Independent Financial Advisers (Regulation)

Debate between Justin Tomlinson and Mark Garnier

Monday 29th November 2010 Commons Chamber

[Mark Garnier]

My hon. Friend will not be at all surprised to hear that there are a number of surveys. Which? Undertook a survey that showed that 85% of people would prefer to pay fees, yet a survey by Harris Interactive showed that only 6% of the public said they would be happy to pay fees as opposed to commissions. That is a big problem, I think.

In future, customers will need to agree a fee with their adviser. That means that no longer will a client pay for advice via a commission charged on a transaction.

[Justin Tomlinson (North Swindon) (Con)]

I congratulate my hon. Friend on securing this excellent debate. Does he agree that if it is believed that commission makes advisers more inclined to promote products with higher commission, the same would surely apply to banks that offer their staff product sales incentives? Should changes not be consistent across the sector?

[Mark Garnier]

Yes, they should, and it is fair to say that the FSA is looking at the whole sector.

At the moment, every client is given the option of paying for their advice via a fee or commission. Since 1991, every client of every IFA has been given full details in writing of the adviser’s commission, and the overwhelming majority of clients elect to pay by commission. During that period, the market share of the IFA sector has increased from 29% to more than 65%—based on commission charging—with consumers demonstrating a clear understanding of and preference for independent financial advice. It should be noted that independent advice is not the preserve of the wealthy. Some 60% of IFA clients are ranked as C1 or below. If consumers are forced to pay a fee for advice, it is inevitable that many who would benefit from independent advice will not seek it, resulting in only the well-off accessing a significantly reduced IFA sector. The subject of commissions is extensive and I am sure that many hon. Members will want to expand on it in their speeches.

School Funding (Wyre Forest)

Debate between Justin Tomlinson and Mark Garnier

Tuesday 19th October 2010 Westminster Hall

[Mark Garnier (Wyre Forest) (Con)]

I thank the Minister for coming along this afternoon to listen to what I believe is a very special case for Wyre Forest: its school building programme.

I am very pleased to have secured this debate, as it gives me an excellent opportunity to put on record the case for the funding of school building in Wyre Forest. However, before I get to the main thrust of my argument, I want also to put on record how incredibly grateful I am to Lord Hill, the Under-Secretary of State for Education with responsibility for the Building Schools for the Future programme, who agreed to meet last week with seven of my local school heads, the chief executive of Worcestershire county council and the officer in charge of the council’s estates. It was an incredibly helpful meeting and, I believe, very constructive, and I hope that it bears dividends.

To underscore the argument, it would help if I gave the history behind what is going on in Wyre Forest. Wyre Forest is—or was—part of the wave 6a tranche of the Building Schools for the Future programme. As a result of the cancellation of some 700 BSF projects across the country, Wyre Forest has now lost the rebuild or partial rebuild of five secondary schools. I am certainly not here to argue in favour of the BSF programme. My constituents, particularly those who have had a lot to do with the programme, think that BSF was an overly bureaucratic and unnecessarily expensive way to deliver what is otherwise a very good outcome: new schools fit for the 21st century. Indeed, Worcestershire county council was encouraged by the previous Government to spend about £3 million on the programme, on what have amounted to largely unnecessarily bureaucratic measures. However, in Wyre Forest we are just part way through a major schools reorganisation, and the implications of the BSF cancellation are widespread. It is not just that five schools have had their rebuilds cancelled; as a direct result of the decision by my right hon. Friend the Secretary of State for Education, a total of 11 schools in Wyre Forest face an uncertain future regarding their accommodation, and a special school has failed to take advantage of a unique opportunity.

About 10 years ago, Worcestershire county council was instructed by the Department for Education to look into a number of local education issues that were causing concern. In very simple terms, there were three key issues: failing standards and lower-than-average pupil retention into the sixth form; a very small surplus of accommodation; and Wyre Forest’s adoption of a three-tier system of education as opposed to the two-tier one, which was, I believe, used in more than 90% of the country at the time. The county council undertook not one but two consultations among parents, pupils and staff across the whole district, and in April 2005 the county council cabinet took the bold decision to implement what is now widely known as the Wyre Forest schools review. That incredibly bold decision introduced the biggest school changes ever undertaken in this country, and culminated in moving 45 three-tier schools into just 30 two-tier ones.

In August 2007, all 45 first, middle and high schools were closed, and just 30 primary and secondary schools were opened in September. All middle schools and a handful of primary schools were closed for ever. It is important to underscore the enormity of that undertaking. Every child, parent and teacher, as well as all the support staff, were involved in this colossal local change. A third of the education estate in Wyre Forest was closed, never to be reopened. Every member of staff had to reapply for their job, many children were moved from one school to another, and parents had to adapt to changes that they were not expecting. Importantly, accommodation became very cramped across the whole Wyre Forest school system. But my constituents, in a manner that I am finding is typical of them, knuckled down as a group to deal with the disruption, and teachers and other staff made huge efforts to ensure that standards were kept as high as possible and that no child was at any time disadvantaged by the process of change. The past five years have been very traumatic in Wyre Forest, but the light at the end of the tunnel has always been that in the end the district would have education facilities fit for the 21st century—until, of course, my right hon. Friend the Secretary of State for Education made his decision to cancel BSF in Wyre Forest.

The knock-on effect of the BSF cancellation has been immense. As I have mentioned, five secondary schools have been cancelled. As I have said, I am not here to argue for BSF, but the vision for the district was far greater. Because of the building programme, the county council made what I believe was a wise decision—that economies of scale could be introduced. Accordingly, three of the secondary schools were to have primary schools located on their sites. Stourport high school, a school rated as excellent, was to have Burlish Park primary school built on its single site. Stourport was built for about 900 pupils, but now accommodates about 1,400 on a split site, with significant numbers of pupils in temporary classrooms. I shall refer to Burlish Park primary school a little later, because it is important in its own right.

Kidderminster’s King Charles I school now has 1,300 pupils on two sites that are 10 minutes apart and separated by a main road. There are 880 pupils on one site and 420 on the other. Only recently, a child was involved in a road accident there, but I am happy to say that it was not serious. King Charles I was to have a complete rebuild, and was to accommodate Comberton primary school on its new single site. Comberton was built as a one-form entry school, but is now struggling as one-and-a-half-form entry and is being asked to become two-form entry this year, accommodating half its pupils in temporary classrooms.

The most visionary development was to have been the learning village at Baxter college. There was to have been a major rebuild, alongside St John’s primary school, of the 70-year-old building, which accommodates just under 1,100 pupils.

[Justin Tomlinson (North Swindon) (Con)]

I congratulate my hon. Friend on securing this excellent debate. I attended St John’s first school and middle school, and Baxter college, so I know first hand the importance of delivering improvements and investing in schools. I would, however, politely request that, should my hon. Friend secure any investment, he insist that Baxter college revert to its original name of Harry Cheshire high school.