Oral Answers to Questions

Anne Marie Morris Excerpts

Thursday 2nd February 2012 Commons Chamber

[Mr Davey]

I know my hon. Friend is a huge supporter of the Bill, but the Leader of the House has made clear the problems of getting it through both Houses during this Session, and I am certainly not one to challenge his judgment.

[Anne Marie Morris (Newton Abbot) (Con)]

7. What steps his Department is taking to support micro-businesses.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

The Government have already acted to make it easier to start and grow micro-businesses. Action has included cutting corporation tax rates, extending relief from business rates, and introducing a moratorium from regulation for all micro-businesses.

[Anne Marie Morris]

The Minister is conducting a review of disruptive business models as part of the red tape challenge. Has he considered introducing a new limited liability scheme for sole traders, similar to the limited liability partnership? I believe that such a scheme operates in France, and it would be fantastic to see one like it operating here.

[Mr Prisk]

I know that my hon. Friend is a real champion of micro-businesses. The Government have focused on practical measures that help the micro-businesses’ bottom line, but, as she knows, I am happy to consider the legal issues with her and her all-party parliamentary group.

Self-Employment

Anne Marie Morris Excerpts

Tuesday 24th January 2012 Westminster Hall

[Anne Marie Morris (Newton Abbot) (Con)]

I will be brief, given the number of hon. Members who want to speak. The UK Commission for Employment and Skills, which reported last August, said that we are at an all-time high; we have 4.1 million people in self-employment at the moment. That report was particularly interesting because it examined what drives the increase in self-employment, and it does not depend on the economy, as we might have thought. It is principally driven by looser regulation, access to finance and Government policy that specifically drives unemployed people into self-employment. The 1980s was a particularly fine example of that.

[Mr Gary Streeter in the Chair]

Let me deal with each of the three elements. With regard to Government policy, the new enterprise allowance has been a great step forwards; I endorse it entirely. The Government now need to consider whether, having extended it from young people to the whole working population, they should take away the requirement for a person to have been on jobseeker’s allowance for six months as a precursor to being eligible to receive it. Many people see unemployment as a bit of a stigma. They may want to come into employment after having brought up children or for many other reasons.

Equally, the Work programme is excellent. I am working with the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), who is responsible for employment, to consider the extent to which the Work programme is enabling and encouraging individuals to become self-employed rather than going into employment.

I come now to the two other issues raised by the commission’s report. On regulation, the Government have clearly taken a very good first step by exempting micro-businesses from regulation for three years. However, I urge them to exert all their energies on getting the European Union to exempt micro-entities—that is a new definition for the very smallest businesses—from new regulation. I gather that that is being discussed, but I urge the Government to push it forward as a priority.

The Government’s red tape challenge has been extraordinarily useful and powerful. It has explored 12 different areas of red tape—12 sectors—and five more are to come. The Government have said that they will report on that three months after the closure of the consultation. I look forward to those results. I urge the Government to examine in particular those regulations that disproportionately disbenefit the self-employed and the very smallest businesses. The EU has recognised the need to simplify regulation for the very smallest businesses. I ask the Government to work hard at insisting that the EU has its own red tape challenge. It has examined simplification, but it has not considered root-and-branch removal, which is crucial.

Finance is the third issue. Points have been made clearly and well about the challenge faced by the self-employed and the small business in trying to access finance. Tributes have been paid to Business Link. A new portal, Business in You, sets out a number of schemes that are available. There are 851 of them. My advice to Government would be that it is a great idea, but some guidance is needed because it is quite difficult for a self-employed individual to work out which of those is particularly beneficial.

The real challenge is ensuring that a very small business can find information about the opportunities available. It is the case that 28% of micro-businesses are not online, so we need to make the information available in libraries and to encourage the chambers of commerce and the local enterprise partnerships to play a role in disseminating that information. Without that, we will not secure the change that we need.

There was mention of the Government schemes to support access to debt, equity and guarantees. Most of those schemes are aimed at the whole remit of the SME community, which takes us up to 250 employees. The banks, who are usually the people delivering the schemes, will go for the easy wins because they are in business to make money, and the easy wins are the bigger businesses with good business plans and a good track record. The Government need to ring-fence—perhaps they will do this with their credit-easing proposals—a pot specifically for the self-employed, recognising that they are looking for smaller pots of money and do not have well developed business plans.

Perhaps the best initiative has been the growth of the community development finance initiative. The Fredericks Foundation should be recognised for the work that it has done to provide loans to those businesses that cannot find money anywhere also. I also pay tribute to the Government for considering making credit unions able to lend to small businesses, rather than just making loans to individual people. In addition, the Virgin Media pioneers proposal to enable those wanting to set up a business to be given financing at the same rate as applies to a student loan is definitely to be welcomed.

I pay tribute to my hon. Friend the Member for Watford (Richard Harrington), who initiated the debate. He is absolutely right to say that culture change is the key. In the November report of the all-party parliamentary group for micro-businesses—I have to declare an interest here because I chair that group—the research that was supported by the London Business School, Lancaster university, Imperial and Manchester Metropolitan indicated that we needed an education change, not just at university level but at primary and secondary level. We need to consider how to inculcate the idea that setting up a business is a good, valuable and genuine alternative.

I am delighted with the Government’s support for the National Association of College and University Entrepreneurship, which has put in £500,000 to support the establishment of entrepreneur groups in universities across the country. It has succeeded in establishing groups in about three quarters of the universities across the country. It is now looking at colleges.

Finally, we need to enable the self-employed who are setting up small businesses to have bottom-up mentoring support. Although there is a Government scheme to create 40,000 mentors, a scheme that will require the banks to mentor those who get refused loans and the “mentors me” website, which is great, it is still not enough and we need to consider bottom-up volunteering, and, as has been suggested by the Virgin Group, we need local chambers of commerce and others to take some responsibility as well.

I look forward to hearing the Minister’s reply. I hope that I have not taken up too much time and I welcome the changed agenda that this debate heralds.

[Several hon. Members]

rose—

Oral Answers to Questions

Anne Marie Morris Excerpts

Monday 17th October 2011 Commons Chamber

[Michael Gove]

I am grateful to the hon. Lady and know that she has recently completed a report on some of the barriers to young women taking advantage of the opportunities in science, technology, engineering and mathematics. A new UTC is opening in Sheffield and I hope to be able to work with her to ensure that it generates enthusiasm among boys and girls in Sheffield and across South Yorkshire for the superb education it will offer.

[Anne Marie Morris (Newton Abbot) (Con)]

The Secretary of State will perhaps be aware of recent correspondence I sent to his ministerial team about the possibility of opening a UTC in Newton Abbot. Has he had an opportunity to consider the proposal, which would transform our local economy, and would one of his team be prepared to meet me to discuss it?

[Michael Gove]

One of my team will be more than happy to meet my hon. Friend—I imagine my colleagues will be fighting to see her. Plymouth is already benefitting from a new UTC, but there is no reason why other equally beautiful parts of Devon should not also benefit.

Oral Answers to Questions

Anne Marie Morris Excerpts

Monday 21st March 2011 Commons Chamber

[Michael Gove]

I am grateful to the hon. Lady for making the case for that primary school. Sadly, the state of the school estate that we inherited from the previous Government was such that many schools, particularly primary schools, require investment. We will consider every case sympathetically, and I hope that I or a member of my ministerial team will have an opportunity to talk to her to see what we can do to help in that particular case.

[Anne Marie Morris (Newton Abbot) (Con)]

3. What proposals he has to improve the quality of teaching of children with special educational needs.

[The Minister of State, Department for Education (Sarah Teather)]

Our Green Paper on special educational needs and disability set out proposals to improve initial teacher training and continuing professional development so that leaders and teachers in schools and colleges are well equipped and confident to identify and overcome a range of barriers to learning and to intervene early when problems arise.

We will encourage schools to share expertise and learn from best practice and ensure sharp accountability for pupils’ outcomes.

[Anne Marie Morris]

Will the Minister look at how we can help young people with special educational needs make the transition into work, given that they are more than twice as likely as their peers to be not in education, employment or training?

[Sarah Teather]

Transition is at the heart of what we are trying to achieve with the Green Paper, and the reason for setting out an education, health and care plan from nought to 25. The focus is much more on outcomes, specifically to try to deal with transition, so that we start planning for independent life at a much earlier stage. The Green Paper sets out the direction of travel, and we hope to get input from across Government. I encourage people with a specific interest in the subject to respond to the Green Paper and give us their views on whether it meets young people’s needs and whether we should do more.

Department for Business, Innovation and Skills (Performance)

Anne Marie Morris Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Mr Weir]

I hope that is correct—but action is needed, not just talk. The situation has been going on for a long time, and many small businesses in my constituency and rural constituencies throughout the country are in serious difficulties and struggling to keep their heads above water. They need help now, and the Government have to move on that.

The motion mainly concerns growth in the economy, which I understand, and I wish to talk about some of the things that small businesses need in order to grow. Many of the points in the motion are specific to England, but I wish to mention two matters that cover all small businesses, including in Scotland.

The Minister may know that, just today, the First Ministers of all the devolved Administrations have issued a joint declaration calling for action to protect the economy. The second point made in it is about addressing access to finance, and it states:

“It is clear that securing affordable finance remains a considerable challenge for many of our companies. This is particularly true for many small and medium sized firms—the bedrock of the Scottish, Welsh and Northern Irish economies.

It is unacceptable that many businesses are being prevented from expanding or are faced with significant increases in lending charges and we need to ensure there is in place transparency and accountability in the flow of finance for SMEs. We must also ensure that the planned £1.5 bn Business Growth Fund is implemented now to support lending to viable companies.”

That is the vital point. Many companies in my constituency are finding it very difficult to access finance, and even when they can, it is at a high cost. At a time when the Bank rate of interest is 0.5%, probably the lowest in recorded history, it is ludicrous that small businesses are having to pay ever-higher charges to banks to get finance, if they can get it at all. It is worrying to small business people to read daily in the papers that the Monetary Policy Committee is being pressed to raise the interest rate to deal with fears of inflation, because that would hit small businesses seriously.

For all the talk of making banks pay more to small businesses, there is no sign of that actually happening. The mood music from the Davos summit, which the Prime Minister and the Chancellor attended, appeared to be that the banks are not interested in that any more. They seem to think that they have got through it all and can get on with business as usual, which is totally unacceptable. The issue has to be tackled now. My constituents do not understand why so much taxpayers’ money bailed out the banks yet they are unable to get finance and help local employment. The banks have a duty to help the people who helped them when they were in trouble.

[Anne Marie Morris (Newton Abbot) (Con)]

Perhaps I could draw to the hon. Gentleman’s attention the fact that I had a meeting yesterday with the business finance taskforce of the British Bankers Association, whose chief executive told me that its 17 initiatives to support lending are on track. Indeed, mentors are beginning to be recruited and the lending code is almost in place. The business growth fund is pretty much ready and just requires some changes in FSA regulation. I hope that that provides some comfort.

[Mr Weir]

Again, we hear, “It is almost there, it is coming”, but it is not here. Help is needed now. The Merlin process seems to have stalled—we were told that there would be announcements, but they have not come. If they do not come soon, it will be too late for many businesses.

I turn to the second point that I wish to discuss. I agree with the Secretary of State that it is ridiculous that there is no mention of the Post Office in the motion. I tabled an amendment to that effect, but Mr Speaker did not select it. I suppose that, to be honest, it is unlikely that the Secretary of State would have supported it even if it had been selected.

If we are talking about growth, we have to remember that a postal service is an engine of growth for many small companies. Many of them are very worried about it. This morning I chaired a session of the Westminster eForum at which we talked about Royal Mail’s universal service obligation. It was interesting to hear the Federation of Small Businesses say that when the Government initially talked to it about privatisation, it was given assurances that small businesses would be okay and that their interests would be looked after. However, it is becoming increasingly worried about what is happening. It points out that in April, first-class mail will go up by 12%, large letters by 13%, a 2 kg parcel by 8% and a special delivery by 8%. Worse still—I find this utterly ludicrous—a business that currently goes to a sorting centre to collect its own mail will apparently be charged £210 for the privilege of doing so. Where is the logic in that? What on earth is going on?

I urge Members to read, if they have not done so, Postcomm’s research paper “Business customer needs from a sustainable universal postal service in the UK”, which was published towards the end of last year. It makes very interesting reading about how small businesses see the postal service.

--- Later in debate ---

[Jack Dromey]

I agree with my hon. Friend. Representatives of the construction industry who have come to see me have said with one voice that the danger in what is now happening is that capacity is going and vitally needed skills are being dispersed and, in the event of recovery, they would no longer be available.

My second example comes from local government, which has had 27% cuts, frontloaded by the Secretary of State. The impact will be enormous, and it is already clear from the Local Government Association that 140,000 jobs will go in local government. But as PricewaterhouseCoopers has said, for every job that goes in local government, a job will go in the private sector. Local government’s procurement budget is £38 billion. Some £20 billion goes to SMEs, so the impact of these savage, deep and frontloaded cuts will be catastrophic for SMEs that depend on local government throughout Britain.

[Anne Marie Morris]

Is the hon. Gentleman aware that the Reed job index went up nine points in January, and that the growth is in engineering and construction?

[Jack Dromey]

With the greatest respect, I am not sure what planet the hon. Lady lives on. The figures on the economy are clear: the Government inherited a growing economy, but it has now stalled and gone into reverse.

My third example relates to the abolition of the regional development agencies. Thirty years ago, the midlands used to be one of the two strongest economies in the country, but it is now one of the two weakest. We had the most successful RDA, Advantage West Midlands, of anywhere in Britain. For every £1 of public money invested, £8.14 was produced in wealth in the private sector. Crucially and in addition, Advantage West Midlands managed shocks to the motor industry, such as the closure of Rover, and promoted the motor manufacturing cluster in the midlands. The cluster is 150,000 strong, from the prime companies through the components companies, the machine tool companies and the logistics companies, all the way down to the games companies with which Jaguar Land Rover is working right now on the next generation of in-car entertainment systems. That cluster, galvanised by Advantage West Midlands, was one of the key reasons why Jaguar Land Rover last year decided to commit to Britain as its global hub and to invest £5 billion over 10 years, creating thousands of jobs and bringing wealth to our economy.

Government Skills Strategy

Anne Marie Morris Excerpts

Wednesday 19th January 2011 Westminster Hall

[Anne Marie Morris (Newton Abbot) (Con)]

I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his excellent contribution and the Government on their skills strategy, which is an excellent piece of work. Clearly, if we are to get this country back on its feet, apprenticeships will be key. They will generate private sector jobs, particularly in manufacturing and industry, which will create wealth, so I really welcome this strategy. The fact that we are creating 50,000 new apprenticeships for young people, using, in part, some £50 million from the Train to Gain fund is good news. Moreover, we will put some £605 million into creating 75,000 apprenticeships for adults. That is an area that has not been given the funding or attention that it deserves, so I really appreciate the investment.

My hon. Friend talked about the challenge of creating apprenticeships that are valued, and that goes hand in hand with making manufacturing jobs, or any job that requires the use of one’s hands as well as one’s brain, valued in this community. In Germany, those involved in such industries are well respected, and we must bring that view here. I agree with my hon. Friend that bodies should be created to help build some pride in the idea of being an apprentice. I ask the Minister to think of a way in which we can regenerate some value in the word “technician”. Those of us who have been lucky enough to go to university can call ourselves graduates, which is an incredibly valuable term. It would be good if we could make the word “technician” resonate in the same way.

The Government are looking to raise the baseline for apprenticeships. At the moment, we have NVQ level 2, which is the basic apprenticeship scheme, NVQ level 3, which is the advanced apprenticeship scheme and NVQ level 4, which is the higher apprenticeship scheme. The Government plan to make the advanced level the new baseline, which is an excellent idea. That will help people to aspire to something higher and enable employers to see how much we value the scheme.

Research has shown that those who take on apprenticeships do better economically than those who do not. An advanced apprentice is likely to earn £105,000 more over a lifetime than a colleague with a lower qualification, so there is a definite win for the individual who makes that investment.

The hon. Member for Upper Bann (David Simpson) talked about some apprentices starting courses and not completing them. I am heartened to find that the apprentice success rate is on the increase. The latest figures that I have seen put the success rate at 70.9%, which, in the grand scheme of things, is not bad at all. In my constituency of Newton Abbot, we have a history of manufacturing. Originally, Newton Abbot was at the heart of the railway industry. When that fell away in the 1950s, a number of individuals were taken on at Centrax, which has been the hub of engineering and manufacturing in my constituency. I am pleased to say that the organisation has attracted a number of other businesses to the area. Getting apprenticeships working well in the area should help more engineering businesses—some of them will be very small—to establish and develop in the area.

[Mr Andrew Smith]

I am following the hon. Lady’s remarks with interest. She referred earlier to the shift of more apprenticeships to the higher levels. Has she seen the Association of Colleges briefing for this debate, which points out that such a shift is not as simple as it might appear, because the time commitment and the cost increase for both the apprentice and the employer? Moreover, it found that there was less demand from employers for apprenticeships at the higher level. Does that not reinforce the point that I made earlier that there must be a thorough dialogue and engagement with employers, with incentives where appropriate, to ensure that they take advantage of the scope to expand the higher level apprenticeships?

[Anne Marie Morris]

The right hon. Gentleman makes a good point. It is crucial that we get employers as engaged in the process as the potential apprentices. A private sector vocational organisation in my constituency is an excellent example of that. Before finding the apprentices, it makes contact with local businesses to explain the opportunities offered by the scheme and to create those apprenticeships. That sort of proactive approach is invaluable. The more of that we can do, the better off we will be.

The real value of the apprenticeship scheme is that it will give young people an alternative. Not everyone is suited to an academic career. Many NEETs in our society feel that there is no real alternative. Nationally, we have more than 1 million NEETs, which is far too high. In Devon, within which my constituency sits, there are 1,190 NEETs between the ages of 16 and 18 —5.7% of the youngsters—which is a huge waste. Research shows that the cost to the taxpayer is substantial—around £97,000 over a lifetime. Some people put the cost as high as £300,000 because of the associated benefits, which is a huge price to pay both financially and socially. Therefore, this must be the right way forward.

To get the apprenticeship programme working well, we must look at the linked-in skills training that is on offer and establish the link between training colleges and sixth forms. Will the Minister tell us what sort of grant might be available to those skills colleges, because, at the moment, that is an area that lacks clarity? A number of training organisations and colleges in my constituency have questioned me on the matter. They ask what the picture will be when the Train to Gain programme slowly begins to evaporate. They are particularly concerned that grants will be as available to the smaller organisations as they are to the larger organisations. I am interested to hear the Minister’s thoughts on that particular front.

As I have said, it is important to get employers to play their part and to incentivise them, as the college I referred to earlier is doing. We want our colleges literally to go out on the streets and find those young people. I have been very impressed by South Devon college, which does just that. There are parts of Newton Abbot where young people with no education, training or job congregate. Individuals go to those places to talk to young people about what might be possible. That is absolutely the right way forward, and I welcome it.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Lady talks about actively targeting young people on the streets, but does she agree that some groups—I am sure things are the same in my constituency as they are in hers—are also actively involved in mentoring young people? Many young people feel helpless when it comes to getting the vocational training that might help them to get employment—they feel completely disempowered. If these groups get out there, they can target young people, help them, sit alongside them and bring them into the mainstream to ensure that they get essential qualifications.

[Anne Marie Morris]

That is a prime example of the big society. We are in a good position to achieve exactly what he has indicated. We are all in this together, and there is a lot that we can do together.

While we are on that point, my hon. Friend the Member for Harlow has mentioned his concern about the withdrawal of the EMA. I share his view that the old system did not work terribly well, but I also share his concern that there needs to be something to help young people. I am pleased that the new fund will be made available, but the real challenge is the transition and ensuring that nobody falls down the gap. One of the things that I have been doing locally in my constituency is trying to help deal with that gap. I have been working with colleges and voluntary charities that provide local transport and asking them whether we can find a way to work together and get young people to college. I am pleased to say that I have received positive responses from local transport charities. That is exactly where we should be going and what we should be doing.

Perhaps I can leave the Minister with a second and final question, which is about real challenge that we face in deprived rural areas, of which Newton Abbot is undoubtedly one. The cost of living in Newton Abbot is very high, partly because of the distances involved in getting around the constituency and, as hon. Members are well aware, because of the huge water bills. However, we also have very low salary levels. The challenges that my hon. Friend has mentioned are particularly acute in rural areas. I appreciate that we are in difficult times and that we must be careful to get value for every penny we spend, but I wonder whether particular consideration can be given to helping youngsters in rural communities access the apprenticeships and training that they need.

Royal Mail Privatisation

Anne Marie Morris Excerpts

Tuesday 18th January 2011 Westminster Hall

[Anne Marie Morris (Newton Abbot) (Con)]

I thank the hon. Member for North Ayrshire and Arran (Katy Clark) for securing an excellent opportunity to talk about the future of the wonderful post offices that we all love and need and upon which our constituents—in particular, some of our small businesses—are dependent. However, I am surprised that the hon. Lady raised the issue of post offices when the Bill we are talking about and have been debating recently is about Royal Mail. The debate is meant to be about Royal Mail, rather than about post offices, but I was encouraged by the response that the Government gave, indirectly, with regard to post offices, effectively guaranteeing that we would be able to retain post offices, which we all value. I was absolutely delighted.

The other measure in the Bill, which the hon. Lady did not mention but which I find exciting, is the concept of mutualisation. It is a huge opportunity.

[Katy Clark]

There have been many opportunities over the past few weeks to make all sorts of points about Royal Mail privatisation. The debate today is about the implications of Royal Mail privatisation on the post office network. There are genuine concerns. Does the hon. Lady share any of those concerns?

[Anne Marie Morris]

I thank the hon. Lady for her comment but, to be honest, hearing her discussing the concerns about the future of the post offices was very reminiscent of the concerns felt by Opposition Members under the previous Administration. Our concern in opposition, when there were mass closures of post offices, was that the Government of the day had failed to recognise that such post offices were crucial to communities and were providing a social service as much as anything else.

I am delighted that both parties supporting the coalition Government are determined to ensure that post offices have a bright future. I do not share the hon. Lady’s concern about the future of post offices; they are far better off under the new coalition Government than they ever were under the previous Administration.

The hon. Lady made some points about universal delivery, but I am very heartened. It is important. The Government look on it as fundamental and will retain it.

Turning to post offices, we must remember that 99% of the population live within three miles of a post office. In the grand scheme, that is not a bad position to be in. The Government subsidy to non-commercial post offices is currently £150 million, but I am pleased that it will increase to £180 million in the next financial year.

[Nia Griffith (Llanelli) (Lab)]

Is the hon. Lady suggesting that a three-mile access criterion would be sufficient? In other words, as long as someone was within three miles of a post office, that would be acceptable. Is that the sort of network of post offices that she envisages?

[Anne Marie Morris]

I thank the hon. Lady for her comment. Clearly, we need to have as good access as we can for every individual. Therefore, we need to look at a good service and a good distribution of post offices. The sort of figures talked about, and where we are now with the number of post offices, will give a good service. What I would like to comment on, and will come to in my contribution, is what more those post offices could do.

[Karen Bradley (Staffordshire Moorlands) (Con)]

I am interested in what my hon. Friend says about the provision of post office services not only to individuals but also to businesses. Businesses in my constituency are concerned about how the post office network can help them in the current economic downturn. Does my hon. Friend have any thoughts on that?

[Anne Marie Morris]

My hon. Friend makes an excellent point. When we are looking at our small micro-businesses to lead the drive to put the economy back on its feet, post offices have a key role. In my constituency, in the village of Broadhempston, there is a delightful situation. Local volunteers run a small community shop—absolutely an example of the big society—in which they have effectively ensured that the post office can be retained. The challenge—the point made by my hon. Friend—is to ensure that we can grow that service. The shop currently opens in the morning between 9 and 12, but if it opened in the afternoon, it would really be able to offer services to local businesses. I have been looking at that and championing it. Looking at such post offices being able to support small businesses must be the way forward; my hon. Friend’s point is extremely well made.

Post offices are at the heart of the community. With regard to concerns expressed in all parts of the Chamber, post offices need to be able to provide more, not less, to individuals and to small businesses. Indeed, the Federation of Small Businesses has said that it would be an excellent idea to have a dedicated business counter or business advertising. Could not such post offices provide meeting rooms or wi-fi hot spots? As discussed, we could be moving towards providing banking facilities.

The opportunity for post offices is enormous, and I am delighted that they have that opportunity. The big society and the overall push to help small businesses should make that opportunity a reality. Nineteen per cent. of small businesses visit post offices on a daily basis, and 47% visit twice a week. That is excellent news. As I said earlier, mutualisation could be the way to make things possible. I have found a real will to work together in the community, whether that is the business community or the community within a geographical area. Mutualisation is a real opportunity and it may be the solution to the position in Broadhempston.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am a supporter of mutualisation. Many people, however, are concerned that from mutualisation comes demutualisation. Would the hon. Lady be in favour of building a way of preventing demutualisation into any plans for mutualisation, as far as that is possible? People are wary of mutualisation given some of the experiences of the past 20 years concerning building societies and other mutual organisations.

[Anne Marie Morris]

I understand the hon. Lady’s point, but the devil is not in the legislation but in the detail and particular circumstances. I am not a great believer in regulating and legislating; I believe in the free market. It is right to empower communities and businesses, but not to tell them how to do what they do.

In conclusion, I would be delighted to see the Government look carefully at what post offices can do, and then empower them so that it happens, perhaps by looking at how we can improve the number of Government services in post offices. At the moment, people cannot always sort out vehicle taxation at post offices or pay their utility bills—they might not know that they can pay in a post office because it does not say so on the back of the bill. There are things that the Government could do to ensure that where it is financially sensible, more services are provided through the local post office network. There is much that could be done by the business community, and I commend to the Minister the suggestions made by the Federation of Small Businesses.

--- Later in debate ---

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

It is always a delight to serve under your chairmanship, Mr Hollobone. It is a delight, also, to welcome a debate on the implications for the post office network of the privatisation of Royal Mail, and I congratulate the hon. Member for North Ayrshire and Arran (Katy Clark) on securing it. She introduced the subject with typical courtesy and clarity. I know that her concerns are widely felt, and I want to be as responsive and sensitive to those concerns as I can. I shall try to deal with as many of the points raised in debate as possible; I hope that hon. Members will not mind if I am not as generous as usual in taking interventions, as we have a lot of ground to cover.

The matter has been extensively debated over recent weeks, including during the Committee stage of the Postal Services Bill, the oral evidence session of the Scottish Affairs Committee, the Third Reading of the Bill last Wednesday and at Business, Innovation and Skills Question Time. Indeed, the matter has been aired in a number of forums. I fully appreciate that people are concerned about the future of the post office network. In essence, this debate focuses on that subject, and I shall try to restrict my remarks to that, for understandable reasons.

I start by putting the matter in context. I do not mean the economic context—the fact that the Government inherited the largest peacetime deficit in our history, and that the state is borrowing one pound in every four that it spends and is paying only the interest on the nation’s debt, which costs £43 billion each year, or about £120 million a day. That is not entirely relevant, Mr Hollobone, and you would not want me to dwell on it, but it needs to be said. I mean the context that surrounds Royal Mail—the need to invest in Royal Mail, to update it and to make it a business that can compete in an increasingly complex international scene.

As the hon. Member for Solihull (Lorely Burt) said, social change and the way in which people access, exchange and use information are having an impact on post offices and Royal Mail, as has the increasingly competitive nature of the marketplace. In order to get that investment, the Government needed to think afresh about the ownership of Royal Mail. That is widely acknowledged. I put on record the fact that that the previous Government were indeed considering the matter, and introduced a Bill in the Lords. Had they been re-elected, I have no doubt that we would be having a debate in Government time about the future of Royal Mail, but on a different set of assumptions about its ownership.

The context is one of a need for change, and a need for fresh ideas about how to guarantee a strong future for Royal Mail. In that spirit, I do not want to dwell too much on the previous Government’s record, but it would be remiss of me not to say that between 1997 and 2010, about 7,000 post offices closed, 5,000 of which were in two Government-funded closure programmes in 2003-05 and 2007-09. Government Members should not be expected to take too many lessons from the Opposition.

I do not want to be excessively partisan or to get into an argument about this, but the Government value post offices. We understand their social and cultural value as well as their utility. As constituency Members, we have fought for them to be retained up and down the land, so we have nothing to be embarrassed about in those terms. It is in that spirit that this Government approach the subject of post offices and make it clear there will be no further post office closure programme. That is enough of my partisan points; I just felt that it was important to put them on the record.

Let me make 10 points to kick things off, then I will try to deal with the points that have been raised in the debate. First, the Government have made it absolutely clear that the Post Office is not for sale. Secondly, we recognise that the Post Office is a unique national asset, so there will be no repeat of the closure programmes of the past. Thirdly, we have committed £1.34 billion to the Post Office for it to modernise its network and safeguard its future, thus making it a stronger partner for Royal Mail. Fourthly, the Bill before Parliament proposes to separate Post Office Ltd from the Royal Mail Group, thus allowing the Post Office to focus more attention on developing its business. It also allows for the possible future mutualisation of Post Office Ltd.

Fifthly, under a mutual structure, the ownership and running of the post office network could be handed over to employees, sub-postmasters and communities. Sixthly, the Government are committed to secure a sustainable future for the Post Office and we want it to become a genuine front office for Government at both a national and local level. Seventhly, we will support the expansion of accessible and affordable personal financial services that are available through the post office. Eighthly, we will support the greater involvement of local authorities in planning and delivering local post office provision.

Ninthly, the Government fully share hon. Members’ laudable interest in ensuring a strong commercial relationship between Royal Mail and Post Office Ltd, but we do not share the view that legislating for a contract of between five and 20 years is the way to achieve our shared objective. To pick up on the point made by the hon. Member for Llanelli (Nia Griffith), it is not just that that would make Royal Mail less saleable—although it might—but that it would be legally challenged under competition law and possibly internationally, too. I agree that it is important that the arrangements between Royal Mail and the Post Office are as secure as they can be, and I will return to that point and the particular question that she raised in a moment.

Lastly, as the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), made clear last week, stamps will continue to be issued in the same way.

[Anne Marie Morris]

I am delighted to hear the Minister’s comments about stamps, but I am concerned about those wonderful red pillar boxes and the monogram. Will the Minister confirm that they will also be protected?

[Mr Hayes]

I was about to say that stamps will continue to bear the sovereign’s head, which is right and proper. I hear what my hon. Friend says, and I share her view; it is important that we retain the iconic pillar box with the Royal monogram on. That is something that the Government will consider. I can say no more at this stage, but I know that my hon. Friend will want to take up that point and see what can be done.

In evidence to the Postal Services Bill Committee over recent weeks, there has been strong backing for the separation of Royal Mail and Post Office Ltd. I noted that no one made a case against that today. As I said, it was, I think, accepted by most Members in this House. They are different businesses that will benefit from focusing on different challenges. In his evidence to the Committee, Richard Hooper of Consumer Focus and Postcomm supported the separation of the ownership of the businesses.

In her evidence to the Committee, Moya Greene, chief executive of Royal Mail, said that it would be unthinkable not always to have a strong relationship between the Post Office and Royal Mail. To underline that point, Donald Brydon, Royal Mail’s chairman, pledged in his evidence that before any privatisation of Royal Mail could take place, a continued long-term commercial contract will be in place between the two businesses for the longest duration that is legally permissible—a point that was picked up by the hon. Member for Argyll and Bute (Mr Reid). Such a pledge provides a reassurance about the marriage between the two, which is essential to maintaining the post office network that we all feel so strongly about. This is done not for sentimental reasons, but because it makes good commercial sense. The post office network has an unparalleled reach and a very strong brand. As my hon. Friend the Member for Newton Abbot (Anne Marie Morris) said, we can be optimistic about the relationship. A stronger Royal Mail is more likely to secure the future of many more post offices. If we do not take the necessary radical steps to support and invest in Royal Mail, post offices will be at risk. That is something that we can look to with confidence, based on the belief that post offices not only provide important services, but are at the hub of local communities. The post office in my own village of Moulton, which is run by Gary and Jane, does an excellent job not just providing postal services but as a centre for all kinds of activities in the village. It is a shop, too, and provides a valuable local service.

As a representative of a rural constituency, I understand some of the concerns expressed by other rural colleagues. We heard from the hon. Member for North Ayrshire and Arran that there are concerns about the spread of the network—the universality. Let me make it clear that in terms of universality, the Bill will create a fundamental duty at the heart of the legislation for a six-day per week collection and delivery of letters at uniform and affordable prices. To do that, we need a service that is spread across the whole nation and not a partial service; we are committed to that and I personally feel very strongly about it.

It is important to say that the future success of the post office network will depend on its providing a fuller and wider range of services. I hear what my hon. Friend the Member for Warrington South (David Mowat) says about cost and subsidy. We can deal with that by allowing post offices to do more, thus ensuring that they can be profitable businesses. We are looking at a range of additional services—both local government and national Government services—that post offices can provide. Post offices can act as a front line for those clients or users that need to do things in their community in a way that is accessible and convenient. We are piloting a range of services that post offices can provide and, as a result of this debate, we will look at other things that Government can do to make the post office network more viable, commercial and profitable. I know that my hon. Friend is anxious about that and I understand why.

However, there will always be small rural post offices, perhaps in more remote communities, that will find it very hard to operate without subsidy. I do not have a problem with that. Post offices are so culturally and socially important that we need to take that on board. Certainly, all those that can be profitable should be profitable.

Youth Service

Anne Marie Morris Excerpts

Tuesday 23rd November 2010 Westminster Hall

[Anne Marie Morris (Newton Abbot) (Con)]

I thank the hon. Member for Bolton West (Julie Hilling) for securing this debate on what is undoubtedly an important issue. Young people deserve our support, and youth services are vital to all our communities. She is absolutely right that if young people get a better start in life, our communities are safer and more cohesive as a result. It is also correct to say that prevention—she gave us many figures on that—is better and much more cost-effective than simply waiting for the cure.

The number of young people who are not in education, employment or training—NEETs—is horrifying, and it is crucial that we engage those individuals in our communities. In my part of the world, Devon, 1,190 young people between 16 and 18—5.7% of the people in that age bracket—are unemployed, do not have training and, frankly, have very little hope. As the hon. Lady explained, that has a cost to society, and it is not insignificant. The figures vary, depending on how they are calculated, but those I have looked at show that each NEET costs around £97,000 over their lifetime. That figure could exceed £300,000, depending on the benefits they have to look for.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I congratulate the hon. Member for Bolton West (Julie Hilling) on securing the debate. On the point made by my hon. Friend the Member for Newton Abbot (Anne Marie Morris) about NEETs, in Medway, 666 people in a population of 260,000 are NEET. Does she agree with me that we need to do all we can to support organisations such as the Medway Youth Trust, a charity that does excellent work in giving people who are NEET support and help to move into working life?

[Anne Marie Morris]

I thank my hon. Friend for that intervention and endorse what he said. Such organisations should, undoubtedly, be encouraged.

We are missing one key piece: providing youth services must be about providing quality. It is not a matter of how much money is thrown at something but how it is spent to get the best possible result. I am lucky, because Teignbridge, which is my local area and a large part of my constituency, has an excellent youth services record. The portfolio holder described Mike Stevens, who is the leader of the unit in Teignbridge, as outstanding and said that, if she could, she would clone him. There are some extremely able people who deliver high-quality services.

There are two outstanding examples in Teignbridge district. In Newton Abbot, which is at the heart of my constituency, an organisation called Chances, which operates out of a building called The Junction, is responsible for giving many young people who are excluded from school hope and a future that they would otherwise not have. I have seen the kind of outward-bound courses that are offered and the engagement of the teachers who work there, and they are fantastic.

More recently, a new centre was opened in Dawlish, which is another key town in my constituency. It is called Red Rock, and what is special about it is that it is a fine example of the big society. I would take issue with the hon. Member for Lewisham East (Heidi Alexander), who suggested that the big society was merely a convenient label. The centre evolved from the local business community, the local voluntary sector and the local authority working together.

[Kelvin Hopkins (Luton North) (Lab)]

The hon. Lady speaks about the big society. One imagines that that means that local voluntary and third sector groups will take over where public services are cut. In my constituency, we have had a meeting with a dozen local organisations that are fearful that their funding will be cut, and that they will be able to provide less, rather than more, in future.

[Anne Marie Morris]

I thank the hon. Gentleman for his contribution. I shall turn to funding in a minute, because clearly it is relevant, but let me stick with quality, which is key.

That project involves real engagement, and it is not the intention of anyone—certainly not the county council—that group A should take over from group B. What people see in the future is an integrated approach among different parts of our community, which we should commend.

I believe that there is a misunderstanding about funding. The hon. Member for Bolton West spoke about cuts. It is known across the House that this country is plagued with a huge national debt, and that the Government have to look at the measures to be taken. However, they have not cut youth services. They have taken away the barriers between individual prescribed funding streams that central Government used to pass money down to local government, but the amount of money going from central Government to local government remains unchanged.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Will the hon. Lady give way?

[Anne Marie Morris]

May I finish? Local government has been given the opportunity to use money sensibly. Ninety funding streams will be reduced to 10, and that will substantially reduce the bureaucracy. It will also liberate £7 billion-worth of funds for local authorities to use appropriately. There is certainly no intention that this should be about cuts between between national and local government.

[Stella Creasy]

rose—

[Julie Hilling]

rose—

[Anne Marie Morris]

I will allow interventions in a moment. Let me just clarify my point on funding. What we will see in local government is a review of what quality and value for money should look like. In speaking to my county council, I have found no evidence that youth services per se will be any harder hit than any other part of the budget. On community engagement, we are looking for more, not less, but before I move on, I am more than happy to give way.

[Stella Creasy]

Can the hon. Lady clarify what she thinks the cuts to the Department for Education’s non-school budget and the cuts to the voluntary youth sector development grants will mean? That central Government funding for youth services has been cut—that is a national cut in funds for youth services. What does she think will be the impact of that?

[Anne Marie Morris]

I thank the hon. Lady for her intervention. I am sure that in due course the Minister will clarify exactly how that will work, but my understanding is that it is not about reducing money but about taking away artificial barriers between individual pots of money.

[Julie Hilling]

To add to what my hon. Friend the Member for Walthamstow (Stella Creasy) said, the cuts to the youth opportunity fund and youth capital fund were cuts in central Government funding, so this is not just about local authority cuts. In addition, money that was coming from the Department for Education specifically for youth work has been cut. That is a double whammy for local authority and area-based youth services.

[Anne Marie Morris]

I thank the hon. Lady for her intervention. Again, she is talking about structure rather than amount. As the Minister will explain, we absolutely will support youth services because they are important. The hon. Lady mentioned several new initiatives, including the national citizen service. Actually, there is a new group in the constituency adjoining her own. It is called the Bolton Lads and Girls Club, and I hope that she will welcome it. I am lucky, because the national citizen service, which provides an outward-bound social action experience for young people, will see 900 places created across the south-west by Young Devon and the South West Consortium. That must be a good thing for the future.

[Julie Hilling]

rose—

[Anne Marie Morris]

If I may, let me get back to the principle. We have been asked to keep contributions short, so I will not take any further interventions.

Quality is key. In conversations that I have had with my county council, I have found that people like Mike Stevens and what he contributes are highly valued. That kind of provision is not at risk. What any responsible council must do is look across their patch for the best way to provide best-quality services. Our young people deserve no less.

Local Enterprise Partnerships (South-West)

Anne Marie Morris Excerpts

Wednesday 10th November 2010 Westminster Hall

[Mr Ben Bradshaw (Exeter) (Lab)]

A more accurate title for this debate than local economic partnerships in the south-west would be the absence or lack of local economic partnerships in the south-west. When the Government launched their flagship regional economic policy the week before last, most of the south-west was completely missing. Only Bristol and Cornwall are covered by these new bodies.

This sorry saga began with the Government’s ideologically driven determination to abolish the regional development agencies. That of the south-west, like most of those around the country, was successful. It had brought much-needed strategic coherence to our region, as well as valuable investment. It had managed to overcome the age-old political in-fighting between the different parts of the region, and the RDA could take a view as to what was in the interests of the region as a whole. I am afraid that, like so much of what the coalition Government are doing—and in spite of the Business Secretary’s support for RDAs before the election —regardless of their merits RDAs had to go, because they were a Labour creation.

Soon after the election, in preparation for the new policy, the local business leaders in our half of the region—led by Tim Jones and the Devon and Cornwall business council—started an early promotion of the idea of a peninsular local economic partnership, comprising Cornwall, Devon and Somerset. The business community felt scale and capacity were vital for these local economic partnerships to succeed, and I wholeheartedly agree. In his letter of 29 June, the Secretary of State invited local areas to come together and put forward bids for LEPs in their areas by 6 September. That precipitated a two-month period of chaotic negotiations, lobbying and planning. That happened largely behind closed doors and was led, not primarily by business, as was supposed to be the case, but by the upper-tier local authorities—in our case, Cornwall, Devon, Plymouth and Torbay. Somerset county council was effectively frozen out of those discussions. It was clear that the four upper-tier authorities in Devon and Cornwall did not want Somerset’s involvement in the discussions or in any subsequent local economic partnership for the area.

My own local authority, Exeter city council, and the Exeter business community, led by our chamber of commerce, were totally excluded from the discussions. They were never formally consulted on any of the emerging proposals. That was in spite of numerous requests to be involved as one of the two key economic drivers in our peninsula. Exeter’s exclusion was also in clear contravention of an instruction in a letter of 25 August from the Minister with responsibility for decentralisation, the right hon. Member for Tunbridge Wells (Greg Clark), to Gary Porter, chair of the district council network, in which the Minister said,

“It is essential that district authorities are included.”

He went on to say that he did not expect county councils to act as “sole building blocks”, and that

“We want to see economic geographies reflected in proposals, not just administrative ones.”

It soon became clear that Cornwall, as is so often the case, wanted to go it alone—a move unfortunately endorsed by the Government for political purposes, much to the consternation of the Cornwall business community and business leaders in the rest of the peninsula.

I have a number of questions for the Minister today. First, does he agree with me and the business community in the west country that local economic partnerships should have sufficient scale to add value and to have clout? Does he also agree that they should reflect real functional economic areas? Is it not the case that the first of those objectives has been compromised by his Government’s decision to accept Cornwall’s bid to go it alone? Is it not also the case that the Cornwall bid did not meet the criteria the Government laid down and did not enjoy sufficient business support? Will he explain how, exactly, a Cornwall local economic partnership will differ from or add value to the economic development functions of the unitary Cornwall county council? Does he also agree with me that it is vital urgently to salvage something from this sorry mess, and that the most sensible solution would be for Devon, including Plymouth and Torbay, to work with Somerset and, if they are interested, those western parts of Dorset that look west rather than east? Will he confirm that the Government have been pressing such a solution?

When questioned in the House on the day of the announcement, the Business Secretary blamed the situation in the west country on the lack of agreement between the local authorities involved. That, I am afraid, is an understatement. In spite of the fact that Devon, Somerset, Plymouth and Torbay are all Conservative-controlled councils, which one might think would make the process of negotiation easier, they have been fighting like rats in a sack. We have seen a return to the worst sort of petty political in-fighting that blighted economic development so badly in our region in the past, and was one reason why Labour set up the RDAs in the first place. I understand that there is little love lost between the Conservative leaders and the councils involved. At one stage, to illustrate the ludicrousness of the whole process, Somerset became so frustrated by Devon county council’s behaviour that Somerset suggested a tie-up between it and Cumbria, based on the nuclear industry.

Will the Minister please start banging some heads together and tell his political friends in the south-west that they must stop their childish squabbling and work together in the interests of the public and local businesses? If they cannot, or will not, do that, will he please tell them to get out of the way, and let the business community get on with it? Business leaders are keen to move forward with a partnership on the basis I have outlined.

[Anne Marie Morris (Newton Abbot) (Con)]

I am delighted that the right hon. Gentleman has given this debate an airing, because it is crucial that we have LEPs in the south-west. Would he agree with me that, in the vein of what he has just said, we should put political divides aside and move forward and get an LEP for Devon, and I suspect for Somerset, as quickly as possible? I believe the business community is now absolutely behind it.

[Mr Bradshaw]

The hon. Lady is right; the business community is behind it. The point I was trying to make is that this is not about putting political differences aside, because the four local authorities involved are all Conservative controlled. They do not—or should not—have political differences but they have been completely incapable of working together on a sensible local economic partnership for our region. I hope we can see them make swift progress toward doing so now. If they will not do it, I want the Minister to tell the local authorities to get out of the way and leave the field clear for the business community, which, as the hon. Lady rightly says, is keen to make progress, so it can put in a bid. Will the Minister confirm, on that basis, that the business community is entitled to come forward with a bid—that it is perfectly possible for it to bypass the fractious local authorities? Will he assure the business community and me today that the Government would look favourably on such a bid? Will he also reaffirm the instruction of the Minister with responsibility for decentralisation: that it is essential that Exeter, which is so important for our region’s future prosperity, be included at the table? If I were the Minister here today, I would be hopping mad at Devon’s deliberate and calculated rebuff to his colleague’s instruction that Exeter should be included in the process.

As the head of Britain’s leading business organisation, the CBI, said recently, this process has been a shambles. We now know that the Minister’s own colleague, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), warned the Business Secretary in a letter of 14 September that the Government’s local economic partnerships were in danger of failing. I quote from his letter:

“There is a strong view amongst the business community that many LEPs lack the ambition to make significant economic impact undermining our agenda for growth. Key messages I have been made aware of include: a lack of credible business representation on LEPs Boards; negotiations dominated by local politics and a lack of a clear focus on economic growth. They also report different messages coming from Government about LEPs. John Cridland [of the CBI] specifically was concerned that the process has not been transparent, business engagement was poor overall and exacerbated by a tight timescale. He and other senior business leaders from Tesco and Ford have expressed their concern that in their view the policy is in danger of failing to aid economic growth.”

That is exactly what the Labour party warned would happen if the Government went ahead and abolished RDAs. The public and businesses of Devon and most of the south-west have been badly let down by the Government, and the Minister and the Government need to get a grip before it is too late.

--- Later in debate ---

[Mr Hayes]

I am delighted to say that my hon. Friend is absolutely right that local authorities should co-operate with each other in pursuit of that objective of economic development. We would expect them to co-operate, but the early stage will inevitably involve a process of negotiation and of bid and counter-bid. That is not unhealthy, provided that it does not delay progress unduly and Government play a helpful mediating role in assessing those representations against the core criteria, which I am about to discuss.

We announced the first wave of successful LEPs alongside the White Paper on 28 October. The first 24 partnerships—of many more, I am sure—all shared certain characteristics. Perhaps it will help the hon. Member for Chippenham and my hon. Friend the Member for Stroud (Neil Carmichael) if I describe those characteristics: they have a strong local identity; they have a buy-in from the business community; and they are a testament to the ambition and ingenuity of local people. That is what we expect of local enterprise partnerships.

In the south-west region, we received seven applications, two of which were approved. Each of the remaining five groups of applicants has been asked to do further work to develop their proposals, and we are supporting them as they do so. I understand why the right hon. Member for Exeter is making a strong case for his area—it is right that he should do so—but he should know that Devon, Plymouth and Torbay have been asked to hold further discussions with local business, civic leaders and the Government to develop the long-term vision for their partnership. In addition, they have been asked to consider in more detail their economic links with neighbours, particularly Somerset. The chief executives of Devon, Torbay, Plymouth and Somerset have embraced that feedback and are working together to secure the best outcome for their area, and we hope to say more in due course. The right hon. Gentleman will also be mindful that I have said that undue delay would be unhelpful.

[Anne Marie Morris]

I am delighted to hear what the Minister is saying. I am glad that progress is being made, and I welcome LEPs. They are absolutely the right vehicle, and the combination of local government and businesses is on point. I ask that a decision be made quickly—subject to all the bodies concerned giving him all the information that he needs—so that the deadline to apply to the regional growth fund is not missed. I hope that that will be present in his thinking and timeline, even though he cannot be specific.

[Mr Hayes]

My hon. Friend, like me, will want to ensure that the criteria are applied robustly and consistently. The right hon. Member for Exeter made the good point that we need to be certain that the marriage between local authorities is right, as is the link between them and business. I repeat that I share the view that the construction of areas should reflect their economic profile. That seems fundamental to making the scheme work well.

The right hon. Gentleman mentioned Cornwall, so I will give him a straight answer. Cornwall made a powerful argument for a local enterprise partnership covering Cornwall and the Isles of Scilly, making it clear that it was a functional area. The Department examined it closely and we decided, in the end, to support the partnership. I know that counter-arguments will be made, but as he knows from his long experience as a Minister, the Government sometimes have to take decisions. We took that decision, and I think that we can justify it based on the criteria that I have outlined. People from Cornwall would certainly argue that the area’s profile is very particular. The right hon. Gentleman will know the economic challenges that face Cornwall. Its issues include skills, employment and the character of the local economy, which legitimises the case that Cornwall made.

South-west Members, including the right hon. Gentleman, understandably make the argument that they do not want the south-west to be left behind. I assure him that we are keen to see as many local enterprise partnerships taking root as possible, both across the whole of England and in the south-west. We do not want any part of the country to be left behind, so as soon as a bid can demonstrate that it meets the assessment criteria, it will be given the green light.

I will say a word about Exeter in particular, as the right hon. Gentleman would expect me to do. I am aware that he is worried that his constituency might suffer disadvantage and that it will not be able to bid to the regional growth fund because it is not part of a partnership. Let me reassure him that although we expect many LEPs to submit project bids to the fund, it is not a prerequisite that applications for funding must be submitted by partnerships—any public-private partnership may apply. Exeter’s business community and local council—along with other potential partners, such as the city’s excellent university, which he and I both know—may work together on an ambitious plan for economic development and then apply for funding accordingly. Indeed, I take this opportunity to encourage them to do so. I know that the right hon. Gentleman, as a diligent local Member, will work with them to make it a success.

Government Policy (NEETs)

Anne Marie Morris Excerpts

Tuesday 9th November 2010 Westminster Hall

[Tony Baldry (Banbury) (Con)]

A number of right hon. and hon. Friends want to intervene during this debate. As I have told the Minister what I intend to say, I hope hon. Members will excuse me if I take my speech at a bit of a canter because that will, I hope, give colleagues the opportunity to intervene when they can. Given the interest in this topic, I slightly regret that I did not enter the ballot to have an hour and a half debate.

A report on young people not in education, employment or training produced earlier this year by the then Select Committee on Children, Schools and Families states:

“We accept that the term ‘NEET’ is imperfect. In particular, its use as a noun to refer to a young person can be pejorative and stigmatising. It is, however, a commonly used statistical category, and—in the absence of an appropriate alternative—we have accepted it as a first step in understanding the issues.”

A NEET is someone under 25 who is in employment for less than 16 hours a week and who is not in education or training. My constituency has two main towns, Banbury and Bicester. In September this year, 7.5% of Banbury’s 16 to 18-year-olds—approximately one in 12 young people—were not constructively engaged in education, employment or training. Nationally, the Prince’s Trust estimates that almost 15% of 16 to 24-year-olds in England are NEETs, which is around 874,000 young people. The Prince’s Trust estimates that the cost to the state of young people who are NEET is £3.65 billion per year.

As hon. Members may know, in recent years, I have helped to establish job clubs in Banbury and Bicester and, earlier this year, we set up a working party involving those running the job clubs—including Jobcentre Plus and Connexions—to consider what more could be done to help NEETs back into education, employment or training. We also considered how to improve the NEET situation in future years and assist the 142 or so existing NEETs in and around Banbury.

I know my hon. Friend the Minister takes the issue seriously. He inherited a skills system that he has rightly described as over-complicated, over-bureaucratic, incredibly micromanaged and top heavy. He has observed that the previous Government went wrong by basing their skills policy on target-driven bureaucracy, failing to provide sufficient attention to community-based adult learning and effectively abandoning a generation of NEETs. However, during the work I have been doing this year, I have become concerned that a number of policy changes might have the unintended consequence of worsening the opportunities for less skilled and disadvantaged young people to move into further education or employment with training.

We need to consider whether returning the contractual relationship to the Young People’s Learning Agency from councils has reduced local flexibility to provide what is needed post-16, and whether removing the ring fence from Connexions funding has put at risk the work needed to prevent NEETs. It is not possible for me to show in Hansard a diagram of what we are doing locally to try to prevent NEETs and to help existing NEETs. However, the simple fact is that Connexions is the gateway for existing NEETs and provides the signposting, engagement and intervention to help them. That is done through support with apprenticeships, engagement with things such as SKIDZ motor mechanics, work trials, personal advice, interventions, or through programmes such as the new projects in Banbury, including the very welcome new Prince’s Trust programme. We need to ensure that Connexions can effectively undertake that work, because we should be in no doubt that the long-term cost to society of a youngster dropping out at 16, 17 or 18 is far greater than the money that would be spent in ensuring they have educational or training opportunities.

[Anne Marie Morris (Newton Abbot) (Con)]

I am certainly grateful for the debate. The comments my hon. Friend makes about the costs are absolutely on point. I am sure he is well aware that the cost to the taxpayer is £97,000 per individual over their lifetime—some estimates put the figure at £300,000 if benefits are included. Does he therefore agree that such figures need to be borne in mind when the Government consider how to resolve this intractable problem?

[Tony Baldry]

I entirely agree with that point, which my hon. Friend makes extremely well.

--- Later in debate ---

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

As ever, it is a pleasure to serve under your chairmanship, Mr Chope. It is a particular delight to respond to this debate, secured by my hon. Friend the Member for Banbury (Tony Baldry), who I know cares deeply about such matters. I make it clear that I share his doubts about the label “NEETs”. For some reason, young people seem perpetually prone to being pigeonholed in unhelpful ways—from mods and rockers to hoodies. Of course such terms do not reflect reality and therefore do not do people justice. There is no such thing as a typical NEET; there are different groups of young people with particular kinds of challenges, different circumstances and different needs. As my hon. Friend said, it follows that we will be more effective in dealing with the problems and challenges they face if we have the flexibility to draw on a range of different options and build on best practice.

I intend, in the course of the all too short time that I have, to make nine points of substance and then move to an exciting peroration. My hon. Friend will forgive me if I rattle through those points, but I hope they are relevant to him. Along the way, I will attempt to answer some of the particular issues that he raised. Next week—I know that you, Mr Chope, and the whole Chamber, are waiting with bated breath—we will publish our skills strategy, which will set out the direction we intend to take regarding the funding and management of skills. It will be radically different from the assumptions that have underpinned policy over recent years, and will challenge much of the orthodoxy upon which that policy was based.

Let me deal with one point at the very beginning. I have asked officials to look at the issue regarding certification, which my hon. Friend raised. I agree that it does not seem appropriate—it is anomalous to say the least. We will look at that closely and deal with it.

The young people whom my hon. Friend mentioned, and those whom I meet, have ambition. They want to get on with their lives, and they recognise that learning can help them make something of themselves and can make them objects of admiration and respect. By attaining skills through learning, people gain a sense of value and are recognised by others as having worth. We believe that and care about it, and we will adopt policies that will enable young people to gain that sense of value. The investment we make in young people is our gift to future generations.

I do not doubt that the previous Government cared about such matters too—no party in this place has a monopoly on wisdom, and certainly not on compassion. The matter is one that understandably generates strong sentiment, and sentiment is not something we should disregard in politics; we are not dull utilitarians, are we? None the less, there were real problems with past policy. Many millions have been spent on a bewildering succession of schemes, but to what effect? At the last count, some 874,000 young people between the ages of 16 and 24 —or about one in seven—were not in any form of education, training or work. For a nation that cares about fairness and opportunity and about its own future, that is simply unacceptable.

Let me move to my nine points. The first is that we will certainly take a close look at job clubs such as those in Banbury and Bicester. They are good examples of what can be achieved by local people using prudent public investment, drawing together industry, local government, community groups and charitable organisations. I have discussed the matter with my hon. Friend, and I know they are examples that can be followed. I have asked my officials to look at them to see what can be done to share that good practice.

The second point is again implicit in my hon. Friend’s analysis. We need a more holistic approach to the way we deal with the problem of such young people. It ranges from the circumstances at school and their prior attainment, to family circumstances and the particular physical or mental health issues they may face, to simple matters of confidence born of inadequate skills—a lack of confidence that is inevitable for those who have poor literacy and numeracy skills. However, it is not as simple as that—indeed, it is not simple at all—which is why we need the joined-up approach that I think has been lacking in the past.

Thirdly, we also need to link the issue closely to our benefit reforms. I am speaking to the Department for Work and Pensions about those matters, and I assure my hon. Friend that part of the discussion is about funding. He made a good point about such people carrying funding with them and therefore being attractive to learning providers. We are on the case, and we will look once again next week—I do not want to give away any secrets—at the principles of learning accounts and the part they can play in driving the system through learner choice and employer need. I am mindful of those who are moving from disengagement to engagement in those terms.

[Anne Marie Morris]

There is certainly an attraction to that approach. South Devon college, in my constituency, goes out on to the streets to where the NEETs are to find them. It is a win-win situation. I think we need to go out to get them rather than waiting for them to come to us, which is the point the Minister is making.

[Mr Hayes]

My failure to respond to that point has nothing to do with its salience but with the time I have available. I will certainly take the matter up with my hon. Friend; it is a well-made argument.

The fourth point is about careers guidance. We need, as my hon. Friend the Member for Banbury said, to give such people the right advice and guidance. We will be launching an all-age careers service, which I spoke about last week in Belfast. Those who are interested may have a copy of my speech; those who are very interested can have a signed copy.

The fifth point is that raised by the right hon. Member for Oxford East (Mr Smith) about pre-apprenticeship training. As others have said, it is about getting people to the point where they can enjoy more formal training by the skills they acquire early on. We need a continuum of training, and I am working on that, too. However, it has to be progressive. I have said to the DWP that the offer must be authentic in terms of training and skills, and progressive—it must lead to further learning that makes people more employable, and then takes them into work.

The sixth point is the need for early intervention. When dealing with such multi-faceted problems, we need to look at disadvantage; let us be frank about that. It means using the pupil premium, announced by the new Government, in the most imaginative, creative and productive way possible, and seeing how that can leverage real outcomes for people’s subsequent progress in learning and work.

My seventh point is that the Government made a big commitment in the comprehensive spending review not just on apprenticeships, about which I will say a little more in a moment, but on community learning. Adult and community learning was protected in the CSR. I am passionate about the fact that there are different routes into learning. Some of them are informal and others formal, but we must not take the view that there is only one ladder to climb. People will return to learning, and people with a poor history in their prior experience will need a gentle approach. Small, bite-sized chunks of learning, highly accessible, very attractive and often linked to practical competencies can often be the way forward. That is why we protected both the basic skills and the adult and community learning budgets in the CSR.

Eighthly, I have already mentioned apprenticeships. I do not want to trumpet the Government’s achievements in that respect. People are right: we will need to get employers involved, which is why we sent out tens of thousands of letters last week to small businesses to get them involved in an apprenticeship programme and to back the £250 million we have put in, with a view to creating not just 50,000, or 60,000 but 75,000 more apprenticeships, which is more apprenticeships than we have ever had in Britain.

Ninth and finally, we certainly need to give institutions more flexibility. We need to make the system more responsive to the needs of such young people, and generally. A more dynamic and responsive system, shaped around employer need and driven by learning choice, can deliver the skills the country needs, and it can also change lives by changing life chances.

As a result of the initiative of my hon. Friend the Member for Banbury in securing the debate, I have done three things. First, I have asked my Department to develop a cross-departmental strategy to deal with the NEETs problem. Secondly, I am looking at simplifying the funding process for accessing the right money to run community-led projects to address NEET issues. Finally, in particular, I have asked officials to see what we can learn from job clubs in north Oxfordshire.

The issue is about the value we place on individual lives, and the value we place, too, on social mobility, social justice and social cohesion. When each feels valued, all feel valued. It is about building the big society from the bottom up—a brighter Britain where lives are illuminated by the power of learning, and a bigger Britain where all have their chance to grow.

Question put and agreed to.