New Grammar Schools
Lucy Frazer Excerpts(8 years, 2 months ago)
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Justine Greening
That again underlines why we are right to open up this agenda for debate. In a way, we will not be able to tackle any of the issues that the hon. Gentleman cares about without a broader look at what a modern policy approach to grammars should look like. We should not simply discount the excellent education that so many children get at grammars, including children from very disadvantaged backgrounds. We should look harder at how we can make sure that grammars play a role more collaboratively in a wider, broader school system, while ensuring that they build capacity and provide more good places as they steadily improve.
Lucy Frazer (South East Cambridgeshire) (Con)
Yesterday, during an Education Committee evidence session, we heard about the truism that what affects pupils’ attainment most is good teaching in the classroom. That is evidently true, but does the Secretary of State agree that structures can sometimes support learning? A 2011 PISA—programme for international student assessment—study showed that giving schools autonomy improves outcomes, so further choice for parents, teachers and students may provide further opportunities.
Justine Greening
I think that is right. Critically, we need the right level of autonomy for schools so that they can actually get on with the job of teaching our children. We need fantastic leadership in our schools. We know from the London experience that that was absolutely critical. Heads who showed what could be done in difficult schools then worked with other schools so that they could put in place the same approaches. More broadly, we also need teaching staff who are motivated and able to work effectively in the classroom with children who can be disciplined effectively by a head who genuinely feels they have control over and can exercise leadership in their school. All those things make a difference.
Beyond that, if we are to make an impact on long-term social mobility in Britain—it will not change overnight—we need not just schools and the education family to drive social mobility, but communities, business, our universities and civil society to do so. Everybody needs to play a role, alongside core education reform, to make sure that children in the classroom and outside it can get the skills, knowledge, advice and experience that they will need truly to develop their potential.
Education, Skills and Training
Lucy Frazer Excerpts(8 years, 6 months ago)
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Ms Eagle
I certainly agree that quantity is not all. I will come on to some of the detail of those Bills as I make progress with my speech.
Michael Portillo went on to say:
“The Government is in total paralysis, because the only thing that matters to the Government now is the saving of the Prime Minister’s career”—
by—
“winning the referendum.”
In what will be a damning epitaph of this Tory Administration, he said that the majority that the Prime Minister secured last year is “all for nothing”. He said:
“The Government has nothing to do, nothing to say and thinks nothing.”
We have this “nothing” Queen’s Speech before us. We have a few eye-catching announcements designed to distract attention from the emptiness of the Government’s programme. We were presented with the possibility of driverless cars on our roads in four years’ time and even private spaceports, but there is still no sign of a decision on the much more pressing issue of airport capacity for the travel that millions must now undertake.
We were told that there would be a legal right to access digital broadband, but there is no clear route to resolve the scandal of this Government’s total failure to provide adequate digital infrastructure for all. Despite being the fifth largest economy, we still languish at 18th in the world for broadband speed.
Perhaps it is a sign of just how toxic things are in the Conservative party that even this self-described “uninspiring, managerial and vacuous” legislative programme has already caused yet another Tory Back-Bench rebellion.
Ms Eagle
No.
The Government have already caved in by agreeing to an amendment to the motion which will exempt the NHS from the Transatlantic Trade and Investment Partnership. We on the Labour Benches have long called for the Government to exempt the NHS from trade deals, and we are glad that they have now agreed with us.
It is interesting to see what this divided shower of a Government are now able to agree on. The only things on which they seem to be able to unite are flogging off valuable public assets such as the Land Registry, which actually makes us money, and unleashing the full force of the market in higher education. This rebellion on TTIP follows other Government U-turns and defeats on areas such as: forced academisation; cuts to tax credits for the low paid; cuts to personal independence payments for the disabled; pension tax relief reform; the solar tax; the tampon tax; Sunday trading; watering down the fox hunting ban; closing the wildlife crime unit; scrapping their own criminal courts charge; welcoming some child refugees to this country; and housing. The list does not even include the Chancellor’s latest Budget fiasco, which remains unresolved, and seems to be a £4 billion hole in its arithmetic.
Lucy Frazer
I am very grateful to the hon. Lady for giving way. I am surprised that, six minutes into her speech on the subject of education, skills and training, she has failed to mention that the first paragraph of the Queen’s Speech was about life chances. Given that the Queen’s Speech talks about education in prisons, when we know that half of the young people in prison have no education at all, a fairer funding formula for schools and social care, it is clear that it has some real substance.
Ms Eagle
I will get on to those points, but this is a debate on the entirety of the Queen’s Speech, and I am entitled to say what I like about any little bit of it. The hon. and learned Lady can make her own speech if she catches the Speaker’s eye, and I will thank her if she lets me make mine. I am here to make the point that I want to make, and I intend to do so.
The emptiness of the current Conservative agenda outlined in the Queen’s Speech is apparent in the public relations hyperbole that accompanied its announcement. Once more, we have to “mind the gap” between rhetoric and reality. Although the Government boast about their credentials as a “one nation Government”, they are cutting support for working people and giving the richest a tax cut. They think £450,000 for a starter home is affordable, and they are doing nothing effective to solve the housing crisis or the problem of soaring rents. They boast of a life chances agenda, as indeed the hon. and learned Lady has just done, but this is what is happening in 2016 in Tory Britain: homelessness is soaring; millions are forced to resort to food banks just to eat; Sure Start centres are closing; the attainment gap is widening between different areas of the country; and millions more are struggling to see their doctor, and cuts to funding mean that that is likely to get worse.
The Prime Minister’s self-proclaimed life chances agenda is either a joke or a con. How do the Tories improve life chances by abolishing student maintenance grants for the poorest, increasing tuition fees and barely mentioning further education colleges in their plans? How do they create opportunity by underfunding education and constantly fiddling with school structures while ignoring low morale, the chronic teacher shortages and the growing pressure on school places? The Government’s proposals for improving life chances must be judged in the context of their funding settlements for education, as I mentioned earlier. The 16-to-19 age group has seen a real-terms fall of 14% in its funding provision since 2010, and education capital spend has fallen by 34%.
Lucy Frazer
The hon. Lady is being very generous with her time. In circumstances where we know that one of the biggest single factors affecting the education of children and young people is the quality of teaching, does she agree with the principle that it is appropriate to ensure that we have excellence in teaching and that we improve teaching if we can?
Ms Eagle
Yes, but I am talking about how we measure excellence and what it means. If the hon. Lady were so concerned about the excellence of teaching, she would be looking at Sure Start and what is happening with early teaching. She would also be looking at the problems we have with teacher recruitment and at a range of other things. Nobody in the House disagrees with the concept of teaching excellence; the question is how one defines and measures it, and that is what I am trying to deal with now.
We have talked about subsequent employment. The other two proxies the Government have chosen are student retention—that is reasonable—and satisfaction surveys. Again, there are reasons why a student is not satisfied with an institution that may have nothing to do with whether it teaches in an excellent way. A lot more work will probably have to be done on these proxies if they are to have any meaning whatever. I look forward to hearing what the Minister has to say, because the concept is very dubious at the moment.
“Educational Excellence Everywhere”: Academies
Lucy Frazer Excerpts(8 years, 6 months ago)
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Nicky Morgan
At Prime Minister’s questions the Prime Minister talked about academies for all and education for all, and that is exactly what we are going to see.
Lucy Frazer (South East Cambridgeshire) (Con)
The shadow Secretary of State said that there is no evidence that academisation, in and of itself, improves performance, but does the Secretary of State think that the increased autonomy that is inherent in the structure of academies does improve performance, as set out not only in the PISA report that she mentioned but in the McKinsey report of 2010?
Nicky Morgan
I entirely agree with my hon. and learned Friend. We have been very clear that just calling a school an academy does not automatically raise standards, but academies are the vehicle by which those working in them have the creativity to innovate with the curriculum, to set flexibility for pay and conditions, and to collaborate more freely with other schools. That is exactly what academy schools are doing, and that is why standards are going up.
Education Funding in London
Lucy Frazer Excerpts(8 years, 6 months ago)
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Lucy Frazer
My hon. Friend perhaps anticipates the point I am going to make as the Member who represents South East Cambridgeshire. Of course London has enjoyed great success, but is it not only right that other areas—areas that have been underfunded for years—should benefit from the opportunity to enjoy the same success so that they can be brought up to the level that London has enjoyed?
Robert Neill
That is part of the point about levelling up that was made by the right hon. Member for Enfield North (Joan Ryan).
The other two things I would observe are these. I mentioned that London is not homogeneous. The levels of funding in outer-London boroughs such as mine, Bromley, and in others, such as Richmond upon Thames and Kingston upon Thames, are actually often much lower than those that are headlined in respect of inner-London boroughs. Boroughs such as mine have levels of funding that are scarcely different from those in the shire counties around us.
Rushanara Ali
The hon. Gentleman will recognise that in boroughs such as mine and in Newham and Hackney, the unprecedented rise in house prices has been much greater than in outer London. I accept his point that house prices are a major issue, but the Government should be considering how to address that across London and the country, rather than dividing communities and areas. That is our point. We must build on our achievements and not close our ears to each other, because that does not serve our constituents or young people well.
Let me turn to population growth in London. When the population is growing by 100,000 a year in London, we cannot afford to have fewer teachers. If we are already looking at 6,000 fewer teachers with these cuts, imagine what will happen in the future. We need to plan ahead for the needs of cities such as London. If we want London to remain a world-class city with some of the best educated young people in the country, and help other areas to improve and replicate what we are achieving, we must ensure that we do not throw away that success.
Rushanara Ali
I will continue my remarks because other Members wish to speak and I have given way a number of times. Perhaps the hon. and learned Lady will also have the chance to speak.
As has been mentioned, the increased cost of living in London has meant that teachers find it increasingly difficult to survive on their current salaries, and they require the London weighting equivalent to enable them to live and work in London. Already in boroughs such as mine and elsewhere, local authorities are struggling to maintain teacher numbers, and with these cuts they will have to lay teachers off, which is not what local schools need.
In boroughs such as Tower Hamlets, Hackney and elsewhere, we have seen such as collaboration, partnership and the effective use of resources by teachers and local education authorities have helped to create a success story that has transformed our schools. We must build on that model. It is not about the academisation of schools in my borough—we did not have academies; it is the collaborative model and partnership, along with well-targeted resources into schools, investment in training, and support to teachers, that transforms schools in my constituency and elsewhere. That is well recognised around the country. Recent reports by the Brooking Institution and the Institute of Education highlight what it took to transform education, and spending resources effectively was critical to that.
My plea to the Minister is that he take back these plans, consider the formula again, and ensure that funding is targeted on those who need it. In London, given the inequality and deprivation, it is vital that we maintain that support. The Government should be looking at levelling up support to schools across the country, not taking resources away and punishing schools for doing well. It has taken a generation to transform schools such as those in my borough and across London, but it will take a matter of years—perhaps even less—if this funding formula is introduced and resources are taken away from schools, to decimate our education system. Surely the Minister will appreciate that it is far better to learn from one other and to build on our achievements rather than damage them.
Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this debate and I congratulate my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) on leading it.
It is also a pleasure to follow the hon. Member for Bethnal Green and Bow (Rushanara Ali), although I must say from the outset that I did not agree with the tone of her speech. The Labour party is committed to the fair funding formula. The one we have now is broken and it is broken in London. I described the difference between Lambeth and Croydon, but we can find examples all over London. Schools hundreds of yards apart have differences in funding of up to tens of thousands of pounds per classroom. The current system is completely broken and wrong, and it is wrong across the country. The biggest gainer from the F40 proposals would be Barnsley. Other major northern cities would be beneficiaries, too. If we created a fairer system, other northern cities would lose out, because what we have now is erratic, irrational and bears no examination.
I beg Opposition Members in particular not to use the language that the hon. Lady used. The Government have set out a consultation on the principles. She did not itemise a single principle in the consultation with which she disagreed; she simply asserted that it was some sort of appalling assault on London to reverse the progress that has been made. Nothing could be further from the truth. There are limited resources; that is recognised by those on the Front Benches on both sides of the House.
Talk of levelling up is all very well, so long as the hon. Lady’s party is committed to the vast budgetary increases that that would require. However, the Labour party is committed to no such thing and neither is the Conservative party. Even if the budget for this broken inequitable system was increased, we would still have to sit down and seek to ensure that the needs of every single child, regardless of disability, race or geography, were met.
The hon. Lady was right to say that we should have a system based on needs. That is precisely what the Government have consulted on. Whatever they come up with will doubtless not be perfect—nothing ever is—but to question the motive, when the Government are setting out to introduce a fairer funding system with the support of Labour Front Benchers, is beneath the hon. Lady. To say that London education will be decimated is so far from the truth. We need every area of the country to enjoy the improvements that have happened in London. One way to do that—it is only one way; money is not everything—is by making sure we have a system that is truly fair. I hope that, across the House, partisan voices will not stop us coming to a fair and consensual conclusion.
Lucy Frazer
My hon. Friend makes a very important point. We need fairness so that every child has an equal opportunity to get an education. Does he agree that many of the points made about London—growth, special needs, high house prices, a need to recruit and retain teachers—apply to other areas of the country, too? I cite by way of example Cambridge and its outer areas. Every one of those factors applies to us as it does to London.
Graham Stuart
My hon. and learned Friend is absolutely right. We heard language about dividing communities. With respect, the only person attempting to do that today is the hon. Member for Bethnal Green and Bow, who used inappropriate language. No one is seeking to divide communities. We have a broken system. If anyone would like to make the case that the current system is fair, reasonable and just, then please do so. But if it is not—and it is not—then we have to redistribute.
Making pernickety points about the manifesto, which says that the Government are going to protect the amount of money per child—which they are—[Interruption.] To the point where we cannot redistribute from someone who is grossly and unfairly funded in one place to another person somewhere else who is on the other end of the spectrum? That is ridiculous. Again, that is beneath the hon. Lady who brought the issue up and it is beneath other Labour Members—including the highly distinguished figure of the right hon. Gentleman, to whom I am happy to give way.
Oral Answers to Questions
Lucy Frazer Excerpts(8 years, 7 months ago)
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Nicky Morgan
The hon. Gentleman perhaps knows that I am a caffeine addict, but he is missing the point, which is that good schools have much to offer the whole of the rest of the education system. What we see now in schools across the country is collaboration and partnership in clusters of schools, and that is what we want to continue right across the system. We know that actually the best people to run schools are those on the frontline—the heads, the teachers and the professionals—and that is what we want. The issue for the Labour party is that we never hear talk of the pupils, the children or the raising of standards; it is always about vested interests.
Lucy Frazer (South East Cambridgeshire) (Con)
Over the past 11 months, one of the issues that has come to me time and again in the constituency has been the cost of the recruitment of teachers, so I was very pleased to see the proposal in the White Paper in relation to the national website that will be set up. Will the Secretary of State tell us how this will help to improve teacher recruitment across the country?
Nicky Morgan
I thank my hon. and learned Friend very much, first, for raising this important issue, but also for spotting that only one of the eight chapters in the White Paper deals with school structures, while the rest tackle the issues that schools have been talking to us about, one of which is the high recruitment cost of teachers. We think that if we can work with the sector to provide a low-cost or no-cost website to enable schools to advertise vacancies, it will mean that more money gets to the frontline, which I think we all want to see.
Budget Resolutions and Economic Situation
Lucy Frazer Excerpts(8 years, 8 months ago)
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John McDonnell
The present Chancellor has borrowed £200 billion more than what he promised. Let us be absolutely clear that like any company, UK plc under us will invest—it will invest in plant and machinery to create the growth that we need if we are to afford our public services.
Let me go back. The Chancellor promised us a “march of the makers”, but manufacturing still lags behind its 2008 levels. He said he would build his way out of our housing crisis, but we have seen new house building fall to its lowest level since the 1920s. He said that he had moved the economy away from reliance on household debt, but, yesterday, the Office for Budget Responsibility said that his entire plan relied on household debt rising “to unprecedented levels.” He said that he would aim for £1 trillion of exports by 2020. Yesterday’s figures suggest that he will miss that target by the small matter of £357 billion.
When it comes to the Chancellor’s failures, he is barely off the starting blocks. The fiscal rule he brought before Parliament last year had three tests. We already knew that he was likely to fail one of them, with the welfare cap forecast to be breached. Yesterday, it emerged that he will fail the second of his tests. Having already raised the debt burden to 83.3% of GDP, it is set to rise now to 83.7% this year. Therefore, since the new fiscal rule was introduced, it is nought out of two for the Chancellor’s targets.
Lucy Frazer (South East Cambridgeshire) (Con)
The hon. Gentleman started by saying that we needed some straight talking. In order to be fiscally credible, one needs to have concrete figures. The Chancellor has said in his Budget that he will borrow £1 in every £14 in 2016-17. Will the shadow Chancellor tell us what his borrowing figure will be?
John McDonnell
Unlike the current Chancellor, we will not set ourselves targets that can never be realised, and we will create an economy based on consultation with the wealth creators themselves—the businesses, the entrepreneurs and the workers. In that way, we will have a credible fiscal responsibility rule.
Yesterday, the OBR revised down its forecast for growth for this year, and for every year in this Parliament—in some cases by significant margins. That is reflected in lower forecasts for earnings growth. The Resolution Foundation says that typical wages will not recover to their pre-crash levels before the end of this decade. It is not just forecasts for economic growth and wages that are down. Those are driven by productivity, which has also been revised down for every year of this Parliament. Any productivity improvements last year have disappeared. As the OBR said, it was, “Another false dawn”. Perhaps that is not surprising. After all, productivity is linked to business investment, which should be driving the recovery, but which plunged sharply last quarter.
John McDonnell
Regrettably I do not think it has been sugar-coated for many of those who will be suffering the cuts included in this Budget.
On productivity, it is the Chancellor’s failure to boost Britain’s productivity that is at issue. The Office for Budget Responsibility is very clear on this point. British productivity, not global factors, is the reason the Chancellor is in trouble. Robert Chote, the head of the OBR, confirmed in an interview last night that “most of the downward growth revisions were not driven by global uncertainty, but by weaker than thought domestic productivity.” As a result of that, we now see drastically reduced economic forecasts and disappointing tax revenues.
The Chancellor has been in the job six years now. It is about time he took some responsibility for what has happened on his watch. It is not just on basic economic competence that the Chancellor has let this country down. Unfairness is at the very core of this Budget and of his whole approach.
John McDonnell
I will press on, if the hon. and learned Lady does not mind.
The Chancellor said in 2010 that this country would not make the mistakes of the past in making the poor carry the burden of fiscal consolidation. The facts prove that that is just not accurate. According to the Institute for Fiscal Studies, the long-run effect of all tax and benefit changes in last year’s autumn statement would mean percentage losses around 25 times larger for those in the bottom decile than for those in the top decile.
John McDonnell
I fully concur with my hon. Friend. I will come back to that point.
The distributional analysis by the Women’s Budget Group shows that by 2020 female lone parents and single female pensioners will experience the greatest drop in living standards—by 20% on average. In the case of older ladies, the single female pensioners, the cuts in care are falling upon their shoulders. I find that scandalous in this society.
It is disappointing, too, that the Budget offered no progress on scrapping the tampon tax. The Chancellor is hoping for a deal from the EU on the tax. If there is no deal, we will continue to fight for it to be scrapped.
Lucy Frazer
The hon. Gentleman mentioned that productivity was down for domestic reasons, not for international reasons. Can he therefore explain to me why the Congressional Budget Office in the US has reduced its forecast for potential productivity growth by 8.9 percentage points, which is lower than that for this country?
John McDonnell
That relates to the US economy. The figures that I quoted were not mine. They were from the Office for Budget Responsibility, which referred to domestic productivity falls.
Young people have also paid a heavy price during the Chancellor’s tenure. It is not just the education maintenance cuts in the last Parliament, or the enormous hikes in tuition fees; it is the dream of home ownership receding into the distance for young people on average incomes. The new Lifetime ISA will not resolve that. With pay falling so sharply for the young, there can be very few who can afford to save £4,000 a year.
We know that so far on the Chancellor’s watch, people with severe disabilities have been hit 19 times harder than those without disabilities. If that were not enough, the Government are now taking over £100 a week out of the pockets of disabled people. Even for a Chancellor who has repeatedly cut public spending on the backs of those least likely or least able to fight back, this represents a new low. I believe it is morally reprehensible.
Engineering Skills: Design and Technology Education
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Michelle Donelan
I thank my hon. Friend for that point, which I will touch on in a minute. I completely agree: the link between business, companies and education needs to be aligned much better. There is a big stigma and misconception about this sector, and the only way in which we can myth-bust is by introducing young people to real people in the industry, who will tell them what life is like in the job.
Lucy Frazer (South East Cambridgeshire) (Con)
Does my hon. Friend accept that businesses are already doing a great deal in this area? In my constituency, Marshall does a great job of inspiring young people to go into engineering and aerospace, and yesterday I met representatives of TWI, a company just outside my constituency, which is doing the same. However, businesses need to do more and they need to do it at an early stage if they are to inspire young people at the ages of six, seven and eight to get involved in engineering.
Michelle Donelan
Yes. I thank my hon. and learned Friend. Again, I will touch on that point in a minute, but I totally agree. The problem is that there is inconsistency. A number of businesses and schools in my constituency are also doing an excellent job, but not every school is offering the same link with businesses and not every business is engaging as much as it could be.
Oral Answers to Questions
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Lucy Frazer (South East Cambridgeshire) (Con)
On Friday, I had the opportunity to meet representatives of Blue Smile, a local charity in Cambridgeshire that makes provision for those suffering from mental health issues. I was told that many schools use their pupil premium for the services of Blue Smile to help to deal with mental health issues in their schools. Does the Minister agree that the provision of mental health services in schools to solve issues at a very early stage is crucial?
Edward Timpson
My hon. and learned Friend is right to highlight the importance of establishing as early as possible the underlying causes of a child’s ability or inability to learn in school, which can be a result of emotional and mental health issues. That is why some schools are being extremely innovative about how they access pupil premium money to offer individual support to those children so that they are able to be in the best space possible to learn to the best of their ability.
Education and Adoption Bill
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Mr Gibb
The Government consider that to be an important step that will allow failing schools to begin receiving the expert leadership and support that the hon. Gentleman seeks from day one.
Underperforming schools are carefully matched to sponsors. Trusting educational professionals to improve schools based on their experience and expertise is central to the academies programme. The proposal to impose a requirement on sponsors to consult parents about their plans to improve a school would represent a return to the rigid approach that allowed vested interests to prevent sponsors from taking decisive action and to delay the process of transformation.
Lucy Frazer (South East Cambridgeshire) (Con)
Does my hon. Friend agree that the Government’s proposals offer flexibility? Although there is no obligation to consult and discuss, it is always open to the regional schools commissioner and the school to discuss the issue and consult as much as possible. For example, there is a school in special measures in my constituency, and the regional schools commissioner and I have had a meeting with parents to discuss the situation at the school and the potential new sponsor. It is always open to those who are involved in education to consult as widely as possible.
Mr Gibb
My hon. and learned Friend is right, and nothing in the Bill prevents any amount of consultation, or a new sponsor from talking to staff, parents and so on. The amendment imposes a requirement on sponsors to communicate with parents. Elsewhere the Bill also prevents ideologically driven organisations and community groups that are determined to prevent a failing or underperforming school from becoming an academy from doing so. We will not tolerate failure in our school system, and we want to take action from day one.
Enterprise Bill [Lords]
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Ms Eagle
Let me just get on with this section, and then I will be happy to give way.
The Opposition will be working hard to secure assurances on amendments on some of the issues I have mentioned as the Bill goes through the Commons. I commend the hard work of Labour colleagues in the Lords, who successfully won some welcome concessions and clarifications as the Bill went through the other place.
Lucy Frazer
The hon. Lady suggested that these provisions are minor. I am surprised that she does so in circumstances where R3, the body that represents insolvency practitioners, says that some of its members feel that late payments contribute to 25% to 50% of small company insolvencies. Does she think that the difference between solvency and insolvency is a minor issue for many of our small companies?
Ms Eagle
No, I do not, but I think the hon. and learned Lady should read the Government’s own impact assessment. The provision on the small business commissioner that the Bill proposes is so minor that the Government’s own impact assessment says that they will be able to deal with only 500 cases a year, and yet we know that late payment is a huge issue. I am not saying that the issue of late payments is trivial; I am saying that in dealing with it, the Government’s response is far too limited and very disappointing.
Ms Eagle
I could not agree more with my hon. Friend’s words.
Part 1—clauses 1 to 13—deals with the small business commissioner, so let me come on to the Opposition’s view on this. In the previous Parliament, Labour argued for the establishment of a small business administration that would be specifically tailored to focus on the very specific needs of small businesses.
Ms Eagle
No, because I have given way to the hon. and learned Lady.
This Bill contains a much more modest aim in seeking to establish a small business commissioner to assist in late payment disputes and signpost advice services for small businesses. The Opposition will support this, but we are disappointed by its small scale and its very limited remit. Indeed, the small business commissioner’s budget is to be a modest £1.3 million a year, and only because of an Opposition amendment accepted in the Lords will the commissioner be independent and able to appoint their own staff. Moreover, the Government intended to allow the role to be abolished by ministerial order without parliamentary scrutiny—a situation that was changed by another Lords amendment. We support the idea of a small business commissioner, but it remains to be seen whether such a modest proposal can really counter the huge imbalances of market power that exist, especially between huge companies and their much smaller suppliers. I certainly wish the new commissioner, whoever they are to be, well in the work ahead, not least because figures showing that the amount owed to small and medium-sized enterprises in outstanding invoices has increased by more than 70% in two years and that almost a third of small businesses are expecting things to get worse this year.
Lucy Frazer (South East Cambridgeshire) (Con)
Small businesses are critical to our economy and make up 99% of businesses nationally, and the Bill is designed to assist them. I want to focus on the resolution of disputes and debt collection, and I refer to my entry in the Register of Members’ Financial Interests. As a barrister who specialises in business law, and insolvency in particular, I have seen at first hand the impact that uncollected debts can have on a company.
Sometimes the inability to collect debts can have a significant impact on a small company. The most obvious consequence is simply the customer’s failure to pay, which means that their supplier is out of pocket. We know from BACS that an average small business has overdue payments of almost £32,000. However, it is not just the lack of cash flow, it is also the cost of collecting debts, and we know that £10 billion is spent per year in trying to recover overdue payments. It is not just the expense; it is also about management time, and in the end many small businesses simply give up. Indeed, the consequences can be even greater than that—sometimes they mean a lack of survival. R3, the trade body for the insolvency profession, has said that late payment by customers for goods and services is often cited as a cause of insolvency.
Andrew Bridgen (North West Leicestershire) (Con)
My hon. Friend is giving a great speech with her experience in insolvency. Does she agree that companies do not go bankrupt because they run out of profit; they go bankrupt because they run out of money, and late payment is part of that?
Lucy Frazer
That is absolutely right. Often, the cause is cash-flow insolvency, which is a test of insolvency, as well as the balance sheet.
The measures to introduce a small business commissioner to give free advice and information, and to operate a complaints scheme, are a welcome step in the right direction. Indeed, a similar scheme set up in Victoria Australia has had considerable success. The hon. Member for Wallasey (Ms Eagle) suggested that the Bill does not go far enough, but in 2014-15, with 704 mediation sessions, the Victoria scheme had an 80% success rate.
As my hon. Friends the Members for Huntingdon (Mr Djanogly) and for South Ribble (Seema Kennedy) mentioned, we must ensure the success of this scheme, and to do that, we must ensure that the small business commissioner has good identity, good awareness, and is effective.
We need to ensure that the person appointed has the gravitas to command the respect of businesses big and small. We need to ensure there is public awareness of the role. There are already a number of mechanisms to resolve disputes—there is already a free small claims mediation telephone service—but such schemes are successful only if the public know about them and so can use them. Finally, the small business commissioner will have to take full advantage of his or her powers to ensure speed, efficiency and an effective service.
The measures set out in the Bill are extremely welcome. The Government do not create jobs; businesses—often small businesses—do. It is our job to create the right environment for them to thrive in. This is a significant part of that process.