Education Maintenance Allowance

Andrew Stephenson Excerpts

Tuesday 2nd November 2010 Westminster Hall

[John Robertson]

My hon. Friend is absolutely right, and I will go on to talk about such people in detail. In my speech, I will refute the Government’s reasoning for scrapping the scheme, and shed light on the path they have taken to arrive at their position. Let me give a brief explanation for those in the Chamber who may be unaware of the EMA and why it is such an essential part of further educational support.

The EMA is a means-tested allowance of £10, £20 or £30. It is paid to 16 to 19-year-olds who stay in education and come from families where the annual household income is below £30,810. The top rate of EMA payment is £30, which requires the student to come from a family where household income is below £20,810. Some 80% of all recipients are on that top rate of £30.

The EMA was introduced nationally in September 2004 in order to reduce the country’s post-16 drop-out rate, which was one of the worst in the developed world at that time. The policy intent of the EMA is to broaden participation and improve the retention and attainment of young people aged 16 to 19 in post-compulsory education. The EMA is already strictly means-tested, so tightening the eligibility criteria further will only harm already disadvantaged young people. The scheme is close to my heart because it is based on providing a platform for poor families so that economic barriers will no longer stand in their way to getting an education and getting on in life.

I expect the Minister to say that the EMA is not being axed but rather “replaced.” However, if we turn to page 42 of the comprehensive spending review, we see that the so-called “saving” from replacing EMA is £500 million from a £550 million budget. It is not necessary to be Einstein or to have a university degree to realise that removing 90% of the budget of any scheme means effectively axing it, or severely undermining its implementation. I say to the Minister: do not insult my intelligence or that of our young people, and be honest.

The Government will tell us that there is a dead weight to the scheme and that according to a poll, only 10% of people say that they need the EMA. However, that argument barely stands up to closer examination. First, that was the only research on which the Government based their decision, despite the weight of widely available evidence showing that the EMA works. One example of how bad that research was is the fact that the Government poll was carried out on school pupils instead of college students. As we know, those still in school are in receipt of free school meals and free travel, as well as a uniform allowance and the full measures afforded to school pupils. In contrast, the National Union of Students conducted a poll this year looking at actual recipients of the EMA in college. Almost 60% of those students said that they would not be able to continue in education without the EMA.

Let us take the Minister’s argument to its natural conclusion. His research suggests that 10% of students would be affected, which equates to over 60,000 of the poorest teenagers in this country—the sort of numbers mentioned by my hon. Friend the Member for Stockton North (Alex Cunningham). Does the Minister feel that that is a price worth paying?

For a long time, many supporters of the Conservative party have argued that the scheme is a waste of money and that the allowance is misspent by those receiving it. Before last week, the Conservative party, the Secretary of State for Education and the Prime Minister all said that they would support the EMA. In March, the Secretary of State told The Guardian:

“Ed Balls keeps saying that we are committed to scrapping the EMA. I have never said this. We won’t.”

It is not only the Secretary of State who has said one thing in opposition and another in government. In January this year, the Prime Minster, then leader of Her Majesty’s Opposition, told the Save EMA campaign in an ironically named “Cameron Direct” event in Hammersmith that he supported the EMA. That was after he had refused to give a straight answer on the EMA in an interview with Sky in 2007, so I was pleased to hear that he had seen the light and was supporting the EMA.

A couple of weeks ago, however, we had the announcement on page 42 of the CSR about axing the EMA. It is safe to say that the Prime Minister’s support did not last long. I hope for the Minister’s sake that the Prime Minster does not offer the same level of support for him as he did for the EMA, or the Minister will be out of a job by Easter—then again, perhaps I do hope that.

On a serious note, I do not ignore the fact that there may have been some fraudulent claims, just as there are those who claim other benefits fraudulently or who avoid paying tax by using offshore bank accounts. I despise fraud whether it is by Tory grandees or benefit scroungers. However, if EMA fraud follows the levels of other benefit fraud, we are looking at a meagre 1%. It seems draconian to axe an entire scheme because of the actions of such a minority; it is tantamount to cutting off the head to cure a cold.

I hope that the Minister does not try to link the end of the scheme with the deficit, because that would show a lack of economic competence on his part. First, if he is telling me that taking money out of the pockets of the poorest teenagers in the country is our salvation, we are beyond redemption. Secondly, it makes very bad long-term economic sense to do that, because according to the Treasury, by 2020 the number of unskilled jobs will be half what it is today, meaning that more unskilled people will be fighting for even fewer jobs. I would be interested to know whether the Minister denies that.

Lastly, we need more people in employment. With rising youth unemployment, the decision we are discussing will swell an area that does not need increasing any further. What is more, as the Directgov website page for EMA clearly points out, for every extra skill and qualification that someone earns, they are £3,000 a year better off. Research by the Office for National Statistics shows that people without the minimum set of qualifications earn on average £55 a week less. I am sure the Minister will agree with me that paying people £30 a week in the short term so they can earn £55 a week more in the long term will help us not only to upskill our work force, but to pay down the deficit faster.

A 2009 survey by the Chartered Institute of Personnel and Development found that only 17% of employers were planning to recruit from the pool of 16-year-olds leaving school, and that only one third of employers planned to recruit those leaving school at 18. We know that being unemployed for more than 12 months under the age of 23 has a hugely negative impact on a person’s future, causing a permanent scar of disadvantage. Those who have experienced long periods of unemployment in their youth will suffer sizeable wage penalties well into their 40s.

There has been talk that the Government plan to budget for EMA at local authority level. That concerns me greatly. With no ring-fencing of council spend, how will that be achieved?

The best thing about EMA is that it ensures parity of payments throughout the country. Let us take, for example, someone under 18 who is a care leaver. As payments controlled by local authority children’s or leaving care services vary, young care leavers could fall victim to a postcode lottery of support. A care leaver living in Croydon in south London, where almost 5,000 young people are on EMA, could receive less than someone in Richmond upon Thames, which is only a bus ride away but has only 900 young people on EMA, as there is less demand locally and it has a bigger budget to go round.

The evidence speaks for itself on why we should save EMA. Research by the Institute for Fiscal Studies shows that attainment at GCSE and A-level by EMA recipients has risen by 40% since its introduction, and by even more for those living in the most deprived neighbourhoods.

In addition, RCU market research services carried out research on the national scheme and published in 2007 a report called “Evaluation of the EMA National Roll-out”, which concluded:

“EMA has had a positive impact on the retention, achievement and success of certain groups of learners…traditionally associated with lower levels of achievement”.

[Andrew Stephenson (Pendle) (Con)]

I thank the hon. Gentleman for securing this important debate. As a Conservative, I am a fan of EMA; 65% of students in my constituency going to Nelson and Colne college receive EMA. The Government are not scrapping EMA; they are simply replacing it with more targeted support. Surely that is a sensible and credible step in clearing up the worst public sector deficit in the G20, which was bequeathed to them by the hon. Gentleman’s party.

[John Robertson]

I did not see, but the hon. Gentleman must have come into the Chamber late, because he obviously has not listened to my speech and has not read the CSR. I point him to page 42 of that document; he obviously was not listening.

[Andrew Stephenson]

I’ve been here for two hours.

[John Robertson]

If the hon. Gentleman was here, how sad.

As we can see, the scheme is widely recognised by independent authorities as a success, and the arguments by those opposed to the scheme are easily silenced.

The Minister will be aware that the EMA scheme is devolved and each Administration have their own policy responsibility for EMA. The Scottish National party Administration in Scotland have been as inconsiderate as this one when it comes to protecting students from low-income families during the recession. They cut the £10 and £20 payment scheme and lowered the threshold for the top rate of £30 to below £19,000, despite warnings from NUS Scotland that that could lead to about 8,000 students dropping out this year alone. This year, EMA for my constituency of Glasgow North West has been cut by 20%.

However, figures released by the Scottish Government last year show that the old system, developed under Labour, was successful. The figures showed an increase in uptake on previous years and that the allowance helped school pupils from low-income families to stay on in education, just as it was planned to do.

I know that the Minister has no responsibility for the administration of EMA in Scotland, but I use that as an example of what will happen if support is removed from students on EMA. That view is supported by the National Union of Students for Scotland, as well as by many education experts and independent think-tanks.

The Minister should also take into consideration those living independently at an early age, who may need particular support. Lack of access to financial support may be one of the main barriers to participation in education. There are some key barriers: course fees; travel expenses; the cost of food and other essential items; costs associated with the course or placement, such as equipment; and a lack of comprehensive advice and guidance for young people on their entitlement to benefits.

For example, a young person aged from 16 to 18 is far more likely to be independent of their family than younger students, and as such to require more support to enable them to participate in learning. For those living with families on a low income, the overall impact on the family finances should be considered. In some instances, young people have been discouraged from taking part in education. Economic barriers should not be part of someone’s choice about whether to stay on in education.