Chuka Umunna MP

To all my constituents, it has been wonderful to represent our fantastic community since May.  I wanted to take this opportunity at Christmas to thank you so much again for giving me the great privilege to represent you and to speak on your behalf this year – I shall carry on working tirelessly for our area through 2011 and beyond.  To one and all, I wish you and your family a very happy and restful Christmas and all the best for the New Year!

Best festive wishes,

Chuka

Treasury Select Committee member Chuka Umunna MP has commented on the revised Q3 GDP figures released today, with growth having been revised down by 0.1% to 0.7%.

Mr Umunna said:

“These figures underline the continuing uncertainty over the future prospects of our economy and the government’s approach.

“Given this uncertainty and the fragility of the recovery, these figures call into question the severe austerity measures which the government is implementing.”
On November 25 when giving evidence to the Treasury Select Committee, monetary policy committee member Dr Adam Posen voiced concerns over the government’s austerity package, saying that it is “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”.

“It is my personal assessment that the short-term effects of the government’s fiscal plans will be quite contractionary.

This morning, Labour launched the Speak Out For Your Generation campaign, with a Christmas invitation for young people to join the party for just 1p until May.

The campaign brings together issues affecting children and young people including Sure Start, the government’s decision to increase student fees and scrap EMA – there will be a vote in Parliament on EMA in the New Year. To find out more, follow this link.

Luke Lawar, formerly a student at Lambeth College in Clapham, became the first person to join the Labour Party for 1p this morning and spoke on the difference which receiving EMA has made in enabling him to pursue his ambitions.

Chuka appeared on BBC Panorama this week discussing the banking sector, its obligations to society and the need for measures to tackle excessive remuneration. Alistair Darling, former City Minister Lord Myners and economist Will Hutton also appear.

To watch the programme, follow this link

Last month, Chuka spoke in a debate on the future of banking and financial services. An abridged transcript of his speech is below:

I, too, congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on initiating this important debate. I welcome the fact that we are conducting it in a reasonably non-partisan way. I have listened with interest to the comments of my fellow Treasury Committee members, and the last three contributors in particular. Although I do not agree with everything that has been said, there is much common ground.

There is no magic bullet when it comes to reforming financial regulation. The previous Government made a good start; it is absolutely crucial that the coalition Government build on that.

Chancellor George Osborne and Vince Cable are divided on the issue of bankers bonuses ahead of their meeting with bank bosses today to discuss the issue, with the Business Secretary promising to crack down on excessive remuneration while the Chancellor was in New York promoting the attractiveness of the UK as a base for financial services firms.

On Friday, in a Financial Times interview Deputy Prime Minister Nick Clegg said the government would not “stand idly by” and that banks would not get away “scot-free” unless bonuses were reined in. Business Secretary Vince Cable has also adopted an aggressive tone towards the banks, promising “robust action”.

However, Ministers have had more than seven months to act on bonuses and this tough talk has not been matched by the government’s actions.

The Bank Levy announced in the June Budget fell short of expectations, giving banks a £20 billion tax-free allowance regardless of their size and not applying to many investments banks for which more than 50% per cent of operations are defined as ‘non-financial’. Additionally, the IMF has said the levy could raise more than the £2.5 billion a year which the government has announced.

Despite promising in the June Budget to implement new rules on the disclosure of bankers’ remuneration in pay bands above £1 million, ministers have U-turned and failed to bring forward proposals. Because a consultation on the scheme would take a minimum of three months, it will not be possible to introduce new disclosure rules before the end of this year’s bonus season.

This is despite the fact that RBS CEO Stephen Hester has indicated that introducing a disclosure scheme unilaterally would not disadvantage the UK compared with its competitors.

In contrast, a year ago the then Chancellor Alistair Darling introduced a 50% levy on bankers’ bonuses and imposed strict rules on state-owned banks RBS and Lloyds Banking Group specifying that staff earning more than £39,000 would not be paid cash bonuses while any payments to board members would have to be deferred.

On Friday, the FSA published its new remuneration code which determines how guidelines issues by the Committee of European Bank Supervisors earlier this month will be implemented in the UK. However, concerns have been raised that many hedge funds and investment firms will escape the toughest of the new rules.

Commenting, Treasury Select Committee member Chuka Umunna MP said:

“Despite all the tough talk from Lib Dem ministers, the government has consistently failed to take action on excessive bonuses in the City.

“Vince Cable’s words are nothing more than hot air designed to buoy his party’s remaining activists after the tuition fees debacle.”

Before the General Election the Prime Minister and Deputy Prime Minister talked tough on the banks but the talk has turned out to be hot air says Labour Treasury Select Committee member Chuka Umunna in reaction to Nick Clegg’s FT interview today.

Today the Deputy Prime Minister said in the Financial Times:

“The banks should not be under any illusion, this government cannot stand idly by. It is wholly untenable to have millions of people making sacrifices in their living standards only to see the banks getting away scot-free.”

The Prime Minister said to PoliticsHome.com:

“Of course we want to see restraint. Bankers have to realise that the British public helped to bail out the banks and it is very galling when they see bankers pay themselves unjustified bonuses. The bankers have got to think about their social responsiblities and wider responsibilities.”

However, both the Prime Minister and Deputy Prime Minister have already broken their promises to make the banks pay a full and fair contribution to reducing the deficit and to force disclosure of reckless remuneration practices in the City.

In the June 2010 Budget, the government announced a bank levy which it has since announced it would look to raise £2.5bn in revenue a year but:
• the levy gives banks a £20 billion tax-free allowance – all banks regardless of their size will not be subject to the levy on their first £20 billion of taxable liabilities;
• it will not apply to firms where 50% or more of activity is defined as ‘non-financial’ – because investment banks often have extensive and varied operations this could allow firms to avoid the tax; and,
• the levy is projected only to bring in £2.5bn from 2013 (some time after the government’s austerity measures begin to bite) and the IMF says it could raise more – in 2011-12 the levy will bring in £1.3bn, £2.3bn in 2012-13 and £2.6bn in 2013-14 and 2014-15.

Also, Sir David Walker’s review of the financial services sector recommended new rules on the disclosure of bankers’ remuneration within pay bands above £1 million in December 2009. Following this, in the June 2010 Budget the coalition government pledged to take forward these proposals with a consultation leading to the implementation of a banking sector remuneration disclosure scheme yet:
• the government has now u-turned and refused to move forward unilaterally with the scheme without agreement at EU level despite Stephen Hester, CEO of RBS, indicating that the unilateral introduction of a scheme by the UK does not rank highly in his list of concerns;
• because consultation on any proposals for a scheme brought forward would need to be consulted on for a minimum of twelve weeks, it will not be possible to put a scheme in place for the current bonus season, due to finish around March/April 2011; and
• meanwhile the Centre for Economics and Business Research estimates that £7 billion will be paid out in City bonuses in the coming weeks.

Commenting on the remarks today of the Prime Minister and Deputy Prime Minister, Chuka Umunna MP, Labour member of the Treasury Select Committee said:

“David Cameron and Nick Clegg talked the talk on clamping down on reckless City remuneration practices and on making the banking sector pay for the mess it created but all we’ve seen are broken promises – the pre election rhetoric has turned out to be hot air.

“The Business Secretary – who called bankers ‘spivs and gamblers’ – is reportedly at loggerheads with the Chancellor over the banking remuneration disclosure scheme which the Treasury has run scared of introducing when the head of one of the country’s biggest bank says it is not high up in his list of concerns – they should stop arguing and get on and implement it.”

Shadow Education Secretary Andy Burnham today visited Lambeth College in Clapham with local MP Chuka Umunna and shadow minister for further education Gordon Marsden to speak to students affected by the government’s withdrawal of education maintenance allowance (EMA).

The trio spoke with students currently studying at the college who said the removal of EMA would mean they would not be able to afford textbooks or would have to go without eating during their days studying.

At Lambeth College, which is situated in the fifth most deprived borough in London, 60% of students receive EMA and of these, 85 per cent receive the full amount of £30 per week. In academic year 2009/10, 90% of students receiving EMA completed their course compared with 75% of non-recipients.

Lambeth College Principal Richard Chambers and Chair of Governors Dame Lorna Boreland-Kelly have written to Mr Umunna to voice opposition to the government’s decision to abolish EMA. In their letter, they say: “We believe that the Department of Education has made the wrong decision and that disadvantaged young people in Lambeth and adjoining boroughs will suffer as a result of the decision.”
Commenting, Shadow Education Secretary Andy Burnham said:

“For young people from less well-off backgrounds, EMA provides a helping hand to succeed. By scrapping EMAs and trebling tuition fees, the Government is pulling up the drawbridge and kicking away the ladder. They seem intent on creating a segregated and elitist education system where success is possible for the few, not for everyone. The risk is a lost generation of students, who have the talent but not the financial means to stay in post-16 education.”

Local MP Chuka Umunna said:

“More than 60% of students at Lambeth College receive EMA and it makes a real difference – those getting the support are more likely to achieve a qualification and less likely to drop out of their course as a result.

“The number of young people from Lambeth going to university went up by more than 80% between 1997 and 2009. The government’s withdrawal of EMA threatens to undo this good work and prevent talented young people from staying on in education.”

Chuka visited Lambeth College this morning with shadow Education Secretary Andy Burnham and shadow minister for further education Gordon Marsden to talk with students affected by the government’s abolition of education maintenance allowance.

Lambeth College is located in the fifth most deprived borough of London and 60% of students receive EMA, of these 85% receive the full amount of £30 per week. In the academic year 2009/10, 90% of students receiving EMA completed their course compared with 75% of non-recipients.

Commenting on the cut, Chuka said

“More than 60% of students at Lambeth College receive EMA and it makes a real difference – those getting the support are more likely to achieve a qualification and less likely to drop out of their course as a result.

“The number of young people from Lambeth going to university went up by more than 80% between 1997 and 2009. The government’s withdrawal of EMA threatens to undo this good work and prevent talented young people from staying on in education.”

Luke, a former student from the college, then took part in a roundtable discussion chaired by Andy Burnham to a in Westminster, where he spoke about the positive impact of EMA and how it enabled him to pursue his ambition of going to university.

This afternoon, Chuka spoke in a Westminster Hall debate on the future of support for further education students to defend EMA and pass on comments made by students at Lambeth College this morning.

Chuka Umunna MP has raised concerns over the future funding settlement of HMP Brixton with Justice Secretary Ken Clarke following a report by the prison’s Independent Monitoring Board (IMB) which stated that a cut in funding would severely undermine the progress the prison has made in recent years.

The prison’s Independent Monitoring Board, a group of independent and unpaid volunteers who assess the standards at the local prison and report to the Justice Secretary, has warned that a cut would impede the progress which has been made in recent years at Brixton

In their annual report, covering the period from July 2009 to August 2010, the board outlined improvements made in security, rehabilitation and the quality of the prison’s facilities, but highlighted the need for ongoing investment in mental health provision.

The IMB noted that although the building of a new healthcare centre at Brixton was due to start this year, the National Offender Management Service (NOMS) has not released the funding necessary for the project to go ahead.

In response to questioning by Mr Umunna, the Justice Secretary refused to commit to maintain the current levels of funding at HMP Brixton, stating that he was unable to guarantee that “nothing will be changed”.

Mr Umunna visited HMP Brixton in July and met with prison staff and has previously raised with the Justice Secretary the importance of securing expansion of mental health facilities at HMP Brixton. Mr Clarke has also visited Brixton Prison since becoming Justice Secretary in May. The vast majority of prisoners at HMP Brixton, which is a remand prison serving the local area, have at least one mental health problem.

Chair of HMP Brixton’s Independent Monitoring Board Alan Brown said:

“It would be a great shame if the progress HMP Brixton has made was now undermined by further cuts and reductions in regime.

“Current healthcare provision in the prison is also of great concern – funding must be released so that this situation can begin to be rectified.”

Reflecting the board’s concerns that funding cuts will have a detrimental impact on the rehabilitation prospects of the prisoners, Mr Umunna commented:

“Anyone who has visited HMP Brixton, as I have, will take note of the dedication of its staff and management team and the positive work happening there.

“The prison’s Independent Monitoring Board has highlighted real concerns that progress in areas such as rehabilitation could be undermined by a cut in funding and I am therefore deeply concerned that the Justice Secretary has refused to give our community any comfort in that regard.”

Chuka has demonstrated his support for Labour Students’ Stand up for Students campaign against the government’s increase in tuition fees by signing a letter to Vince Cable calling for a fairer funding system for higher education.

Not only will many students be deterred from applying to university because of the higher fees, but, as the letter points out, the £9,000 fees will not lead to an increase in funding for universities with higher fees being introduced to plug a funding gap caused by the decision to cut higher education funding.

As well as voting against the increase in fees, Chuka spoke in the House of Commons debate on the matter citing the correspondence he has received on the issue and the effect it will have on the young people in Streatham.

Between 1997 and 2009, there was an 81% increase in the number of young people going to university in the area; however, as a constituency in the fifth most deprived borough in London, the increase in fees, in addition to the cut of Education Maintenance Allowance, will almost certainly be affect the number of young people applying to university.

The Stand up for Students’ letter is online, and you can show your support by signing it.