Economics & Finance

Chuka’s Response to the Autumn Statement

Wednesday, December 5th, 2012

Commenting on today’s Autumn Statement, Chuka Umunna MP said:

“The Chancellor claimed the economy is healing and we are making progress but I don’t think anyone in our community feels better off after more than two years of the Liberal Democrat and Conservative Party’s mishandling of the economy. With more than eighteen people chasing every job in my constituency, a massive squeeze on living standards and working tax credits and child benefit frozen until the end of this parliament, local people will be dismayed at the government’s refusal to change course.

“The changes the LibDem/Tory government announced today will hit working people the hardest. Following today a one earner family with two children on £20,000 will lose £279. Maternity, paternity and adoption pay are all cut in real terms and child benefit will be frozen till 2014. With the governments flagship work programme only succeeding in 3% of cases in Lambeth the government is compounding its failure on jobs and growth – and asking our area to pay the unfair price for their failure.”



Chuka – “We need an active industrial strategy to diversify our economy and meet new demand”

Saturday, September 1st, 2012

Chuka’s article which originally appeared in the London Evening Standard on 20 August 2012.

Speaking to an audience of African business people in London this month, I discussed how Africa has changed. Only a decade ago, it was plagued by war, grinding poverty and gloomy economic prospects. This year the IMF says that the likes of Angola, Ethiopia, Mozambique and Nigeria will grow at more than 25 times the rate of the British economy. Gone are the days when our trade ministers could attend international gatherings and lecture those countries on growth.

Our principal trade minister, Business Secretary Vince Cable, sees himself as the solution to our economic problems, telling us he would make a “good Chancellor”. Yet he is fully signed up to the same failed plans of the present incumbent — George Osborne — and he is failing to make the grade in his current role.

When both took office in 2010, unemployment was falling and growth was strong. Cable and Osborne vowed to secure the recovery and help British businesses start up and grow. However, since the election, unemployment has soared beyond 2.5 million. Britain is now the only G20 country, save for Italy, in a double-dip recession. Successful businesses are struggling to get the support they need.

Last Friday this newspaper revealed that five backbench Tory MPs are to publish a book in which they will say that part of the problem is British workers, whom they describe as “among the worst idlers in the world”. This follows the Foreign Secretary’s earlier claims that British businesses need to “work harder”.

But these out-of-touch ministers and MPs have only themselves to blame. It was their October 2010 spending review that choked off the recovery, precipitating a fall in confidence that caused sales to dry up. This was long before the eurozone crisis became the issue it is now. It was before many of their cuts to public investment started to feed through. Consequently government borrowing has come in at £150 billion more than they planned — equivalent to the defence, transport and education budgets put together.

Labour has urged Cable and Osborne to change course and implement an immediate plan to get our economy moving again in the short term. Leading economists who once backed the duo are now urging them to do the same. Our five-point plan includes a national insurance break for micro businesses in London — something the Government refuses to implement — and a temporary cut in VAT. They should adopt it now.

In the long term we also need to adopt the active industrial strategies which, for ideological reasons, the Tory-led Government stands in the way of. They are necessary to ensure we diversify our economy and to ensure UK plc is set up to meet the new demand coming from growing middle classes in emerging markets like those in Africa. Not only does this mean ensuring we get the policy right to provide the skills, finance and infrastructure investment that business needs. It means effective corporate governance and incentives that reward long-term value creation over the fast buck.

Above all, we should not be afraid of identifying and backing those British business sectors where we have a competitive edge and comparative advantage globally. That is, after all, the approach that helped win Team GB so many medals in so many sports.

Chuka Umunna is MP for Streatham and the Shadow Business Secretary.

Chuka calls for urgent action on unemployment

Friday, December 16th, 2011

Chuka Umunna MP has called for urgent action to tackle unemployment and boost economic growth following the publication this week of updated unemployment figures by the Office of National Statistics.

Commenting on the impact complacent Government policy has had on local residents, Mr Umunna said:

“The deteriorating unemployment situation needs to be dealt with urgently. In my constituency alone there are now nearly 500 more people without a job than this time last year.
The Government needs to do far more to get demand back into the economy to boost growth and create jobs in South London. Government politicians in the 1980s used to justify inaction by saying unemployment was a price worth paying – that attitude was unacceptable then and it is unacceptable in 2011.
Labour has a five point plan for the economy to boost jobs and growth including a temporary cut in VAT and a bankers bonus tax to create thousands of youth jobs. My constituents cannot wait any longer for the Government to act particularly given the likely negative impact of the Eurozone crisis – we need immediate action now.”

High Street Walkabout in Streatham Vale

Thursday, December 15th, 2011

Chuka Umunna, MP for the Streatham constituency, made another of his regular visits to local High Streets today.

Chuka visited Streatham Vale businesses including, amongst others, Superchoice newsagents, Covenant Hair & Beauty, Watts Pharmacy, The Village Card Shop, and Gow Gow, a new pet grooming business.

As MP for the area, Mr Umunna considers it vital to keep in touch with how local business owners are doing and what issues they are facing so that he can be of assistance. Among the issues discussed was what action needs to be taken to tackle anti-social behaviour and provide security to business, as well as how important it is to get banks lending.

Mr Umunna makes regular visits to local High Streets and earlier this month visited shops in Greyhound Lane. As Shadow Business Secretary, Mr Umunna is responsible for holding the Government to account for their Business policies, as well as for making sure that the Government do more to secure economic and business growth. High Street Walkabouts in his constituency are a good way for Mr Umunna to make sure local concerns are communicated in Parliament.

High Street Walkabout: Greyhound Lane

Friday, December 2nd, 2011


Chuka Umunna today visited Greyhound Lane to talk to local business owners and employees about their needs and concerns.

Visiting Greyhound Lane Mr Umunna talked to local business owners and employees, as well as representatives from the Police about problems with anti-social behaviour and street drinking, as well as about concerns raised that not enough has been done by the Government to ensure confidence in our economy, and that this is having a negative impact on local businesses.

As MP for the Streatham constituency, Mr Umunna regularly visits local High Streets to listen to their concerns and see what help he can give as the local MP. In Mr Umunna’s role as Shadow Business Secretary he is responsible for holding the Government to account for their business policies and ensuring the Government does more to enable businesses to grow. High Street Walkabouts are a good way to quickly transfer local concerns to action in Parliament.

What the autumn statement means for Londoners

Tuesday, November 29th, 2011

For Londoners today’s Autumn Statement means

• Rising travelcard costs and no end in sight for farepayers. Only Ken will cut fares and set a course that ensures a fairer deal for Londoners.

• Tory Mayor Boris Johnson has failed to get a decent settlement for London out of the Autumn Statement. He has been awarded 4 out of 40 projects for the Infrastructure Fund lower than almost every other English region. Of the 4 projects that have been announced, only two are actually funded.

• George Osborne’s remarks about a Silvertown river crossing and a Northern line extension are little more than warm words. There is little or no detail on how the projects would be delivered or funded.

• The Government should take up Labour’s five point plan for growth and jobs – which will give up to 334,000 London firms a tax break to take on more workers, create 11,500 jobs for young Londoners and build 5,000 new homes.

More Tory fare rises

Today’s fares announcement by the Tory Mayor and Tory Chancellor means rising travelcard costs and no end in sight for farepayers:

• This is the fourth consecutive year of inflation-busting fares under the Tory mayor

• Fares in London have risen faster than anywhere else in the country during tough

economic times. Boris Johnson should use the £729 million of surplus money in his TfL budget to keep fares low.

• If Ken is elected Mayor in May 2012, in October 2012 he will cut fares, then freeze them the whole of the following year and ensure that they rise by no more than inflation in the following two years.

London’s economy in worse state

The London economy is in a worse state than it has been for more than 15 years

• 410,000 people are now unemployed in London, almost one in ten of the population. Unemployment in London is now higher than it has been at any other point since 1994. According to the latest estimates from ONS, more than one in four young people in London is unemployed.

• Only 56 affordable homes were built in London in the last 6 months, and the number of housing starts in the last quarter went down by more than 50% on the previous year.

• Between January and September, the number of 18-24 year olds on the dole for more than 6 months has doubled in more than half of London’s boroughs.

• A survey by Travelex yesterday showed that 59% of small and medium sized businesses in London expect to go into a double dip recession.

Infrastructure projects cut

The government is cutting not investing in infrastructure.

• Only 4 out of the 40 infrastructure projects outlined today are in London, less than the 10 in Yorkshire and the Humber, and less than the West Midlands, the North West, the South East and the East of England. This is despite the fact that unemployment is higher in London than anywhere else apart from the North East.

• The Tory-led Government got rid of the London Development Agency as well as agencies to promote tourism and inward investment in London

• And even these 4 are beginning to unravel once the detail emerges:

I. The Northern Line extension is a wish not a commitment. London will get no money from the Government for the Northern Line extension, and no guarantee that it will be allowed to borrow. At the earliest, this project will only begin in mid 2013.(In the Autumn Statement it says “Subject to commitment by April 2013 from a developer to develop the site and make agreed contributions, the Government will consider allowing the Mayor of London and partner authorities to borrow against the Community Infrastructure Levy (CIL) to support this scheme.”)

II. If London receives the same as the other super-connected cities – it will get only £2 million of funding next year – 26p for every citizen

III. There are no commitments on where or when new river crossings will be built or how they will be funded. (In the Autumn Statement it says “the Government will work with the Mayor of London and Transport for London to explore options for proposed additional river crossings, for example at Silvertown.”

Child tax credits cut

As a result of George Osborne’s cuts to tax credits:

• 561,900 families in London will lose out as a result of the changes to the child element of the child tax credit

• 323,600 families in London will lose out as a result of the freeze on the couple and lone parent element of the working tax credit.

In 2008 Boris Johnson axed the childcare affordability programme which had delivered affordable childcare for thousands of London children.

Pay freezes

As a result of George Osborne’s further reductions in public sector pay

• 719,000 public sector workers will experience just 1% pay increases in the two years after a pay freeze ending in 2013. This will impoverish well over a million households in London, who will experience falling real pay every year for the lifetime of the Tory-led government

Labour’s 5 point plan in London would:

1. Create up to 11,500 jobs for young people and build 5,000 homes

2. Bring forward investment projects like new school buildings

3. Temporarily reverse the Tory-led Government’s VAT rise – a £450 boost for families with children

4. Cut VAT on home improvements to 5% for a year

5. Give up to 334,000 small firms a tax break to take on extra workers

Unemployment up as 25 people chase every local job

Tuesday, September 20th, 2011

Local unemployment has risen amid a bleak outlook for job seekers, with more than 25 people chasing each vacancy and a large increase in young people without work according to new statistics.

According to analysis of last week’s unemployment statistics by the House of Commons Library, the number of Jobseekers’ Allowance (JSA) claimants per Jobcentre plus vacancy in the Streatham Parliamentary constituency, which includes parts of Brixton, Clapham and Tulse Hill, is 25.7. This is the 18th worst ratio of jobless to jobs of the 632 constituencies across England, Wales and Scotland.

Locally, the number of JSA claimants rose by 403 between August 2010 and August 2011, a 10.3% increase. Additionally, there are now 895 people living in the constituency who have been claiming JSA for more than a year.

Unemployment among those aged 24 and under and aged 50 and over locally has risen disproportionately over the last year, by 13.7% and 17.1% respectively, according to the analysis.

Nationally, the number of people aged 18 or over claiming Jobseekers Allowance increased by 20,300 between July and August 2011 to 1.58 million people. The wider ILO measure of unemployment, which takes into account those looking for work but not claiming JSA, was 2.51 million in May-July 2011, a rise of 80,000 from the last quarter, the largest increase since summer 2009.

Commenting, Mr Umunna said:

“These latest local unemployment figures make for particularly depressing reading. It is worrying that joblessness is rising so sharply and that so few jobs are being created. We should never underestimate the impact on the lives of those affected by unemployment and their families.

“The government’s austerity programme is hitting families hard, denting businesses’ confidence in the economy and hampering job creation. These figures underline the urgent need to get the economy growing again.”

Helping local businesses get back on their feet after the unrest

Wednesday, August 10th, 2011

Chuka was interviewed this morning on business television network, Bloomberg, on the affects of the recent unrest and violence on local businesses across the UK and on what needs to be done to help them recover.  You can watch a video of the interview here:

Local MP demands better finance for local businesses

Wednesday, July 13th, 2011

Chuka Umunna MP is taking action to help local businesses, undertaking a survey to find out about their experiences in accessing finance amid concern over banks’ failure to lend on reasonable terms to small and medium sized businesses (SMEs).

While banks have cited a lack of demand for lending among businesses, Mr Umunna is finding out whether this reflects the experiences of SMEs in Streatham.

The government’s Project Merlin agreement with the UK’s banks in February promised billions of pounds in increased lending to SMEs. However, the first set of quarterly Project Merlin lending statistics, published by the Bank of England, show that banks are failing to meet its target by £2.2 billion.

There are concerns that banks are not offering businesses finance on reasonable terms, putting off potential SME applicants for loans and overdraft facilities.

The survey also aims to build up a picture of the pressures which businesses in Streatham are currently facing in accessing finance. It is part of Labour’s Better Finance for Business campaign, gauging demand for business finance among SMEs across the UK and engaging with their concerns.

There are more than 166,000 SMEs in London – accounting for over 99 per cent of businesses in the region, and SMEs are responsible for 59 per cent of private sector employment across the UK.

Mr Umunna was appointed Shadow Minister for Small Business & Enterprise by Leader of the Opposition Ed Miliband in May, and leads on a range of issues including access to finance for businesses.

Commenting, Mr Umunna said:

“Small and medium sized businesses are the lifeblood of the economy – we are looking to them to create the jobs and growth we need and this will only be possible if they can access finance.

“The government is not doing enough to get banks lending to SMEs, and I am concerned about the impact this is having on our local businesses in Streatham that provide jobs and services in our area. That’s why I am engaging with our local small businesses and listening to their concerns, experiences and views.”

Pressure mounts to remutualise Northern Rock as 100 MPs support campaign

Thursday, April 28th, 2011

Pressure on the government to remutualise Northern Rock is growing as 100 MPs have thrown their weight behind the campaign by signing an EDM calling for the state-owned bank to be returned to the mutual sector.

The Early Day Motion, tabled by Labour MP Chuka Umunna, who sits on the Treasury Select Committee, has attracted cross-party support and is gathering support swiftly, having been signed by 19 MPs in the days since Parliament has returned from recess on Tuesday this week.

It has attracted the support of former Conservative cabinet minister Jonathan Evans and former Lib Dem leader Menzies Campbell and Liberal Democrat President Tim Farron.

The Treasury Select Committee’s report on competition and choice in retail banking, released on April 2, called on the government to do more to promote mutuals and diversity in financial services, as promised in the May 2010 Coalition Agreement.

Support for the campaign to remutualise Northern Rock has been growing in recent weeks outside Parliament. Earlier this month, economic modelling firm Landman Economics released its report The economic case for the re-mutualisation of Northern Rock arguing that re-mutualisation would secure better proceeds for the taxpayer in the long run, as well as decreasing the likelihood of another systematic crisis in the UK economy and increasing lending to businesses.

Coventry Building Society, the UK’s third largest mutual, announced earlier this month that it considering making a bid for Northern Rock.

The government is yet to outline a position on what form the future of Northern Rock will take. In May 2010, the coalition agreement promised to “bring forward detailed proposals to foster diversity in financial services, promote mutuals and create a more competitive banking industry”.

In January, UKFI issued an invitation for corporate financial advisers to work with UKFI and Northern Rock in the evaluation of strategic options for the company’s future. Deutsche Bank was subsequently appointed to evaluate options and is expected to present these to UKFI imminently, although no official timetable has been announced by UKFI or the Treasury on when final recommendations can be expected.

In March, a letter organised by Treasury Select Committee Member Chuka Umunna MP calling for the remutualisation of Northern Rock was published in The Guardian. It was signed by MPs from all three main parties as well as the Adrian Coles, Director General of the Building Societies Association, Prof Jonathan Michie, President of Kellogg College Oxford and Len McCluskey, General Secretary of Unite amongst others. Philip Blond, Director of think tank ResPublica and author of Red Tory was also a signatory.

Northern Rock was formed in 1965 by the merger of two smaller mutuals which had formed in the mid nineteenth century respectively. It continued to grow and operated as a traditional building society until it demutualised and floated on the London Stock Exchange in 1997. It was listed on the FTSE 100 for the first time in 2000.

Commenting, Treasury Select Committee member Chuka Umunna MP said:

“Support is growing for remutualising Northern Rock both in Parliament and the country at large. Increasingly it is becoming clear that a mutual option will provide the best future for Northern Rock in terms of return for taxpayers, help for businesses, the stability and health of the financial services sector and the best deal for consumers.”

“Remutualising Northern Rock has been a longstanding commitment of the Labour Party – it is welcome that a cross party collection of over 100 MPs are now backing the cause.”