Oral Answers to Questions

Mark Garnier Excerpts

Monday 29th April 2024 Commons Chamber

[David Johnston]

York is in our safety valve programme to provide support with the financial challenges it has. It has seen a 27% increase in per-head funding in the last three financial years. We review the funding formula every year. The biggest complaint people have is the historic factor, which is difficult to reduce quickly because there are children receiving that provision at the moment.

[Mark Garnier (Wyre Forest) (Con)]

Wyre Forest School, a special school in Kidderminster, has been doing a fantastic job for a number of years, but it has been running way past its maximum capacity for some time. There was potential for relief when its next-door neighbour, Baxter College, secured funding from a generous grant from the school rebuilding programme for a mutually beneficial rebuilding to expand capacity on both sides. However, with that project being in phase 3, Wyre Forest School and Baxter College may have to wait until 2032 before they can see any beneficial reliefs. Will the Minister or the Secretary of State meet me and the heads of the two schools to discuss how we can expedite getting this rebuilding programme under way?

[David Johnston]

I would be very happy to meet my hon. Friend.

Oral Answers to Questions

Mark Garnier Excerpts

Monday 23rd October 2023 Commons Chamber

The Secretary of State was asked—

[Mark Garnier (Wyre Forest) (Con)]

1. What progress her Department has made on ensuring equality of school funding through the national funding formula.

[Kerry McCarthy (Bristol East) (Lab)]

13. What assessment she has made of the adequacy of core school funding for the 2023-24 academic year.

[The Secretary of State for Education (Gillian Keegan)]

The Government introduced fairness into school funding. Under Labour, we got disproportionately inflated school budgets in places such as London, while constituencies such as mine were underfunded for over a decade. It was the Conservatives who introduced the national funding formula, which funds schools fairly, objectively and, most importantly, based on the needs of pupils, not political ideology. Not only that: this year, school budgets are up by over £3.9 billion, and next year schools will be funded at their highest level in history, at £59.6 billion.

[Mark Garnier]

My right hon. Friend will be aware that Worcestershire County Council languishes among the weakest 10 local authorities for funding per pupil. As a result, a lot of pressure has been put on other budgets, including the high needs and special educational needs and disabilities budget. Worcestershire now faces a deficit of more than £20 million in those budgets. Can she do something to help counties such as Worcestershire to meet those important demands for our young people?

[Gillian Keegan]

I am conscious of the pressures that many local authorities have faced on their high needs budgets. Nationally, high needs funding is set to increase by 60% between 2019-20 and 2024-25. Next year, Worcestershire will receive more than £89 million for its high needs budget. The Department is also supporting individual local authorities to tackle financial sustainability through two programmes: the Safety Valve programme for those with the highest deficits, and Delivering Better Value in SEND, which will help local authorities, including Worcestershire, to develop plans to reform their systems to reach a sustainable footing.

Equal Pay and the Gender Pay Gap

Mark Garnier Excerpts

Wednesday 1st July 2015 Commons Chamber

[Gloria De Piero]

My hon. Friend makes an excellent point. Those moments of progress are indeed reasons to celebrate. What happens in schools is really important. The decline of careers advice and work experience will take us backwards in challenging stereotypes in career choices.

[Mark Garnier (Wyre Forest) (Con)]

The hon. Lady is making a very powerful and thoughtful speech. I ask this question in the interests of genuine debate and gaining information. We have heard that we do not have enough women in senior positions. It is possible that that is because we have not reached a tipping point where more women feel it is perfectly normal to be on a board of directors. Does the hon. Lady think we should employ more positive discrimination to reach that tipping point, so that senior roles become much more acceptable for younger women coming through?

[Gloria De Piero]

That has certainly worked for non-executive positions on boards. My experience, and the experience of friends and colleagues, is that when in work, women want to progress, take decisions and move up the ladder to executive roles. It is therefore important for us as a country to ask why more women are not in senior positions, because it is not credible that there are simply not enough talented women who could rise to the top of their professions. I think it is fair to say that something else is going on. Nobody wants their daughters, wives or girlfriends to miss out on those kinds of opportunities. This is not just a women’s issue; it is an issue for Britons.

Oral Answers to Questions

Mark Garnier Excerpts

Thursday 6th March 2014 Commons Chamber

[Vince Cable]

We have already made it clear that we would encourage companies to pay the living wage if they could afford it, but we need to be very clear that this is not a mandated system. Indeed, the Low Pay Commission has expressed considerable care in its recommendations to be sure that in promoting a higher level of wages at the bottom, which we want to see, we do not force large numbers of workers out of work.

[Mark Garnier (Wyre Forest) (Con)]

12. What steps he is taking to support businesses affected by recent floods.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

We have funded a £10 million business support scheme which is available to businesses that have been flooded or significantly impacted by the floods. The grant can help businesses with clean-up costs, drying equipment, temporary accommodation and marketing. This is part of a wider package that includes 100% business rate relief for three months and new repair and renewal grants.

[Mark Garnier]

I am grateful to my right hon. Friend for that answer and for all the Government are doing to help businesses affected by the floods. In my constituency, 29 businesses, mainly in the town of Stourport-on-Severn, have been directly flooded and a number of others have been indirectly affected. So far, Wyre Forest has not been included in the first tranche of the direct support grant. Can my right hon. Friend reassure my constituents that those businesses that have been affected will be supported when the second tranche is announced next week?

[Michael Fallon]

Yes. With the first round of funding—some £5 million—the aim was to get the money out and allocated to local authorities as quickly as possible. We are in touch with other local authorities, including Wyre Forest district council, and I hope the second round of funding will be allocated very shortly.

National Curriculum

Mark Garnier Excerpts

Monday 8th July 2013 Commons Chamber

[Michael Gove]

The hon. Lady makes two important points. First, by removing the current national curriculum levels we create space for more sophisticated methods of tracking. One of the problems with current level descriptors is that they are opaque and confusing, and sometimes different schools register different levels of achievement at different levels. The new method we propose will mean that there is far greater rigour in how assessment is carried out. Secondly, Darlington is a model local education authority, because it has encouraged more and more schools to take on academy freedoms. I hope that more Labour local authorities follow where Darlington has led.

[Mark Garnier (Wyre Forest) (Con)]

Carrying on with the subject of financial education for young people, I am grateful for my right hon. Friend’s comments. He will be well aware that the Parliamentary Commission on Banking Standards also endorsed putting financial education on the curriculum. Does he agree not only that that will reinforce mathematics as a relevant subject, but that a good grounding in financial literacy can prove to be a major engine for social mobility?

[Michael Gove]

My hon. Friend is absolutely right. The more confident every student is with the increasingly sophisticated range of financial temptations they face, the more that social mobility and resilience can be built in.

School Funding (Worcestershire)

Mark Garnier Excerpts

Tuesday 23rd October 2012 Westminster Hall

[Harriett Baldwin (West Worcestershire) (Con)]

It is a pleasure to speak under your chairmanship, Mr Weir. I should start by placing on record my interest in this matter as a governor and associate governor of Hallow primary school in my constituency for many years.

Worcestershire is one of the lowest-funded counties in the country for education. It is 147th out of 151 for per pupil funding and a long-standing member of the f40 group. According to the National Governors Association, the guaranteed unit of funding for pupils in Birmingham is £5,689, yet in neighbouring Worcestershire it is only £4,601—a difference of 20%. That has been going on for years. Mrs Susan Warner, head teacher of Lindridge primary school, said to me in one of the many letters that I have received on the subject:

“There is very little reasoning behind this unfair distribution and it appears to be purely historic, with no-one really understanding how the allocations were made in the first place.”

Last year, my right hon. Friend the Secretary of State signalled his intention to deal with the national unfairness of the school funding formula with “Consultation on School Funding Reform: Proposals on a Fairer Funding System”. That was welcome, but in an environment in which the overall school budget is only rising with inflation, it apparently will not be implemented this side of 2015.

In the meantime, the Department has decided to simplify the allocation formula for the direct schools grant, replacing the outdated and unfair national formula with a clearer one by reducing the number of allowable factors from 40 to a maximum of 12. The principle of a single flat amount per pupil in each stage of education from primary to sixth form makes sense. It is intuitive and, given that 80% to 85% of the cost of each school place relates to the salaries of teachers whose rates are set nationally, it makes sense to have a per pupil amount of funding that is broadly the same nationally.

[Mark Garnier (Wyre Forest) (Con)]

I congratulate my hon. Friend on securing this important and useful debate for the county of Worcestershire. She talks about the ratio of staff costs being 80% to 85%, but in Wyre Forest we see that rising as high as 95% as more experienced staff go up the internal pay scale. That puts even more pressure on schools locally to try to perform with these very limited budgets.

[Harriett Baldwin]

I thank my honourable constituency neighbour for that observation. Staff costs certainly form by far the largest part of a school budget. It makes sense to have money follow the pupil, as that gives a clear signal to schools that they will do better if they can attract more pupils. The pupil premium, which has been welcomed at £600 per pupil on free school meals, will be even more welcome in Worcestershire when it is increased from 2013 by 50% and set at £900 per pupil. As the pupil premium now links to the pupil level the concept of income deprivation, it stands to reason that the main pupil funding allocation should be set more equally at national level as well. If the pupil premium is a national amount, why should not the main per pupil amount be more equal, too?

School Funding

Mark Garnier Excerpts

Tuesday 24th April 2012 Westminster Hall

[Richard Graham]

Yes, apart from an alarming analogy with Martin Luther. [Hon. Members: “King.”] Martin Luther King—even more puzzling. Martin Luther was of course responsible for the great saying, “Who loves not wine, women and song remains a fool his whole life long,” but I do not think that that was the object of my hon. Friend’s attempt to introduce him into the debate. However, my hon. Friend’s fundamental point—that we are looking for an early gesture from the Government to reassure our constituents that they do not just have warm sounds, but an initial step towards resolving the funding problem—is absolutely right, and one that I think all hon. Members endorse.

There are budgetary challenges to finding a solution, but the F40 group has submitted various suggestions for interim funding proposals that would improve the situation considerably. It has put forward four options to make steps towards equality, not all of which are hugely expensive. It is not for me to ask for a specific amount of money or a specific formula for the Government to start the ball rolling, but I urge the Government to look closely at the F40 group’s proposals in the hope that one of them is attractive and affordable, and, above all, can be introduced for the academic year 2014-15—before the funding settlement of the next Government.

My main wish is for the Minister to take from the debate the thought that not only are the Government able to agree with the principle and the direction of travel, but they can make the first steps to implement financial change to show that this long, 20-year inequality will finally be tackled.

[Mark Garnier (Wyre Forest) (Con)]

My hon. Friend has mentioned timing on three occasions. Is that not one of the crucial points? Given that we have had that inequality for 20 years and that we have a very strained economic environment, it is vital that we resolve this problem as soon as possible and in the best way possible.

[Richard Graham]

My hon. Friend is absolutely right. Of course, the difficulty is in the words, “as soon as possible” and “the best way possible”. Neither he nor I have control of the finances, but I think we both agree strongly that this is our opportunity to lobby the Minister and for him to reflect the strength of our conviction to the Treasury in the hope that additional moneys can be found as soon as possible.

--- Later in debate ---

[Mr Walker]

Absolutely, I could not agree with my hon. Friend more. That injustice would be made all the more clear if there were greater transparency on school-by-school funding.

There have also been some moves to protect special needs funding and to simplify arrangements for early years provision, all of which we welcome. The Government set out plans to end disparities within local authority areas but, with a perhaps understandable concern to limit turbulence, they have so far resisted dealing with disparities between authorities until 2015. There is much to praise, therefore, but that last point is a profound mistake.

The biggest and most obvious flaws in the current funding system, as my hon. Friends have pointed out, are the yawning gaps left in per pupil funding between neighbouring authorities. There is a gap of £1,088 between annual per pupil funding in Worcestershire and neighbouring Birmingham; my hon. Friend the Member for Loughborough (Nicky Morgan) mentioned the gap of almost £900 between Leicester and Leicestershire, the lowest funded authority; and there is the stunning gap of nearly £5,000 between the lowest and the highest authorities. We have often discussed such disparities before, and I accept that there are many historic and political reasons for them, but the Minister has accepted the point that no firm formula underpins them any longer. The successive layers of government priorities that created those gaps have ossified over the years, and the gaps have grown ever wider as spending has grown, creating an unfair and indeed unjustifiable system.

It is extremely welcome that the Government have recognised the problem, and the previous Government suggested that they were beginning to do so, but it is not enough to recognise a problem—the challenge is to correct it. When the previous Labour Government opened a consultation on funding reform but proposed no preventive action, I and many others present would have accused them of dithering. Now that my own coalition Government, whose education reforms I support strongly and whose pupil premium I have praised, are proposing no action until after the next spending review, I cannot do otherwise with them. To accept the need for fundamental reform but to postpone any move towards it is similar to a dentist recognising the cause of a toothache making a patient’s life unbearable and then offering to deal with it in three years’ time. If such a case came to our surgeries as MPs, we would react with outrage. On behalf of all the teachers, head teachers, parents and—above all—pupils in our schools, we must demand swifter action now.

The question is not about a system that rewards the neediest areas and gives least to the best off. If that were the case, the City of London would hardly be the best funded authority in the country, nor Kensington and Chelsea in the top 10. Since the introduction of the pupil premium, many F40 authorities have received a good chunk of pupil premium funding, despite the factors mentioned by my hon. Friends, showing that there are significant levels of deprivation in many F40 areas. In my own urban constituency, I have wards that are among the most deprived in the entire country. However, the low level of underlying funding, before the allocation of the pupil premium, means that many head teachers in those wards tell me that they need the extra money to break even—to keep their schools afloat—and that they cannot spend the money on what it was intended for, to improve the chances of the most deprived.

[Mark Garnier]

My hon. Friend and neighbour might be interested to hear about my recent discussions with some schools in Wyre Forest. Usually, a school expects to pay somewhere between 80% and 85% of its budget on staffing. Now, because of the very low funding formula, we see typical schools in such lower funded areas spending nearer 90% or even more than 90% of the budget on staffing—an intolerable situation for their head teachers to manage.

[Mr Walker]

Absolutely right. My hon. Friend from Worcestershire points out that the extra money from the pupil premium is sometimes needed to support such costs and it is not necessarily reaching the target at which it is aimed.

We all recognise that it is impossible to correct the problem overnight. Ministers have said that their consultation threw up widespread support for reform but also much concern about turbulence. Interestingly, the teaching unions came out strongly in favour of postponing the issue; in doing so, they might have been representing many of their members, but they were certainly failing to represent the interests of those members in F40 areas whom we meet day in, day out.

The many MPs I have spoken to and the volunteers who make up the F40 executive recognise the need to avoid setting one part of the country against another in a scrap for funding. We also recognise that it is incredibly difficult to change the system radically when spending is under extreme constraint. We can idly wish that the previous Government had been quicker to act and more determined to deliver, but what is done is done; the opportunity to correct the glaring inequalities in the system during the days of ready money has now been lost forever. In the tough conditions of today, however, the need for fairer funding is all the greater. Worcestershire school leaders tell me that they understand the need for constraint and, like other public servants, they are straining every sinew to deliver more with less, but they are harder pressed to do so when there is an open and acknowledged injustice in how they are funded. In Worcestershire, we have schools within a few miles of the boundary with Birmingham that must deliver lessons on a budget hundreds of pounds per pupil lower, that must compete for teachers with a much better funded authority down the road and that are now being asked to accept the same constraints as that neighbouring authority, having missed out on many of the benefits of easier times. It would be neither fair nor reasonable to make no move in the lifetime of this Government to right such wrongs.



I am grateful that, within days of his March announcement, the Secretary of State met the Chairman of F40 and some of its local authority members to hear their concerns. Neither he nor the Minister would have been surprised at the profound disappointment they expressed at the decision to postpone until 2015 the move to a new formula. At that meeting, it was agreed that further representations would be accepted from the group on changes that would not hurt the funding of other authorities, but would mark a first step, however small, towards greater fairness. F40 has since sent in its suggestions, which I strongly support.

We have heard about Martin Luther and Martin Luther King, and I want to introduce Mark Twain to the debate. He wrote:

“The secret of getting ahead is to get started”.

F40 has suggested some options for getting started. It looked at the cost of bringing the lowest-funded authorities up to the level of Lincolnshire, which is the 41st worst-funded authority, and found that that would cost almost £300 million. It considered giving each of the lowest-funded authorities a small flat cash bonus to help, but found that the difference would be too small, and the process would simply rearrange the league table, pushing some authorities outside the F40 down the tables. Under its preferred option, it has proposed making the shift towards Lincolnshire levels of funding, but doing so proportionately, taking each of the lowest 40 one third of the way towards that level. That modest suggestion has the advantage of giving most help to those who need it most, while not altering the fundamental balance of funding.

F40 has suggested that Ministers should seek the £99 million cost directly from the Treasury. I think all hon. Members here would support the Department for Education in applying for that. However, knowing the harsh constraints on public spending that are Labour’s unfortunate legacy, will the Minister consider whether any of it can be found from other sources within the education budget? The sum of £99 million is less than the set- up costs of the new Education Funding Agency, and a very small amount relative to the £1.25 billion earmarked for the pupil premium next year, or the £2.5 billion that it is set to reach by 2015. It could make a major contribution to the work of that vital premium, ensuring it had its intended effect in the areas that it currently has difficulty reaching.

The sum of £99 million is a tiny amount compared with the £36.5 billion paid out under the dedicated schools grant to local authorities and schools around England. If that £99 million were taken equally from all those authorities better funded than Lincolnshire, it would equate to just 0.4% of their DSG funding, and cost no single authority more than £4 million. I hasten to add that that is not what F40 nor I propose, because we prefer no authorities to lose out in the quest for fairer funding, but such a change would be a small step towards a fairer system at a cost that would enable them to stay well within their minimum funding guarantee that no school lose more than 1.5%. At the end of the day, it is up to Ministers to decide the best way of meeting the challenge. We are here today to urge them to do so.

I shall illustrate how the problem has developed. During the first year of the Labour Government, when my predecessor in Worcester used his maiden speech to promise fairer funding as a result of the abolition of assisted places, the gap between Worcestershire and the national average stood at £230 per pupil, and was £380 between us and our neighbours in Birmingham. By the end of that Labour Government, the gap with the national average had risen to £371 per pupil, and with Birmingham it had doubled to £760.

The coalition agreement focused on fairness, but it is disappointing to record that under the coalition Government the unfair gap has widened further. In the current financial year, it stands at £482 per pupil against the national average, and £1,088 against Birmingham, almost three times the gap in 1997. For too long the system has been working against us. For too long we have faced an ever-widening gap. The Government have been brave to recognise the flaws in the system, and right to recognise the need for fundamental reform. However, as Benjamin Franklin said:

“Well done is better than well said."

Today, we are asking for a down payment on reform, a firm signal that the changes that we all agree are needed will be delivered, and a first step towards delivering them. The last Government failed completely to deliver on the issue. The present Government not only can, but must deliver. I urge the Minister to respond positively to the urgent representations from F40 to set much-needed change in motion, and to deliver a real improvement to schools in Worcestershire and across all the areas that have hitherto been left behind. We must not just talk the talk on fairer funding; we must walk the walk. As Shakespeare said: “Action is eloquence”. The Government have displayed great eloquence in dealing with the issue. Now is the time for action.

[Karen Lumley (Redditch) (Con)]

It is a great pleasure, Mr Gray, to serve under your chairmanship. I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this important debate. It is not the first we have had in Westminster Hall on this matter. We have had a debate on Worcestershire, and the Minister is well aware of my views, so I will not speak at length.

A good education is the right of every child in this country. I was educated in the state system, as were both my children. Every child deserves the best education we can provide, and the state should provide it. Imagine my shock when I moved to Redditch 12 years ago to find that my children were in a postcode lottery for education funding. We had arrived from Wales where funding per head was far more than in Redditch. I have campaigned for those 12 years to rectify the situation, and I thought that when we finally got the Conservative-led coalition we would see the end of that disgraceful situation. I am disappointed that again the children of Redditch will have to wait at least three years before they get a fair deal.

Will the Minister explain directly to all the children, teachers and parents in Redditch just why they are worth less than those who live 7 miles up the road in Birmingham? As my hon. Friend the Member for Gloucester (Richard Graham) said, funding per child in Redditch is £1,000 less than in Birmingham.

[Mark Garnier]

In neighbouring Wyre Forest I share the same problem as my hon. Friend. Does she accept that it is a tribute to the teachers in our constituencies of Redditch and Wyre Forest in Worcestershire that they choose to work in those financially constrained conditions when they could take the easy option and move 8 miles up the road to Birmingham where they would received 45% more money? They choose to look after our students and pupils, and we should pay tribute to them for that.

[Karen Lumley]

I certainly pay tribute to those teachers, and I will come to that. I used to be chair of the governors of a first school in Redditch, and if it had received the same funding as Birmingham, it would have had £400,000 more. One of my first jobs then was to appoint a new head at Vaynor first school. She came from a school in Birmingham, and was shocked at the funding level. She did not stay long.

I know that fairer funding is on the agenda, and I am grateful for that. I acknowledge that we have inherited the worst deficit from the previous Government, but that should motivate the present Government to address the structural deficiencies in the system now, and not continue to the next Parliament with an unjust system that jeopardises the future of young people in Redditch. I look forward very much to hearing the Minister’s response.

Self-Employment

Mark Garnier Excerpts

Tuesday 24th January 2012 Westminster Hall

[Mark Garnier (Wyre Forest) (Con)]

I thank my hon. Friend the Member for Watford (Richard Harrington) for his helpful and useful comments. As he said, I will speak about the slightly more tangible and gritty problems facing businesses. Before getting into the meat of my speech, I am struck by how many MPs are in the Chamber and the fact that I cannot see one who has not been in business. It is remarkable that the Chamber is so full, although I am sorry not to see more support for the shadow Minister with responsibility for small businesses. It is incredible to see so many politicians here, all of whom have extensive business experience.

As my hon. Friend said, I want to speak specifically about taxation, regulation, access to finance and cash-flow management. For the purposes of clarity, we are interested today in self-employed people and those who employ fewer than five members of staff—small businesses and micro-businesses. It would be wrong to start my speech without highlighting some of the initiatives that the Government are already taking.

On finance for businesses, the Government are introducing measures to increase the availability of equity finance through venture capital trusts and improvements to the enterprise initiative scheme. They are making regional growth fund allocations for business opportunities and addressing tax initiatives, such as rolling over capital gains into new venture funding. The national loan guarantee scheme is seeking to push debt finance further down the line, and the emergence of community finance organisations, which my hon. Friend the Member for Mid Norfolk (George Freeman) highlighted, is providing locally based informal financing opportunities.

On helping businesses with advice, my hon. Friend the Minister has recently announced three new websites. The Business Link website has an information section offering help on a range of business-related issues, including how to start up a new business. The “mentors me” website offers an opportunity not just for new businesses to find business mentors, but for business people to provide mentoring services. My hon. Friend the Member for Meon Valley (George Hollingbery) made the very good point that setting up a business is tough and that having the benefit of the experience of business people who have learned from their mistakes and can impart their wisdom to new businesses is incredibly important. Websites such as “mentors me” are a way of disseminating that information.

Finally, the improved Business Link website has a wide range of information on how to finance and grow a new or expanding business. However, were I to stand here praising the Government’s glorious achievements, many though they are, as I am sure all hon. Members agree, the Minister would have nothing to say, so I shall turn to some of the problems facing businesses. I hope that he will address some of them and explain how the Government can help and thereby reinforce the process of developing part of the economy that has so much potential for growth and is so liberating for a huge number of people.

I shall start with taxation. No one wants to pay tax, but if we all want to enjoy the wealth of services that the Government provide and to sort out the problems that we inherited, we accept that we must make a contribution to tax. But as we know, it is widely reported that the UK tax system is the most complex in the world. Whether that is true is a moot point, but irrespective of where we are in the ranking of complexity, the fact that we have tax complexity at all is completely at odds with any sort of entrepreneurial spirit that we may want to foster. The last thing a bright, young and enthusiastic business creator wants is to have that entrepreneurial spirit crushed by the dead hand of taxation regulation.

There are various simple answers. On national insurance, for example, the Chancellor has not only put in place a policy to help small businesses by giving employers a national insurance holiday for the first 10 employees, he is investigating doing away with that pointless and superfluous tax. That is definitely a noble direction, but things such as the accounting period for national insurance and PAYE and the fact that two forms must be filled in doubles the bureaucracy facing small businesses. Something as simple as dealing with that would be a quick fix.

We are familiar with the Federation of Small Businesses, which is an incredibly rich source of information on issues facing many small businesses. However, for micro-businesses and the self-employed, there is little specific data. The FSB definition of a small and medium-sized business is one with up to £25 million turnover and 250 employees. I do not know about other hon. Members, but certainly in Wyre Forest anybody bigger than that is quite a large employer locally, and there are few of them.

[Glyn Davies (Montgomeryshire) (Con)]

I agree from a standpoint of running a micro-business myself: I have been a farmer and my wife has been a restaurateur. Regulation, and the fear of it, is particularly damaging to a micro-business, because the individual running it simply has to have the capacity to deal with all these things. In a larger business, often other people can deal with such matters, but it is typical of the small and micro-businesses that we meet for one person to do so. That is incredibly difficult. Fear of regulation and not being able to deal with health and safety issues are probably more of a deterrent than anything else.

[Mark Garnier]

I will come to the regulatory burden in a minute. My hon. Friend is right. I have seen a turkey farm that has had to comply with huge industrial reporting requirements for toxic chemicals, because turkeys produce ammonia, but it also has to prove that it is not producing a great range of other chemicals. These are the unintended consequences of over-bureaucratic regulation.

The FSB provides a great deal of helpful data on business attitudes. Sticking with the taxation issue, 60% of FSB members—two thirds of businesses—complained that the UK tax system is not only too complex, but has a negative impact on their ability to take on more staff and expand.

[Guto Bebb (Aberconwy) (Con)]

The VAT threshold creates problems for micro-businesses. The fact that that kicks in at £73,000 is a cliff edge for many small businesses, because if they hit that level, they end up being penalised to the tune of £10,000, so they make a decision not to grow. Having a tax cliff edge of that nature is a barrier to growth for many micro-businesses in my constituency.

[Mark Garnier]

I agree. Our complex tax code is full of all sorts of unintended consequences exactly like the one that my hon. Friend mentioned. It is ridiculous having a tax that means businesses going above £73,000 will have to start charging their customers. That is a disincentive to growth in terms of going out and gathering business. If people stay below that threshold, it is a disincentive to employ more people.

[Toby Perkins]

The hon. Gentleman is talking about the difficulty with taxation faced by small firms. Will he support Opposition Members calling for a national insurance holiday for any micro-business with less than 10 employees that takes on a new member of staff?

[Mark Garnier]

A national insurance holiday? I think that we are already doing it. That is a policy of ours.

[Toby Perkins]

For micro-business.

[Mark Garnier]

I am sorry; the hon. Gentleman is talking about extending it to micro-businesses. Yes, all this has to be put into the mix of things that we need to look at. It is important to consider any way that we can help more micro-businesses.

FSB members say that our tax system is detrimental to their ability to make capital investments in their business, which again is another reason why people are being held back.

On a wider social point—sticking with tax complexity—it is worth noting that a complex tax system allows a huge range of opportunities for tax avoidance and tax evasion, which makes it extraordinarily complex for Her Majesty’s Revenue and Customs to collect tax and ensure that we avoid the tax gap, which is estimated at anything between £40 billion and more than £100 billion a year. The rest of us have to pay for that tax gap and lack of revenue through increased taxes.

Half of small businesses spend at least two hours every week complying with their tax responsibilities alone and for 10% of businesses, particularly small micro-businesses, that can take up to six hours per week—six hours when those businesses should be capturing new customers, developing new products and investing in their future.

Two thirds of businesses feel that they need professional help to complete their tax returns, which costs them on average an extra £3,000 a year. One third of them find that national insurance in its various forms is difficult to understand. Half of businesses find allowances difficult to get to grips with. Frankly, it is all far too complicated and too expensive in man hours and financial resource to administer.

Regulation is the second area of extreme unrest for micro-businesses. According to the World Economic Forum’s global competitiveness report, the UK is ranked 89th out of 139 for the burden that regulation places on businesses. Aside from the obvious problem of possibly deterring inward investment, the overburden of regulation, especially in the realm of employment law, is cited by businesses as a reason not to expand.

In a business survey in 2008—that was some time ago, but it gives a good idea of trends—a third of businesses thinking about expanding cited fear of regulation as a significant headwind to be faced in expansion and therefore a key factor in their decision. The same survey revealed that half of businesses planning to downsize or close rated regulatory burden as important in their decision to do so. The 2008 survey was undertaken in difficult trading conditions, but regulatory burden should not be a significant factor when businesses are struggling to stay alive in a difficult environment.

Possibly more worrying is the fact that in the 2009 business survey 34% of businesses that were no longer employers cited complying with legislation as a reason for no longer employing staff. This is madness.

[Karen Lumley (Redditch) (Con)]

In my constituency, I have been working closely with small businesses. Does my hon. Friend agree that they feel isolated, with a perceived lack of business support around them?

[Mark Garnier]

Yes. Being a small business man is quite an isolating experience, as many hon. Members will know. People are out there on the front line, struggling to get more business in. They can join network groups and all the rest of it, but they feel like they are in a foxhole, with letters in brown envelopes coming at them from HMRC and all sorts of regulators. That is not necessarily a particularly enthralling experience. My hon. Friend is right.

In addition to accountants and tax specialists to handle tax compliance, a plethora of organisations offer advice on human resources, fire and emergency, health and safety and other things. All that is welcome and they provide an excellent service, but the fact that they are needed and that a sub-class of business advice has been created shows the amount of regulation that we have to face.

The Government have made some progress on access to finance and cash flow. I do not want to be an apologist for the banking crisis. I have to declare an interest here. I was an investment banker and one or two other hon. Members here were, too. It is important to understand that banks have an aversion to risk. Part of the problem faced by the banks is that the Basel III and the Vickers’ recommendations, and so on, are trying to deal with the problem of not wanting the banks to fail. On one hand the banks are being asked to tighten their balance sheet, and on the other they are, rightly, being asked to lend more money. For the banks, those are opposing requests. We need to take great consideration of that as we go through the process of implementing the recommendations of the Independent Commission on Banking, because we cannot ask the banks to take on more risk and expect them not to go bust. That is a contradiction.

[Sheryll Murray (South East Cornwall) (Con)]

Is my hon. Friend aware that in my constituency—with particular reference to the fishing industry—someone receiving training who then wants to start a business needs to purchase a fishing vessel? The banks will not just accept that fishing vessel, although it is a valuable asset, as collateral for a loan. They ask for additional collateral, such as a charge on a property, which a lot of young people do not have. That is stopping industries that support our coastal communities from expanding. Does my hon. Friend think that there is an answer to that?

[Mark Garnier]

My hon. Friend raises two important points. First, on the general point about raising finance for businesses, part of the problem is that, in the past, loans have not so much been business finance loans as mortgages, where a bank has taken a secure guarantee, such as a property, thereby effectively giving a mortgage used to finance a business and the cash flow out of the business is used to service that debt. The feeling that I get out there is that banks have slightly morphed away from being business financers to being mortgage companies dressed up as business financers.

Secondly, my hon. Friend mentions marine finance. We have one of the finest marine businesses in the world. We produce the most fabulously made yachts—we are world class. I hope you will forgive me for getting in a plug for one of my constituents, Mrs Riordan, but Sealine in the middle of landlocked Kidderminster builds very good ocean-going yachts, and if you ever get a chance to take one out, you should. However, this country does not have a significant marine financing industry, and that is a real problem for all the marine industry, whether we are talking about luxury yachts or working fishing boats. I am working with constituents and various marine industry representative bodies to see whether we can address that point, because we must look at it specifically.

In addition to problems with equity and debt, part of the problem businesses face lies with cash flow. All too often, small businesses suffer as a result of delayed payments. To return to the FSB, three quarters of its members have received late payments in the past 12 months, while nearly half claim that a third of invoices are paid late. That is costly in terms of the time spent chasing invoices. In addition, a fifth of the claims for money owing to those businesses are for more than £20,000. Many businesses go bust not because they do not have enough capital or customers, but because of their cash flow. The problem is that, although a business is perfectly viable, it can easily go bust because of a late payment.

[Christopher Pincher (Tamworth) (Con)]

Further to that point, is the problem not that businesses have difficulties with their cash flow, but that banks do not offer decent overdraft facilities to tide companies over in such difficult times? We need to ensure that, when banks lend money, they do not simply do so through loans tied to interest rates and specific rules. They should be much more flexible about offering overdrafts, so that businesses can get through difficult times.

[Mark Garnier]

My hon. Friend is right. Various factoring, invoice and financing arrangements can be put in place for businesses. They are designed, in theory, to help businesses through their cash-flow problems, such as paying for stock to put on their shelves and sell on. A number of the banks in my constituency are certainly much more cautious about asset filing and invoice filing than they were. That is a serious problem, but it can be dealt with, despite some of the bigger problems that the banks face in meeting the Basel III requirements. My hon. Friend makes an incredibly important point.

I want to look at what the Government can do to help. I ask my hon. Friend the Minister to take note, and I am sure he will have some helpful comments at the end of the debate. First, we already have the Office of Tax Simplification, and it is incredibly important that we get the Government to take on its recommendations. We must make absolutely certain that any tax changes are properly thought through in terms of simplicity and that they have a good economic and social justification. If we are going to write taxes, we should do so with an eye to international competitiveness. They should make it easier for our businesses to trade and for us to attract businesses to come and invest in our country.

I talked a bit earlier about merging income tax and national insurance contributions, but I should stress again that it would be incredibly helpful if the collection of national insurance and PAYE could be merged, so that people have a simple form to fill in, rather than two complex forms.

The one-in, one-out system of regulation is welcome, and it should start to force some helpful changes. However, the system needs to be rigorously enforced, and the Government’s commitment to it must remain strong.

[Lorely Burt (Solihull) (LD)]

The hon. Gentleman makes a really important point. Does he agree that, as well as introducing regulations in a rigorous way when they are absolutely necessary, we should measure whether they do their job, with a post-examination within a specific period, so that we can sunset those that we do not need and get rid of them?

[Mark Garnier]

Yes, absolutely. I agree with the hon. Lady. She is absolutely right on UK regulation, but we should also do that on European regulation. We simply cannot have endless regulation coming through, and we really need to see whether it is worth having.

[Julian Smith]

Does my hon. Friend agree that, with very small businesses and start-ups, the Government might need to be more radical than they are being at the moment? On issues such as flexible working and the right to request training, there may be an argument for exempting very small businesses and new businesses from legislation. We should seriously think about more radical measures, such as making it easier for small businesses to get rid of staff. That is politically difficult, but I would like to encourage the Government to think carefully about those proposals from Adrian Beecroft.

[Mark Garnier]

My hon. Friend could have been reading my speech, because my very next point was exactly that. It is vital that we help businesses. Ronald Reagan introduced a law under which businesses with fewer than five employees were exempt from a lot of business regulation, and he increased the number of jobs by 30 million as a direct result.

On a practical point that is deliverable, rather than necessarily doing something wholesale, it is vital that we have a system under which we exempt micro-businesses with fewer than, say, five employees from new legislation. We should also give such businesses a holiday when new measures are introduced. If we introduce new regulation—to follow on from the comments of the hon. Member for Solihull (Lorely Burt)—we need to see how it beds down with those organisations that can afford to implement it. If it works and it is sensible, we can translate it through to smaller businesses when we know how to implement it. We should not load it on to small business right at the beginning and expect them to tackle it and to be the crash-test dummies, when they do not really have the resources to deal with such regulations.

Another problem with regulation is that its introduction is like Chinese water torture, with one drip after another throughout the year. It is quite difficult for many businesses to tackle that drip-feeding of regulation. If we are to bring in regulation, we should bring it once a year. That would make it a lot easier for businesses to focus and comply.

Finally, there is no doubt that the Government have plenty of opportunities to help businesses on cash-flow issues. They have quite a lot of money, although, admittedly, not as much as they used to, and they have a useful cash flow. When they take on contractors, particularly SME contractors, they could achieve a number of things by having a process whereby invoices were paid within 10 days. First, that would set an incredibly good example to the business community and show that early payment is important. Secondly, the Government could push such early-term payments from the contractors to the sub-contractors. Such a process would also give them the ability to persuade their sub-contractors and contractors to sign up to an agreement to help businesses by adopting better payment terms. Those are just a few suggestions, and I am sure that hon. Members will have many others.

I am heartened to see the Minister in his place. He has been in the private sector and has worked hard in business in the past. It is incredibly heartening to see so many business people here, including the Minister. I have every confidence that he will have some helpful comments when he winds up. Much more importantly, when he goes back to his civil servants, he will have a zeal and an enthusiasm for helping small businesses that can come only from somebody who has first-hand experience of the business world.

[Several hon. Members]

rose—

Financial Education

Mark Garnier Excerpts

Thursday 15th December 2011 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

It is a great pleasure to follow the hon. Member for Chippenham (Duncan Hames), who is doing a lot of work on the further education part of the all-party group’s inquiry. I have had the pleasure of being in a couple of his inquiry sessions. I extend my appreciation also to my hon. Friend the Member for Brigg and Goole (Andrew Percy), who has done a fantastic job of chairing the evidence sessions that have resulted in the group’s report, and to my hon. Friend the Member for North Swindon (Justin Tomlinson), who has done a really outstanding job in putting the group together. As we have heard, it has had record membership right from the start. It would be wrong of me to start my speech without also expressing my appreciation of Martin Lewis, whom I met when he first came before the Treasury Committee. He was not only an extraordinarily fine witness but quite an inspirational one.

I come to the subject from the point of view of being a member of the Treasury Committee. The House has heard a lot from teachers and from Members with constituency experience, but I consider the matter with regard to how we run the economy of our country and deal with the crisis that faces us.

When we as a society send children to school, we do our very best to equip them to face life and give them the best opportunity possible to have a successful life and career. We teach them basic subjects such as maths, reading and writing, computer skills, sex and relationships education and how to be good citizens. That is all extremely good and important, but we signally fail to equip people to be financially literate. The evidence of that is all around us. We are one of the most personally indebted nations on the planet, with a staggering £1.5 trillion of personal debt. That is about £25,000 for every man, woman and child. To put that into the context of more meaningful numbers, this country has about 10% or 11% of the population of the EU, yet we have 50% of the personal debt. That is quite a frightening statistic.

As constituency MPs, we see on an all too frequent basis people coming to us with financial problems and, as we have heard, Citizens Advice is seeing a ballooning of debt problems. We are in the midst of a financial crisis, and the banks are accused on a daily basis of causing it. They are quite rightly accused of making irresponsible loans to customers in the housing market, yet we all too frequently gloss over the elephant in the room. For a bank to make an irresponsible loan, it needs an irresponsible consumer to take on that debt. Our response to that situation is to increase the regulation of the financial system, and in so doing increase the cost of financial services to consumers.

It is absolutely right that we examine the regulatory system carefully and do our very best to ensure that we neither have a repeat of the financial crisis nor walk into the next, as yet unidentified, financial crisis. However, part of the solution to the current problems has to be greater financial literacy. We would not have irresponsible borrowers taking out irresponsible loans if they knew what they were doing.

Another topic that we have heard about this afternoon is payday loans. We know that as many as 3 million people will take advantage of that service in the next year, and in some cases they will pay annual percentage rates in the thousands. Yet someone could easily pay a higher rate of interest on a small, unauthorised overdraft, by the time the cost of the levy from the bank, the interest and the penalty charge has been taken into account. However, our response is to consider harder regulation of payday loans. Surely the answer is greater financial literacy, so that an individual is less likely to need any sort of loan.

[Kevin Brennan]

Would not another possible answer be regulating unauthorised bank overdrafts with more rigour?

[Mark Garnier]

I want to get away from the need to regulate everything. We need to ensure that people are in a stronger position to manage their own money and accounts properly, so that they do not get into that problem in the first place. If they did get in trouble, they would be in a far better position to evaluate the best solution.

[Kevin Brennan]

I accept the hon. Gentleman’s point of view on deregulation, but does he not see the paradox in supporting the all-party group’s report, whose first key recommendation is that personal financial education should be a compulsory part of every school’s curriculum, while also supporting the deregulation of the schools system, which would ensure that schools did not have to teach anything of that kind compulsorily?

[Mark Garnier]

That is a neatly and well made point, but the hon. Gentleman will remember my hon. Friend the Member for South West Norfolk (Elizabeth Truss) making the point that, by having financial education in the curriculum, we would not just provide for directly funded schools but provide a lead for other schools to follow. That is an incredibly important point.

The Money Advice Service is part of the solution. It announced earlier this week the start of a new strategic oversight function for financial education. I shall quote from its press release, because it is always very good to hear such excellent civil service-speak. It says that the review is

“to inform and improve the provision of financial education for young people in the UK. Firstly, mapping the range of education initiatives funded by the financial services industry, to create a single view of the landscape; secondly, commissioning new research into education and behaviour change - to both identify global best-practice in the field of financial education; and examine whether successful types of intervention in other fields, for example health or drug education, can be applied to the area of money.”

That sounds fantastic, but there is a simple solution, which we keep repeating: we should put financial education on the curriculum in schools. We should get the Money Advice Service to concentrate on those adults who have not had the chance to get a financial education so far, and who are in desperate need of it to help them to deal with the problems that they face as a result of being financially illiterate.

As part of the all-party group inquiry team, I heard a great deal of interesting comment. I think I went to almost every single meeting, although I might have missed a couple. As we have heard, help is out there. Financial institutions go into schools to assist with financial education, but many teachers feel intimidated by the subject, presumably because they in turn did not receive a financial education. We have also heard that provision is sporadic: sometimes financial education is very good, but sometimes there is none at all. One member of the Arun youth council said that his school spent more time teaching him how to put on condoms than they spent teaching him about money. It was a thin day for bananas that day at his school.

The question is: how do we get financial education into the curriculum and where do we put it? Of course, there is a maths element—frankly, financial education is the type of thing that could enhance maths teaching. Teaching a child about compound rates of interest is not an exciting subject, but teaching a child that buying a pair of football boots for £125 on a credit card with an APR of 26% and paying that over six months will cost him a lot more than if he paid cash gives that child both a good example of how maths works and a lesson in financial facts.

If I were Martin Lewis, I would be able to work out in my head what that compound rate of interest would mean, but I was an investment banker and I am afraid I am completely unqualified to do so, as I would be if I were a footballer. However, to limit financial education to maths would be a huge mistake. Although maths can handle the quantitative side of things, it can do nothing about the qualitative side. We need people to make solid, judgment-based decisions. Maths will give people the skill to answer the question of whether they can afford something, but the question of whether they should buy something is just as relevant.

If I live in the centre of a city, the question of whether I should buy a car is a relatively simple one—there is plenty of public transport so I might not use it, parking might be a problem and so on. However, for an unemployed person living in the country with just a few hundred pounds to their name, the question of whether they should spend their last savings on a car so that they can find a job and make themselves more employable or keep the money to live on is much more difficult to answer. Many people are simply not equipped to make such a subjective evaluation.

[Mr John Redwood (Wokingham) (Con)]

Three constituents have written to me to congratulate my hon. Friend and colleagues on the work they have done on this matter. They said how important their work is and hope that it results in some improvement.

[Mark Garnier]

I am incredibly grateful for that intervention and thank my right hon. Friend very much indeed.

To continue my point, if we equip the next generation to answer the supplementary question to the one I just described—should I set up a business with my last few hundred quid?—we will begin not only to address the financial independence of our citizens, but to find the key to unlocking economic growth in future.

The fact that we are questioning whether financial education should be on the curriculum is a mistake. I fail to understand why it has not been on the curriculum for years. As we have discussed, the APPG has just published its report. The Minister has shown great interest in it and has read through it. We will keep pressing to ensure not only that he reads it again and again, but that he initiates its recommendations.

I shall conclude by mentioning the work of organisations such as PFEG, which we talked about earlier. Its work is incredibly important—it does a valuable job promoting financial education and co-ordinating the efforts of the financial services industry to get expertise into schools—but we must recognise its efforts by delivering the ultimate goal: a curriculum-based financial education which addresses not just maths and the quantitative elements of money management, but the qualitative and judgment-based elements of financial literacy.

Apprenticeships (Small Businesses)

Mark Garnier Excerpts

Thursday 9th June 2011 Westminster Hall

[Mark Garnier (Wyre Forest) (Con)]

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this important and useful debate. We have already heard a great deal about the issue, and I thank him for the huge amount of detail he has given on the statistics associated with this important topic. I will not try to reinforce any of those points.

I agree with everyone else present that apprenticeships are important, and I want to look at three particular reasons why they are important. First, they provide an opportunity for school leavers to get into the jobs market. As we have heard, the Government—the Chancellor announced this in the Budget—have presented an opportunity for 250,000 more apprentices to gain relevant specific training over the next four years. That applies to youngsters who might otherwise struggle or be tempted to go to university. This point was developed earlier, and I think that it is the case that the random target of getting 50% of school leavers to go to university is based on no fact whatsoever. It has led to the emergence of a market among universities, whereby they sell degree courses for things that, frankly, might be better served by apprenticeships. To a certain extent, it is our job in Parliament to highlight the fact that, if someone wants to be a photographer, there is no point taking a degree in photography when more photography graduates leave university each year than there are jobs for photographers in the whole of the European Union. It would be better to get an apprenticeship as a photographer’s assistant and learn the trade on the job.

Secondly, apprenticeships are also an important opportunity for local businesses and small and medium-sized enterprises, as we have heard. There is no doubt that small businesses that are looking to further expand or to ensure their employee succession process will benefit from apprentices who come in at the bottom end of their businesses. Apprentices can work from the bottom and grow to understand the business so that, as they develop into managers of that business, they know it from a shop-floor level.

It is also important that a district can generate a local skills set that meets the expectations of future employers. I am delighted that Wyre Forest—specifically southern Kidderminster—has been selected by the Worcestershire local enterprise partnership as the preferred bid for the LEP business expansion zone. That is incredibly important for my constituency. My constituency once had 20,000 people working in the carpet industry, which brought on many apprentices but now employs about 1,700 or 1,800 people—it is a much diminished area. In the district, 4.6% of local people are on jobseeker’s allowance, which is higher than in Worcestershire, and the area will benefit from having a business expansion zone. Although it is important that, if we are to attract businesses to Wyre Forest, we do so partly through the business expansion zone, it is just as important that we have a local skills set that meets the expectations of incoming businesses. It is incumbent on us locally to deliver those workers and apprentices, in order to meet the expectations of those incoming businesses.

I was recently asked to open a new apprentice training academy in Bewdley, one of my local towns. The TDM Wyre training academy offers a range of information and communication technology training for apprentices in the local community, either by taking on apprentices from local businesses that already employ apprentices but want to give them more specific training, or by taking on students and finding them apprenticeship places. My hon. Friend will be delighted to hear that I am already talking to the academy to find out how my office can best take advantage of that opportunity and employ an ICT apprentice who, even though he is an apprentice, will no doubt be able to teach me a few things about information technology, which I am a bit of a muggins at. This is an organisation that recognises the Government’s ambition and has reacted, as so many do, to market demand. It and others have not only identified the need for training, but, as I have said, are increasing the local skills set in my constituency, which is absolutely vital if we are to attract new businesses.

The Government-run NAS has recently started the 100 in 100 campaign, which, as we have heard, aims to generate 100 apprenticeship placements in local businesses within 100 days. The NAS is looking for business leaders, training providers and local media to work in partnership to influence the local business community to drive up the number of apprenticeship opportunities locally.

I am delighted that the Wyre Forest community housing group has become an ambassador for the campaign in Wyre Forest. The group has 35 placements for youngsters and claims a high number of apprentices who achieve nationally recognised qualifications and who stay on in permanent employment in the group after their apprenticeships have ended. Indeed, to demonstrate its commitment, the group is using apprentice bricklayers, carpenters, plumbers and electricians alongside qualified teams on all its new builds in Kidderminster. The community housing group scheme is important, because it draws its apprentices from a particularly challenging area in southern Kidderminster. The area has about double the district average for jobseeker’s allowance claimants and about 40% of residents are economically inactive. I hope that the Minister will take back to his Department that further reason for looking favourably at the application for the Kidderminster business enterprise zone.

Thirdly, it is important to remember that businesses are also at the forefront of new technology. We have talked about small and medium-sized businesses, but I now turn to big business in order to illustrate the importance of this issue. In my capacity as the vice-chairman of the all-party group on space, I visited Astrium at the company’s factory in Stevenage. Astrium is a global leader in the manufacture of satellites, and in addition to a tour of its Stevenage assembly plant, we were invited to the award ceremony for its apprenticeship scheme. The company is about as high tech as it gets. It manufactures satellites that are at the cutting edge of technology—indeed, one imagines that all space activities are at the cutting edge of technology. At any given time, it employs about 40 apprentices. They are youngsters who are bright kids, but in some cases they may have low aspirations. In a few instances, the company finds its candidate apprentices working in less than exciting jobs, with, frankly, limited prospects of career progression. Astrium takes them on, trains them up, gives them higher education if they want it and gives them a career path and a future. Some 50% of their apprentices go to university and half of those get first-class degrees. Many end up with high office within the company and typically they stay for an average of 25 years with this one company.

Astrium and other high-tech companies take on apprentices for a couple of key reasons. First, companies at the cutting edge of high technology have a unique and focused skills requirement that they simply cannot fill with resources off the shelf. They have to train their staff in specific ways. Secondly, they draw their apprentices locally, which provides not only a benefit to the local community, but a labour source that is loyal to the local area. That reinforces the reason why they are so keen to stay with the same company for such a long time. That is important for career progression and for resource progression, so that we know where the managers of the future are coming from. With 95% of apprentices staying on for a significant time, that is a very important point.

I shall end on a slightly more sober note. I was recently at a meeting of the Worcestershire Association of Secondary Heads with, among others, my hon. Friend the Member for Worcester (Mr Walker). Of course, we talked a great deal about education and what the Government are doing on that and, obviously, we presented a very good argument for the Government’s sterling work, as I am sure hon. Members can imagine. However, at the end of the meeting, one of the heads asked the following sobering question: how can the Government demonstrate that this generation of school leavers will not become a lost generation. My reply to him—this has been reinforced in my regular column in The Kidderminster Shuttle—is that, far from being a lost generation, this generation of schools leavers are at the cornerstone of our country’s future. Their success will determine our success as a country and as an economy.

Apprenticeships and the Government’s apprenticeship programme are a good example of how this Government are delivering on that message. The Government recognise the importance of our future generation of skilled workers, and they are absolutely committed to supporting them, because, at the end of the day, business and skills are at the heart of the economic recovery.