mr Osborne with two children will lose £1,752 a year, only 1.3% of his income. In stark contrast, a family with a single earner just above the threshold will face a reduction of more than 4% of their income.

There are also concerns that it will not be possible to implement the changes due to the tax system, which takes into account the income of individual earners in a household rather than of couples. Under the current system, women are not obliged to reveal whether they claim child benefit or not to their partner.

Commenting on the government’s handling of the child benefit cut Chuka Umunna MP said: “This is an ill-thought out plan. It is deeply disappointing that, when a huge change like this affects so many families, the government could not take the time to consider fully the impact such a proposal would have.

“With this change they are hitting middle income earners hard – most of whom are not millionaires – who often struggle to make ends meet while the bankers who caused the problems in the first place get off lightly.”

Chuka has launched an online petition to protest against Sainsbury’s proposal to open a supermarket on Abbeville Road, the centre of Abbeville Village in Clapham.

Hundreds of local residents attended a People’s Question Time event on the issue which Chuka chaired last night and expressed concerns about the impact of a supermarket on the shopping and residential street and the surrounding area. Many questioned the need for an additional supermarket given the large number nearby.

To read more about the campaign and sign the petition against the Abbeville Road Sainsbury’s, follow this link.