Adult Learning and Vocational Skills: Metropolitan Borough of Dudley

Margot James Excerpts

Tuesday 1st October 2019 Westminster Hall

[Margot James (Stourbridge) (Ind)]

I beg to move,

That this House has considered adult learning and vocational skills training in the metropolitan borough of Dudley.

It is a pleasure to serve under your chairmanship, Mrs Moon. I congratulate my hon. Friend the Minister on assuming her new position at the Department for Education. I am delighted to see the hon. Member for Dudley North (Ian Austin) in his place as this debate is about vocational provision and adult learning in the borough of Dudley. Although I will focus on the provision in Stourbridge, we must assess the need for provision in my constituency of Stourbridge in a borough-wide context.

This debate takes place in the context of the very sad closure of Stourbridge College earlier this summer. Our college dates back over 100 years to the establishment of the Stourbridge College of Art in 1848. That institution merged with the Stourbridge Technical School in 1958. I first visited the college in January 2007 and found a vibrant and welcoming culture. Shortly after that visit, I found myself volunteering as a young enterprise course facilitator at the college, helping students learn about business through the experience of setting up an actual company. I then joined the college board as a governor during 2008-9 and remained close to the college after I was elected and after I stepped down from the board in 2010.

The closure of our college came as a real blow to me, as it did to thousands of other people locally, many of whom had a direct connection with the college. Clearly, those worst affected were today’s students, the teaching staff, the support staff and local small and medium-sized enterprises, particularly small retailers in the vicinity of the campus. When staff and students told me that the closure came as a terrible shock and something of a bereavement, they were not exaggerating. Although I do not want to dwell on the past and cover in too much depth the role played by Birmingham Metropolitan College, known as BMet, which acquired Stourbridge College shortly after 2010, there are a few points to make before I come to the main part of my talk, which is about the need for continued skills provision in my constituency and preferably on the site of the Hagley Road campus.

To cut a long story of mismanagement and financial woes short, by May of this year, BMet had outstanding debts to the banks of £8.9 million and to the Education and Skills Funding Agency of £7.5 million. Debts running out of control was not the only problem. The college had also received three “requires improvement” notices, but each time Ofsted rated the college a 3 and did not award it the worst rating of a 4, and that detail is very relevant to the bigger picture, as a rating of 4 would have triggered automatic intervention much earlier by the ESFA. The Department should learn from that crisis.

BMet now has a legal obligation to bring its debts down to a sustainable level, which of course means the sale of assets that has led directly to the closure of our college. Top of my list of current concerns, which I hope the Minister will take back to discuss with her Secretary of State, is the nature of the sale of the Hagley Road site. The site has been associated with education for many years, and it is the deep wish of our community that the site be protected in future for educational use, at least for the most part, for the generations to come.

When I hear that BMet is expected to realise red book value for the site, alarm bells start to ring and I urge caution on that endeavour and objective. Some colleges within BMet have sought to balance their books by selling off land assets for housing development. We have had experience of that already in Stourbridge; long-suffering residents who live near the Longlands site, which until eight years ago was the proud home of the college’s centre for the study of art and design, have endured years of antisocial behaviour and uncertainty as BMet has negotiated with a trail of developers and the local authority to effect the sale of the site. The ESFA should take note that it took from 2011 until the summer of this year to get planning approval for the residential development on that site.

The board of BMet and the ESFA should reflect hard on the fact that there would be huge opposition to selling the Hagley Road site for residential development and that it would take years to get the change of use and planning consent required. I know that educational providers are in serious talks with BMet about acquiring the site, and I hope those talks will reach a satisfactory conclusion.

That brings me to my main point: the need for vocational skills learning and, in particular, adult learning in Stourbridge. The first thing to acknowledge is that there has been a history of over-provision of 16-to-19 education in our borough of Dudley. Until the closure of Stourbridge College, we had four colleges in the borough, and the problem has been that the 16-to-19 population has been in decline from a high of 12,400 in 2009 to a low of 10,700 across the borough in the current year.

However, there are two points that must be borne in mind. First, if we take a 15-year horizon, 2019 is the low point. From this year, the numbers start to increase again to an estimated 11,800 by 2024. Secondly, it is harder to predict the numbers of adult learners. There were 280 adult learners registered at Stourbridge College in the year 2017-18, and it is that local provision for adult learning that concerns me most, primarily because so many people in adult learning have either part-time employment—sometimes full-time employment—or caring responsibilities, and travelling elsewhere in the borough can present a critical issue for them, such that it will deter them from the studies and upskilling that they acknowledge they need. As I say, it is harder to predict those numbers.

The importance of adult learning should be seen in both a social and an economic context. Indeed, the social and the economic are intertwined. When I was a Minister in the Department for Business, Energy and Industrial Strategy, I had responsibility for labour markets. It was a real eye-opener, and I got to see what lay behind the statistics. We now have close to full employment—a record that this Government can justly be proud of—but there are a great many people living with the assistance of tax credits on low-paid and insecure employment.

I was proud to be associated with the Taylor review of employment practices, commissioned by the previous Prime Minister. The Government accepted the vast majority of Taylor’s recommendations, which centred on improving the quality of work. The opportunity for people to improve their skills throughout their working lives was fundamental to achieving that goal, and nowhere is that improvement greater than among people who are stuck in low-skilled, low-paid employment.

The Government have presided over good and positive changes in the quality of vocational learning. The former Minister for Skills, my right hon. Friend the Member for Guildford (Anne Milton), introduced much-improved apprenticeship standards and the Institute for Apprenticeships, which have been much to the good. However, the emphasis has been on 16 to 19-year-olds and not enough is being done for the huge need that exists for upskilling and lifelong learning among the working-age population.

The figures, I am afraid, speak for themselves: the expenditure on adult learning nationally has been reduced by approximately 40% since 2010. Skills devolved to our own region, the West Midlands Combined Authority. That has been well received, but I am informed that the adult education budget across the west midlands is £2.1 million, which would barely buy a bedroom in a luxury flat not a mile from here.

The funding reduction has been damaging both economically and socially. There are many groups in the working-age population who face greater barriers than most when it comes to securing employment at all and certainly better employment. I am talking about people who have been unemployed for a long time, people with poor literacy and numeracy skills, people who were brought up in the care system, people with disabilities, ex-offenders, sometimes even older workers, and parents who have had a career break. All these groups, and more besides, face significant barriers to improving their skills and getting back into the workplace so that they can progress their careers.

The social consequences of that are dire, but it is also bad news economically. I know the digital and technology sectors particularly well from my role as a Minister at the Department for Digital, Culture, Media and Sport. The skills gap in those sectors will not be narrowed or eliminated just by improving the quality of technical and digital education among the school, university and college-age populations. We need to look at the working-age population as well. The 2018 Lloyds survey found that 21% of people in the working-age population lack basic digital skills, while 8% have zero digital skills and 5.4 million working adults do not have the full range of basic digital skills. Unless we sort this out, it will delay the uptake of technology in industry and dampen the growth of the tech sector, and we can only sort it out through a commitment to adult learning.

This issue also accounts for some regional discrepancies, especially when we look at the five basic skills that people of working age need in the digital space. Some 71% of people in the north-east have all five basic skills, whereas in the south-east the figure is 86%. The ramifications of the skills gap and the inadequate response to it by adult learning are a key issue that needs to be resolved. I am delighted that the Department for Education’s resources have been increased going forward. I congratulate the ministerial team on securing that increase and appeal to them to use some of that money to go some way towards redressing the reduction in funding for adult learning that I have described today.

When it comes to the provision of adult learning in particular and vocational skills generally, I believe there is an economic case for continuing with such provision in Stourbridge, and I am delighted by the reaction of local colleges: the exemplary Dudley College, now rated outstanding by Ofsted, Halesowen College, rated good by Ofsted, and the brilliant King Ed’s—King Edward College—in my constituency. They are all committed to supporting the provision of vocational and adult learning on the Hagley Road site—assuming that it can be sold to an educational provider who welcomes that provision on a subletting basis.

There will need to be some new money, however. Dudley College and Halesowen College absorbed many students and staff from Stourbridge College at the beginning of this term. I commend both colleges for their amazing work on integrating our students and college staff into their new environment. Funding is tight for both colleges, and they will need new money in order to meet the needs of vocational skills provision and adult learners in my constituency. I have my eye on various budgets, including growth deal 3 funding from, I presume, the Department for Business, Energy and Industrial Strategy and the underspend in the local enterprise partnership. Providers in the Black Country can also bid for funding from the almost £97 million skills budget. Local authority level budgets may also need reassessment, but my hon. Friend the Member for Dudley North has been working on securing money from the stronger towns fund. Of course, the combined authority also has devolved funding for skills, and I am grateful to Mayor Andy Street for his close involvement in our bid to get adult educational provision and vocational skills in my constituency—ideally on the Stourbridge Hagley Road site.

I thank everybody involved locally thus far in the bid to secure the future of adult learning and skills provision in Stourbridge. I trust that this afternoon’s debate and my upcoming meeting with the Secretary of State and local colleges towards the end of October will lead to some real movement on this issue, so that my constituents, whether adults or young people, will still be able to access the training needed by both Stourbridge and, importantly, our economy.

--- Later in debate ---

[Margot James]

I must thank my hon. Friend the Member for Dudley North (Ian Austin) for his extremely kind remarks about my work. They are fully reciprocated; I have seen at first hand what an incredible champion he is for his constituents and the wider borough of Dudley. I echo his praise for Dudley College. I, too, have seen its progress over the past 10 years; it has been truly transformational. I join in his tribute to the former principal, Lowell Williams. The Minister made the good point that Halesowen College is in the top 10% of colleges for results; it is a great asset to the wider borough.

My hon. Friend the Member for Dudley North gave the very important context, which is that we need local improvement in skills to attract new industries, which will bring better-paid employment. That is central to the industrial strategy, in which I am a great believer; it is crucial for our borough.

The hon. Member for Blackpool South (Gordon Marsden) showed great understanding of our local situation—I must thank him for that—and deep experience of further and adult education. He mentioned the survey done by locally by Stourbridge College staff and students, which revealed the issues to do with travel locally. The Minister says that there is a safeguard: no student should have to travel more than 10 km. However, that is a huge distance in our borough. As I mentioned, we should not underestimate the difficulty of travel, particularly for adult learners, but also for younger students who have particular needs.

The hon. Gentleman mentioned my dialogue with the National Audit Office. I was pleased to hear the Minister talk about the various inquiries that the Department has set up. I welcome Dame Mary Ney’s inquiry; I look forward to seeing the fruits of that. I thank the Minister for her support. She encouraged local stakeholders in Dudley borough to look for and find a solution to ensuring very local provision, particularly of adult learning. I welcome those remarks and thank her for setting out the funding opportunities at the combined authority level. I am meeting Mayor Andy Street to discuss those opportunities next week.

Question put and agreed to.

Resolved,

That this House has considered adult learning and vocational skills training in the metropolitan borough of Dudley.

Tax Avoidance (HSBC)

Margot James Excerpts

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

Part of the issue is that, as I have said, HMRC has consistently used civil penalties as the most cost-effective way of collecting the revenue and changing behaviour. When these cases have been taken to the Crown Prosecution Service, it has taken the view that a successful prosecution would be unlikely without corroborating or additional evidence and just on the basis of the data from the leaks.

[Margot James (Stourbridge) (Con)]

The last Government presided over an unsustainable boom in the financial services sector and, at that time, aggressive tax avoidance flourished. What steps has my hon. Friend taken to close the tax loopholes that were left wide open by the last Government?

[Mr Gauke]

My hon. Friend raises a good question, and this Government have closed 42 loopholes. We inherited a tax system in which not enough had been done to tackle tax evasion or avoidance, and we have addressed that over the past four and a half years. That is partly why the yield from HMRC’s activities has risen from £17 billion in 2010 to a forecast £26 billion this year.

Charter for Budget Responsibility

Margot James Excerpts

Tuesday 13th January 2015 Commons Chamber

[Andrew Bridgen (North West Leicestershire) (Con)]

I welcome the motion, which is another step on the path to long-term responsibility in Government fiscal policy and, indeed, debt management. It is useful to look at the position that this Government inherited to see why the charter for budget responsibility is absolutely necessary.

Before the Government came into office, the deficit was 10.2% of GDP, the highest in the EU and one of the very highest in the developed world. The independent Office for Budget Responsibility expects the deficit to be reduced by half this year: it will finish at 5% of GDP, and then fall to 4% of GDP next year. The Government have achieved that by reining in public spending and creating the conditions in which our GDP growth could outstrip that in virtually every other country in the developed world.

All that was done with policies that, in the overwhelming majority of cases, were opposed by the Labour party. It has opposed virtually every one of our necessary spending reductions. At the same time, Labour doom-mongers predicted mass unemployment and often repeated their mantra that we were going too far, too fast on deficit reduction. They sound like a nervous passenger in the back seat of a car, which is a useful analogy because I believe that Labour Members are completely unfit to be given the car keys, given that this Government have only just got the economic wheels back on the car after the last time they took it out for a joyride when they were in government.

Let us again remind ourselves of where we were in 2010, when Government spending represented almost 50% of GDP, which is a completely and totally unsustainable level.

[Margot James (Stourbridge) (Con)]

Does my hon. Friend recall that the previous Government also presided over a record increase in public spending, which was 50% higher in 2010 than it was 10 years earlier?

[Andrew Bridgen]

Yes, of course. As the previous Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), had ended boom and bust, the whole country embarked on a Government-inspired orgy of credit, safe in the knowledge that there would be no day of reckoning, but such a day came in 2008, as we all recall; that is history.

The Labour party opposed our reductions in public sector work force numbers. Rather than those people returning to the productive part of the economy—the private sector—they would have stayed in the public sector and the deficit would have grown even further. In fact, five private sector jobs have been created for every one of those that had to be lost in the public sector. That tells us all we need to know about the Labour party’s view of deficit reduction.

Let us consider the announcements at the Labour party conference. The shadow Chancellor announced paltry measures that would save only £400 million, and he failed to rein in shadow Ministers who promised an extra £20 billion of spending. As we all recall, the Leader of the Opposition famously forgot even to mention the deficit—he did not recall it—in his conference speech, which shows where it ranks on his list of priorities for the country.

The truth is that Labour has not learned the lessons of the past. It still believes that it can tax and spend its way to prosperity. We know that the Leader of the Opposition admires the economic model currently pursued by President Hollande in France, which is delivering double-digit unemployment and anaemic rates of economic growth.

There is much for my constituents to fear from a Labour Government. North West Leicestershire is delivering one of the highest growth rates outside London and the south-east, thanks to a strong private sector. As with the national economy under this Government, the economy of my constituency has been rebalanced and strengthened. That has resulted in a 60% fall in unemployment and a 70% fall in youth unemployment since 2010, meaning that hundreds of extra people are in work, paying taxes and looking after their families, without Government support.

In conclusion, it is essential that we continue to reduce our deficit. We must have a plan to ensure that public sector net debt continues to fall consistently as a percentage of GDP. By contrast, the Opposition clearly intend to run deficits indefinitely for our children to pay for. They have not learned the lessons of the past, and their plan is for more borrowing, more taxes and more debt. That will lead to higher interest rate payments, meaning less money for schools, hospitals and infrastructure, as well as lower economic growth. By looking across the channel to France, we can see where the socialist economic policies of the Labour party will lead our country. Labour’s plan B always stood for bankruptcy. That shows how essential it is that we win the next election, stick with our long-term economic plan to deal with the deficit, and keep on the road to economic recovery and prosperity.

Autumn Statement

Margot James Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

At the moment, we see Britain as the fastest growing major economy in the world. We also see a record fall in unemployment, and the highest rate of job creation occurring in Scotland. That is the United Kingdom delivering for the people of Scotland. Now we have proposals from the Smith commission, jointly agreed between the different parties, whereby the Scottish Government, and the Scottish Parliament, can take more responsibility for raising their own taxes to pay for their own expenditure. Then we will have an even better debate in Scotland on how things are paid for.

[Margot James (Stourbridge) (Con)]

I was glad to hear my right hon. Friend confirm that there has been no new recession in the years since 2010. It would have been a strange recession that resulted in unemployment falling by 45% and average weekly pay being up by 12.5% in my constituency and in 4,000 new businesses opening in my borough. Will he join me in congratulating the thousands of people who have got into work and started new businesses in my constituency in the past four years?

[Mr Osborne]

My hon. Friend has been a real champion for small businesses and for exporters in her Stourbridge constituency, and for attracting investment into the black country. I pay tribute to the work she has done. The measures we have taken today to help high street stores by increasing the business rate discount to £1,500, to take the smallest businesses out of business rates, and to back exporters and to increase the research and development tax credit for firms in the west midlands are all tribute to the work she has done and the issues she has raised in Parliament.

Oral Answers to Questions

Margot James Excerpts

Tuesday 4th November 2014 Commons Chamber

[Mr Osborne]

The right hon. Gentleman says “Come on”, but there were no independent forecasts when he was in the Treasury. He was the economic adviser who cooked up the forecasts, and came to the House and as a result misled this country about its economic fortunes. The OBR is working as an independent institution. The independent review of the OBR said that we should not extend its powers. We do not want the Labour party undermining the independent institution that has brought confidence back to public statistics.

[Margot James (Stourbridge) (Con)]

T8. Last week, the Queen opened a new Jaguar Land Rover plant in Wolverhampton, which is creating 1,400 new jobs. The enterprise zone and the black country city deal are set to create nearly 10,000 more new jobs. Does my right hon. Friend agree that we could go even further in Birmingham and the black country if our local authorities followed the example set by those of the northern powerhouse?

[Mr Osborne]

The investment by Jaguar Land Rover is very welcome. I was at one of the Jaguar Land Rover plants in September, and saw the incredible investment that is going in there. The new engine plant in the black country is a huge and welcome investment in the west midlands. I take very seriously my hon. Friend’s suggestion that we should talk to authorities in the west midlands to see if we can build on what has been achieved in Greater Manchester. I would be very happy to start those discussions with civic leaders and local MPs.

Currency in Scotland after 2014

Margot James Excerpts

Wednesday 12th February 2014 Westminster Hall

[Anas Sarwar]

I could not have put it better. Yes, this has an impact on business and big institutions, but the price will always be paid by the poorest and most vulnerable people. I and my Labour colleagues stand shoulder to shoulder with those people throughout the United Kingdom. The nationalists will throw everything into this debate—every assertion, opinion, myth, allegation, contention and baseless claim—so that they can win on 18 September. They do not have any recognition of reality; they are much more the Walter Mittys of Scottish politics. The only thing that they have been clear on is the willingness to hand over control of monetary policy to another country; in the words of the Governor of the Bank of England, they would “cede sovereignty”.

It is important to look at the first letter sent in May 1997 by the then Chancellor, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), when he made the Bank of England independent. In paragraphs four and five of that letter, the point is made that

“The Bank is there to fulfil the objectives of the UK Government, as set out by the UK Government and not as determined by the Bank.”

So the Bank is there to support the economic policy of the UK, and after Scottish independence, it will be there to support the economic policy of the rest of the UK, not that of the Scottish Government. The Bank of England would go by the political will of the Chancellor of the Exchequer—whether the current Chancellor or the future Chancellor, the current shadow Chancellor, my right hon. Friend the Member for Morley and Outwood (Ed Balls). The Bank will follow that remit and not the remit of the current Scottish Government or, indeed, a future Scottish Government.

What does that mean for Scots? If someone has a mortgage, their interest rate will be controlled by the central bank of a foreign country, with no input or influence from Scots, no accountability and no say on inflationary targets or the cost of money supply. Likewise, if someone has a car loan, a credit card or an hire purchase agreement for a new suite or a new washing machine, all those things will be controlled by a foreign Government, with Scots having no say or influence, and with no accountability.

[Margot James (Stourbridge) (Con)]

I thank the hon. Gentleman for giving way. He is making a very passionate speech. In addition to the points that he is making, there are the lessons from the European currency union and the debate within that union about the central bank having pre-budget approval of all the budgets proposed by member states. Can he envisage that applying to Scotland as well if those plans should unfold?

[Anas Sarwar]

I thank the hon. Lady for that intervention. What I envisage is Scots making a confident and passionate no vote on 18 September and working together with our friends and colleagues in the UK to create the right kind of economy that works for everyone right across the UK.

The reality is that the cost of borrowing money would be in the hands of an institution over which the people of Scotland would have no say—none. If a Scottish business wanted to invest, the cost of borrowing that money would be controlled not by the Scottish Government but by the Government of Scotland’s biggest competitor and trading market. That is like British Airways setting the trading conditions and pricing policy of Virgin Atlantic. There would only be one winner in such an arrangement.

Is it any wonder that business organisations are horrified at these proposals? It is not that long ago that the SNP would churn out press release after press release attacking the UK Government, UK politicians or the Monetary Policy Committee, saying that the interest rates being set were not suitable for Scotland. What on earth does the SNP think would happen after independence?

The reality is that what the SNP is offering Scotland is neither right nor fair for Scots. That is the real democratic deficit on offer in this election. The other reality, and the reason why the SNP does not want to outline plan B, is that it knows that its entire White Paper is based on the assertion that sterling is kept. If sterling is lost, the entire White Paper comes into disrepute.

Oral Answers to Questions

Margot James Excerpts

Tuesday 28th January 2014 Commons Chamber

[Margot James (Stourbridge) (Con)]

7. What recent fiscal steps he has taken to support small businesses.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

12. What recent fiscal steps he has taken to support small businesses.

--- Later in debate ---

[Mr Osborne]

This year, there is the help for the high street and the £1,000 support for business rates for our high street shops, cafés and pubs. We are also introducing the employment allowance, which will take many small businesses out of employer national insurance altogether. Next year, we have the removal of the jobs tax altogether when someone under the age of 21 is employed. That is what we are doing to help the many businesses that my hon. Friend so ably represents in Parliament.

[Margot James]

There have been 3,000 new business start-ups in my borough of Dudley since 2010, many of which will benefit from increased research and development tax allowances, the national insurance rebate and the business rates cap. Does my right hon. Friend agree that while the fiscal measures he has introduced make a vital difference, the 2.8% growth in the economy announced today is sure-fire proof that his economic plan is working and that those small and medium-sized enterprises are now on a far better growth trajectory as a result?

[Mr Osborne]

I am delighted to hear about the success of businesses in the Dudley borough area and in my hon. Friend’s constituency. The Government made a choice that we were going to back a private sector recovery and that, in a time of limited resources, we would put our efforts into helping small businesses grow by cutting their business and employment taxes. That is what we have done, and we are beginning to see the fruits in the growth of jobs in the west midlands and across the whole country.

National Insurance Contributions Bill

Margot James Excerpts

Monday 4th November 2013 Commons Chamber

[Mr Gauke]

That is a similar point, and, as I say, I am nervous about giving precise numbers. Of the FSB respondents, 28% believed that this would help them. We believe that we have to consider a range of measures, but clearly measures that reduce the cost of taking on staff must help in increasing employment. For example, the Bill would enable a business to take on four people on the national minimum wage and not pay any employers’ national insurance contributions at all. That will clearly help.

[Margot James (Stourbridge) (Con)]

My hon. Friend mentions the welcome for this Bill from the FSB. Is he aware that charities and social enterprises will also benefit from it? Alex Swallow, chief executive of the Small Charities Coalition, said:

“For a lot of the smallest charities, having one paid member of staff is a big step forward…having this allowance now helps them to do that, so it is a very positive thing.”

[Mr Gauke]

I am very grateful to my hon. Friend for that intervention. She makes an important point that applies to both businesses and charities. Taking on the first member of staff can be the most difficult step, as it is a big event for a business. If we are able to help and to reform our tax system to enable businesses or charities to take that member of staff on without paying the jobs tax—employer’s national insurance contributions—that will clearly encourage those businesses, which, I hope, will then take on further staff and expand.

--- Later in debate ---

[Mr Gauke]

To have implemented the policy we inherited would have destroyed jobs. It did not do businesses in the United Kingdom any good to have the prospect of an increase, sending the wrong message that we were going in the wrong direction. I am pleased to say that we have reversed that direction of travel by not implementing the previous Government’s policy in full. We have increased thresholds for national insurance contributions, which has clearly helped. Now, through this Bill, we are providing an employment allowance of £2,000.

[Margot James]

Does my hon. Friend agree that the reason the previous Government proposed the ridiculous increase in the jobs tax was testimony to the fact that they could not countenance cutting public expenditure? That was their downfall. They were content to continue to borrow £1 for every £4 this country was spending, and their proposal was evidence of a wholesale mismanagement of the economy.

[Mr Gauke]

My hon. Friend makes a valuable point that is well worth highlighting. When running a deficit of the size that we were running, we face some tough decisions. We have taken a range of measures to reduce the deficit, and it has reduced by a third.

Ultimately, though, whoever was in government was going to have to take these difficult decisions. If we are not prepared to take difficult decisions on spending—there is no evidence that Labour Members would do so—the answer is that we have to increase taxes. When we look around to see what taxes are available, it is clear that some very difficult decisions have to be made. Labour Members chose to go for employers’ national insurance contributions; perhaps they considered that that option was less visible to the general public than some of the others. However, the consequences would have been higher unemployment, and this Government were not prepared to face that.

--- Later in debate ---

[Mr Gauke]

If I remember correctly, that was in autumn 2010, when the next leader of the Labour party was saying that 1 million jobs would go missing. The hon. Gentleman says that the NICs holiday was too complicated. One of the lessons that can be learned from the NICs holiday is that the simpler the scheme, the better. Perhaps the Labour party has not been listening to him because since that debate, it has proposed two NICs schemes, both of which are more complicated than the one that we had in place. If he is making the case for keeping NICs schemes simple, perhaps he ought to have a word with his party leader.

[Margot James]

My hon. Friend is being exceedingly generous in giving way. Does he agree that the Opposition’s latest wheeze of giving a subsidy to employers who take on employees at the living wage will have a huge dead-weight cost, because 12 months before the appalling prospect of the return of a Labour Government, employers are likely to stop giving salary increases to workers who are on the minimum wage, mindful of the fact that if they give it another year, they might get it all rebated by the taxpayer?

[Mr Gauke]

My hon. Friend makes two valuable points, but I detect that you do not want me to dwell on the issue, Madam Deputy Speaker.

--- Later in debate ---

[Margot James (Stourbridge) (Con)]

Before I come to my main points about this Bill, which I support, I would just like to follow on from the speech of the hon. Member for Edinburgh East (Sheila Gilmore) and talk about the big picture for a few minutes. One can quibble about the benefits or otherwise of this scheme or that one, but the Government’s economic policies and interventions have contributed to Britain becoming the fastest-growing country in the western world. Survey after survey confirms the figures, which are extremely optimistic about this economy. I sometimes think the Treasury team is, with characteristic self-effacement, almost cautious in putting forward the record of this Government in full technicolour, so I would like to take up that role this afternoon.

The Bill is a straightforward and simple measure, top-slicing £2,000 off every company’s employer national insurance bill. As such, it will provide significant help to small businesses. I have 5,200 small and medium-sized enterprises in my constituency, and I welcome this measure on behalf of them all. We have heard the quotes from various organisations representing small businesses, social enterprises and so on welcoming the measure. The fact that it has such independent support ought to speak for itself.

I also wish to draw attention to the ambitious sole trader. The SMEs will have their employer insurance bills cut, but we also need to consider the small sole trader who is ambitious and wants one day to grow his or her business, just as I did. When I started my business in the 1980s, it consisted just of my business partner and me—everyone else who helped was begged, stolen or borrowed. I well remember the agony of the decision to appoint the first paid member of staff. One knows that one has to do it at some point if one wants to grow the business, but the responsibility that comes from knowing that someone walking through the door is then dependent for their livelihood on the success of one’s business really makes one stop and think. Anything that makes that decision easier, as this Bill does, has to be welcomed.

I wish to talk about a young woman in my constituency, Amy Fairley, who has a passion for flowers. She worked in a florist’s shop until about six month ago, when she was made redundant. She decided to follow her passion and dream by setting up her own florist’s shop. She did that with help from the new enterprise allowance scheme—another good scheme—and a Prince’s Trust grant and the mentorship that the Prince’s Trust also provides. I helped her to open her wonderful florist’s shop on Coventry street in Stourbridge three weeks ago. As a Prince’s Trust mentor for four years before I was elected, I have had similar experience and I was always reluctant to advise on taking on that first member of staff, because of the cost and the risk. One wonders whether the member of staff will be needed all the time, although, of course, they could be taken on part-time. The Bill will mitigate that caution.

I also wish to make the point that the Bill is part of a package of measures designed to help employment and small businesses. The reforms to employment law are also crucial, because this is not just about the cost of taking someone on; it is also about the fear that if the wrong person is appointed, the business is in for a huge headache. The Government’s doubling of the qualifying period before people can make unfair dismissal claims to two years is a huge advantage, as is the fact that they are making settlement agreements easier, obviating the need for employment tribunals, which are expensive in many cases. I know from my work as a Parliamentary Private Secretary to Lord Green that the Government have invested hugely in UK Trade & Investment and UK Export Finance, again for the development of specific programmes to support small businesses with their exports.

[Julian Smith]

May I pay tribute to my hon. Friend for the work she has done to promote UKTI’s merits to MPs across the House and for doing that with a passion that I suspect has never been seen in this House before?

[Margot James]

I thank my hon. Friend for his kind contribution and for his wholehearted support of that work on trade—both are much appreciated.

[Ian Swales]

May I add my tribute to my hon. Friend for playing a role in this exercise? My constituency office is in a business centre and it was fantastic to see UKTI officials advising small businesses recently on exporting to China—I never expected to see that.

[Margot James]

I thank my hon. Friend for that intervention. Indeed, what he has observed might explain why British exports to China have risen at a record rate in the past 12 months.

Another aspect of Government support for the small businesses that are crucial to employment and many of the new jobs that have been created has been the reduction in the small companies tax rate to 20%. The small business rate relief scheme was doubled until 14 April and we have also had the start-up loans scheme and the new enterprise allowance, which I have already mentioned. All those measures were designed to have, and have had, a positive effect on the livelihood of our small businesses.

Of course, not just employers have benefited from such measures. Employees have benefited too. In my constituency, 3,794 people have been removed from income tax altogether. A vast number of people in my constituency—33,000—are now paying less tax and that is an important development, freeing people to spend more money on the high street, which is where the economy is starting to grow again.

It is instructive to recall the Opposition’s record. The shadow Business Secretary makes the laughable claim that Labour is now the party of small business, but I think that small business people judge Governments, Oppositions and former Governments on their actions, not their words. The Opposition have a long way to go before they can put themselves up as people who understand the needs of businesses. As I said earlier, I think that it was indicative of their deeply flawed management of our economy that they felt in 2011 that they needed to put up taxes by putting up national insurance, rather than cutting public spending, which, of course, is what—only the other day—Tony Blair said they should have done. We all know how the economy ended up.

[Sheila Gilmore]

Is it not in fact the case that the incoming Government put taxes up? In particular, they put up VAT and that was the choice that they made. To say that no taxes went up would not be true.

[Margot James]

I would apologise if I felt that I had said that no taxes had gone up. Let me clarify in response to that intervention. I was making the point that the previous Government proposed to increase national insurance, presumably because they could not face the public expenditure cuts that this country really needed. The hon. Lady is quite right that the Government were driven to put up VAT, but the important point is that in getting a grip on the public finances we had a rough ratio. Spending cuts delivered approximately two thirds of what was required and the tax increases, regrettable though they were, were necessary and delivered the other third. I fear I digress somewhat, Madam Deputy Speaker, and I feel your watchful gaze so I shall return to the subject of the Bill.

I congratulate the Government on introducing this important measure. I would have benefited hugely from it when I was in business and I welcome it on behalf of the many small businesses and sole traders in my constituency.

--- Later in debate ---

[Catherine McKinnell]

Coalition Back Benchers want to forget what the Government have done and the past three years of the policy we are debating. They want to debate a policy that never came into play.

None the less, despite the restrictive and complex nature of the previous scheme, the Exchequer Secretary and his Treasury colleagues had bold ambitions for it. He acknowledged from the Dispatch Box that some 400,000 new businesses would benefit from the scheme, with each successful applicant creating an average of two jobs. At that rate, the scheme would have created 800,000 new jobs, with a total cost to the Exchequer of £940 million over its three-year lifespan.

Given that the scheme, which was one of the Chancellor’s flagship policies, drew to a close in September, one might have assumed that the Exchequer Secretary would want to promote the outcome. Sadly, he cannot do so—sadly for the businesses that failed to benefit. Only through a written answer obtained by my hon. Friend the Member for Nottingham East (Chris Leslie), the shadow Chief Secretary to the Treasury, did we learn that a grand total of some 25,400 businesses successfully applied for the scheme over the three-year period. That is undeniably a sizeable number, and the creation of any new jobs in the past three years, during a period of economic stagnation, is welcome; but with only 6% of the target reached, the Exchequer Secretary has had to acknowledge that, as flagship policies for economic growth go, that one has been a bit of a flop.

When the previous scheme was introduced, the Opposition called for there to be no regional restrictions on it, for it to be extended to charities, and for a review of its effectiveness after six months. Those proposals were rejected. The Government ploughed on with a scheme that obviously was not delivering the goods throughout its operation. That was why, as long ago as September 2011, my right hon. Friend the Member for Morley and Outwood (Ed Balls), the shadow Chancellor, called for a one-year national insurance break for every small firm that took on extra workers, using the money left over from that failing Government policy—it was clear that it was failing even in September 2011.

The Government are now introducing the employment allowance. It is not regionally restricted and will apply to charities as well as businesses, and it will apply whether or not they are start-ups. It should be easier for firms to access it because it will be delivered by the standard payroll software and Her Majesty’s Revenue and Customs real-time information system, as the Exchequer Secretary said in his opening comments. The question is this: why did it take so long? Given that the scheme will not be available until April 2014, we have had nearly four wasted years when the Chancellor could have helped the thousands of small businesses about which Government Members have spoken so passionately to expand and create jobs.

[Margot James]

This might be a foreign notion to Labour Members, but one reason why it has taken three years to propose the Bill is that the Government have waited until the country can afford it and put the finances right in the meantime.

[Catherine McKinnell]

The budget for the policy in the Bill was there, but the Government introduced a failing policy that was badly delivered, badly thought through and not revised in the appropriate time frame. Given the Government’s record on delivering the previous national insurance contributions initiative, what reassurances can the Minister provide that they are on top of delivering this one?

Investing in Britain’s Future

Margot James Excerpts

Thursday 27th June 2013 Commons Chamber

[Danny Alexander]

It stands completely alongside that promise. First, I welcome the hon. Gentleman’s positive remarks about strike prices and he will see in the document we published today strike prices for all the other forms of renewable energy. Of course, in the case of nuclear, there is a detailed and ongoing commercial negotiation. I am sure that he would think it right for us to drive a hard bargain in those negotiations, because of course these prices will have to be paid by consumers for 50 years to come.

[Margot James (Stourbridge) (Con)]

I very much welcome the shift from entitlements and consumption to capital investment that will create jobs now and underpin our future prosperity. It represents a crucial part of the Chancellor’s rebalancing of the economy strategy. Will my right hon. Friend the Chief Secretary comment on the benefit of the plans to regions outside London and the south-east, such as my own area of the west midlands? Will we see more projects like the excellent new transport interchange opened in my constituency of Stourbridge last year?

[Danny Alexander]

I welcome that project, which is another example of projects being delivered by this Government during this Parliament. Of course, the plans I have set out today on roads, on energy and on rail will directly benefit every part of this country, including the west midlands. The hon. Lady is right that even at a time of austerity we are squeezing spending wherever we can to realise more resources for investment in the long-term infrastructure needs of this country. That is the right strategy and it is a shame the Opposition seem to oppose it.

Economic Growth

Margot James Excerpts

Wednesday 15th May 2013 Commons Chamber

[Margot James (Stourbridge) (Con)]

The estimated cost of the Labour party’s plans is £28 billion. Labour opposes every one of our spending cuts, so does that not imply that it would fund the whole lot by pushing this country’s borrowing back towards £150 billion? Is that why the shadow Chancellor is so reluctant to say what more borrowing he could commit to?

[Mr Osborne]

My hon. Friend is right to say that that is the approach of the shadow Chancellor. The right hon. Member for Neath (Mr Hain), who is sadly not in his place, gave the shadow Chancellor some unsolicited advice last week—I think it was unsolicited. He said:

“Labour’s Treasury team need to get out on the stump now and work even harder. It shouldn’t just be left to Ed and Harriet”—

Miliband and Harman—

“to carry the heavy load”

on shows such as the “World at One”. We could not agree more, because it is fair to say that when the Labour leader appears on the radio—I am not sure how to put this delicately—there is a little confusion about what Labour’s economic policy might be. Ten times he was asked whether borrowing would go up or what his party’s policy was, and he did not reveal it. I will be fair to the shadow Chancellor and say that he is much more straightforward. He has a much clearer message than his leader: “Vote Labour and borrowing will go up. Vote Labour and welfare bills will rise.” Vote Labour and he will do it all again. It is not just the right hon. Member for Neath who wants to see the shadow Chancellor on the media more—we want to see him on the media much more.

--- Later in debate ---

[Richard Drax]

I will carry on, if I may.

If we do not wake up, we will lose the respect of the people of this country. I would suggest that repatriating the competences that still go to the EU, despite the treaties that have been agreed and the promises that have been made, would do more than anything else to generate jobs in this country. This is a golden opportunity that we must take if we want to restore the trust in this House and this country that was thrown away as a result of the failed promises over Maastricht and Lisbon.

What more evidence do we need that the EU is dead? It is finished. Look around! Wake up! Greece is a disaster and Spain is potentially on the brink of civil war—53% of youths are unemployed. [Interruption.] Hon. Members say, “Oh, my God!”, but there are riots in the streets and their own police are bashing youngsters over the head. This is the Europe that we now face.

[Margot James]

rose—

[Stephen Williams]

rose—

--- Later in debate ---

[Margot James (Stourbridge) (Con)]

I welcome the Queen’s Speech, especially the Bills that will drive growth and help businesses in my constituency. Manufacturing companies will welcome the capital allowances and companies of a certain size and charities will welcome the national insurance rebate. Everyone, including businesses, will welcome the fairer taxes and the Government’s commitment to tackling corporate tax avoidance.

I am delighted that the UK is now one of the 10 most competitive countries in the world in which to do business, according to the World Economic Forum. We must capitalise on our improved competitiveness by exporting more to the rest of the world outside the European Union. Our recent success is demonstrated by the two-thirds increase in our exports to China, India and Brazil over the past two years.

In the debate about our membership of the European Union, some people, including Lord Lawson, have argued that we need to extricate ourselves from the European Union to capitalise on the opportunities in the rest of the world. I disagree with that. We should be capitalising on the opportunities in the rest of the world as well as, not instead of, doing the bread-and-butter business that we already do with the European Union.

I liken that situation to running a business. I ran a service company for 15 years and we were always trying to balance our efforts to generate new business with the need to look after our existing business. That is always a tension. It is the same for the country. We have 45% of our exports going to the EU, and we need to look after that business in difficult times, but at the same time we need to go after the new business. That is why, out of the top 20 markets that UKTI is prioritising for Government support for exports, only one, Poland, is in the EU. All the rest are in the rest of the world, and that is as it should be.

The EU is fundamentally about the economy, growth, improving competitiveness and jobs. Throughout Europe, we need to improve our competitiveness. As my right hon. Friend the Chancellor said earlier, Chancellor Merkel stated at the beginning of the year that Europe accounts for 7% of the world’s population and 25% of its GDP, yet 50% of its social spending. That cannot go on in the EU and Britain.

The Prime Minister’s strategy of negotiating a new settlement with the EU and a change within it, has to be about improving the competitiveness of all member states. There has already been some success over the past two years. Britain has been extricated from the EU bail-out funds, we have a better policy on fisheries, we have managed to make some progress on the EU budget—not as much as we would like, but at least we have had no real-terms increase in the multi-annual financial framework for the first time ever—and there is starting to be some movement on regulation.

Regulation is a key matter. I am talking about not just employment law but all regulation. Businesses in some areas of my constituency are considering relocating their manufacturing outside not just the UK but the EU as a whole to become more competitive, and that problem has to be tackled. However, we will not tackle it by rubbishing the Government’s strategy of reforming the EU, which is the path that many in the press want to lead us down. We should give the Prime Minister our backing, because his strategy rests on change being delivered throughout the EU—change that will benefit all member states, not just Britain. That is the basis on which our strategy of negotiating change in the EU will succeed.