Education Maintenance Allowance

Fiona Mactaggart Excerpts

Wednesday 19th January 2011 Commons Chamber

[Andy Burnham]

My brother is the vice-principal of a sixth-form college, and I have asked him that question. He says that it would be an impossible task for his college to decide between one student and another. Colleges want to help students, but they would have to make those decisions with an inadequate fund that covers only a tenth of the amount that it currently covers. The hon. Gentleman’s suggestion would mean passing on an impossible problem, but I welcome the spirit of his remarks. He will notice that I have deliberately moved a broad motion that invites the support of all hon. Members who want the Government to think again. It sounds as if he is one of them.

Let us not throw out everything about EMA that is a success, and that brings me to the economic case for keeping it. In short, EMA is good not just for the individuals who receive it, but for all of us in building a higher-skilled and more prosperous society, in which the costs of social failure are lower. Yesterday, the chief executive of the Institute of Mechanical Engineers called on the Government to rethink their decision. He said:

“Tough decisions have to be made, but the UK economy will increasingly need skilled engineers and technicians over the next few years. Our long-term economic health depends on making the right decisions now.”

Haroon Chowdry of the Institute for Fiscal Studies has said that even taking into account a dead-weight cost of 88%, the costs of EMA are “completely offset”. He said:

“The initial outlay of the EMA policy is likely to be more than recouped by the increase in productivity that we expect to result from the 16- and 17-year-olds staying on in education for longer”.

Has the Secretary of State made an economic impact assessment of his policy alongside an equality impact assessment? I have not seen one. Has he assessed how EMA helps to build a skilled work force that benefits us all? If we take that support away, we lose not just those skills—taxpayers must also face the higher costs of social failure as young people drop out of education. Has he made an assessment of that?

On the Government’s own figures, around 78,000 are unlikely to be able to stay in further education without EMA. We cannot know for sure whether all those young people will end up unemployed if they lose EMA, but given today’s figures showing record youth unemployment, it does not look good for them. Will not the Government have to provide support for them in some other form—perhaps a less constructive form—when they have reduced hope for the future?

[Fiona Mactaggart (Slough) (Lab)]

In view of my right hon. Friend’s point about improved qualifications, will he note the figures that East Berkshire college has provided to me? It has a number of students on EMA. I have worked out that its figures on improved retention would mean that 45 or 50 young people in the town that I represent would be unlikely to complete their course if they did not have EMA.

[Andy Burnham]

My hon. Friend is exactly right—that is borne out by the experience of many colleges around the country. Some of those young people are at risk of ending up in the benefits system. Will not the Secretary of State’s policy lead to an increase in 16 to 17-year-olds seeking to claim jobseeker’s allowance in exceptional circumstances, or certainly to an increase in the numbers claiming JSA at 18? We know that every young person not in education, employment or training costs more than £55,000, according to research for the Audit Commission. The IFS has said that EMA successfully reduced the number of NEETs. Will it not therefore cost more to get rid of EMA?

Those costs will add up on many levels. As Paul Gregg at Bristol university has found, youth unemployment imposes a “wage scar” that can last for decades. He suggests that scrapping EMA fails to take account of other benefits, such as lower crime. That adds to the fears that through a combination of the Government’s policies, they are taking hope away from a whole generation.

I have set out the education case, the social mobility case and the economic case for keeping EMA, so let us now deal with the democratic case. The Prime Minister and the Secretary of State made personal promises to young people to keep EMA. Failing to honour them will do great damage to young people’s trust in Parliament and politics. From this Dispatch Box, the Secretary of State said:

“We are entirely in favour not only of the existence of the EMA but of the provisions in the Bill to secure an extension to it.”—[Official Report, 14 January 2008; Vol. 470, c. 669.]

Weeks before the general election, he said:

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

On the back of these statements, does the Secretary of State not accept that young people embarking on a two-year course in September 2010 had a reasonable expectation that they would receive EMA support for the duration of their course, and that they could not have expected that the rug might be pulled from under them?

Beyond that, do the Government have a democratic mandate for this change? This time it is not the yellow Tories, but the real Tories who have broken their promises to young people. However, did any of the people who voted Lib Dem in May vote to curtail the life chances of the least well-off in this way? Unsurprisingly, the Government’s amendment shifts the ground on to deficit reduction, but if that is now the Government’s main argument why did the schools Minister, the hon. Member for Bognor Regis and Littlehampton, say to the House in a holding answer dated 7 June:

“The Government are committed to retaining the education maintenance allowance”?—[Official Report, 14 June 2010; Vol. 511, c. 307W.]

What changed after June? Did the full costs of the risky, unwanted reorganisation of the NHS become known, or did the Prime Minister choose his marriage tax break—costed before the election at £550 million, which is almost the same amount as EMA—as a priority above EMA? This confirms the growing impression that this is a shambolic ministerial team that changes its argument and does not know what it is doing.

The House may be forgiven for feeling a certain sense of déjà vu. This is a rushed decision with no warning, no consultation with those most affected, no evidence to support the decision, a growing backlash as the implications sink in, and a desperate rearguard action to justify it with dodgy statistics. If this is starting to sound familiar, it is because we have been here before with, for instance, Building Schools for the Future, school sport partnerships, and Bookstart. The fingerprints of this repeat offender are all over the scene of the crime. My question today to Liberal Democrat Members is this: how much longer are they prepared to carry the can in their constituencies for the disastrous decisions of this Secretary of State?