Educational Settings

Rachel Reeves Excerpts

Wednesday 18th March 2020 Commons Chamber

[Gavin Williamson]

I can absolutely give my hon. Friend that reassurance, and I very much take on board the point he makes about the need for flexibility for schools to be able to demonstrate some discretion.

[Rachel Reeves (Leeds West) (Lab)]

Parents may not be key workers but they will be key workers in their homes, because they are the ones who are paying the mortgage, the rent and the bills. So if parents cannot go out to work because their children cannot go to school, who will pay their salaries?

[Gavin Williamson]

In this statement, we are dealing with making sure that we have the provision we need for those key workers in order to sustain our NHS, but I very much accept that many wider issues are raised as a result of this. That is why we have had some reluctance to be in a position of closing schools rapidly, but when the evidence and the science point out the fact that we need to make changes, it is right that we do so.

Oral Answers to Questions

Rachel Reeves Excerpts

Monday 9th September 2019 Commons Chamber

[Gavin Williamson]

My hon. Friend raises an important point. We have already increased the amount of the levy being directed in that way from 10% to 25%. We will very much look at working closely across the whole region of East Anglia on how best we can support this important initiative that makes sure that young people who want the training and people who are retraining have the right skills to be competitive in the jobs market.

[Rachel Reeves (Leeds West) (Lab)]

Last Friday, I met graduates of the Forging Futures scheme at Kirkstall Forge in my constituency. Those young people, who were previously not in education, employment or training, now have a bright future to look forward to, but because that is a pre-apprenticeship scheme it gets no Government funding. Will the Government look again at funding such schemes to give young people, such as those I met on Friday, a better future to look forward to?

[Gavin Williamson]

I would be very happy to look at the details of the scheme that the hon. Lady outlines. It is important for everyone on both sides of the House that we do everything so that those who need the maximum amount of support always get it.

National Minimum Wage

Rachel Reeves Excerpts

Wednesday 15th October 2014 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

This has been a valuable and instructive debate. At a time when too many people in the country feel left behind by our economy and left out of our politics, it is important that the House of Commons devotes its attention to the issues faced by millions of people in our country who work just as hard as everyone else, doing jobs that are vital to our economy and country—as Members, including my hon. Friend the Member for Bolton West (Julie Hilling) have pointed out—but who are not getting a fair share of the prosperity that they help to create.

Millions of people put in the shifts and clock up the hours, sometimes in two jobs or more, often when the rest of us are still asleep in the morning or when we have already gone to bed at night, yet when they get their payslip at the end of the month, their pay is not enough to cover the bills or the rent, or to buy simple things that anyone should be able to afford for themselves and their family. Those people think that something has gone seriously wrong with our economy and our country, and they are right. That is why we need a plan to put it right. That is what the debate is about.

I am proud that the Labour party has called the debate. Our party is founded on our belief in the dignity of work, born of the earliest struggles of working people against extreme exploitation, as my hon. Friend the Member for Corby (Andy Sawford) has said. We are proud of the part that we have always played in improving working conditions and winning for working people a fairer reward for their effort and contribution.

A minimum wage was the aim of our movement for more than a century. I pay tribute to my predecessor as Member of Parliament for Leeds West, who, in 1988, laid before the House a Bill calling for a statutory minimum wage. John Battle noted that, at that time, a primary cause of poverty was

“the persistence, even in what is heralded by the Government as a booming economy, of low pay.”

He told the House of jobs advertised in Bramley in my constituency, including a catering assistant post at £2.10 an hour, five cleaning jobs with hourly rates starting at £1.70 an hour, and a security guard job at £1.50 an hour working for 60 hours a week. He said:

“To generate a low-wage economy for a large minority in our society alongside the current economic boom for the rest of us is grossly unjust. It is pricing people into work at the expense of their families.”

He concluded:

“Without a commitment to a national minimum wage, we perpetuate the conditions that manufacture poverty in our society alongside the wealth of others… The way to prevent poverty is to pay decent wages and not force families into the benefit system.”—[Official Report, 18 May 1988; Vol. 133, c. 951-2.]

Needless to say, the Tory Government of the time did not support my predecessor’s Bill; but 10 years later, the Labour Government and the Department of Trade and Industry, in which he served alongside the former Member for Makerfield, Sir Ian McCartney, to whom others have rightly paid tribute in the debate, established the Low Pay Commission and legislated for a national minimum wage, one of the greatest achievements of Labour’s period in office, and now widely accepted as an essential institution of our economic life. It has made a huge difference to millions of working people—two thirds of them are women—with no negative impact on employment, despite the dark warnings we heard at the time from members of the Conservative party.

Even today, some Conservative Members want to turn the clock back and, rather than strengthen the minimum wage, undermine it. We learned today that that reaches into the heart of the Government, with a serving Minister in the Department for Work and Pensions questioning whether some disabled people are worth paying the minimum wage. He even suggested that it should be possible to pay them £2 an hour. Like the rest of us, disabled people deserve a floor below which their wages cannot fall. They should not be paid £2 an hour. They should be paid the minimum wage, and the minimum wage should increase. Disabled people who heard what the Minister said will be horrified. Labour Members, too, are shocked and disappointed. He should not be serving in the Government, and least of all in a Department that is responsible for work and policies for disabled people. Apparently, he has apologised this afternoon, but he says one thing to the Tory party conference and Tory party members, and another thing in public. That is not acceptable and he should not be in his job.

We have heard excellent speeches in the debate from hon. Members on both sides of the House about the cost of living crisis faced by people at the hardest end of the labour market and about the damage that that does to our economy and our society. We heard from my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) about his work campaigning with cleaners in our Houses of Parliament to get the living wage paid to them.

We heard from my hon. Friend the Member for Westminster North (Ms Buck) about people in work in poverty, and particular problems both in London—not just in inner-city London, but growing into the suburbs—and faced by black and minority ethnic communities, especially the Bangladeshi community, as well as the growing problem of low pay and the pressure that puts on in-work benefits.

We heard from my hon. Friend the Member for Dumfries and Galloway (Mr Brown) about the economic recovery not being felt by everybody across the country, and he is right. I pay tribute to him for his work on the Bill Committee that considered the national minimum wage. He spoke about the Bill Committee sitting from 4.30 pm on a Tuesday until 1 pm the next day, and then on the Thursday from 4.30 until 6.30 the next day; but, as he said, it was really worth it, because the minimum wage was set then at £3.60 an hour and has been rising until today, and will rise again, I hope, under a Labour Government in the future. He spoke about a man in Lockerbie working 50 hours a week but taking home just £112 a week—just over £2 an hour. That is the difference a Labour Government made for such men and women across our country.

My hon. Friend the Member for Middlesbrough (Andy McDonald) spoke about a security guard in his constituency working before the introduction of the minimum wage who, as well as not being paid a wage that he could afford to live on, was told that he had to bring his own dog to work.

The hon. Member for Banff and Buchan (Dr Whiteford) spoke about businesses’ worries about the costs of the minimum wage, but pointed out the huge benefits to the economy and to society, as well as the fiscal benefits of a minimum wage.

I also pay tribute to the hon. Member for Bedford (Richard Fuller) who spoke powerfully about the importance of the minimum wage and the importance of it rising. I hope that he will support the motion, because, as he argued and as we put in our motion, the national minimum wage should be pegged to average earnings, so that it increases and regains its value. He also spoke about the importance of the living wage in local government contracts, and I pay tribute to the local authorities—the Labour local authorities—that are now living wage employers, and not just for their directly employed staff, but also for their contracted-out staff. [Interruption.] If the Minister would like to mention the Tory councils that pay a living wage and also pay all their contracted staff a living wage, I look forward to hearing from him.

My hon. Friend the Member for Bolton West (Julie Hilling) also paid tribute to Sir Ian McCartney, as well as talking about the importance of enforcing the minimum wage, particularly for migrant workers and carers, who are so often exploited.

The lesson we should draw from that success of the national minimum wage is not to rest satisfied, but to raise our ambitions higher, because today we face new challenges that require a new plan. This Government have presided over an historic squeeze on wages that has been a key cause of the cost of living crisis our country faces today. Workers are on average £1,600 a year worse off than when the Prime Minister took office in 2010.

Today’s labour market figures confirmed that wages are still losing ground compared with prices, with wages rising by just 0.7% and inflation running at 1.2%. One in five British workers are low paid according to standard international definitions. That is one of the highest proportions in the developed world, placing us 25th in an OECD league table of 30. That is not good enough, and that is why this motion today is so important.

Today, half of people in poverty, and two thirds of children in poverty, live in working households. We need to do more to make work pay by increasing the value of the minimum wage, to ensure we all benefit as the economy grows. It is a damning indictment of an economy that is not working for working people where the link between hard work and reward urgently needs to be repaired.

Change cannot come soon enough for all the people my hon. Friends mentioned in this debate, and it cannot come soon enough either for my constituent, Alice. She works three shifts a day as a cleaner to support her family, but ended up trying to survive on rolled over payday loans and had to come to me to ask for food vouchers because she had to wait months for the tax credits she was entitled to. Our welfare state was built to protect working people who fell on hard times, not to provide a permanent subsidy to profitable companies paying poverty wages. That is why the minimum wage—and increasing it—is so important.

As shadow Secretary of State for Work and Pensions, I know that this simply is not sustainable, with the loss in the real value of the minimum wage since 2010, taxpayers are now paying out an extra £170 million a year in tax credits, an extra £60 million a year in housing benefit and another £40 million a year in other means-tested benefits because of the fall in the real value of the minimum wage since 2010.

Unless the value of the minimum wage increases, there will be further pressure on our social security system. We need to tackle the root causes of the rising social security bill by building homes, ending exploitative zero-hours contracts and increasing the value of the minimum wage.

That is why Labour has set a goal to halve the number of people on low pay by 2025. We have the plans to deliver it. A key plank of that plan is our target to raise the value of the minimum wage over five years to 58% of median earnings from the current 54%, which would bring it to £8 before the end of the next Parliament. We will also get more workers paid a living wage by sharing the savings that the taxpayer makes from reduced social security expenditure. Every pound employers pay in increasing the value of the wages paid to the lowest-paid saves the Treasury 32p in higher tax revenues and national insurance contributions and 17p in lower social security payments. We would allow employers to claim back as a tax rebate 32p in extra tax revenue for the first year only to help their businesses shift to models to make investments in their staff. These measures form part of a comprehensive plan to build a stronger economy that works for all working people: strengthening vocational education, taking tough action on youth and long-term unemployment with our compulsory jobs guarantee and ending the exploitative use of zero-hours contracts.

The House has a clear proposal before it this afternoon: a plan to raise the national minimum wage and to get it properly enforced; a plan to get more people paid the living wage; a plan to halve the number of those on low pay; and a plan to ensure that work pays, so that everyone in our country, not just a privileged few, benefits from the economic prosperity that we all help to create. That is the choice before us this afternoon—a choice that I hope Members on both sides of the House will support. If they do not, that will be the choice that the country faces at the general election next year.

Oral Answers to Questions

Rachel Reeves Excerpts

Monday 23rd May 2011 Commons Chamber

[Sarah Teather]

I thank the hon. Lady for that question. DCLG is undertaking a comprehensive review of all the statutory duties, but it is intended to remove unnecessary duties, not necessary duties, and there is absolutely no intention to downgrade those duties relating to special educational needs.

[Rachel Reeves (Leeds West) (Lab)]

The Minister told the Education Committee last week that she thinks there will be resources for special educational needs. Children and parents deserve more than guesswork. Can she guarantee now that the Government will make sure that all children with additional learning needs have the support that they need to succeed at school?

[Sarah Teather]

That is exactly what the Green Paper is about, and I hope that the hon. Lady, if she has constituents who are particularly affected by our proposals, will ensure that they respond. The proposals are absolutely about making sure that children get the help that they deserve, but that is sadly not happening at the moment, partly because a lot of resources are wasted.

Youth Service

Rachel Reeves Excerpts

Tuesday 23rd November 2010 Westminster Hall

[Julie Hilling]

I am not in the Government or even in the shadow Government, so I am not in a position to say where cuts should be made. However, making substantial cuts to a small pot of money—some £300 million is spent on the whole youth service throughout England and Wales, which is a very small pot of money nationally—does huge damage to the services provided.

It is with sadness that I report that Warwickshire county council is proposing to abandon its youth service all together, and it appears that Norfolk, Suffolk and Southampton city councils are planning to do the same. According to a recent survey of proposed cuts that was conducted prior to the comprehensive spending review by the National Youth Agency and the Confederation of Heads of Young People’s Services, 95% of services were predicting cuts during the current year, the majority of which would be in the region of more than 30%.

Bolton council has already had to cut £200,000 this year and is predicting a cut of £415,000 next year. Am I right to assume that the Minister is concerned about a cut of £2 million to West Sussex county council youth service, which covers his constituency? Does he support the thousands of young people across West Sussex who have been petitioning and campaigning against the cuts? The portfolio holder for the area, Councillor Peter Bradbury, admitted that young people had not been properly consulted. Again, is the Minister aware that consultation with young people on service provision is fundamental to the Education and Inspections Act 2006?

There is an illusion that mutuals, social enterprises or even the private sector will take up youth work provision. Although there are some excellent voluntary sector projects, there is little evidence that many providers are ready to take on the role of providing youth services. In any case, they are dependent on adequate public funding for the work. The staffing and resources of some services are already so depleted that even a small cut of 10% will effectively end their ability to function meaningfully.

[Rachel Reeves (Leeds West) (Lab)]

I congratulate my hon. Friend on securing the debate. In my constituency, Bramley and Rodley Community Action Trust provides a youth bank in the area. The trust also runs a youth inclusion programme, which helps people who are at risk of becoming involved in the criminal justice system. Does she agree that cuts to Leeds city council of 27% will mean that those services are at risk and that, as a result, we risk building up future problems of antisocial behaviour and criminal activity? With just a bit of funding, we could ensure that such organisations were able to continue providing those excellent services.

[Julie Hilling]

I thank my hon. Friend for that intervention. I absolutely agree that it is a false economy to make such cuts to youth services. Historical evidence shows that youth services will be harder hit than other services. Local authorities will have to protect some of the services relating to safeguarding issues and the care provision for older people. However, youth services always get squeezed. They have always been Cinderella services and will have greater cuts imposed on them unless action is taken—in particular action to enforce the legislation that is in place, which I shall come on to.

Such cuts will mean the end of universal out-of-school services for young people. Since January 2007, through working in partnership with the voluntary and private sectors, local authorities have had a statutory duty to promote the well-being of young people aged 13 to 19 years—in fact, it is up to 25 years for those with learning difficulties—and to promote access to educational and recreational leisure time activities, which are referred to as positive activities. The legislation that supports youth work is described in detail in statutory guidance published in March 2008 under section 507B of the Education Act 1996. That statutory guidance sets out the requirement for local authorities to provide youth work in three areas: positive activities, decision making by young people and 14-to-19 learning. The guidance refers to the fact that educational leisure-time activities are explicitly linked to youth work methods and approaches. The purpose of both forms of positive activities—educational and recreational—is the improvement of well-being. The definition of well-being in the legislation reflects the five Every Child Matters outcomes: be healthy, stay safe, enjoy and achieve, make a positive contribution, and achieve economic well-being.

The statutory guidance also refers to “Aiming High for Young People: A Ten Year Strategy for Positive Activities.” That strategy concludes with a very strong statement that recognises high-quality youth work. The Government’s view is that high-quality youth work delivered by third and statutory sectors is central to delivering our ambition of increasing the number of young people on the path to success. Is the Minister concerned about the ability of local authorities to fulfil their statutory responsibilities? If they do not fulfil their statutory responsibilities, will he intervene under sections 496, 497 or 497A of the Education Act 1996?

Would it not be helpful to revisit the recommendations of the “Resourcing Excellent Youth Services” document? Instead of aiming low for young people, as the Government appear to be doing, would it not be better to return to the recommendations of the “Aiming High for Young People” document? Does the Minister recognise that 70% of funding for the voluntary sector, particularly for youth services, comes from local authorities, and that decreasing that funding reduces the potential of what he might term big society organisations?

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

Again, I thank my hon. Friend the Member for Bolton West (Julie Hilling) for securing this debate. I am sure that we have all seen in our constituencies the excellent work that youth services do. In Leeds West, there are several vital services. Earlier, I mentioned one of them—Bramley and Rodley Community Action Trust—and now I would like to highlight the role of another one.

Armley Juniors is a small group in my constituency. It is run by just three people in a deprived part of a constituency that already has low incomes and low educational attainment. Armley Juniors took over an old post office in the constituency and has managed to turn it into a youth centre with a kitchen for cooking classes. It also offers computer lessons and a communal area for children on the estate, and runs sports teams and outdoor activities during term and school holidays. It benefits from funding from Leeds city council and a peppercorn rent on its site, but, like many youth services across the country, it operates on a shoestring budget.

Leeds city council faces 27% cuts across the board during this Parliament, and the people in the dedicated team running Armley Juniors, whom I visited recently, are extremely worried about their future. Such issues may not register on the national scale, where we are seeing significant job losses and cuts across the board following the comprehensive spending review—indeed, in Leeds alone, we are facing the loss of 3,000 council jobs—but on the Heights estate in Armley, where Armley Juniors operates, the removal of funding would deprive young people in the community of the only communal space in the area.

The estate is a densely populated inner-city area with no playing fields, no other youth clubs and no sports halls. To make matters worse, Government cuts mean that the council now has to charge local youth groups for their use of school playing fields and community areas, which is a double whammy for groups such as Armley Juniors that need to use those facilities if they are to provide activities, especially sports activities, for young people.

[Fiona O'Donnell (East Lothian) (Lab)]

Does my hon. Friend agree that with a comprehensive spending review that will hit children and families even harder than other sections of society, the need for services such as those in her community will be even greater?

[Rachel Reeves]

I agree with my hon. Friend. As well as having some excellent youth services in my constituency, we have Armley prison, and the point made earlier by my hon. Friend the Member for Bolton West about the long-term impacts of cuts to youth services rings true to me. A lot of people who provide youth services in my area say that their aim is to ensure that young people from very deprived backgrounds do not become the future inmates of Armley prison. During these difficult economic times, it is very worthwhile considering long-term impacts. Many hon. Members here today will recognise that this is an issue in their constituencies, and I fear that the cuts will cost us more in the long term.

Alongside the cuts to the police in Leeds, there are cuts to sports funding in schools, which we read about over the weekend and on which we will hopefully—although I fear not—hear some more positive news this week. There are also cuts to free swimming, and cutting services such as Armley Juniors on top of all that will have costly implications for both the community and for Government spending in the long run.

Most of us remember the 1980s and the generation of young people who were condemned to the scrap heap then. I was at school in that decade, and remember well the funding cuts that meant that sports clubs and after-school activities were available to children if their parents had money, but that children whose parents did not have money and who lived in inner-city areas without open spaces or playing fields, missed out. I urge the Minister not to allow us to go back to those bleak days. The value of organisations such as those that we are championing today cannot be measured, as my hon. Friend the Member for Bolton West said, just by their cost on a balance sheet. They educate, engage and inspire young people and make a huge difference to their lives. Cuts on the scale envisaged by this Government will devastate youth services across the country, and I urge the Minister to think again.

Free School Meals

Rachel Reeves Excerpts

Wednesday 30th June 2010 Westminster Hall

[Mrs Hodgson]

My hon. Friend is right, and I will come on to the Hull experiment.

The quality of packed lunches is usually dependent on cost, but do not take my word for that, Mr Weir. Research by Professor Derek Colquhoun of the university of Hull showed that it is not always possible for families to access, let alone afford, fresh food for their children. The alternative of paying for school meals may cost almost £20 a week for a family with two children—money which those still living below the poverty line do not have.

I look forward to hearing more about the success of the Durham and Newham pilots from my hon. Friends the Members for City of Durham and for West Ham. Unfortunately, due to the recession, universal free school meals did not make it into our manifesto, but our party gave a commitment in the 2009 pre-Budget report to extend the universal free school meals pilots to at least one in every region and permanently to raise the access threshold everywhere else to £16,190 to enable a further 500,000 children to have a free, hot and healthy lunch every day. That approach would also lift a further 50,000 children out of poverty, which was welcome news as far as my colleagues and I were concerned. Such a measure would also be an important first step on the way to universal entitlement, and I welcome it as still affordable, even during a recession.

[Rachel Reeves (Leeds West) (Lab)]

Does my hon. Friend agree that it is even more important to extend that entitlement during the recession? In my constituency, the average income is £16,000 a year, which means that the average family is living in poverty. However, if someone works and earns £16,000 a year, their children are not entitled to free school meals. It is harder for those families to go back to work because they lose the entitlement, which for many is equivalent to about £600 a year. If the coalition Government want to get more people back to work—although the forecast from the Office for Budget Responsibility showed that their Budget will put 100,000 more people on the dole—one important measure would be to extend the entitlement to free school meals so that parents who go back to work can claim it for their children.

[Mrs Hodgson]

My hon. Friend raises an issue that I was coming to—I fear that she makes the point better than I would have done. A lot of hon. Members in the coalition Government are not getting that point, but hopefully the contributions that my hon. Friends and I make today will put paid to that.

Confusingly, although the new Government committed themselves to meeting the child poverty targets set by the previous Government, the Secretary of State for Education announced on 9 June that the coalition Government would not be going ahead with the additional pilot schemes, or the extension of schemes to include more low-income families. That is devastating news for the families concerned. The extension would have eased the transition into work for many parents—my hon. Friend has just spoken about that—and supported the Government’s wider drive to improve educational and health outcomes among the least well-off in our society. It seems that the Education Secretary wants to follow in the footsteps of a former Conservative Education Secretary, who became well known—indeed infamous—overnight with the tag of “milk snatcher”. Today’s Education Secretary shall for ever more be known as the “meal snatcher”.

Entitlement to free school meals usually ends when a family moves off benefits and into low-paid employment. That gives rise to an extra cost of around £300 a child per year, just when families are trying to make themselves better off through work. Furthermore, 60% of children in poverty have at least one parent in work, so the majority of children who live in poverty today do not benefit from free school meals. That is a shocking statistic, but it is true.

The decision announced by the Government is spectacularly short-sighted and I urge the Minister to reconsider it as a matter of urgency, particularly considering that the coalition’s stated aim is to decrease the number of people on benefits and increase the number of people in work. That is a laudable goal, but it will never be reached with such poorly thought out policy decisions.

A measure that would have raised 50,000 children above the poverty line has been scrapped, thereby exposing the Government’s claims to promote fairness as nothing but empty rhetoric. How can increasing the number of children living in poverty in 2010 help the Government to meet their 2020 target for eradicating child poverty, especially after a Budget that, as the Institute for Fiscal Studies shows, disproportionately affects the very poorest? I was even more disturbed to see a leaked memo suggesting that money that would have been directed to the poorest families for free school meals is now being redirected to help the middle classes to parachute their children out of mainstream schools and into free schools. That is a particularly galling example of money being directed away from the disadvantaged towards the comfortably off and away from a scheme that would have lifted children out of poverty to one that will do nothing of the sort but will pander to middle-class parents who still bemoan the loss of grammar schools in leafy London boroughs.

Following this debate, and with the successful campaign that is being led by my right hon. Friend the Member for Morley and Outwood (Ed Balls), the Government will choose to reinstate the changes to free school meal provision that were announced by the previous Labour Administration. That would be welcome news, but I would like the Government to go even further and seriously consider the case for universal free school meals. It is all too easy to dismiss the argument by saying, “We haven’t got the money to do it”. Tough spending decisions should be a matter of prioritising, not slashing budgets for ideological reasons.

--- Later in debate ---

[Roberta Blackman-Woods]

My hon. Friend makes a powerful point and shows how critical it is to have policies such as free school meals in place when trying to move people off benefits and into work.

The coalition promised to prioritise fairness when implementing cuts and to meet the 2020 target of eradicating child poverty, but deeds speak louder than words and it is appalling that one of the first acts of the coalition Government has been to attack the poorest in our society by cancelling the extension of the free schools meals programme. Furthermore, that will not help to close the attainment gap in schools. The previous Government went some way towards improving standards in school across the board and improving attainment levels, but sadly an attainment gap still exists. The position is that 26.6% of the poorest children passed five good GCSEs compared with 54.2% of better-off children in 2008-09, and that is pretty much the case across the board.

If we want to reduce the attainment gap, we must ensure that all children at school are given an equal chance, and results from the pilots in Durham show that free school meals are contributing enormously to reducing attainment gaps. That is because they help children from low-income backgrounds, who may not have good nutrition, to concentrate more in the classroom. In my constituency, every school has free school meals, and I have visited many of those schools in the past few months. There is not one head teacher or one teacher who is not tremendously supportive of the programme. They say that, even at this early stage, it is making a real difference to concentration levels and children’s ability to perform successfully.

The real argument for universality is how it applies across the board. No stigma is attached to free school meals in that case, and many of my local schools have 100% take-up, but the greatest advocates for the programme are the children themselves. When my hon. Friend the Member for Kingston upon Hull North (Diana R. Johnson) visited Durham with me to look at the programme, we talked to many of the children, and we found that it was the children in the school who were the advocates and ambassadors for the programme. Of course they had the odd grumble, but generally speaking, at the age of seven, eight and nine, they recognised the value of the programme. They talked about how it was encouraging them to eat healthily and to develop social skills. They liked being able to sit down with their friends and teachers and have their lunch. They said that they were pleased because they no longer had to bring packed lunches, and there was no longer segregation in the school between those having school meals and those having packed lunches.

[Rachel Reeves]

My hon. Friend talks eloquently about the difference that free school meals have made in her constituency. Does she agree that as well as free school meals, which are important, breakfast clubs in schools are making a huge difference? However, certainly in my constituency, schools rely on support from the local education authority and the Department for Education to be able to continue those breakfast clubs. Does she share my fear that we are starting to descend a slippery slope and that the support for breakfast clubs, which also help children’s concentration and break down some of the barriers that she talked about, is likely to be at risk in future?

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point; indeed, we were discussing it on the Floor of the House yesterday, when it was noted that the cuts being made to area-based local authority grants are already affecting the extended schools budget, which many local authorities use to support breakfast and after-school clubs.

I honestly wish that the Secretary of State for Education or one of his Ministers had come to my constituency before announcing their policy, because it is impossible to witness the free school meals system in practice, to see how successful it is and then to cut it.

The GMB produced a helpful progress report on free school meals in February, which demonstrated that the free school meals service in Durham was employing 140 additional staff and that food was being sourced locally. Furthermore, it was much more cost-effective to deliver free school meals as a universal, rather than means-tested, service. The system ticked all the boxes because it also helped to educate children and their parents about how to eat properly.

In this time of scarce financial resources, the Government should surely be looking at policies that tick a whole range of boxes and which are cost-effective. Powerful arguments can be made that free school meals are a good investment for the future and that they help to reduce long-term health and education inequalities.

--- Later in debate ---

[Tim Loughton]

No, and I will come to that. It means exactly what the Secretary of State said. Money for free schools will not come from any of the budgets around free school meals. The money that will now not be used for the extension of free school meals, which was never budgeted for, will be used for other methods of improving educational attainment within our schools and closing the gap which, as the hon. Lady agrees, is essential.

[Rachel Reeves]

Will the Minister give way?

[Tim Loughton]

I will give way once more, but if I give way an awful lot, no one will get to hear the answers that many Members wanted.

[Rachel Reeves]

We need more clarity. The previous Labour Government said that the extension of the free school meals pilots next year would cost £85 million and the new Government say that it will cost £125 million. The gap is only £40 million. If the £85 million is there, what will it be spent on? I think that that is the point that my hon. Friend the Member for West Ham (Lyn Brown) was making. Will that money be used for something else? Will it be used to pay down the deficit? For what, precisely, will the money earmarked for the scheme—money that the Minister has said is available—be used?

[Tim Loughton]

If the hon. Lady is patient, she will hear more detail.

Over three years, the extension of the scheme would have cost £295 million, for which the previous Government did not budget. That is a simple fact. It was immoral of the previous Government to lead people to believe that they could extend the free school meal programme without making any provision for funding it. Furthermore, in this debate, hon. Members have not just been talking about extending the free school meal entitlement; they have been talking as though the last Government wanted a universal free school meal entitlement. That was never a manifesto commitment. If hon. Members are now talking about a universal free school meal programme, where will that money come from? Which programmes would they cut? They cannot have it both ways.

To return to the points that many hon. Members want addressed, I will clarify exactly what the Secretary of State for Education said. He has reallocated £50 million in direct funding from the harnessing technology grant to create a standards and diversity fund, thus reinventing a fund set up by the previous Government in 2006, but stopped in 2009, that was intended to create diversity of provision in the school system. The fund will now provide capital funding for free schools until 31 March 2011. Funding for free schools beyond that will be a top priority for the Department in the forthcoming spending review. I would like to make it clear that the new free schools will be funded on a basis comparable with other state-funded schools and that, as is the case now, money will follow the pupil within the funding system.

To return to the issue of free school meals, we are of course extremely disappointed that we cannot proceed with the previous Government’s proposal to extend the free school meals pilots. It would be good for more children to have access to free school meals. I agree with hon. Members that there is no doubt that free school meals help families and children in need across the country. However, the previous Government underfunded the programme to the tune of £295 million over the next three years, and we are not prepared to cut front-line budgets to support an as yet unproved scheme. We have therefore taken the difficult decision, from this September, not to extend free school meals to maintained nursery and key stage 1 pupils from working families on low incomes. We have also decided not to provide funding from central Government for the further five local pilots mentioned.

Let me be clear: we are absolutely not taking free school meals away from anyone who is eligible. The hon. Member for Washington and Sunderland West said that my right hon. Friend the Secretary of State would become known as the meal snatcher. No child currently eligible for free school meals will lose that entitlement. Nothing is being taken away. However, the extension that the Labour Government promised but failed to fund will now no longer take place.

Industry (Government Support)

Rachel Reeves Excerpts

Wednesday 16th June 2010 Commons Chamber

[Vince Cable]

That was starting to morph from an intervention into a speech. It did not require a great genius to see the fallacies in the bubble economy that was being created, and I was one of many people who saw the problem. However, the hon. Gentleman is getting to the issue of my position, which was also raised from the Opposition Front Bench, so let me deal with the question of cuts, the timing and what the sensible response is. The motion refers to a

“critical moment in the…cycle,”

and talks about recovery being fragile, and it is fragile. There are risks in both directions. If there are rapid cuts in public spending, they of course run the risk of having an impact on growth; we all understand that, but there is the risk on the other side that if we did nothing or delayed taking action, there would be a serious crisis of confidence in the economy because of the sovereign risk crisis that is rolling around Europe.

I was specifically challenged to say why I had changed my mind on the subject, and I will tell the hon. Gentleman when I changed my mind. Before I entered this Government, I spoke at some length to some of the key decision makers in the UK, including the head of the Treasury, and we also had advice from the Governor of the Bank of England. Their advice was unequivocal: in the circumstances that we entered, we had absolutely no alternative but to act decisively and quickly. I always made it clear in opposition that we had to act rationally. We had to take account of growth on the one hand and sovereign risk on the other. Those factors had to be balanced. We have balanced them, and we came to the decision that early action was essential in the light of the circumstances that exist. That was objectively based on the evidence in the economy.

[Rachel Reeves (Leeds West) (Lab)]

The right hon. Gentleman also met the permanent secretary at the Treasury and the Governor of the Bank of England before the election, so I am still not clear how his mind was changed between the election campaign and when he became the Secretary of State. Can he clarify what it was between those dates that made him change his mind?

[Vince Cable]

I do not know whether the hon. Lady was reading the newspapers when she was campaigning for election to this House, but there was a major sovereign debt crisis emerging in Europe. [Hon. Members: “Oh, come on!”] Well, I am sorry, but the gasps from Opposition Members suggest how utterly and completely out of touch they are with the realities of financial markets. We are talking about a very serious crisis, and the Government had to respond to it, as other Governments are doing now.

I congratulate the Opposition spokesman on being honest enough to acknowledge, in a rare departure from tradition, that he had been forward in accepting the need for cuts. Those on the Benches behind him who are so anxious about early cuts need to be aware—the Institute for Fiscal Studies pointed this out—that the previous Government were already engaged in a fiscal tightening of £23 billion for this financial year. We are now being accused of making cuts in the current circumstances, but the previous Government were planning that too.

That was on the record, and it was not just a theoretical abstraction; rather, many of us saw it happening. It happened in the Department for Business, Innovation and Skills, which the right hon. Member for Wolverhampton South East was responsible for. Lord Mandelson was the first Minister to put his Department forward for early cuts, which was why, in the run-up to the election, I attended a meeting of further education college lecturers in my constituency, 70 of whom were going to be made redundant. The reason for that was that those early cuts, introduced by the right hon. Gentleman, were working their way through to the front line of teaching. I then went to one of the leading science laboratories in my constituency, where 40 members of staff were being made redundant because of cuts made by the right hon. Gentleman and Lord Mandelson this financial year, so please let us not have any more of this pious nonsense about early cuts.

--- Later in debate ---

[Margot James (Stourbridge) (Con)]

I must congratulate my hon. Friend the Member for Bracknell (Dr Lee) on his excellent maiden speech, with which I agreed in every respect. I also congratulate the hon. Member for Bolton West (Julie Hilling) on her excellent maiden speech, which was entertaining as well as informative.

I am grateful for the opportunity to contribute to this important debate on support for industry, but we cannot debate support for industry in a vacuum. I do not want to dwell on the past, but none the less we want to learn from it. A lot of the Opposition’s schemes for supporting business when they were in office had a rather half-hearted effect, at best. Many of the schemes, such as the capital enterprise fund, were only subscribed to by 50%. The trade credit insurance fund, which had an original budget of £5 billion, only had a take-up of less than £20 million. Apprenticeships have been hard to fill. A lot of the problems with these schemes are caused by low awareness among industry, eligibility criteria that are far too complex and rule out far too many worthy applicants, and a bureaucracy that small enterprises simply cannot cut through.

[Rachel Reeves]

I thank the hon. Lady for giving way. I am surprised by what she says about apprenticeships, because in my constituency of Leeds West, the number of apprenticeships has gone up from 70 to 210 in the last decade. At Leeds college of building, 400 people started on apprenticeship programmes supported by businesses this year—more than they have ever had before. I am very surprised that she says that people are not taking up places.

[Margot James]

There is a big problem with apprenticeships for a lot of people in my constituency. The college funds NVQ level 2 and 3 training programmes and more and more students are trying to stay in college because they simply cannot get the apprenticeships outside as the employers are too hard up to provide them.

--- Later in debate ---

[Kwasi Kwarteng (Spelthorne) (Con)]

This is the first time I have had the privilege of speaking while you are in the Chair, Mr Deputy Speaker, so I congratulate you on your appointment.

We are in a bit of a déjà vu situation. Labour Members cry about Tory cuts, yet they forget why the cuts have to take place. They are suffering from collective amnesia and forgetting that for the last 13 years they ran this country and the Government on the proposition that they had abolished boom and bust. The former Prime Minister, when he was Chancellor, openly boasted about that. There was a feeling that money would pour in—that there was an inexhaustible pot of gold to be drawn from. It reminded me of Aladdin, who rubbed the lamp and the genie appeared. Labour seemed to think that the genie would appear, they would ask for money and, magically, it would arrive.

[Rachel Reeves]

Does the hon. Gentleman remember that the financial crisis happened across the whole world? Does he believe that the Labour Government are responsible for the budget deficits in all those countries?

[Kwasi Kwarteng]

I remember that very well, but I would point out that, in the five years before the crisis that the hon. Lady speaks of, we were running completely needless deficits. We did not have to run those deficits; we did so because of the concerted attempt by the then Chancellor to expand the state and to keep spending money.

[Rachel Reeves]

Can the hon. Gentleman give us an example of when the Conservative party opposed our spending plans?

[Kwasi Kwarteng]

During the 2005 election, we were—[Interruption]. If I may continue.

The general Aladdin’s lamp approach was shown to be absurd. As the then Government kept rubbing the lamp and the genie came out, they asked for money, but the genie suddenly became rather less giving. At one point, the genie—in form of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—wrote a letter and said, “There is no money. We have run out of money.” The reason why we have done so is simply that we were spending too much.

I have a Methodist background. My mother is a Methodist lay preacher, and she would tell the Sunday school, which I attended, about the seven fat years and the seven lean years. Those hon. Members who know the Old Testament will remember that Joseph had a dream in which he dreamt of seven fat cows and then the seven lean cows. [Interruption.] This is not very complicated; it is quite simple actually, so please bear with me. I know that Labour Members have concentration problems sometimes. I am sorry—it was a long time ago. The pharaoh had the dream and he spoke to Joseph. [Interruption.] This is very important and interesting. He asked, “What does this mean?” and Joseph said very simply, “You will have seven fat years and seven lean years.” The whole point is that we are meant to save money in the fat years, so that we can spend it in the lean years. The Labour Government comprehensively failed to do that. They thought that the fat years would run indefinitely. They thought that they had abolished boom and bust.

The point of telling that simple story is to show comprehensively the reason for the cuts mentioned by the hon. Gentleman—I forget his constituency. [Hon. Members: “Sedgefield.”] I apologise; I was perhaps confusing him with another Member for Sedgefield. The hon. Member for Sedgefield (Phil Wilson) referred to them as Tory cuts, but the simple story of Labour’s failure to rein in Government spending in the boom is why we must make these cuts. They are not coming out of the blue or from savageness.

--- Later in debate ---

[Kwasi Kwarteng]

I am fully aware of those facts. The figures show that the ratio of our debt to GDP is 12%. That is higher than any other country in the west. [Interruption.] I am sorry; I stand corrected. The deficit-to-GDP ratio is the highest of any other country in western Europe and, indeed, in the western developed world.

[Rachel Reeves]

I am sorry to correct the hon. Gentleman again. He is right to correct himself—the deficit, not the debt, ratio is 12%—but is he aware that the deficit figure in Greece stands at 14%? Greece is, I believe, in the western world. Is he also aware that we went into the crisis with the second lowest debt-to-GDP ratio in the G7?

--- Later in debate ---

[Matthew Hancock]

I agree with my hon. Friend.

[Rachel Reeves]

rose—

[Matthew Hancock]

It would be a delight to give way to the hon. Lady, who has made so many fascinating interventions this afternoon.

[Rachel Reeves]

The hon. Gentleman has quoted a fascinating statistic, but does it not fly in the face of what those on his Front Bench have been saying about how, because nobody wants to buy our debt—that is what one of his colleagues said earlier—we have to make cuts immediately? If interest rates are going down, surely there are lots of people who want to buy our debt.

[Matthew Hancock]

Interest rates are going down in the market because people can see a Government who are taking action and getting to grips with our problems, who have already made in-year cuts and who will finally put this country back on the path to fiscal sanity. That is exactly why interest rates are going down, which is a commendation on the action that the Government have taken so far.

The point that I will rest on is this. Across this country, businesses are paying interest rates that are in some cases extremely high. They need to borrow in order to invest for the future and get the private sector recovery that even some Labour Members talk about. The single best measure to do that is to have low interest rates and a stable economy, with confidence in the future. That is exactly what this Government’s programme is delivering, and I commend them on that. I strongly support the amendment to the motion, and I look forward to voting for it later.

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

I welcome you to your position in the Chair today, Mr. Deputy Speaker. It is a pleasure to speak in the debate after so many excellent speeches, not least from the hon. Member for West Suffolk (Matthew Hancock). Ten years ago, he and I started work on the same day at the Bank of England. We had many good debates there and I am sure that they will continue in the House.

It is also a pleasure to follow the maiden speeches of so many Members: the hon. Member for Bracknell (Dr Lee), and my hon. Friends the Members for Bolton West (Julie Hilling), for North West Durham (Pat Glass), for Middlesbrough South and East Cleveland (Tom Blenkinsop), for Wansbeck (Ian Lavery), and for Barnsley East (Michael Dugher). I know that my hon. Friend the Member for Barnsley East shares my concerns about the future of Yorkshire Forward, our RDA.

We have heard lots of stories from Members on the Government Benches about the waste of RDAs. I can only tell them what Phil Thompson, managing director of Resource Print Solutions in my constituency, says. His business, like many in all our constituencies, was hit hard by the recession, but he got through it because of a grant from Yorkshire Forward, which enabled him to buy new machinery and equipment and to keep jobs in-house that he had previously had to contract out. During the recession, he did not lay off a single worker. Because of the support from Yorkshire Forward and changes to shift patterns, he managed to keep people in work. The company is now growing again as we recover from the recession. What Phil’s business needs now and what the British economy needs now is economic growth.

[Mr Hayes]

The hon. Lady is already a distinguished and articulate advocate of her cause—I note it from her many interventions in the debate. In an effort to be helpful on RDAs, may I recommend to her the National Audit Office report and the report that preceded it from the Public Accounts Committee, which make it absolutely clear that in many instances the RDAs are cost-ineffective and insensitive to the very local circumstances that she champions?

[Rachel Reeves]

I thank the hon. Gentleman for that intervention. I think that we can tell from the debate today that different Members, representing different areas of Britain, have different views about their RDAs. I plead with the Minister. Labour Members representing Yorkshire, the north-east and the west midlands have spoken with huge passion about their RDAs. They have related the stories that they hear day in, day out from businesses and the people they represent. Let us keep our RDAs and let them continue to do the work that they are doing in our regions. That is all that I ask.

[Matthew Hancock]

Given what the hon. Lady has just said, does she support the Government policy on RDAs, which is to allow local people to decide whether local economic partnerships should cover the region or a smaller area?

[Mr Deputy Speaker (Mr Hoyle)]

Order. Only one Member can be on their feet at any one time. Please allow the Member to finish before rising again.

[Rachel Reeves]

Thank you, Mr Deputy Speaker. I am sorry for my enthusiasm.

I welcome the clarification from the hon. Member for West Suffolk that regions will be able to make their own decisions, but that was not my understanding of what the Secretary of State for Business, Innovation and Skills said earlier. [Interruption.] If he did say that, I think that everyone on the Opposition Benches would welcome that. If our regions will be able to make the decisions about our regional development agencies and their future, I welcome that. I am grateful for that clarification, but that was not my understanding of what the Business Secretary said in his statement.

I know that Conservative Members will disagree with this, but I am sorry to say that we do not hear enough from them about growth. They cite the G20 advice about reducing deficits while consistently forgetting about or ignoring the advice in the G20 communiqué for

“credible, growth-friendly measures, to deliver fiscal sustainability”.

That omission on growth is worrying from the perspective of industry and jobs—the subject of today’s debate—because the greatest risk we face is that of a double-dip recession, with the job losses, business failures and higher budget deficits that that would bring.

On Monday, the Chancellor dismissed the possibility of a second recession, but businesses in my constituency are less certain that we are out of the woods. Key to the recovery and to bringing down the budget deficit—we hear a lot about that from Conservative Members—are growth and having a regionally strong and diverse economy. That will not happen by chance; it depends on a strategic Government policy supporting industry in all our regions.

[Nadhim Zahawi]

What does the hon. Lady think about scrapping the national insurance hike for employers? A lot of employers in my constituency will say that the really harmful thing to do to growth is to add to the cost of employing people, thus reducing the net income of a business. What does she think about that?

[Rachel Reeves]

I thank the hon. Gentleman for that intervention. What he describes perhaps comes up less in my constituency than in some others, because average earnings in my constituency are £16,000 a year and the national insurance increase proposed by the previous Labour Government was to apply only to wages of more than £20,000 a year. So that was less of a concern in my constituency.

Britain is the sixth largest manufacturer in the world. If one believed some of the statements made by those on the Government Benches, one would think that the UK did not have a manufacturing industry at all—that is not the case. People in Yorkshire have huge pride in our industrial past. From wool to coal and steel, and to retail and finance, our industries have enriched the region—more than that, jobs and industry in Leeds and Yorkshire have helped to power the UK economy.

The true test of this Government’s strategy and their woolly words about local economic partnerships will be whether they can give local people and businesses a true sense of control over their economic future. That is what Yorkshire Forward and other RDAs have been doing; they have been promoting enterprise and driving economic growth across Britain.

We now know—I am reading what I wrote before the intervention by the hon. Member for West Suffolk—that the RDAs are to be scrapped. Or are they? That wind-down has already started in Yorkshire. The Yorkshire Evening Post today revealed that the proposed cuts to Yorkshire Forward mean that no fewer than 109 projects will see their support slashed and that that will affect 24,160 separate companies our region. Some £1 million that would have been used to help small and medium-sized enterprises to access finance is to be cut. Some £1.4 million that would have helped businesses and universities with research and development is to be cut. Some £2.4 million that would have been spent on Tower Works in Leeds to support the digital and creative industries in my city is to be scrapped.

[Several hon. Members]

rose—

[Rachel Reeves]

I shall give way once I have finished citing these examples. Some £3.2 million that would have supported the roll-out of broadband and £2.5 million that would have helped people at risk of redundancy to get back to work are to be cut. I could continue on this, but I shall give way.

[Harriett Baldwin]

I seek clarification, because cuts were announced by the previous Government and I want to find out whether the cuts that the hon. Lady is describing were announced by them.

[Rachel Reeves]

The hon. Lady makes an important intervention, because cuts were already proposed. The hon. Member for West Suffolk asked whether Labour had any plans to reduce Government spending. I can tell him that it had, and this is one example of them. But this is in response to the—

[Several hon. Members]

rose—

[Rachel Reeves]

Sorry, as I am still on my feet—

[Mr Deputy Speaker]

Order. Hon. Members can, by all means, seek to intervene, but if the Member does not give way, they just have to leave it there. We cannot have two Members on their feet at the same time.

[Rachel Reeves]

Thank you, Mr Deputy Speaker. This Government—the party of the hon. Member for West Worcestershire (Harriett Baldwin)—have called for £293 million of cuts from the regional development agencies. Yorkshire Forward was asked to make £44 million of cuts. It was written to and asked to come back with those cuts within two weeks—it had two weeks to determine cuts that will affect 24,000 businesses in my region. These are not Labour cuts; they are Conservative cuts.

I ask the Secretary of State for Business, Innovation and Skills to give my constituents some commitment and some hope and certainty that the work that Yorkshire Forward does to support innovation, manufacturing, jobs and skills will continue. I urge the Government not to destroy the support for jobs and growth that the Labour Government put in place. Without Yorkshire Forward, we would not have brought clean coal to our region and the 1,000 jobs that that means in South Yorkshire. Without Yorkshire Forward, we would not have negotiated a deal with Siemens and GE to bring offshore wind, with thousands of much-needed jobs, to Hull, Grimsby and Scunthorpe.

[Nick de Bois]

What I am hearing today is that growth depends entirely on regional development agencies. We have to liberate businesses from the heavy hand of regulation and taxation that the Opposition imposed under the last Government. That is the way to growth. It is not entirely dependent on the regional development agencies to which the Opposition seem to be so wedded.

--- Later in debate ---

[Rachel Reeves]

The reason that I talk so passionately today about regional development agencies is that they are what the Government intend to cut.

The regional development agencies do not create jobs. I recognise that, and I believe that all Labour Members recognise it. Siemens and GE will bring those jobs, but they could bring the jobs to anywhere in Europe and anywhere in the world. It is the work of the regional development agencies with businesses, on skills and with people in my region that means that those jobs are coming to Yorkshire. That is why I and other Members on this side of the House speak with such passion about the work that the regional development agencies do.

[Matthew Hancock]

Does the hon. Lady agree that there is a short-term populism that pushes us towards more Government intervention? What we need is a thriving and effective private enterprise to lift our economies up and through to better times—not my words but those of Tony Blair.

[Rachel Reeves]

I thank the hon. Gentleman for that intervention. I hope that I have made it clear that I support the private sector’s coming to our region and bringing jobs with it. However, that requires a Government on the side of our communities and of businesses. That means encouraging jobs to come to this country when they could go to any other country in the world. If we were in Germany or China, we would be urging jobs to come to those countries. If we want a level playing field, we need a Government who support industry.

In Yorkshire, we look to Government for support—to honour the commitments on high-speed rail and on Sheffield Forgemasters. They are key to Yorkshire’s future and good for the British economy, too. Yorkshire Forward and regional development agencies have fought our corner in a way that Whitehall simply cannot. The support is critical and it is good for all of Britain. The short-term hatchet job pursued by the Government risks the recovery and will put Britain in the slow lane of the global economy, making reducing the deficit harder because there will be higher unemployment and tax revenues will be weaker. Growth is the essential ingredient that is missing from the Government’s strategy.

Now is the time for some more ambition. In the wake of the recession, we can build a fairer, stronger and more diverse economy, built on skills and high-end manufacturing, if the Government put in place the policies—

[Mr Deputy Speaker]

Order.