Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Older Industrial Areas: Economic Disparities
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Grahame M. Morris (Easington) (Lab)
I beg to move,
That this House has considered economic disparities in older industrial areas.
It is a pleasure to serve under your chairmanship for the first time in this Session of the new Parliament, Mr Rosindell.
I take this opportunity to thank the Chairman of Ways and Means, who I understand has allocated the time for this important debate. It is significant not only to my constituents and other people living in some of the older industrial areas in England, but to people in similar areas in Scotland and Wales.
Older industrial areas make up a substantial part of Britain. According to the definition used in the report that I will refer to extensively, 96 of the districts in England, Scotland and Wales account for 30% of the population of Great Britain, and these areas have been hard hit by many years of job losses. I place on record my thanks to the Industrial Communities Alliance for helping me to prepare for today’s debate, and for its informative report, “Whose Recovery?”, which shows how the upturn in economic growth is leaving older industrial areas behind.
I draw the Minister’s attention both to that report and to early-day motion 171, “Industrial Communities Alliance report on the Economic Disparities in Older Industrial Areas”. That was tabled only yesterday, but it has already attracted more than 30 signatures.
The report provides an insight into the challenges faced by former industrial communities in the English regions, Scotland and Wales. It shows that the economic gap between London and former industrial communities continues to widen, not only during difficult economic periods, such as the one that we experienced after the global financial crisis in 2008, but throughout the recession, and even today, as the UK returns to modest growth.
I hope that during this debate the Minister will provide more details regarding the northern powerhouse initiative, which is of special interest to my constituents. In particular, will it be tasked with reducing the immense economic disparities between the north-east and London and the south-east? I welcome the Prime Minister and the Chancellor’s intention to create a northern powerhouse, but I must point out that good intentions will not get us very far. We need the political rhetoric to be translated into practical policies and targeted support for the poorest regional economies.
We need a strong voice in Cabinet as an advocate for our regions. I fear that such a voice is missing, particularly when I read comments by newly appointed Ministers, such as the Secretary of State for Communities and Local Government, who questions the existence of the widening economic inequalities between the regions and London, despite the fact that the evidence is absolutely clear and presented very concisely in the report that I have referred to. The first step on the road to recovery is acknowledgement of the problem.
That problem has been evident in the lack of support for my area, and in particular the lack of support from the DCLG for Durham County Council, which is my local authority. The rhetoric about the northern powerhouse has not been reflected in the council’s budget allocation, which has been cut by £250 million—40% of its total budget. That situation is mirrored in other local authorities, where there are huge pressures, in other older industrial areas in England, Scotland and Wales. They are experiencing similar problems to those in my area. That reduction in the council’s budget is despite the fact it is providing services and support to some of the most deprived communities in the country, including some in my own constituency of Easington.
The lack of support for the council is not only felt in terms of budget cuts. The recently published County Durham plan outlined ambitious targets to create 30,000 new jobs, build 31,000 new homes and create 500 hectares of space for business, warehouses and office development by 2030. Indeed, the scope of Durham County Council’s ambition has been welcomed by the local business community, and I also welcome it as we seek to promote economic development and prosperity in my constituency and throughout County Durham and the north-east.
However, the plan was dismissed by the Planning Inspectorate for being too ambitious and, despite our best efforts, Ministers refused to intervene to support its bold proposals. We had a debate here in Westminster Hall in the last Parliament on this subject, but it was not until Durham County Council filed legal papers with the High Court for a judicial review that the Government listened and became involved in the issue. My current understanding—perhaps the Minister can give an update on events—is that there is a 30-day stay to Court proceedings, but I am disappointed that the only way to get the Government to engage in economic development plans in County Durham seems to be to seek legal redress, which could have been avoided altogether if the Minister for Housing and Planning, who responded to that debate on 3 March, had been more forthcoming when we originally discussed the matter.
The report, “Whose Recovery?”, by the Industrial Communities Alliance found that the economic upturn since the recession had been much weaker in Britain’s older industrial areas than in London and the south-east. Whereas the number of jobs in London and the south-east was 540,000 higher at the end of 2013 than in 2009, in the older industrial areas the number of jobs was 70,000 lower. Similarly, the rate of growth in private sector employment in older industrial Britain during this period was just a 10th of the rate in London and the south-east.
When I am sitting in the main Chamber and listening to Government Members reciting examples of economic success and private sector employment, I often think that that is not reflected in the area that I represent, or indeed in many of the other older industrial areas, and part of the purpose of this debate is to draw these inequalities and problems to the attention of Government, to hold them to account, and to seek some redress.
Between 2010 and 2014, employment in older industrial areas rose by 230,000, or 2.9%, but during the same period employment in London and the south-east rose by 440,000, or 5.8%. When we look a little deeper at the figures, we see that there is not only a widening gap between the total number of jobs but a higher reliance on part-time work in the older industrial areas. In London and the south-east, virtually all the job growth since 2010 has been in full-time employment. By contrast, in the older industrial areas such as mine, almost a fifth of the increase in jobs has been in part-time jobs. In London and the south-east, the ratio between new full-time jobs and new part-time jobs is 16:1; in areas such as mine, in the older industrial areas in Britain, the ratio is just 4:1, so there is a considerable difference.
Another feature of job growth in older industrial areas has been the rapid rise in the number of people who are self-employed, which accounted for almost 40% of the increase in employment. An impartial observer might think that is a good thing, but I will drill down into this figure. A rising level of self-employment can be an indication of a vibrant economy, but it can also mask fundamental weaknesses in the labour market. This seems to have been confirmed by evidence gathered by the Department for Business, Innovation and Skills, in its self-employment evidence base, which found that in the south a higher proportion of the self-employed are in professional and higher-skilled occupations, whereas in much of the rest of the country, particularly the older industrial areas, more people are self-employed in elementary or low-skill occupations.
I am concerned that self-employment in older industrial areas, along with the expansion of zero-hours contracts, is creating a low-wage, insecure economy that is leading to the further casualisation of the labour market. Disparities in regional economies are deep rooted. In its report, “Northern prosperity is national prosperity”, the Institute for Public Policy Research North noted that
“regional inequalities date back nearly 150 years”—
this is not a new phenomenon—but
“despite some narrowing of the disparities between north and south in the post-war period, since 1985 the UK has had a higher rate of regional divergence than France, Germany, Italy and even the United States.”
It suggests that regional inequalities and disparities, far from being addressed, as they have been in many of our competitor countries in the European Union and in the United States, are getting worse in the United Kingdom.
We have allowed the north and south to pull apart. We should all be concerned about this, because it has led not only to an economic loss but to a loss of life chances for people in the poorest economies, in terms of education, health and income. I say respectfully to the Minister and the Government that there is also an impact on quality of life in London and the south-east, due to overcrowding and congestion.
Addressing the regional economic gap would provide significant benefits for the national economy. Halving the gap between the north and the national average would increase national economic output by £41 billion. If we are to achieve these gains, we need real commitments from the Government, but these are lacking.
I have some figures on transport investment that highlight the problems that we face. IPPR North found huge disparity between infrastructure spending in London and the north-east. London receives £5,426 per resident in capital investment, compared with just £223 per resident in the north-east; and a single project, Crossrail, is earmarked to receive nine times more funding than all the rail projects from the north’s three regions combined.
We are told of the benefits and economic importance of new projects such as High Speed 2, but I suspect that these will have little impact on vast areas of the north. The north-east has been entirely overlooked, with the line ending at Leeds—which many of us who live in the real north believe, with all due respect, is actually in the midlands. We think HS2 will offer little practical benefit to the north-east or my constituents. It may have the opposite effect. A Network Rail consultation document suggested that the benefits to my constituents would be a cut in journey times from Durham to London of just 11 minutes by 2033, with the loss of direct services to the capital and slower journey times to major Scottish cities. At a cost ranging between £50 billion and £80 billion, I can think of few policies that are so expensive and likely to deliver so little to my community. A tiny shift in spending to constituencies like mine in east Durham would have a transformative impact on our transport infrastructure, as we seek to achieve our aim to improve connectivity to major lines and increase rail services.
In my constituency, I continue to work towards a new rail station at Horden, on the Seaview site. If the Government had shown the same commitment to my area as they do to London, I could press for an integrated public transport system, the extension of Tyne and Wear Metro and improvements to our bus network, which would expand access to a wider labour market for residents. There would be huge economic benefits to the area locally and to the wider economy.
Another matter of great importance in my constituency is housing. Other hon. Members wish to speak, so I will say less about this than I intended. The villages and towns that make up my constituency were established specifically to serve local collieries in this coalmining area. The mines have gone, but investment to transform and redevelop the local communities has not followed. This is as true in terms of infrastructure spending on transport and economic development as it is in respect of housing. These issues have recently come to a head in the villages of Horden and Blackhall, following a series of problems experienced by Accent homes, a registered social landlord with properties in these villages. This situation was the subject of an Adjournment debate just before the old Parliament was dissolved. Accent cited the introduction of the bedroom tax as a cause of the fall in demand for its properties. As tenants vacated their Accent properties, the housing associations decided not to let them but to board them up.
It is soul-destroying to watch your community suffer. I invite the Minister and any of her colleagues to Horden and Blackhall to see at first hand the situation in the numbered streets as these properties fall into decay and disrepair. Many former tenants have vacated the area. Homeowners are trapped, unable to sell their property as there is no demand, and they have to live on streets with boarded-up properties, which are a target for antisocial behaviour, vandalism and crime. This situation is replicated elsewhere in the constituency, particularly in areas where private landlords have bought up properties at low cost and are seeking a return, mostly at the taxpayers’ expense, funded through the housing benefit system.
Local residents do not accept the situation. I commend the work of the Horden residents’ association, which has been engaged in meetings and discussions with Accent housing, the Homes and Communities Agency and the Coalfields Regeneration Trust, and other private and public sector partners and agencies, to find a way forward. Local councillors do not accept the situation, but the cuts to local authority budgets and the lack of any national housing regeneration fund is holding back the redevelopment of east Durham. This is disappointing, particularly given the level of funding that is available but seems to be diverted almost exclusively towards London and the south-east.
There is immense potential for redevelopment in older industrial areas, including my own in the north-east, especially as the properties that I mentioned are located in an area of immense natural beauty bordering the award-winning east Durham heritage coast—a newly declared nature reserve—and tracking one of the first stretches of the England coast path. These areas of natural beauty are at the forefront of our efforts to promote leisure and tourism on the east Durham heritage coast, but the Minister must accept that these efforts will continue to be hampered due to the deteriorating situation in the villages. Poor, derelict housing will also undermine our efforts to bring forward economic development, which is the only way to create jobs. We need to ensure that local people have skills and training and that those who acquire skills are not forced to move away from the region to find work.
We need to deliver a complete package of housing, transport investment and education if we are to attract new business and industries that will sustain our communities in the future and bring forward the economic development that is needed to narrow the wealth gap between the regions and London. We need a redistribution of economic activity to provide a new purpose for communities such as the ones I represent in east Durham, which have lost their core industry over the past 30 years.
We have had some recent successes. Only last weekend, I was delighted to attend a groundbreaking—a ceremony to mark the start of work on Dalton Park phase 2, which is a £45 million investment that we hope will deliver up to 1,000 new jobs in my constituency— 500 during the construction phase. The new retail and leisure facilities will be very welcome in east Durham and the wider region, after nearly two decades of campaigning by the local community, supported by the local council, to secure the investment.
We need greater economic diversification in east Durham and to grasp all of the opportunities available. We need new industries to sustain my constituency in the future. There is a rare opportunity in Easington to secure significant private sector investment for the proposed centre for creative excellence to be built on the east Durham heritage coast. The project would deliver more than £200 million of private sector investment and could create 2,000 jobs and training opportunities in a ready-made global film and media communications market. Our regional development agency, One North East, was supporting the project until it was abolished. I sought to discuss the importance of that project with Ministers in the previous Parliament, but I am afraid that I received little support from the Government.
In view of the Government’s conversion to a northern powerhouse, I will welcome the Minister’s input on any direct support that they are prepared to offer to that unique and potentially transformative project in my constituency. Unfortunately, I am yet to witness the positive impact of my local enterprise partnership, and the Government’s other flagship policy designed to support business development, the regional growth fund, which I feel has a misleading name. It should be called a national growth fund, since it is open to all regions. Widening economic disparities between the various regions, especially between the older industrial regions and London and the south-east, are proof of that fund’s failure. That is why I advocate direct Government intervention for the centre for creative excellence.
If the northern powerhouse is anything other than rhetoric, we need a real development fund that is targeted specifically at weaker regional economies to bring in developments such as the one in my constituency and to address the employment and skills imbalance between the regions. There is a moral duty on the Government to close the gap and address regional inequalities that damage our national economy and leave generations of people in the poorest economies behind, as well as reducing their life chances. There are development opportunities if the Government want to seize them.
The modest return to growth in the last quarter has not been a recovery for all. In older industrial communities, the recovery is in fact reinforcing existing economic divides. If we are to rebalance the economy and deliver a sustainable recovery, the Government need to back up the rhetoric. We need to ensure that the same level of resources and development that is directed towards London and the south-east is targeted at the weakest regional economies. Delivering those practical policies would give us an opportunity to narrow the economic gap and deliver much-needed jobs and growth to the former industrial communities that have been ignored by the Government for too long.
I have made a number of practical suggestions, and I hope that the Minister will reflect on them. They are opportunities to take forward the Government’s vision of a northern powerhouse in a practical, meaningful way that would benefit the region. I will be interested to hear her comments on my proposals.
Alison Thewliss (Glasgow Central) (SNP)
I thank the hon. Member for Easington (Grahame M. Morris) for securing this important debate. I represent a constituency that includes several older industrial areas and bounds other areas in Glasgow and South Lanarkshire with a huge industrial legacy. The legacy comes with real, long-standing issues of contaminated, vacant and derelict land that prevent economic initiatives from happening and private capital from being invested, because the cost of cleaning up the land is astronomical.
Clyde Gateway is an urban regeneration company in my constituency that covers Glasgow and South Lanarkshire. It is a partnership with Scottish Enterprise and the Scottish Government. In the seven years since its establishment, Clyde Gateway has made ready for use 200 hectares of previously derelict and contaminated land, some of which had been derelict for 50 years and a serious blight on the area. Clyde Gateway found that the derelict land was contaminated with, for example, chromium, which is hugely toxic. It had to develop techniques to extract the chromium before it could do anything with the land.
When power stations in other parts of my constituency were taken out of production, they were simply demolished and the land was not cleared or made ready for use. Clyde Gateway’s contractors found sluices, underground works and all kinds of things when they examined the land. No private industry could ever have taken on the cost of cleaning that up. It therefore falls to agencies such as Clyde Gateway, to local authorities and to Government to invest in the land and make it ready for use, so that jobs can be brought into the area.
Unless we tackle such long-standing issues within communities, nothing else can happen. That is true of my own area and of many other parts of post-industrial Scotland. The area in Motherwell where Ravenscraig steelworks used to stand had serious contamination to deal with before anything else could happen.
Clyde Gateway’s work over the past seven years has brought £100 million of public and private investment into the area, as well as jobs, and it has created 40,000 square metres of business space in the east end of Glasgow and Rutherglen. That is absolutely amazing. It is key that such work in post-industrial communities is seen as an investment, because if we do not invest, nothing will happen and the neglect will continue. In Scotland, the latest vacant and derelict land survey figures show that there are 10,874 hectares of vacant and derelict land in cities and rural settings, causing a serious issue for those communities, who have no means to deal with it. Serious investment is needed to overcome the huge problem of post-industrial legacies.
The Scottish Government’s regeneration capital grant fund works with local communities on what they would like to see in their areas and what projects could bring investment, new life and jobs to industrial areas. That fund has been a real success. Despite having an annual budget of only £25 million, it has been very popular and was quickly oversubscribed. Twenty-two projects across Scotland are already being supported. It is absolutely right to ask local communities, “What would you like to see? How can we help?”
In my constituency, there have been changes over time to the fabric of the area. I say “fabric” because the area’s street names—Muslin Street and Cotton Street, for example—reference its former industries. There were dyeworks and the famous Templeton carpet factory in the area. All those heavy industries have now gone. Some of the land has been filled with housing, while other parts lie empty and are waiting to be dealt with. The industries have not failed to leave scars.
Something more positive in the Glasgow and Clyde valley area is the city deal that was negotiated with local authorities, the Scottish Government and the UK Government under the previous Administration. The deal has the potential to bring huge benefits, with local authorities working together across the areas that bear the scars of past heavy industry. We need to collaborate and find ways to work together to deal with such long-standing issues. Many people viewing things from outside just see that there is derelict land; they do not see what is underneath. There is a need for investment to create jobs and overcome the barriers. It is not as simple as saying, “There is a post-industrial area; throw some money at it.” The land must be made ready for use by private and public industry. It means investing a huge amount of money in holes in the ground, but that must be done before the areas in question can move forward.
I thank the hon. Member for Easington for securing this important debate. We should learn from each other about what is happening in different areas, and about what we can take back to our constituencies to tackle long-standing issues.
Louise Haigh (Sheffield, Heeley) (Lab)
I apologise, Mr Rosindell, for being slightly late for the debate. It is a privilege to serve under your chairmanship. I thank my hon. Friend the Member for Easington (Grahame M. Morris) for securing the debate. He has done much over the years to champion communities that have suffered decades of neglect and decline. I also congratulate the Industrial Communities Alliance, which has published an excellent report.
In my brief speech I shall share experiences from my neck of the woods in Sheffield—a beautiful city with a thriving cultural and music scene, a proud sporting heritage and a strong sense of its industrial and political history. I am sure that hon. Members will see similarities between its challenges and those that all former industrial communities face; the pattern is all too familiar.
Much was done in the 1980s to undermine the skills and extinguish the expertise that working-class men and women of my city built up over centuries. They led the world in forging steel, unmatched in brute strength and unrivalled in craft. Pockets of that skill remain in Sheffield. Companies and Governments from across the globe still flock to Sheffield Forgemasters in search of the best there is. Thirty-one thousand people are still employed in manufacturing in my city, in no small part thanks to the fantastic work being done by the former Member for Sheffield Central, Richard Caborn, and the Advanced Manufacturing Research Centre. However, there is no doubt that we are still scarred by the legacy of Thatcher—not only in my community, but, as we have heard, in communities across swathes of the country. The legacy of that Government and their most misguided industrial strategy casts a dark shadow.
The sanitised management-speak term “de-industrialisation” is shorthand for a set of complex issues, which we have heard about, and which my community faces to this day. Generations of families relied on the manufacturing base of Sheffield to make a living. Generally it was well paid, long-term skilled work. However, the legacy of decline is that those jobs have been replaced largely with low-paid work, if there is work at all. The figures bear that out. Wages have flatlined over three decades for all but the super-rich, and the number of people in low-paid work, barely able to afford the basics, has risen from 13% in the late 1970s to 21% today.
Even more alarmingly, the number of people who may not be low-paid now but who have experienced low pay in the past four years is at a shocking 33%—some 8 million people. That is the living, breathing legacy of industrial decline. It is what we mean when we talk about insecure work and low pay, and that is why Labour Members will continue to raise the subject time and again in this place and outside it.
The heart of the debate is about the make-up of the economy. The report by the Industrial Communities Alliance rightly highlights the fact that London and the south-east have pulled away from the rest of the country—not just during the current recovery, but in the past three decades. The trend towards de-industrialisation has gone hand in hand with the financialisation of the economy, which began with the deregulation of the financial system. We witnessed the all too real consequences of that in the 2008 crash: our communities, having been hit once in the 1980s, were forced to pay the price all over again. That will continue unless we fundamentally reform the economy, tackling the short-termist, risk-taking culture that continues apace in the City of London and Canary Wharf and redirecting investment towards the productive, high-skilled and green industries that we need to secure a sustainable future.
The short-termism of our economic system is a major factor in the failure of many communities to recover, as capital is driven towards sectors and activities that provide an immediate return rather than those that can build up jobs, productivity and growth in the long term. Because of that, we have a recovery that is anything but shared. For all the talk of a jobs miracle, in Sheffield there are still 6,000 fewer people in work than just before the crash. The Government have, unfortunately, learned nothing, and they seem determined to repeat the mistakes of the past—mistakes that, we admit, the last Labour Government made in failing to draw in the financial system and rebalance the economy.
Finally, we cannot have this discussion apart from the continuing debate about devolution. The Government’s much-vaunted strategy of pursuing a “northern powerhouse”, however welcome, should not be simplified into a focus on the great cities of Leeds and Manchester. If investment does not reach Sheffield, Copeland, Barnsley and Falkirk, it cannot be a success. Only today the Government have abandoned their plans to electrify the midland main line linking London to Sheffield. That will be incredibly disappointing to small businesses in my region. I welcome the findings in the Industrial Communities Alliance report about the need for the Government to put forward resources and tax breaks to encourage investment in manufacturing, research and development across older industrial communities; I and colleagues in Sheffield have been talking about that for some time.
It is evident from the debate that there is a determination to put an end to three decades of economic illiteracy, during which inequality has increased and opportunity has been stifled in communities throughout the country. Financial services continue to enjoy a boom while a rich seam of opportunity is overlooked in the older industrial communities that many Members represent. We need a strategy fit for the 21st century and this debate is a good place to start.
Christina Rees (Neath) (Lab)
It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank my hon. Friend the Member for Easington (Grahame M. Morris) for securing this important debate. I am pleased to have the opportunity to speak on this matter, which is of paramount importance to my constituents in Neath, a truly beautiful part of Wales.
The Neath constituency has a long and proud industrial heritage. However, since the beginning of the 1980s the British coal industry has lost more than 250,000 jobs. That finally signalled the end, after decades of decline, of the industry across most of the country. Unemployment soared and with it household incomes plummeted, taking with them aspirations and hope. The closure of the pits ripped the heart out of the valleys communities and left a scar that is still felt and seen today.
Prior to the global economic recession, there was some progress in generating new jobs in coalfield areas, but former coalmining areas continue to suffer from a legacy of unemployment. Current statistics show that many areas of the Neath constituency are well below the national average. The Office for National Statistics figure for the rate of economic activity for working-age people in Neath Port Talbot local authority area is 70.6%, but in the Dulais Valley the figure falls to just 35%—more or less a third.
Ill health is part and parcel of that legacy. Residents of coalfield areas across the UK report levels of ill health and limitations on day-to-day activities that are double those of the more prosperous region of south-east England, according to the Coalfields Regeneration Trust 2014 report, “The State of the Coalfields”. Neath Port Talbot as a whole has the highest percentage of respiratory illness, the second highest incidence of strokes and diabetes, the third highest incidence of obesity and the fifth highest death rate from chronic heart disease in Wales. As we know, there is a strong correlation between economic disadvantage and ill health, and that is clearly and sadly reflected in my constituency.
The combination of unemployment and poor health has led to a higher reliance on welfare benefits in many communities. The effect of the Welfare Reform Act 2012 is another blow to us, and we are braced for a further £12 billion of cuts yet to come from the Conservative Government, at which we are yet to see the fine detail. Although losses will widely vary depending on personal circumstances, it was estimated by the Welsh Government last year that the changes will constitute an annual loss of £500 per working-age adult in Wales. Neath Port Talbot is expected to be among the hardest hit in Wales, with losses closer to £600 per year per working-age adult. Likewise, a report from Sheffield Hallam University in 2014 identified the south Wales valleys, with their higher proportion of people reliant on benefits, as being hit harder by the reforms than anywhere in Britain. The valleys as a whole are expected to lose about £430 million a year when the reforms have come to full fruition. Those losses far exceed the flow of funding for economic development that the area receives from sources such as the European Union.
Large reductions in income have an obvious knock-on effect on local consumer spending, straining local businesses and communities and supporting fewer jobs in the local economy, with ensuing detrimental effects on our communities—a vicious cycle. Spending cuts have also affected many voluntary and community organisations and reduced the level of services delivered by local government.
Critically, the Sheffield Hallam report, despite the rather gloomy statistics, had some good news: regeneration does work and, prerecession, progress was clearly being made in the UK’s coalfield areas. Moreover, the report found that raising economic growth would deliver similar levels of savings for the UK Treasury, which is the impetus behind the welfare reforms. The anticipated savings for the Treasury of £1 billion a year once those reforms are implemented could be made with the creation of 100,000 new jobs, which would both reduce the number of people reliant on benefits and provide higher tax revenues.
Initially, the UK Government’s response to the collapse of the mining industry was poor, with token gestures that had little impact. In Wales, it was really only from the late 1980s, with the launch of “Community Investment: An Initiative for the Valleys” and the establishment in 1989 of the European regional development fund, alongside initiatives by the Welsh Development Agency, formed in 1976, that the momentum began to bear fruit. That has accelerated since 1997 with the establishment of the Welsh Assembly Government, who now have responsibility for regeneration and development. Since then, UK, Welsh and European funding, working in partnership with the third sector, has supported a series of initiatives aimed at regenerating the Welsh valleys. Efforts have rightly focused on retraining and the development of skills for the workforce and on diversifying the economy beyond traditional industries.
The Coalfields Regeneration Trust, created by the Labour Government of 1997 and working in Wales since 1999 with the support of Welsh and local government funding, has a mission to champion coalfield communities, generating resources to respond to their needs and delivering programmes that make a positive and lasting difference. In the past 14 years, it has invested more than £14 million in community regeneration in Wales, working with and within the community.
The partnership between the EU and the Welsh Government has been critical in regenerating the Neath constituency. The European regional development fund and the Welsh Government regional area programme, plus contributions from Cadw and the Heritage Lottery Fund, have funded the £9.2 million restoration of the Gwyn Hall in Neath town centre. That has re-established a centre for arts and culture in the locality, as well as providing much-needed employment. The £1.4 million renovation of the Victoria Gardens has also been funded. That beautiful and historic green space in the town centre provides residents and visitors with meeting and leisure opportunities—the opportunity to relax. The redevelopment of Neath town centre itself will encompass new retail units, 600-space multi-storey car parking and housing, including flats above shops that will provide the necessary increase in footfall for the shops and businesses in the locality.
In Neath, we have a very strong community spirit and social networks, but that is not enough. If we are to solve the complex economic and social legacy that our coalfield communities have inherited, financial support and targeted measures are needed. They must be designed in a collaborative spirit with the communities, not imposed.
Organisations such as the Bevan Foundation—an independent social justice think-tank in Wales—and the Industrial Communities Alliance have looked closely at these complex issues and identified a number of important factors. We are talking about measures such as low interest rates to encourage investment; rebalancing the economy towards industry and the regions; a more measured approach to deficit reduction; investing in infrastructure such as strategic transport links and fast broadband; and job creation programmes targeting those areas where need is greatest. Communities First, a Welsh Government programme, has invested in excess of £500 million in the poorest communities in Wales, working with communities on the design, development and delivery of community regeneration programmes and job creation.
As has been mentioned, key to our economic redevelopment has been European funding and the EU’s partnership with the Assembly in Wales, which has made and is making a real difference locally and demonstrates why, for my constituents in Neath, continued membership of the EU is critical. Through a collaborative, creative, constantly evolving and co-ordinated approach, it is possible to sow seeds of renewal and long-term recovery in our communities and to move towards a new model whereby we can provide opportunities for everyone, creating the vibrant, viable communities that we all want and deserve.
Toby Perkins (Chesterfield) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Rosindell, for what I think is the first time. I congratulate my hon. Friend the Member for Easington (Grahame M. Morris) on securing the debate and on his extensive and incredibly important contribution. As we have heard in the other contributions in what has been a one-sided debate, the issues that he raises about his community are felt in many other communities in older industrial areas.
My hon. Friend quoted extensively from the Industrial Communities Alliance report. That is an important piece of work by a very important organisation that ensures that these issues are brought before the Government and that the Government are forced to consider the legacy that exists in our older industrial areas and cannot close their eyes to the poverty and deprivation that have resulted particularly from the collapse of the mining industry, but also from post-industrialisation—the attack on the manufacturing sector that happened, as others have said, under the Conservative Governments of 1979 to 1997. Therefore, the work of the Industrial Communities Alliance is incredibly important, and my hon. Friend reflected its report very well.
My hon. Friend spoke many times about the northern powerhouse and whether that was a real thing or simply a chimera—an illusion—or possibly just a press release. I think that he is on to something there. We have all seen in the past few months the Chancellor of the Exchequer suddenly discovering the north after many years of policies that have made life in northern communities much more difficult. I am talking about huge cuts to local government in the north and the huge increase in inequality that we saw under the previous Government. Suddenly, he arrived in his hard hat and high-visibility vest and announced that we had a northern powerhouse or, if not, he was going to create one.
Grahame M. Morris
This is a very important issue, worthy of the Government’s full attention, not just a photo opportunity with a brightly coloured jacket pre- election. As my hon. Friends have said, many of the problems faced by coal closure areas, such as mine, are multifaceted. The legacy is not just joblessness, but an environment impact, derelict land, substandard former colliery housing, despoliation and ill health. It requires the Government to take a co-ordinated approach, beginning with a recognition of the particular problems of not just coalmining areas, but steel areas, textile areas and, indeed, many of the old industrial areas that face similar problems.
Toby Perkins
I could not agree more. My hon. Friend’s contribution was speaking to many of the partnership approaches that were taken under the last Government. These problems are complex. He is absolutely right to talk about the combination of poverty, historical benefit dependency and ill health that results from what people have put their bodies through while working in heavy industry and from the link, which other hon. Members referred to, between poverty and ill health more generally.
A co-ordinated approach and a Government who take the situation seriously are required. The Government must prioritise the regeneration of our industrial areas and recognise that the situation is not easily resolved. The situation cannot be resolved with a press release or a photo opportunity; substantial partnership and cross-agency work between all organisations—central Government, local government, the business community, the voluntary sector and health authorities—over a considerable period is required to alleviate the situation.
My hon. Friend will be aware that my constituency of Chesterfield features in the Industrial Communities Alliance report. The area had a significant history of coalmining and manufacturing, much of which has now gone. Chesterfield was once a town in which five or six employers employed 3,000 or 4,000 people each; and now it is a town in which 3,000 or 4,000 employers employ five or six people each. The changing face of our economy poses significant challenges, including inequality.
Grahame M. Morris
I take issue with my hon. Friend’s suggestion that we have had a long-term dependence on benefits. Historically, Easington had a long tradition of almost full employment when the pits were working. We are in our current predicament because of the difficulty of attracting inward investment due to the complexity of the problems, which are compounded by various aspects of Government policy, including this week’s announcement of a £200 million cut in public health funding. Indeed, £3.5 million will be cut from Durham County Council’s budgets. That funding is used to address the long-term issues of ill health and poor diet in some of the poorest communities. The Government need to end their short-term approach and take the long-term, co-ordinated approach needed to address the problems in Chesterfield, Easington, Neath, Sheffield, Glasgow and all older industrial areas.
Toby Perkins
I agree with my hon. Friend. I am referring to what happened in such areas, particularly after the closure of the coalmines and manufacturing sector. The irony of the Government’s approach to welfare—they suggest that there is a group of people who want to live on welfare—is that that was precisely Mrs Thatcher’s approach when she shut all the pits. She went to all these people, shut down entire communities and threw them out of work. She put huge numbers of people on incapacity benefit and parked them there for a long time. Inasmuch as there was a history of welfare dependency, it was Mrs Thatcher who caused it, and my hon. Friend is right to clarify that point.
My hon. Friend also spoke about local enterprise partnerships, and I will speak in more detail about their role and the previous role of regional development agencies and how the Government’s decisions prevented them from being as effective as they could have been, particularly when their help was really needed. He raised a couple of issues that I want to explore. He talked about the insecurity that goes with the increase in self-employment. I was self-employed for six years before first coming to Parliament, and I know that self-employment is an insecure line of work, but we should be encouraging self-employment, which is a great thing. Simultaneously, we must recognise that some people set up their own businesses because there are no other options. Self-employment is sometimes a sign of a local economy’s weakness; and at other times self-employment should be welcomed. It is important to recognise such insecurity in the workplace. He may also have been referring to bogus self-employment. Some people who appear to the majority of us to be self-employed are actually in insecure employment.
Grahame M. Morris
My hon. Friend is being generous in giving way. It is important to challenge the accepted logic that an increase in self-employment is necessarily a good thing. We need to consider where it is happening. The Union of Construction, Allied Trades and Technicians and other trade unions that organise in the construction sector are concerned about the increase in casualisation and the use of umbrella companies by unscrupulous employers to decrease job security and drive down terms, wages and conditions on building sites, and there are other such examples. A number of people who were directly employed in the offshore industry are now classed as self-employed not by choice but because they have been forced down that route. Self-employment is not necessarily a positive thing for local economies. I accept that we want to encourage small businesses to grow and to take on employees, but that does not necessarily translate in the figures that have been quoted on the growth in self-employment in areas such as mine.
Toby Perkins
This is a multifaceted issue. I feel like I have been responding to my hon. Friend’s speech for longer than it took him to deliver it, so I will move on. [Interruption.] He rightly says that we have a bit of time.
There were other important contributions. The hon. Member for Glasgow Central (Alison Thewliss) reflected on the extent to which industrial jobs have gone from her constituency. Like my hon. Friend the Member for Sheffield, Heeley (Louise Haigh), she represents a city that has seen huge regeneration and positive change, but there is still the legacy of industrial decline in such older industrial communities. When listening to the hon. Member for Glasgow Central, I was struck by the similarity between the experiences of her constituents and the experiences described by other hon. Members. After hearing Glasgow and Sheffield Members reflecting on the challenges in their cities and hearing my hon. Friends the Members for Easington and for Neath (Christina Rees) talk about the impact on former mining communities like mine in Chesterfield, I am struck that there is a lot more that links us than divides us in the industrial areas of England, Scotland and Wales. We should consider that as we think more broadly about the direction in which our country is going. A huge number of issues affect us all. We have shared experiences and new opportunities, but we have also endured and shared painful legacies.
My hon. Friend the Member for Sheffield, Heeley said that the legacy of Mrs Thatcher has cast a dark shadow over older industrial areas, and she reflected on the importance of rebalancing our economy. My hon. Friend the Member for Neath said that the scar of mine closures is still felt today, and she spoke powerfully about the impact of ill health and its link with poverty. She also made an important point about the impact of spending cuts on local government and the knock-on impact on the voluntary sector. We all know that, over many years, the voluntary sector was incredibly powerful and important in the Labour Government’s approach to regeneration. Ironically, a Conservative Government who came to power promising us a big society and a revolution in the voluntary sector have achieved the absolute opposite: a weakened voluntary sector that is unable to pick up the pieces in many of the ways that it did previously.
Many issues raised in the report, complex and long-standing as they are, were being addressed under the Labour Government. We saw huge regeneration of our great cities. On the motorway in my area we have the new junction 29A, which is still known as “Skinner’s junction” after the campaigning of my hon. Friend the Member for Bolsover (Mr Skinner), and next to it is a huge new industrial estate. The Industrial Communities Alliance report says that there are 4,900 extra jobs in Bolsover, which is one of the most successful older industrial areas in terms of employment growth precisely because the Labour Government made the decision to invest in such communities. So we can get results if we invest. The Coalfields Regeneration Trust did so much work and was strongly supported by the Labour Government.
The Labour Government made huge investments in health promotion, which my hon. Friend the Member for Easington mentioned, and recognised the massive challenges that face older industrial communities. We recently saw the announcement of a £200 million cut in health promotion, which will have a significant impact. The powerful contributions to today’s debate have expressed the importance of this issue.
In terms of earned income, the United Kingdom is the fourth most unequal of the 30 countries in the OECD; only the USA, Israel and Mexico are more unequal than we are. My right hon. Friend the Member for Doncaster North (Edward Miliband) was absolutely right to say that inequality is one of the huge challenges facing our country, although not only our country. The Labour party will give considerable thought to it over the next five years as we attempt to put together a programme that can again win the support of the British people.
Income is spread unequally across the UK’s regions and nations. The average household income in London is massively higher than in the north-east. In addition to income, overall wealth is unevenly spread across the UK—the average household in the south-east has almost twice as much wealth as an average household in Scotland—and different regions of the country have a different percentage share of UK gross disposable household income: London and the south-east have 32%, and the north-east has just 3.5%. Those disparities exist. It is important to recognise that poverty is not the preserve of the north. Areas throughout our country face substantial challenges: for example, Cornwall, which we might have expected to be represented here. None the less, a specific challenge faces the older industrial areas, and it is important to reflect that.
Many Members have discussed why we are in this position. There are three or four key reasons. The first is the failure to invest in retraining and vocational skills for the forgotten 50%, leaving people in the older industrial areas vulnerable to falling into a life of low pay. Far too many people in the UK today do a hard day’s work and still live in poverty and visit the food bank on the way home. The Prime Minister continually tells us that a job is the route out of poverty, but increasingly, people in poverty are also in work. Under this Government, work alone no longer pays enough to allow people the dignity of being able to feed their family.
More than 5 million people are now in low-paid jobs, and more than 250,000 are estimated to earn less than the national minimum wage. The problem of low pay has got significantly worse under this Government. Not only has the national minimum wage fallen in real terms since 2010; the official figures show that without action to tackle low wages, spending on tax credits for people in work is set to rise by an estimated £2.5 billion over the course of this Parliament. Only this Government could think that the response to that environment of low pay, and to all those people who work hard all week and still do not have enough money at the end of it to put food on their table for their kids, is to cut tax credits.
What an appalling legacy this Government will leave in terms of that increase in child poverty. We already hear that this Government are thinking of repealing the Child Poverty Act 2010, so that they will no longer be held to account for that increase in child poverty, but in communities throughout our country, people sitting around the kitchen table know the reality of life under this Government.
There has been a huge increase in the productivity gap. Professor Van Reenen, head of the Centre for Economic Performance at the London School of Economics, has said:
“By Thursday lunchtime the other”
major countries in Europe
“have produced as much as it takes us to produce by Friday afternoon… So basically, we could take every Friday off if we could be as productive as those other countries and earn the same amount of money.”
The productivity challenge is partly linked to the lack of investment and the short-termism that other colleagues have mentioned. For too long, the British economy has taken a short-term approach to matters of research and development. There are far fewer people involved in R and D in this country than in many of our European competitors. Likewise, although we have waited an age for a final decision on a new runway for London, Charles de Gaulle airport outside Paris has had four runways for years. There are many reasons why the endemic challenges in the older industrial areas have not been addressed.
The Government are exacerbating problems. The policies of a truly one nation Government would help overcome regional disparities, but as my hon. Friend the Member for Easington discussed, spending on infrastructure increases such disparities. Spending per head on London is 24 times higher than on the north-east of England. He quoted statistics that bear repeating; I also have them. The amount spent on Crossrail alone is nine times more than the amount earmarked for rail projects in the whole of Yorkshire, the north-east and the north-west.
There is a substantial gap in the ability of businesses in older industrial areas to access finance. The access to finance market is much less competitive there, so the amount of money lent by the banking sector to our businesses is substantially different depending on location: £2,647 per head of population was lent to businesses in London, but less than half that was lent to businesses in the north-east and the east midlands. Entrepreneurs in areas with huge growth potential are crying out for support but finding that, unless they live in an area that is already coping better than most with the post-crash world, the Government’s door is shut to them.
My hon. Friend the Member for Easington referred to the closure of One North East and the local enterprise partnership’s ineffectiveness in his case. Many local enterprise partnerships are working hard to make a contribution, but it was a strange decision at a time when the economy was desperate for growth—we should remember that we already had growth then, in 2010 at the end of the last Government, but we still needed a great deal more—for the Government to shut the regional development agencies and set up those fledgling agencies with limited resources and an unclear role. They have all attempted to the best of their ability to find a role, but they have been inconsistent in their ability to do so. Only now, five years after they were desperately needed, are some of them starting to come to fruition. That is another Government measure that has had a negative impact.
Strengthening local enterprise partnerships so they can provide greater capacity and stronger services is an important part of the solution, as is strengthening local authorities. We welcome steps to strengthen the combined authority in Greater Manchester, but we want more combined authorities to tackle the chronic problems of poor skills, infrastructure and economic development. We need reform of our business rate system, which has worked against business development in older industrial areas. If we had had the business rate re-evaluation counselled by the last Government, business rate bills for people in my hon. Friend’s constituency would be hundreds if not thousands of pounds lower and business rate bills in central London would be higher. That would have made a big impact on our local communities.
We believe that local areas and local authorities should be supported where they are succeeding in attracting and supporting businesses by retaining more of the business rate revenue generated by growth to invest in building further success. We also need greater decentralisation of Government infrastructure, so that more Government money is spent in the older industrial areas.
We support a Government with a commitment to a high-wage, high-skill workforce; devolution to English city and county regions that puts local councils at the heart of building up the older industrial areas; dealing with the huge increase in the productivity fall under this Government; an access to finance system in which money goes to businesses in our older industrial areas; expanding the capacity and strength of the local enterprise partnerships; fair funding for local authorities in the poorest areas; and a reform of business rates that supports small businesses in our communities. That is the kind of programme that will start to support and improve our older industrial areas.
This debate has been important in putting the issues before the Government, but we need them to stop the rhetoric and start the action; if they did, our communities might get the support that they deserve.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
It is a pleasure to serve under your chairmanship, Mr Rosindell.
I congratulate the hon. Member for Easington (Grahame M. Morris) on securing this important debate on economic disparities in the older industrial areas. I want to make it clear from the outset that the Government’s economic ambition is to create a fairer and more balanced economy by supporting policies that grow the economy as a whole and generate new jobs and higher wages for everybody.
The debate has been interesting. I must confess that, as I was listening to some of the speeches by Opposition Members, at times I thought I had stepped back in history and returned to my old student union days in the 1970s. I am slightly concerned about the memories of some hon. Members.
Anna Soubry
One moment. I have not even finished this particular insight. With few exceptions, Opposition Members all seem to have completely forgotten that for 13 years we had a Labour Government. They now complain about things that they might have put right—but did not—during the 13 years of Labour Government. The policies, notably towards the end of that Labour Government—a Government that failed to save and fix the roof when the sun was shining, and continued, as some now recognise, to overspend when the world economy had suffered a crash—exacerbated things.
Anna Soubry
Obviously, I will take interventions, but may I give some advice to hon. Members? If they do not learn from the experience of what happened in May, they will be out of office not only for five years, but for a generation.
Grahame M. Morris
I am familiar with the standard response that Labour is to blame, but my job as the Labour MP for Easington is to hold the Government to account. I have specific suggestions that would help my area and the areas represented by my hon. Friends who are suffering similar problems. For example, the Government’s policy on further education college funding has had a huge, negative impact on East Durham College, because it concentrates on apprenticeship training for young people and does not provide funding for older workers to retrain. Specific proposals are identified in the report. Without being disrespectful, rather than a lecture about what happened years ago, addressing the issues in the report, which we raised in the debate, would be really helpful.
Anna Soubry
Of course, I am going to deal in detail with the situation in the hon. Gentleman’s constituency and in the constituencies of all those who have spoken, with the exception of the hon. Member for Chesterfield (Toby Perkins). I am more than happy to write to him to tell him about the advances that have been made in the past five years in Chesterfield. I want to put this matter into context. I, too, have had to sit listening not only to a lecture, but to a rewriting of history that even the most red historians would struggle to produce.
I want to talk about the industrial communities in the alliance’s report. Since the beginning of the 1970s, UK cities have experienced an ongoing historical shift in economic orientation, driven on the one hand by a process of sustained de-industrialisation, as we have heard, and on the other by a progressive rise in service and tertiary activity. The report focuses on old industrial centres that have been slower to replace declining industries. Former industrial centres that have moved on, such as London—we often forget that London used to be a heavily industrial city, but it moved on—do not appear in the list. Therein lies an important point: there is nothing pre-ordained about past or current trends continuing into the future.
Over the past three decades, some cities have experienced positive shifts of direction, or positive turnarounds, in their differential growth paths. Oxford is an example, as are Brighton, Ipswich and London. I recognise—I am an east midlands MP, as is the hon. Member for Chesterfield—that those cities are in the south of England, and much will depend on how different older industrial centres are able to attract and develop the growth sectors of the future.
Anna Soubry
In a moment. I want to turn to the economy in Easington, because the hon. Member for Easington is a champion for his constituency. We have all witnessed tremendous technological change in our lifetimes. I am certainly old enough to say that, given that I come from Worksop in north Nottinghamshire where there was a coalmine. The whole town depended on the success or otherwise of the Manton colliery and surrounding collieries, so I am familiar with pits.
Industries that did not exist 20 years ago are now the most productive in the world. In the constituency of the hon. Member for Easington, this change has been more apparent than most. Since the closure of the dominant coalmine in 1993, the area has undergone a tremendous change. The legacy of coalmining is still being dealt with, but great progress has been made in remediating the industrial pollution, for example. The Durham coast, as the hon. Gentleman has told us, is now home to one of the most stunning coastal walks in the United Kingdom, with the Durham heritage coast highlighting the great natural, historical and geological interest of the area with dramatic views along the coastline and out across the North sea, framed by magnesian limestone cliffs. I have not been to the area, but I would love to go to the hon. Gentleman’s constituency, and I hope to arrange a visit.
A former slag heap is now the site of one of the country’s most dynamic retail centres, with more expansion about to start at Dalton Park.
My officials have provided me with a note about the regional growth fund’s investment in Easington. We might think from the hon. Gentleman’s speech that there had been no investment in his constituency. On the contrary, eight projects in Easington have been awarded a total of £13.4 million. They are contracted to lever in a further £81.6 million of private sector investment and to create or safeguard 1,189 jobs. I hope the hon. Gentleman will welcome such great investment of taxpayers’ money.
Grahame M. Morris
I congratulate the Minister on an excellent brief and on the description of the Durham heritage coast. It was absolutely perfect; I cannot fault it. The problem is that we are not able to access the coast because of the lack of transport infrastructure and railway halts. On the regional growth fund awards, much of that is linked to the automotive supply chain, so doubts about our continued membership of the European Union cause considerable concern. Yes, there are positive things in relation to support for businesses, but my concern is that they are not as comprehensive as the support and expertise given by One North East. The reorganisation, as always happens whether it is in local government or health, caused a huge hiatus and a delay in taking forward investment for projects that would have benefited the area considerably.
Anna Soubry
I am not sure whether the hon. Gentleman is saying that the investment in his constituency is considerable and great. I have read out the figures. They are substantial. As I have said, the money is part of a contract, so it relies on securing the features that I have identified. I am more than happy to respond to what the hon. Gentleman has said in more detail in a letter, or by meeting him. I would also like to meet his local enterprise partnership, because I strongly suspect that it might have a different view of the situation in his area from the one that he has given us today. The projects include, for example, NSK Bearings Ltd, which was awarded £3.45 million in round three to assist with business expansion. The award by the regional growth fund was part of a £19.9 million investment that helped to safeguard 265 jobs. Again, I hope the hon. Gentleman welcomes that.
It should also be noted that unemployment in the constituency of the hon. Member for Easington continues to fall. There are 6,400 more people in work today than in 2010. Those people would otherwise be at home and on benefits, but they now have the benefit of a job. I find it difficult to understand why hon. Members do not welcome the fact that people are going into the world of work. Surely it is better to be in a job than to be sat at home on the dole.
On the northern powerhouse, the hon. Member for Chesterfield seems to have forgotten that the Chancellor has represented the northern constituency of Tatton in Cheshire for many years, so the idea that he is new to the north of our country is nonsense. The northern powerhouse has not been imposed on northern councils. On the contrary, councils of all political persuasions—I give them full credit, especially the Labour-run councils in Liverpool and Manchester—have not only trumpeted the northern powerhouse, but led the way on its creation. I am concerned that hon. Members in this place are not supporting their colleagues in those great councils, who have come together and are championing the northern powerhouse.
Louise Haigh
Opposition Members are, of course, in favour of the northern powerhouse. We welcome the discussions on devolution, but they have to lead to resources and investment going to the north. Does the Minister not understand why we are sceptical about the northern powerhouse when there are announcements such as today’s on the scrapping of investment in the electrification of the route from London to Sheffield?
Anna Soubry
May I correct the hon. Lady? She said that investment has been scrapped and that the electrification of the midland main line had been abandoned, but she is absolutely wrong. [Interruption.] The hon. Lady is shaking her head, but I was in the Chamber when the Secretary of State for Transport made his announcement—I do not know whether the hon. Lady was there—and I heard exactly what he said. The process has been put on hold because of problems and failings in Network Rail. It has not been scrapped or abandoned. I remind the hon. Lady that in the 13 years of her party’s Government, 10 miles of rail were electrified in this country. We have not turned our back on investment; the £40 billion in railway improvements will continue.
Like the hon. Lady, I travel on the midland main line. Beeston station, in my constituency, lies on it. I assure her that the improvements that will be made to it mean that six more trains per hour will leave St Pancras. I am afraid that the hon. Lady is misleading people and her constituents when she says that the investment has been abandoned or scrapped.
Toby Perkins
I am grateful to the Minister for giving way on the subject of misleading constituents. She is a representative of a marginal east midlands town, and up until the election a few weeks ago all her constituents believed the Government were going to deliver electrification of the midland main line. The truth is that, as soon as the election was over, the Government said, “Actually, we are not going ahead with it.” It may be a pause, or it may never happen. The Minister ought to be careful when she accuses other people of misleading their constituents.
Anna Soubry
This is not the debate we are meant to be having. I sat in the Chamber and heard what the Transport Secretary said. He made it very clear that it has not been abandoned or scrapped. He deliberately used the word “pause”.
Anna Soubry
There is no point heckling from a sedentary position. It does not advance the debate, and it does not address the complaints of the hon. Member for Easington or his constituents’ concerns. The Transport Secretary said it had been paused because of the failings of Network Rail. The improvements to the rest of the line will certainly continue.
Let me return to the constituency of the hon. Member for Easington and the fact that a new economy is beginning to grow in the wider north-east. In Peterlee alone, Caterpillar employs 1,000 people in a global centre for research and development that produces Caterpillar’s articulated truck range. Caterpillar is one of the United Kingdom’s largest heavy equipment manufacturers, with annual exports worth more than £1.5 billion. Some 85% of the United Kingdom’s production of construction equipment is for export. That is something to be championed in this place by the hon. Gentleman.
Nissan’s Sunderland plant secured £250 million of investment to manufacture the Infiniti Q30, creating up to 1,000 new jobs, 300 of which are being recruited now. It is the first new volume manufactured brand in the United Kingdom for more than 20 years. Production starts later this year. I am often reminded that more cars are now being produced in Sunderland than in the whole of Italy. The Sunderland plant currently employs just under 7,000 people on two lines, and it produced just over half a million cars in 2014—the equivalent of one in three of all cars made in the United Kingdom. The northern powerhouse regions—the north-east, the north-west, Yorkshire and the Humber—account for 25% of the UK’s automotive sector, and the work of the newly created North East Automotive Alliance should build on that strength.
Science and innovation also play a considerable part. NETPark in Sedgefield is an outstanding example of how world-class science and innovation can be partnered with great facilities and business support to continue their significant growth. It is now a significant employment site, with plans to expand and to employ more than 3,000 people in the next 10 years. Last week, NETPark announced that it has nearly 160 active collaborations with universities, illustrating its existing global position and helping to translate first-class research into products that have a real social impact and create jobs and prosperity.
The Government recognise the continuing historical challenges facing the local economy in Easington. Similar challenges face many former industrial communities across England, but the solutions to the challenges are not the same. A one-size-fits-all solution from Whitehall will not work. For Britain to prosper, every part of the country needs to fulfil its potential. That is why the Government are so committed to devolving power not only to the northern powerhouse but to great cities such as Sheffield, where the number of people in jobs has risen by some 700, and where there are two outstanding universities and £11 million-worth of technical incubators. Those are just some of the great things that are happening in Sheffield, where £23.8 million of funding is going into skills and 4,000 apprenticeships to be created by 2016. None of those things were mentioned by the hon. Member for Sheffield, Heeley (Louise Haigh).
I have some details about the city deal in Glasgow, in reply to the hon. Member for Glasgow Central (Alison Thewliss). I will write to the hon. Member for Neath (Christina Rees) about the investment that the Government are making in her constituency and in her part of Wales.
I will be brief, because I think I have to finish at 3 pm.
Andrew Rosindell (in the Chair)
The Minister may be aware that the proposer of the debate wishes to have a short summing-up period.
Anna Soubry
Thank you for that guidance, Mr Rosindell. I will bring my remarks to a close.
I will write to the hon. Member for Easington with all the other statistics I have not only about Easington but about his part of the north-east. He and other hon. Members can be assured that, because of the Government’s long-term economic plan, which has already proved successful in growing our economy and creating jobs—hon. Members too often sneer at it, rather than praising it—success and growth will continue not only in the south but throughout the country, right into the northern powerhouse, which includes the north-east and the hon. Gentleman’s constituency.
Grahame M. Morris
I thank the Minister for her response, although I take issue with her geography and a number of the points she made.
I thank all Members who participated in the debate. In particular, I thank the hon. Member for Glasgow Central (Alison Thewliss) and my hon. Friends the Members for Sheffield, Heeley (Louise Haigh), for Neath (Christina Rees) and for Chesterfield (Toby Perkins) for their contributions. They highlighted some important issues about contaminated land, the need to address skill shortages, industrial decline and the need for diversity. They spoke about having a multi-agency approach, the importance of European funding and of our membership of the European Union, particularly for the automotive supply chain. There are many issues that require a co-ordinated approach from the Government, and I hope that the Minister will reflect on the report and the representations from the Industrial Communities Alliance, which has come forward with some solid proposals that will benefit areas such as Easington, Wales, Scotland and the other older industrial areas that need an impetus and initiative from the Government.
Question put and agreed to.
Resolved,
That this House has considered economic disparities in older industrial areas.
School Transport
(9 years, 5 months ago)
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Mr Nigel Evans (Ribble Valley) (Con)
I beg to move,
That this House has considered the cost of school transport.
It is a delight to start the debate under your chairmanship, Mr Walker. It is also a delight to see the Minister for Schools in his place. He is known as a champion of parental choice in education. I look forward to his response to this debate on school transport costs.
In many ways, this is not a partisan debate; it is all about parental choice and whether people should be, in essence, fined or taxed for sending their youngsters to the school that they prefer. That could be a faith-based school or a grammar school to which someone who has managed to pass the 11-plus or admission exam has been admitted. The child and parents might prefer a single-sex school. I will focus on the Ribble Valley, but I understand that the problem is happening increasingly in other areas now.
We know that a lot of local authorities are under financial stress; they must live within their budgets and must look for savings, but irrespective of the colour of party control of authorities, they are picking on school transport costs because they have, in the main, an element of discretion on them. Youngsters who are on free school meals or working tax credit will get support paid for irrespective of where they live, but the vast majority of everybody else in Lancashire could find themselves having to pay more than £500 per child simply because the school that they wish their child to go to is a bit further than the next nearest school. Later in my speech, I hope to pick at least one absurd example where that happens: the schools back on to one another and yet parents are asked to fork out £500 a time simply because they want their child to go to a Catholic school.
I am not being partisan. The hon. Member for West Lancashire (Rosie Cooper), who would have liked to be here today but has had to return to her constituency, emailed me to say that she strongly opposes the county’s stand on education transport costs. She said:
“Those who exercise their right to religious education where the school is more than the specified distance from home are forced to pay transport costs if there is a state school closer. Outrageous! You have my full support on this issue”.
She said that she would be delighted if I shared that with the Chamber today.
A number of parents have contacted my office over the past 12 months about their youngsters and the fact that they found that their choices came with financial strings. A lot of people who are just above the income level for free school meals or working tax credits find themselves being stung for up to £500 of taxed income. Parents from Mellor, one from near Burnley, which is just outside my patch, Lango, which is inside my area, Samlesbury, Chipping, Bamber Bridge, Wilpshire, Lostock Hall and several parents from Waddington, Dunstop Bridge and surrounding districts contacted me just before the general election to say that they were outraged by one particular instance. The local authority was edging them towards a school, suggesting that it was the school—Bowland high school—that it wanted them to take, because it was in the catchment area and was where all the youngsters tended to go. The parents who got in touch with me said, “We put the school down as No. 1, Mr Evans, and we were delighted when we got it.”—maybe it was where the child’s siblings or friends were going—“but then the bombshell happened.” They received a letter from the county council saying, “You’ve been given the school that was your first preference, but we have to tell you that as the crow flies your nearest school is in Clitheroe. You are now going to be charged £500 per child for sending your youngster to the school we wanted you to send them to.” That is absolutely outrageous. Of course, once a parent has made a choice, there is nothing they can do. If the parents had known that in advance, they could have put Clitheroe down as their first choice, and would more than likely have been turned down, because the school would have been full of youngsters from the area. The local authority would then have said, “You now have to take your second choice, which is Bowland high, and because it is your second choice, we will pay.” A huge anomaly has resulted from the fact that the council wants to save money and thinks that it can do so by scorching parents for £500 a child.
I wrote to the chief executive of Lancashire County Council to say that the situation was appalling and ask her to do something about it. She wrote back to me in September 2014:
“The Council has no statutory duty to provide transport assistance in circumstances where pupils do not attend their nearest school or academy. Granting assistance to pupils who attend faith schools and academies which are not the nearest establishments to a home address is a discretionary element of the Council’s policy.”
The “discretionary” bit is what it is all about. Council after council throughout the country are deciding, “It’s easy pickings. We’re going to ignore the discretionary bit and we’re not going to give it.” Even on appeal, when people write to say that they are finding it hard to provide £500 per child, they still get turned down. If they want their youngster to go to the school, they have to pay.
In the olden days, when deciding where to put the Catholic school in Clitheroe, many people thought that it should be in the centre. They were told, “No, we have some land out in Billington, so that is where it’s going to go. Don’t worry, there will be school transport for the youngsters to be ferried from Clitheroe to Billington at no cost.” Therefore, no protest was made about the siting of the school. It is a very good school. Lots of Catholic parents in Clitheroe want to send their youngsters there. They have to pass at least two schools in some cases, if not just one, before they get to the Catholic school. If they want their youngsters to go to the Catholic school and they are from Clitheroe or outlying villages, they have to pay the full cost. Call me old fashioned, but I think that is discrimination. We are saying to the parents, “If you want a faith-based education, you’re going to have to pay, but if you want to go to the non-faith-based school, you’ll get it for free.” That cannot be right. I know that the Minister believes in parental choice; he is a champion of parental choice. Surely we should ensure that if people wish to travel a reasonable distance—perhaps a distance that they prescribe themselves, which could be up to 15 miles—they should be eligible for free school transport. I am not saying that someone should be able to travel 40 miles down the road to a school.
In her letter, Jo Turton, the chief executive of Lancashire County Council, explained how much money the council had to cut, and how it requires difficult decisions. I looked at it and decided to find out how much the chief executive of Lancashire County Council earns. It is a package, including pensions and all that sort of stuff, of £206,000. That is a bit eye-watering; it is rather high. Why does she not make some difficult decisions there? Cut it back. The salary bit is £169,000, so she could make a difficult decision and cut it to below what the Prime Minister earns, which as we know is £147,000, if he took it all, which he does not. That would be a nice, difficult decision for her to make. Indeed, seven salaries on Lancashire County Council add up to over £1 million. Make a difficult decision there; cut it back. Lead from the front. That would be courageous. No, they will not do that, but they expect parents to dip into their own taxed income to pay £500 a child, and that cannot be right.
One area where two schools back on to one another is Longridge. There is Longridge high school and the Catholic school St Cecilia’s just behind. I have 30-odd wonderful, lovely villages. If parents want their child to be educated in Longridge, which is where the nearest secondary schools are, and they happen to be Catholic, the bus stops outside Longridge high school first. The schools back on to one another and the youngsters can—and do—get out at Longridge high and walk through a ginnel to get to St Cecilia’s. That is fine, but the Catholics get charged. It is only those who go to Longridge high who do not get charged. That is clearly absurd.
Woe betide those who decide that they want the education that is offered by the grammar school and manage to pass the admissions exam. If they pass another school that is non-grammar, they have to pay. That seems like a tax or penalty on academic success. I am really lucky that I have some very good schools. There is not a single school in my constituency that I would have reservations about sending my children to, if I had any. If I decided that I wanted them to go to the grammar school, the Catholic school or another faith-based school, I do not see why I should be penalised for taking my parental choice.
I mentioned Bowland high school, which is smaller than Ribblesdale school in Clitheroe. Some parents decide, if they have a sensitive child, that they would prefer him or her to be educated in a more rural setting. It has a brilliant and relatively new sports centre and they might prefer their child to be at that school. It may be that a school specialises in the arts or sciences. If parents choose that school, they will be penalised because the local authority, while it has discretion, has decided that it is not going to use it.
I am delighted to see the newly elected Chairman of the Education Select Committee, my hon. Friend the Member for Stroud (Neil Carmichael)—a popular choice. I took the opportunity to raise this issue with him as soon as the jubilation at his success had died down, and suggested that his Committee might like to conduct an inquiry into this policy. We all believe that education should be free at the point of use. Parents have the choice, if they wish, to pay for their youngster to go, for example in my constituency, to Stonyhurst. That is a private school and, if parents want to pay the fees, their child can go there; it is a fantastic school.
I do not think anybody would quibble with parents paying transport costs to get their youngster to that private school. They have made that firm decision. If parents wish their child to go to a school within the state sector and decide that it should be a single-sex, faith-based or grammar school, I do not believe that they deserve to be caned. If they have two or three children, it can be incredibly expensive. Mr Walker, you might find that people are making choices based not on what is in the best interest of the youngster but, sadly, on what is in the best interests of their wallets or purses, simply because they have difficult financial decisions to make.
I have also received correspondence from the Association of Colleges, which pointed out to me that, of course, parents now have to pay anyway after their child is 16. We have moved into a different era now, when—in the main—people are expected to go to college between 16 and 18. Local authorities have not caught up with that, and it can be incredibly expensive for parents to send their 16-year-old to a specialist college a few miles away, but they have to stump up for them.
This problem hits people irrespective of their constituency, but it hits people harder in rural areas, where the grammar schools or secondary schools tend to be further spaced out than in urban areas, and of course people in rural areas often live in villages that are miles away from schools. In many cases, rural transport is inferior to urban transport, so it may well be that parents have to make a decision about whether they themselves ferry their youngsters to school as they go to work. It is particularly galling for parents when they see the bus coming into their village, youngsters going to the nearest school getting on for free, and spaces on that bus, and yet they have to take their child to school themselves because they cannot afford the £500 or so each year for school transport.
What is even more surprising is that the county council has already stated that each year the cost to parents will go up by 5% above inflation. We are delighted that inflation is as low as it is, thanks to the long-term economic plan, but a 5% rise, year on year, and compounded, can be incredibly expensive.
I would like the Minister to do something. I have raised this issue several times in the House, and I know that it is the responsibility of another Government Department, but I dearly want that Department to back up parental choice and not to fine parents; not to penalise academic success; and to allow parents living within a reasonable distance of a school to get their youngsters ferried to that school. In some rural areas, it is very dangerous even to attempt walking or cycling on the roads.
I want the discretion removed. I want every youngster to be put on the same level, so that parents can choose a school within a reasonable distance in their own best interests without being penalised. I do not want the local authority to use them as cash cows to make up the shortfall because it will not make difficult decisions in other areas.
I plead with the Minister not to let this situation drag on. Let us help the local authorities to make the decision by removing the discretion, and let us ensure that people have full parental choice about where they send their youngsters.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to serve under your chairmanship, Mr Walker.
I have a great interest in this motion and I thank the hon. Member for Ribble Valley (Mr Evans) for securing this debate. In Glasgow this afternoon, there are people outside Glasgow City Chambers protesting at the cuts to bus services within the Glasgow city area. Glasgow City Council has decided to raise the qualifying distance for free bus passes in the city from 1.2 miles to 2 miles for primary school pupils, and from 2.2 miles to 3 miles for secondary school pupils. Those are quite considerable distances, especially for primary one pupils who will be starting school, aged five, come August.
I may not be able to refrain from being partisan in my comments today, because that choice has been made as a result of austerity programmes and cuts being made here, then passed to the Scottish Parliament and down on to councils. Councils have a difficult choice to make in coming to these decisions.
In Scotland, we also have a slightly less complex picture of schools, with fewer choices for pupils. Although Glasgow has catchment areas that can be complex, by and large children go to local schools of their choice in the catchment area; they do not often have to travel past a school they want to go to, to get to the one they have a place at.
Glasgow City Council’s decisions on changing the cost of bus passes—putting that back on parents—could cause serious difficulties for parents who cannot afford to pay for one. If their parents cannot afford it, children will have to walk significant distances, across busy roads and perhaps through industrial estates and derelict areas. If that is a daunting prospect in our glorious Scottish summer, what will it be like in winter time? In Scotland it is often dark on leaving the house in the morning and dark when coming back in the afternoon. It is a pretty grim thought.
Parents are advised by Glasgow’s education department that children should be accompanied—and of course, young children should be accompanied. But that causes serious difficulties for parents with more than one child who have to take their children to different places in the morning. There may be drop-offs at a nursery in one area, at a primary school in another and perhaps even at a secondary school, too. It is practically impossible for parents to make all those journeys.
The level of car ownership in Glasgow is low, particularly in deprived areas, where there is greater reliance on bus services. In 2012, only about half of households in Glasgow had access to a car. Bus transport is important for families and a lot of people without access to a car, because there is no other option for them other than using public transport.
The Labour council administration has made several attempts to introduce the proposal I have mentioned, but it has been rejected by the people and eventually rolled back on by the council; I hope that this time the council sees sense and finds the money elsewhere. More significantly, the proposal means that Glasgow City Council is reneging on promises it made during city school closures in the past, when lots of schools were closed or merged: parents were reassured about transport costs and told that school bus passes would be provided so that children could get to the schools. That was in 2008. Now parents find that the council has reneged on that promise and they are facing serious costs for school transport. That is unfair and will lead to further disadvantage for children in many parts of the city—areas with food banks and areas of multiple deprivation—who are already suffering from significant poverty. People trying to get several children to school face a disproportionate cost. It is deeply unfair that the cost of transport is falling on families at this time.
I understand that some rules about qualifying distances come from a House of Lords ruling in 1986. If that is so, it is time for that to be revised; something decided so long ago that is affecting people now is surely ripe for revision. Things have changed—far more cars are on the road and our cities are much busier, with heavier goods vehicles moving across them. We need to be mindful that young children, some of whom may want to walk to school, will find a great deal of traffic on the roads.
I support this debate. There should be further action on and consideration of this matter, particularly in respect of Scotland, where we have a slightly different situation, with children trying to go to their local schools and parents trying to get them there. We could do a lot to help parents in this situation, including looking again at the qualifying distances to find out whether something better could be put in place.
Mark Pawsey (Rugby) (Con)
It is a great pleasure to serve under your chairmanship, Mr Walker.
I congratulate my hon. Friend the Member for Ribble Valley (Mr Evans) on securing the debate. I endorse all the remarks he made in his eloquent, articulate speech. His debate is timely: only this morning, I received an email from a parent in my constituency asking for my views on the school transport proposals. I should explain that Warwickshire County Council has, like Lancashire County Council, embarked on a consultation on changes to the supply of school transport for children whose parents do not choose their closest school. The consultation opened on Tuesday and runs until 17 September. If the proposals are adopted, children who enter secondary school this year or in September 2016 will not be affected, but those who start in September 2017 will be—by exactly the changes that my hon. Friend the Member for Ribble Valley spoke of.
In Rugby, the issue is grammar schools. My hon. Friend spoke about the impact on parents who wish their children to attend faith-based schools, single-sex schools or grammar schools. In Rugby, we have retained a selective system and in that respect are relatively unique in east Warwickshire. We have spectacular grammar schools in Lawrence Sheriff school, of which I am proud to be a product and therefore have a vested interest in, and Rugby high school, where my daughter is a pupil. We also have a bilateral school, Ashlawn school, which has a grammar stream alongside the secondary modern stream. Those schools are very popular with parents. An enormous number of children sit examinations to secure places there, and some parents move to Rugby simply to gain access to its schools.
The email I received this morning is from a parent who lives in the village of Binley Woods, to which I also have a connection because I grew up there. I travelled from Binley Woods to Lawrence Sheriff school in Rugby every day—a journey of about 8 miles. The email says:
“My son is due to attend Lawrence Sheriff School in September.”
My constituent’s son will not be affected by the proposals because they will not take effect for her son’s entry. However, there might be a concern if Warwickshire County Council makes changes similar to those that Lancashire is considering. What would happen if her son goes to the grammar school in September and a change is made thereafter? If any county council makes such a change, I hope that children who entered schools before the change will continue to get discretionary support.
My hon. Friend drew attention to an absurd example in his constituency, and I will give the Minister another. My constituent tells me that the allocated non-selective school for children who live in Binley Woods is Bilton school. That is a very good school that I visit regularly, but it is 8 miles away. Lawrence Sheriff school is just as far away. We have an absurd situation where a child who does well in a selective exam and goes to the appropriate school for their abilities—the school that will bring them on best in life—will have their travel paid for if they choose to turn down a place at the grammar school because the secondary modern, Bilton, is closest. However, if the child, having worked hard, takes the place they have secured at the grammar school, their transport will not be paid for. That is absolutely crazy and cannot happen.
My hon. Friend is right to draw attention to the issue of students from low-income backgrounds. Warwickshire County Council’s policy states that the discretionary payment would continue to apply to families with relatively modest means, whether or not Warwickshire makes the change, but my concern is the parents who fall short of that category. There is something of a cliff face here. For a parent, the cost of paying for transport to a grammar school is conceivably a reason for their child not to take up a place there.
I attended a grammar school and am a great supporter of retaining our grammar schools. I sat in a class with fellow pupils from ordinary backgrounds, with parents who were engineers, electricians or worked in cement factories. Those pupils took advantage of their grammar school education and went on to do well in life. There is a grave danger of putting a barrier in people’s way by denying them the opportunity to access the excellent education that our grammar schools provide. I join my hon. Friend on this issue. I have made my views clear today and will make my own representation to the consultation.
Will the Minister consider extending the statutory requirements to include parents who wish their child to go to a school other than the nearest one? Will he also comment on the absurd situation where two schools are almost exactly the same distance away and transport is paid for a pupil going to one but not the other?
Mr Nigel Evans
Is my hon. Friend somewhat suspicious, as I am, of such consultations? Lancashire, too, had a consultation. There is no doubt in my mind that the vast majority of people would say, “We prefer the system to carry on as it is and that the county uses its discretion.” Irrespective of how persuasive I know my hon. Friend and his constituents can be, my suspicion is that the consultation will end up saying, “Well, I’m sorry, we have to save the money. They do this in Lancashire and several other places, and we’re going to force people to pay.”
Mark Pawsey
My hon. Friend makes a fair point about consultations. I will, however, be making representations and I will encourage the parents whom I come into contact with in my constituency to make representations to Warwickshire County Council in the same way. We understand the pressure on local government finance and it is entirely right for local authorities to look wherever they can to avoid excessive expenditure—to get more for less and to spend taxpayers’ money wisely—but not in a situation such as this. I am horrified on behalf of bright and capable children from households just outside the category eligible for support; the measure might act as a disincentive against such youngsters coming forward, putting their name in for the selection exam and getting an education that could enable them to do well later in life.
I will take the consultation at face value, and I will continue to lobby county councillors in Warwickshire so that they know and understand the possible consequences. I am pretty certain about our representations during the consultation.
Neil Carmichael (Stroud) (Con)
I apologise for being late to this excellent debate. The Select Committee on Education has not yet been formed, but I suggest that this issue is one that it might well consider in due course, in the context of proper choice of schools and ensuring value for money.
Mark Pawsey
It is encouraging to hear that the Select Committee will consider the subject.
I will sum up by reading out my constituent’s question regarding her son:
“Why is he potentially being discriminated against for passing his 11-plus?”
Steve McCabe (Birmingham, Selly Oak) (Lab)
It is a pleasure to see you in the Chair, Mr Walker. I congratulate the hon. Member for Ribble Valley (Mr Evans) on securing this important debate. I doubt whether a single Member has not at some time or other come across the vexed issue of school transport, usually at some kind of advice centre.
I will quickly cover what I understand to be the duties and powers of the local authorities in England to provide home-to-school transport under the Education Act 1996, as amended; I am sure that the Minister will confirm this. The “Home to school travel and transport guidance” for local authorities provides further clarification. The guidance was updated recently—only in July last year—and it covers the statutory duties that a local authority must abide by when making home-to-school arrangements. It also provides local authorities with advice on discretionary powers to make provision for children where there is no statutory obligation; the hon. Member for Ribble Valley focused on that point.
The guidance applies to the vast majority of schools—community, foundation, voluntary, non-maintained and special schools, referral units, maintained nurseries, city technology colleges, city colleges for the technology of the arts, academies, free schools and university technology colleges. An independent school can also be covered if that school is named in the child’s education, health and care plan, so the guidance is pretty comprehensive.
Three main issues affect the arguments about the provision of school transport. First, there is the cost. The hon. Member for Ribble Valley and I might not have identical views, but we all heard his point about that issue. I am concerned that the cost is borne increasingly by impoverished local authorities. Secondly, there is the allocation and provision of school places, which seems to be resulting in an ever-increasing number of children in some parts of the country having to travel substantial distances to school. Finally, there is the question of safety and the emphasis on motor transport rather than walking or cycling. That point was alluded to by the hon. Member for Glasgow Central (Alison Thewliss).
As the pressure on public spending intensifies, many local authorities have found themselves facing funding reductions of about 37% over the period 2010-11 to 2015-16. Many hon. Members will recognise that those cuts are not applied fairly across the board, with reductions that can vary from 5% to 40%. Needless to say, councils with the greatest needs and deprivation, such as my own in Birmingham, are required to take the largest share of the cuts. It is hardly surprising in those circumstances that local authorities are finding it harder to provide school transport. The Public Accounts Committee report of 28 January this year warned that further cuts might undermine the viability of not just optional services, but even some statutory ones.
When it comes to school transport, that is exactly what is happening. It is often a case of local authorities tinkering with the distance rules as a means of excluding people. In essence, there is an attempt to save costs. Schools have plenty of other pressures, not least the pensions issue that is looming for the Minister, but they are sitting on quite large reserves. The Department for Education’s figures show that 4,400 academies, as of March 2014, had reserves of £2.47 billion; some way behind are the 18,700 local authority maintained schools, which had reserves of £2.18 billion.
I meet plenty of local authority leaders who ask me why schools, given that they are sitting on these reserves, should not pay for or at least contribute to the transport costs, while local authorities are facing such cuts.
Mr Nigel Evans
I am a former school governor and I was on West Glamorgan County Council. In many cases, schools save that money for capital projects, some of which can run into millions, so that money would not be available to spend on other projects.
Steve McCabe
I am also a former school governor. I acknowledge that there are other pressures in schools. I was pointing out that they are sitting with reserves. Local authorities have largely been encouraged by the Secretary of State to use up theirs.
The hon. Gentleman referred to the problem, with which I totally sympathise, of parents being asked to pay £500. I do not know whether he saw the recent article in the Bournemouth Echo; I am sure he is an avid reader of it. It highlighted the plight of parents whose children attend the Parkfield free school. The school was set up and is now having to move to a more satisfactory base. Unfortunately, its new location is not particularly well served by public transport. There is a business willing to provide a school bus service, but at a cost of £650 to the parents. Neither the school nor the local authority feels able to subsidise that transport cost. When I read about that and as I listened to the hon. Gentleman, I wondered whether he was simply describing the shape of things to come.
Given the importance of getting children to school safely, I wonder whether the Government need to look again at the guidance, even if it was reviewed only last year, and at the funding arrangements. As to the suggestion that we might perhaps extend the travel distance or cut some local authority officers’ salaries, that might be one approach, but perhaps the Minister could also consider whether it is right for the duty to rest solely with local authorities.
We all tend to look a bit nostalgically back to the time when many of us would have walked to school, but at that time, of course, the concept of a local school was common. The hon. Member for Ribble Valley referred to problems of choice and locality, and the confusion over preferences and allocation of places. I certainly recognised what he was describing, but I suggest that the pressure on school places results largely from the imbalance in current provision, which results directly from Government policy. It has resulted in additional capacity in some areas and insufficient places in others, often in areas with the highest numbers of children.
Some Members, including the hon. Member for Rugby (Mark Pawsey), have spoken of the barriers to children’s attendance at grammar schools and other schools of their choice, and that is certainly happening. In other cases, the capacity argument means that children are sometimes forced to travel great distances to school.
I know that the Minister is fond of reading the Daily Mail; in March, it reported on a mother from south London who complained that she was forced to drive her son 25 miles to his current school because she cannot obtain a place at the local school, which is down the road and round the corner. We hear stories repeatedly about children who must make journeys involving several buses, after they fail to get a local place. That pressure is added to by admissions policies that often result in children in the same household attending different schools. Again, that is a point to which the hon. Member for Glasgow Central drew our attention.
Every year at around this time, I am inundated at my advice centres with parents who have experienced the problem of not getting the school of their preference. Can it be right that a five-year-old is expected to make a two-and-a-half mile taxi journey to school, because he cannot get a place at the school nearest to where he lives? What assessment has the Minister made of the pressure on school places and the distance that children must travel? Does the situation mean that, whatever the arguments about academies or free schools, we need a more rational planning arrangement so that we have more school places where they are needed?
It is worth noting that, under the guidance, local authorities are obliged to provide free transport where there is no safe walking route, however close to the school the child may live. There cannot be many of us who have not witnessed the traffic problems around local schools at the start and end of the school day—traffic problems largely generated by parents who not only want to drop off and collect their children, but want to park as close to the school gate as possible.
I was told recently about an incident at one school in my constituency. A parent managed to knock down a child as she attempted that manoeuvre. Fortunately, no serious damage was done, but the stressed driver, rather than apologising immediately, got out of her car and castigated the child for not paying sufficient attention while she was trying to park. That pressure around the school gate is making life far too difficult for too many children.
I note that more than 27% of parents now automatically drive their children to school; 23% of cars on the road at peak times are taking children to or from school, despite 19% of school journeys being under a mile—a distance that I am told people can comfortably walk in about 20 minutes, even if they are not trying very hard.
Clearly, we need to give much more thought to how to create a safer environment in the immediate vicinity of schools and what the Government can do to help to deliver a sensible cycling and walking strategy, as proposed by the Living Streets charity. At a time when we are rightly concerned about childhood health and obesity, it is remarkable how few children walk to school. I am very impressed by Brake and other road safety charities, which have been calling for safe travel zones around our schools. That approach covers speeding traffic, crossings, inconsiderate parking, and cycling and walking. In that context, I welcome the Government’s target of 55% of five to 10-year-olds walking to school, but we will not achieve that without deliberate and specific action. Can the Minister say what he has in mind?
I conclude by asking the Minister to look again at the guidance and whether schools, local authorities and others could be encouraged to share the burden of the cost of school transport. I have given up hope of local authorities getting fair funding deals, but his own Back-Bench colleagues are now asking him to look at this issue. Can he look at the provision of places and the possibility of a more rational planning framework and tell us what parental choice means in this day and age if parents are not able to send their children to the school of their choice, for the reasons that his hon. Friends state? Finally, can the Minister tell us what steps he has taken regarding safer, healthier alternatives for getting children to and from school?
Mr Charles Walker (in the Chair)
The Minister has a lot to get his teeth into, and the debate is due to end at 4.30 pm. Actually, that is quite a long time, but if he is minded to take up most of it, could he leave a couple of minutes at the end for Mr Evans to respond?
The Minister for Schools (Mr Nick Gibb)
It is a pleasure to serve under your chairmanship, Mr Walker. I will try to squeeze my remarks into the remaining time.
I congratulate my hon. Friend the Member for Ribble Valley (Mr Evans) on securing the debate and on his excellent and compelling opening speech. He is a strong advocate for his constituency on a range of issues, and this is another example of that advocacy. I also congratulate my hon. Friend the Member for Rugby (Mark Pawsey) and the hon. Member for Glasgow Central (Alison Thewliss) on their contributions, in which they cited their own constituency issues.
The hon. Member for Birmingham, Selly Oak (Steve McCabe) was unwise to talk about school places planning, given that the previous Labour Government eliminated 200,000 primary school places when it was absolutely clear that the birth rate was increasing. One of the first things that the coalition Government had to do was to double the spending on creating new school places at a time of enormous constraint on the public finances. Over that period, we have spent several billion pounds on providing more school places to make up for the backlog that we inherited in 2010.
Steve McCabe
In case the Minister misunderstood me, I point out that I am not disputing whether the Government are creating more places; I am talking about the problem that they are creating by giving us over-capacity in one area and insufficient places where children are living. That is the difficulty; it is about the planning, not the number.
Mr Gibb
But of course the planning is easier if we do not have to catch up on a huge deficit in school places.
My hon. Friend the Member for Ribble Valley has consistently championed the practical importance of school transport to children and their parents in his constituency. Where schools are beyond reasonable walking distance, parents should be entitled to expect the local authority to support transport arrangements. That rightly remains a statutory duty on local authorities. This afternoon, my hon. Friend has highlighted the impact of local authorities’ decisions, in the context of a tight fiscal position, to consider the availability of transport to schools that are the parents’ first choice but that the local authority deems are not the nearest suitable school.
The Government are committed to securing a good school place for every child. Today, more than 1 million more children attend good or outstanding schools than in 2010, and 260 new free schools set up by local charities, trusts and groups of parents are offering education that meets the needs of their communities. Additionally, in the previous Parliament, the Government spent more than £5 billion in funding local authorities to create new school places, and we have announced a further £3.6 billion over the next three years. The sponsored academies programme has turned around 1,154 underperforming schools over the past five years, ensuring that more pupils benefit from the highest standards of education.
Parents make few choices for their child that are more important than the choice of which school they attend and, thanks to our reforms, in many cases it will increasingly be the nearest and most conveniently located school. Some parents, however, might decide that their child’s education would best be served by attending a school further away from home because the performance of the nearest school is not yet good enough or because of considerations about a school’s specialism, ethos, faith status—my hon. Friend alluded to that—or, in some areas, whether it is academically selective, as mentioned by my hon. Friend the Member for Rugby.
Local authorities have a statutory duty to provide free transport for pupils in compulsory education at their nearest suitable school if it is beyond the statutory walking distances. Those thresholds, as has been said, are 2 miles for children under the age of eight and 3 miles for those aged eight and above. Under the universal statutory duty, “suitable school” is taken to mean the nearest qualifying school with places available that provides education appropriate to the child’s age, ability and aptitude. If a child has passed a grammar school entry test, for example, the local authority would not necessarily deem other, nearer schools unsuitable.
All local authorities have an additional duty to enable children from low-income family backgrounds to access a wider range of schools, including faith schools. That duty is known as “extended rights” and attracts national funding worth almost £20 million in this financial year. The extended rights policy helps children from low-income groups for whom a lack of affordable transport might act as a barrier to choice, thus enabling some of the most disadvantaged pupils to secure fair access to a wider range of schools. Children are eligible for extended rights if they are entitled to free school meals or if their parents are in receipt of maximum working tax credit. Where those criteria apply, pupils are given additional financial support towards school transport.
The policy amends the statutory walking distances, so that local authorities must provide free transport for such pupils where the nearest suitable school is beyond 2 miles if the pupil is over the age of eight but below the age 11; beyond 2 miles but within 6 miles for pupils aged 11 or over and there are not more than three suitable nearer schools; or beyond 2 miles but within 15 miles for pupils aged 11 or over who are attending the nearest suitable school on the grounds of religion or belief. As my hon. Friend the Member for Ribble Valley said, the policy does not apply to children whose parents do not qualify for extended rights. Although parents do not enjoy a specific right to have their children educated at a school with a religious character or at a secular school, or to have transport arrangements made by their local authority to and from such a school, the extended rights policy includes the nearest suitable school on the grounds of religion or belief up to 15 miles, as there are often fewer faith schools within a reasonable distance. Even if children do not have a statutory entitlement to free home-to-school transport, local authorities have a discretionary power to provide free or assisted transport if they believe it necessary and local funding is available.
Lancashire County Council has historically provided free home-to-school transport to catchment area schools in Ribble Valley, regardless of whether they are the nearest school. Nationally, expenditure on home-to-school transport currently totals some £1 billion, and approximately £600 million of that is spent on transport for pupils with special educational needs. The total figure has remained broadly consistent over the past three financial years, although the proportion allocated to special educational needs transport shows a gradual increase over that period.
Lancashire County Council’s total expenditure on home-to-school transport has remained broadly consistent with the slight reduction in the amount spent on special educational needs over the three-year period. I understand that from September 2015, as my hon. Friend has explained, Lancashire County Council will introduce a package of measures to reduce its home-to-school travel costs, one of which is to remove the county-wide discretion to pay travelling expenses to catchment area schools when there is a nearer school. For new pupils starting this September, the local authority will fund transport only to the nearest school. Those changes are being phased in, and a child who started at a school under one set of arrangements will continue under those arrangements. For some parents who wish to send their child to a religiously designated school, their chosen school may not be their nearest. In that case, Lancashire County Council requires parents to contribute towards the overall cost of transport.
Where possible, I urge local authorities, including Lancashire County Council, to consider preserving discretionary school transport support for disadvantaged pupils and to consult widely about any plans to change arrangements. Good practice suggests that when parents are asked to pay all or some of the costs of non-statutory transport provision, low-income families who are not eligible for the extended rights should not have to pay. That is good practice, although it is not compulsory under law.
My hon. Friend asked about schools that back on to each other, citing the example of the Catholic school along a ginnel—I think that was the word he used—from the school whose students were entitled to free school transport. I urge the local authority to be reasonable and consider the issue in the context that my hon. Friend so ably explained. I make the same point to my hon. Friend the Member for Rugby about the example that he cited from Binley Woods, with the Lawrence Sheriff school and the grammar school under Warwickshire County Council. I know that he has responded to the consultation, which is ongoing.
The Government encourage more pupils to cycle or walk to school, particularly in urban areas. We have set an ambition to increase the percentage of schoolchildren aged five to 10 who walk to school to 55% by 2025, and we have made a long-term funding commitment of more than £400 million for cycling and walking available to every local authority in the country until 2021. To cite one example, Darlington Borough Council has encouraged a shift away from cars to more sustainable methods under the brand Local Motion. Central Government have provided funding for the project since 2011. It ensures that schools, young people and their families receive relevant information to enable them to choose sustainable travel options to get to and from school. As a result, the cycling rate among secondary school pupils in that local authority area has increased from 1% to 7%.
Steve McCabe
I am interested in what the Minister is describing. Am I right in thinking that local authorities are not obliged to tie that funding to travel to school plans and that some local authorities can choose to spend it in other ways? If so, would it not make more sense to require them specifically to take the travel to school issue into account when spending the money?
Mr Gibb
We believe in local discretion. My hon. Friend the Member for Ribble Valley argued that we should remove that discretion and the hon. Gentleman is hinting that he would like to remove some of it, but the Government’s philosophy has been that local authorities should have discretion to spend that money as they see fit, to respond to local circumstances. That has been the policy for many years. We believe that they are best placed to determine how resources should be used in the areas that they serve and to balance the demands of a broad range of discretionary travel against their budget priorities. If we were to remove this discretion from local authorities’ responsibilities, it would hugely increase the number of eligible children at a substantial cost to the taxpayer. Therefore, it is much more practical and helpful to allow local authorities to continue to make these important decisions locally, but they still need to make the right decisions locally.
Many authorities are doing some very good work, for example, by encouraging schools to collaborate with one another and to use some of their own resources to fund transport. For instance, many academies are collaborating with other stakeholders and providers to offer discretionary transport to their schools. Hertfordshire, for example, will save between £5 million and £6 million per annum as a result of schools doing that. From September 2012 onwards, that local authority has only provided statutory home-to-school transport. It wanted to build capacity locally to encourage schools, community groups and commercial operators to provide home-to-school transport, and from September 2013 onwards, 130 routes to schools have operated without a financial subsidy from the council. So creative ways to provide transport are being used by innovative local authorities around the country. I urge both Warwickshire County Council and Lancashire County Council to look at such examples and at Darlington Borough Council to see whether they can learn from them.
The Government recognise that rural areas face particular transport difficulties. Therefore, the Department for Transport has provided £7.6 million in funding for 37 schemes to deliver improved local transport in rural and isolated areas. That funding will provide the essential first step for local authorities to implement service integration. People living in those areas will be able to benefit from integrated public transport, and local authorities will work with schools, hospitals and other local organisations to deliver local services more efficiently and at lower cost.
In conclusion, I am grateful to my hon. Friend for raising these important issues on behalf of his constituents. A good local school within easy commuting reach is something that every parent has the right to expect for their child, and even as we continue to reduce the deficit, local authorities will continue to have a duty to provide school transport in many circumstances. And I share his view that discretionary services should be protected, wherever possible.
Mr Nigel Evans
I thank the Minister for the generosity of spirit with which he has treated this debate. The way that we are praising one another sounds like a bit of a love-in, but I know that he is dedicated to ensuring that every parent is given choice, where possible, and that every child has a decent education, which is what we all want. Part of that, clearly, is the ability to choose.
I am also grateful to my hon. Friend the Member for Rugby (Mark Pawsey) for illustrating some of the anomalies that exist in his own constituency, including the absurdity of the eight-mile range. I wonder whether anyone has measured it; one school may be an inch further away than another one. However, the fact is that parents are being penalised simply for choosing one school over another. I went to a selective school myself and I believe in a mix, so I am delighted to hear that his selective schools are doing very well.
As I said right at the outset, I am so lucky that all the schools in my patch are excellent. However, we do not want to get into the position, although I know that it is increasingly happening, whereby parents move to ensure that their youngsters can get into certain schools. We want all schools to be good, so that nobody has to move.
I am also grateful to the hon. Member for Glasgow Central (Alison Thewliss) for illustrating the problems that face an increasing number of parents in Glasgow. There always seems to be a sense of blame-shifting, whereby somebody else is responsible and it is not really our fault, and people say, “We would prefer not to do it, but we have to. Our hands are tied.” However, the real victims in all this are the parents and their children, who increasingly have to put their hands in their pockets.
I am also extremely grateful to the shadow Minister for some of his comments. I would encourage youngsters to walk where they can, but sometimes in rural areas the road system is bad and the distances great, in particular if the school is not a primary—most villages tend to have a primary school, although in some cases they do not. For secondary education, the situation is clearly more difficult.
I was delighted to hear that the new Chair of the Education Committee has now put the subject on his shopping list of inquiries. Perhaps we will make some progress. The Minister talked about his belief that the Government’s philosophy is discretion. At the same time, he wants that discretion to be used to ensure that parents get choice, and therefore local authorities pay for school transport. If, however, in particular in the inquiry, it is demonstrated that local authorities are increasingly not giving any discretion whatever, but seeing the transport as an opportunity to dip into parents’ pockets—not supporting parents in their parental choice—I hope that that will be exposed and the Minister will look again.
We give discretion to local authorities up to a point on council tax, but we encourage them to freeze and certainly not to go above a certain rate, otherwise things are punitive for them. Perhaps we could look at that for local authorities if they are ignoring wholesale the discretion that they have and if they are imposing those transport costs on parents with—in Lancashire’s case, as I said—a 5% real-terms increase year on year, which can be financially painful for some parents. That is particularly the case for those parents just over the limit, as my hon. Friend the Member for Rugby pointed out, for tax credits or free school meals, or if they have more than one child.
Clearly, the book is not closed on the subject. I hope that the Minister will keep a beady eye—I trust that he will—on the situation. I will ensure that Lancashire county council gets a report of today’s proceedings in Westminster Hall, so that it can see what the Government’s intention is and what they want the county councils to do. If the councils do not follow that intention, we will revisit the subject in the coming months.
Question put and agreed to.
Resolved,
That this House has considered the cost of school transport.