Infant Class Sizes
Toby Perkins Excerpts(10 years, 10 months ago)
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Tristram Hunt
My hon. Friend is exactly right about the academic evidence, and I will come to that shortly. To those of her constituents facing ballooning infant class sizes, I say that we know the reason. It is a misallocation of funding away from basic need funding towards a range of priorities that do not support keeping class sizes low.
Some 14,000 kids are cramped into cattle classes of more than 40, nearly 6,000 are stuffed into classes that are plus 50 and, although it is barely believable, last year this country educated 446 children in classrooms containing more than 70 pupils. Is it any wonder that a Netmums survey published last week showed that nearly one in five parents think that schools are squeezing too many children into classes?
Unlike the parties in the Government, the Labour party believes in smaller class sizes because of the academic evidence referred to by my hon. Friend the Member for Warrington North (Helen Jones). In small classes, research shows, there is more individual interaction between teachers and pupils, more teacher support for learning per pupil, more attentiveness to the teacher and therefore less disruptive behaviour from pupils, and teachers spend more time teaching rather than managing pupils.
Toby Perkins (Chesterfield) (Lab)
I congratulate my hon. Friend and his team on securing this debate. It is incredibly important that parents across the country know that their child’s experience is not an isolated one and how serious the situation has become. When I read the list of schools with extra-large classes, I was surprised to find my own daughter’s school on it. This is happening in schools across the country, and parents are not aware of how terrible the situation has become.
Tristram Hunt
My hon. Friend is exactly right. It is the case in Chesterfield, in Warrington, in Peterborough and right across England. Constituents will want to know what decisions were made and what spending priorities were determined to allow the situation to get out of control.
The Secretary of State for Education (Nicky Morgan)
It is a pleasure to speak in this debate. Let me begin by paying tribute to the hon. Member for Stoke-on-Trent Central (Tristram Hunt), because it shows a huge amount of courage for a Labour politician to call a debate on this of all issues. Perhaps I should address the historian in him by comparing him to Lord Cardigan at the battle of Balaclava: brave but leaderless, charging ahead on a kamikaze mission when everything around him was lost. We all remember the record of the previous Government—the hon. Gentleman’s party—and that makes it very brave indeed to raise this issue now.
As we have heard from Government Members, we remember how Labour cut 200,000 primary school places at the very time that this country was facing a dramatic baby boom. We remember how it cut the funding for basic need places by £150 million at the very time it was needed most, and how they penalised those councils with the foresight to refuse to meet their demands. And we remember how Labour made this all so much worse by allowing immigration to spiral out of control, adding further pressure to the system and leading to so many of the concerns we are talking about today.
Toby Perkins
The right hon. Lady is comparing the situation now with that under the previous Government. She will be aware that in Leicestershire, the county she represents, there were 2,376 children in infant classes in January 2014, compared with just 1,000 before. The figure has gone up by 121%. Does not that show that, under this Government, things have got significantly worse since 2010?
Nicky Morgan
I thank the hon. Gentleman very much indeed for his intervention, but in terms of basic need funding, which is what we are debating today, Leicestershire’s has gone up from £13 million to £51 million, while between 2007 and 2011 Chesterfield got £9.3 million, but now it will be getting £30 million up to 2017.
Toby Perkins (Chesterfield) (Lab)
Much of the debate has focused on numbers, and will continue to do so. Those include the number of classes with more than 30 or 35 pupils. Shockingly, in my constituency, there are even classes with more than 40. I want to start by looking behind the numbers and discussing why large classes matter to pupils, parents and schools. It has not been clear to me, listening to the contributions from Government Members, whether they consider the increase in class sizes to be a problem. We have heard a lot of denials and the blaming of immigrants, and we have heard a variety of reasons why it is not the Government’s fault, but we have not heard whether this result was the design of Tory party policy or whether it is something they regret. It would be helpful to hear from the Minister whether there is a strategy for class sizes or whether the problem that we are bringing to the attention of the Government is recognised by them.
The evidence on the importance of reducing class sizes has been available since 1982, when a study by an American laboratory for educational research concluded that reductions in class size
“promise learning benefits of a magnitude commonly believed not within the power of educators to achieve.”
Thirty years later and much closer to home, studies have shown that class sizes of more than 30 are particularly damaging for children of low ability or for those with special needs. Small class sizes are central to Labour’s vision of what a world-class and inclusive early-years environment should include. The Government seem to be determined to take education back to some mythical golden age when children learned everything they needed to by rote.
Nigel Adams (Selby and Ainsty) (Con)
Will the hon. Gentleman explain what has changed in Labour policy on class sizes since 2008? The then Schools Minister in another place told the teaching union, the Association of Teachers and Lecturers, that it was perfectly acceptable to teach maths to pupils in class sizes of 70.
Toby Perkins
That is interesting, as not long ago we heard the Secretary of State talking about class sizes of 70 happening now. I do not recognise that as something that the Labour party wants to see, and my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) has secured this debate because he wants to make it absolutely clear that the Labour party’s commitment back in 1997 to rescue our schools from the catastrophic and mediaeval state they were in after 18 years of Tory government burns in his heart. He wants a reduction in class sizes and to get away from the huge increases we have seen under this Government.
On the subject of the vision for education held by the previous Education Secretary before his dismissal—I am sure that my two colleagues on the Front Bench are not the only people sitting on a Front Bench at the moment who were pleased to see him disappear—this Government’s approach has led, in my experience, to a demoralised teaching work force, a betrayal of the Government’s rhetoric when they came to office of a commitment to the early years, and a fragmented landscape that has seen enfeebled local authority provision, schools driven unwillingly into becoming academies and the appalling realisation that although money has flowed towards free schools, often in areas that had sufficient demand, there has been a 200% increase in the number of infant pupils taught in classes sized over 30.
Any MP who has taken the time to visit their local schools cannot fail to be moved by the pressure put on our schools by this out-of-touch Government, but the seeds of that educational approach should have been revealed to anyone who took the time to read the Conservative party manifesto, which was referred to a few minutes ago by my hon. Friend the Member for Stoke-on-Trent Central. It stated:
“A Conservative government will give many more children access to the kind of education that is currently only available to the well-off: safe classrooms, talented…teachers, access to the best curriculum…and smaller schools with smaller class sizes with teachers who know the children’s names.”
I do not know about other MPs, but as someone who has been a councillor, a school governor and a parent in Chesterfield over the 13 years of Labour government I find that description, as though that was what schools were like back in 2010, downright offensive. It seems to be a view of our education system based on the views of someone whose only experience of schools was what they had read in the Daily Mail. But that was how the Tory party represented what education looked like back in 2010. Sadly, it is consistent with how out of touch the Government have been on education and a raft of other issues throughout their time in government.
It is not the fault of Ministers in this Government that the education team was entirely privately educated and that does not prevent them individually from being perfectly good Ministers, but when the basis of their education policy is founded on such a narrow and misguided view of what schoolchildren in my constituency experience, I cannot help but think that a wider perspective across the team would help their approach to be slightly more grounded in reality.
Let me return specifically to class sizes. The old “hug a hoodie” David Cameron used to get it. Back in 2008, when he was still a modern Conservative, he told the Yorkshire Post that
“the more we can get class sizes down the better”.
In the 2010 manifesto, he promised
“small schools with smaller class sizes”
That incarnation of David Cameron—oh, how long ago it seems—understood that every extra pupil adds to a teacher’s work load, with extra marking and planning, and means less time to be spent on pupils. If we want primary education to be about more than just presenting something to pupils, class size is important. Smaller classes mean more attention per pupil and more opportunity for children to develop their analytical thinking skills.
That is why the last Labour Government made class sizes such a priority and made such great strides on this issue. In 1997, as one of our five key pledges ahead of the election, Labour promised to cut class sizes to 30 or under for five, six and seven-year-olds by September 2002. Remarkably, the Labour Government actually achieved that a year early; by 2001 it was clear that it would be met. I cannot imagine that many of the promises made by the current Government will be achieved a year early—they will certainly not be achieving what they promised on the deficit. Unfortunately, those achievements have been thrown away by this Tory-led Government, particularly by two specific policy mistakes they have made.
Whereas Labour outlawed class sizes going beyond 30 for children aged four to seven, so that if a class did go above 30 in one year it had to be brought back down the following year, this Tory-led Government relaxed those rules so that class sizes can be above 30 for several years—we heard the Secretary of State proudly boasting about that today. Worse, the Government’s unfettered and ideological free school programme has diverted funding away from areas that need school places most. Instead, we have heard of the disgraceful situation where free schools have been set up in areas with an oversupply of infants schools and are sat there half empty.
Some people who were planning to set up a free school in Chesterfield came to see me at one of my surgeries. I said to these two parents, “So why do you want to set up a free school?” They said, “We don’t think we can get our kids into Brookfield. We want our kids to go there.” So this entire school was being set up because they could not get their children into one school, even though there were other schools they could get into. When I suggested that they could join the governing body of the school in their catchment area and see whether they could improve that, I was told, “Well, it is a bit of a risk.” So I said, “You are setting up a school that doesn’t exist, that has no teachers, that has no building, that has no other pupils and that has no facilities. That is not ‘not a risk’, is it?” [Interruption.] The hon. Member for Bedford (Richard Fuller) is shouting “yes” and he has a free school in his constituency that is half empty. We heard the Education Secretary saying today that a new free school that was due to be set up has, in the middle of September, when most pupils—
Toby Perkins
Let me just finish the point. The Education Secretary was talking about a school in Leicester that, at a time when most children all around the country are going back to school, has been told that it cannot open, and 69 children are left without a school. She says, “Well, we have to get these things right.” The Government should have looked at that when they were going through all these proposals and giving the money to set up the free school. That is the basis of this education policy.
Richard Fuller
I am grateful to the hon. Gentleman for giving way, because the Labour party is trying, yet again, to divide people on the issue of free schools and is pointing to Bedford as an example. Local people and local teachers have worked very hard to make sure that the free school could be part of the family of schools and, contrary to what he is saying, the Bedford free school is one of the largest free schools that have been set up from scratch, with more than 400 pupils. Their parents have decided that that school is right for their children, and I am very proud that this Government have enabled them to make that choice.
Toby Perkins
The hon. Gentleman talks about a divisive education system, but I have never seen a more divided education system than the one that has been set up by this Government. We have seen an incredibly divided, fragmented system. We have seen schools that do not want to be academies forced into it because they cannot afford to be anything else but academies. The Opposition made it absolutely clear that we support parents getting involved in their schools, but the ideological approach of setting up free schools in a place that already has adequate supply and at the same time seeing infant class sizes at the disgraceful level that has been discussed in this debate is an utterly divisive way to approach education policy.
National Audit Office reports demonstrate that fully two thirds of all of new places created by the free schools programme have been created outside the areas with the most need. Extraordinarily, that has left some local authorities in a position where they want to build a new school to manage a primary places crisis, only to be told that the Department for Education will allow a new school to be built only if it is a free school and only to find out that nobody wants to build a free school in that area. That approach is utterly against the best interests of our children.
Free schools were supposed to fill gaps in the market, but they are in fact doing the opposite and are stacked up in places where there is already sufficient demand. We have seen the consequence of that approach in my constituency. Across Derbyshire, the number of infant school pupils who are in classes with more than 30 children has increased by 117% since this Government came to office. A freedom of information request to the Department for Education exposed the full scale of the class-size growth scandal. How pitiful the Prime Minister’s promise to cut class sizes now looks.
In Chesterfield, schools are grappling with class sizes that were absolutely unimaginable under a Labour Government. Hollingwood primary school has one class of 36; Hasland Hall infant school a class of 39; Abercrombie primary school a class of 44; and Walton Holymoorside, just over the border in North East Derbyshire—it is the school to which my own children went—a class of 36. For anyone who remembers the huge class sizes that we had under the last Tory Government—the one that actually won a general election—those figures will come as no surprise.
Chris Heaton-Harris
The hon. Gentleman is a very nice bloke. I am sure he is an excellent MP for his area and a great parent, but does he think that his children’s education was bad because they were in slightly larger classes? If so, what did he do about it?
Toby Perkins
That is a very interesting way of putting it. The education provided by my children’s school was very good. The hon. Gentleman seems to be making the case that class sizes do not have a lot to do with the quality of education. If that is the case, then he will obviously be saying to the voters in Daventry, “Vote Conservative to get higher class sizes.” Evidence suggests that class sizes are an important factor. Anecdotal evidence from teachers points to the fact that they find it a lot more difficult to perform their role in huge classes. Obviously, he is making an alternative case, and he will have to take that to his electorate and see what they think about it.
As I was saying a moment ago, anyone who remembers the huge class sizes under the last Tory Government will not be surprised by these facts. The speech by the hon. Member for North Swindon (Justin Tomlinson) complaining about the private finance initiative took my breath away. The reality is that in 1997, the Labour Government inherited a state education system that had been chronically underfunded. The quality of the school estate was disgraceful. Over 10 years, the Labour Government had to pay off the deficit that had been left behind by the previous Conservative Government. At the same time that we were radically trying to improve our health service and education system, we were also reducing the deficit that had been left. It is absolutely outrageous for the Tories then to say, “It’s a shame you didn’t pay for it all out of Government funds. You tried to bring in the private sector to support some of the building of the schools and you shouldn’t have done that.”
Tory Governments always end the same way—divisions over Europe leading to paralysis, waiting times in the NHS reaching critical levels, hollowed out local government unable to serve the needs of their local communities, and six-year-old children being educated in classes of 44. We can change the faces but they are all still Tories.
The choice for the British public at the next general election is clear. They can back the ConDems, get an ideological commitment to expensive free schools, a refusal to retain laws that keep class sizes down, weakened local authorities, demoralised teachers, a fragmented system that betrays our children and the threat of ever more children crammed into large class sizes. Alternatively, they can choose a Labour future where we transform standards with a qualified teacher in every classroom, a commitment to every child, new schools where they are needed most and real action on class sizes. Why wait until next May to give parents that choice? No one wanted this Government, not even most of those who are in it. Our children deserve better, so let us have a general election.
Chloe Smith
Thank you, Mr Deputy Speaker. I welcome your advice. The topics are linked because they relate to what a local authority can do for the children under its care, and I am coming to the subject of Norfolk county council. Labour Members laugh. They should be ashamed to the depths of their souls to be heard laughing at the children of Norfolk. The hon. Member for Cardiff West (Kevin Brennan) should come to Norfolk. No doubt he would campaign against me if he did, but he would have to justify laughing at the point that I am trying to make, which is that over half of Norwich 16-year-olds recently left school without five GCSEs at grades A* to C including English and Maths. Perhaps he laughs at the future that awaits them; perhaps he laughs at the idea that those are not only figures but real people; perhaps he laughs at the idea that those people may now struggle to gain a job and that some of them may not be able to read, write, add or function very well. That is all extremely serious.
This is about the ambition that we have for our children. It is about how we manage the school system to allow for that ambition. All those children are being let down if we say that low ambition is acceptable.
Toby Perkins
I am very interested in the topic that the hon. Lady is talking about. She is obviously very concerned about the education of children in Norfolk. What would she say to the parents of the 283 extra children now being taught in classes of more than 30 in Norfolk under this Government? What would she say to them about their educational chances, because they are being failed by this Government, are they not?
Chloe Smith
I would say that they are looking for respect in this debate. They are looking for honesty and for figures to be used responsibly. They are looking for a Government who are putting right the messes of the previous Government. The hon. Gentleman stood up to make the preceding speech, for which I thank him—of course, I should have observed that courtesy at the beginning of my comments—and I thank him for reminding us what schools were like in the years following 1997. I sat in a classroom of more than 30 pupils when I was at school, in a Norfolk comprehensive, so I have personal experience, should the hon. Gentleman wish to hear it, of having been at school under Tony Blair. You are about to remind me, Mr Deputy Speaker, to return to the subject of infant class sizes.
Fabian Hamilton (Leeds North East) (Lab)
It is a pleasure to follow the hon. Member for Norwich North (Chloe Smith). We are both graduates of the university of York, of which I am very proud, and I am sure she is too. I want to echo the hon. Member for North Swindon (Justin Tomlinson), who spent 10 years on his local authority before being elected to this place; I did likewise.
I should declare an interest. First, I am the father of three children, all of whom attended local infant and junior schools in Pudsey, Leeds. Secondly, I was a city councillor in Leeds for 10 years and I was on the education committee, ending up as chair of that committee, before being elected here. Thirdly, I have seen at first hand, as I am sure have many hon. Members, the effect of smaller class sizes on the quality of a child’s education—both the children of my constituents and, of course, my own children, who attended what was then a separate infant school in Pudsey.
If the current trend in the growth of class sizes continues, it will be tragic for the educational prospects of our children, because within six years from now up to 450,000 young children could be in classes of over 30. Time and again we have heard evidence that has pointed to the educational benefits of small class sizes. Many right hon. and hon. Members have mentioned that. That is especially the case for children between the ages of four and seven. It is no coincidence that one of the strongest selling points for fee-paying private schools is small class sizes. Surely that is what we would all like for every child. I am sure that no hon. Member would disagree with that.
Like every hon. Member, since 2010 I have dealt with a growing number of parents who cannot get their child into the school of their choice. They face either an appeal, which if won leads to larger class sizes, or their child attending a school miles away, often in a very different community. Imagine the anxiety of so many parents whose child cannot attend the same school as an older sibling; other Members have mentioned that. It is even worse when three children in a family are forced to attend three separate schools, as has happened to some of my constituents. The hon. Member for North Swindon talked about choice, but what choice does that situation leave parents in my Leeds North East constituency? There is no choice.
Toby Perkins
My hon. Friend talks about choice. Is there not a difference between the experience of some of his constituents who have three children all going to different schools and that of the entire Government, who all seem to have been to the same school?
Fabian Hamilton
I absolutely agree with my hon. Friend.
We talk about choice, but we should recognise that surplus places are needed for that.
Kevin Brennan
I am sure he is working hard—in his other job, in the Cabinet Office, dreaming up more fantasy Lib Dem manifesto pledges at the taxpayer’s expense. Indeed, it appears—just to be topical for a moment—that the coalition Government have now introduced compulsory setting, in that the two Schools Ministers are not allowed to be in the same room at the same time. That perhaps explains why the right hon. Member for Yeovil (Mr Laws) is not here with us this afternoon.
However, it would be useful if the Minister in this debate would clarify in his winding-up speech—[Interruption] —after he has finished reading the Parliamentary Private Secretary’s telephone—the whole shambolic issue around setting, which we have heard about today. We have not really had clarity today; we have just had chaos, in what is, after all, the first major policy announcement by the Secretary of State. It would be good if this House were told exactly what is going on, rather than our having to try to find out from Twitter. Despite the Secretary of State’s earlier remarks about not relying on Twitter for such information, we have to, unless we get it in the Chamber, which is where we should first hear of such things.
The first duty of any Education Minister is to ensure a sufficiency of good school places where they are needed. The figures that have been unearthed in recent weeks and which have been highlighted in today’s debate show that the Government have failed in that basic duty. We all remember the pledge, which has been mentioned in the debate, in the 2010 Conservative manifesto, when the Prime Minister promised
“small schools with smaller class sizes”
and said,
“the more we can get class sizes down, the better”.
That pledge has turned out to be as worthless as a Lib Dem pledge on tuition fees, because we have seen a 200% increase in the number of infants in larger class sizes over 30 since 2010, and the pressure on places is growing.
Toby Perkins
I am prompted to rise to my feet by my hon. Friend’s mention of the Liberal Democrats. I wonder whether he would like to reflect on the fact that we have had a debate on schools with not a single contribution from a Liberal Democrat Member. Is it not remarkable, when we think of what the Liberal Democrats once were, that we can get through an entire debate on education without a single Liberal Democrat thinking it worth actually turning up and speaking?
Kevin Brennan
I apologise for provoking my hon. Friend, but as I think I explained earlier, this is all part of the Secretary of State’s new policy on setting, in that the Lib Dems are set in a different group for this subject and are not allowed to participate in our discussions.
That pledge by the Prime Minister turned out to be worthless, so one would think, under the circumstances, that every sinew of ministerial effort at the Department for Education would be straining at the task of tackling this issue—that no distraction from the cause of meeting the challenge would be allowed and that scarce resources would be prioritised for the issue, with money spent on creating school places where there is a real need. But no, because according to the National Audit Office, two thirds of the places created in the Government’s pet free schools project have been created outside areas classed as having high or severe primary school need. The Government try to claim that the programme is tackling the shortage of places, but the very essence of the programme—a built-in design feature of the policy—is that the distribution of free schools is essentially random. The Department has received no applications to open primary free schools in half of all districts with high or severe forecast need for school places—not one. In fact, overall, only 38% of approved free schools are primary schools, while over 40% of them are secondary. Given that secondary schools are typically double the size of primary schools, despite the growth of “titan” ones under this Government, far more secondary school places are being created than primary school ones, which is where the greater need exists. As we have seen from the debate, there is an acute need. In other words, this Government’s insistence on ideology over pragmatism in opening new schools is producing the wrong kind of schools—secondary—in the wrong places. That is the very definition of policy failure.
Indeed, the National Audit Office found that 42 schools had opened in districts with no forecast need, with estimated capital costs of at least £241 million out of a projected total of £951 million for mainstream schools. That is not an accident. The Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton used to care passionately about class sizes. He told “Daily Politics” back in 2009 that it was important to get class sizes down,
“particularly at primary school level. This is really dramatic, how big our class sizes are compared with other countries.”
That is what he said in 2009, when there were 31,000 infant children in class sizes over 30; by January this year, that had risen to 93,000, which really is dramatic. Before the general election, the Minister told BBC London:
“A child can wander around corridors of a school anonymously because the teacher will not know the name and face of every child in the school. Smaller schools are much more intimate and it’s difficult for a child to be anonymous.”
Those are fine words, but the number of titan primary schools is soaring, with nearly five times the number of primary schools with over 800 pupils than in 2010. So much for intimate smaller schools as promised by the Minister.
What about this Minister’s views on trying to alleviate growing numbers by targeting the resources to areas where there is a shortage rather than a surplus of places? Here is what he said to “Attain Magazine” in spring 2010 about areas with surplus places:
“If it has surplus places beyond a certain figure, 10%, they will at the moment resist any new school coming in because they’ve got to fill these places first. But we’re saying that’s irrelevant”.
That was his attitude. “Irrelevant”—there we have it; it is not an accident. Instead of directing resources to where there is a shortage of places, more places are created where there is surplus of more than 10%. Why? Because right-wing ideology demands a market solution—creating an over-supply to drive out existing schools, rather than operate supportive and collaborative systems such as the highly successful London Challenge approach under Labour, which raised standards for all, and allow investment in new places to happen where those places are needed.
That is the ideology that lies at the root of the places crisis that we are seeing today, and the attempts to blame the last Labour Government are a smokescreen. The number of pupils in primary schools was falling between 2005 and 2010—it fell by 107,000—and the projections of increased numbers from the Office for National Statistics did not come until 2008-10. The last Government recognised that while overall numbers were falling at the time, in some areas, particularly in larger local authorities, more places would be needed. They provided core capital funding of £400 million a year from 2007-08 to 2010-11 to cover local growth in demand for places. Of course, the current Government never acknowledge that in their attempt to create a smokescreen about their role in the places crisis.
In addition, there was an annual “safety-valve” whereby local authorities, if they felt they needed it, could apply for additional funding to address exceptional growth. Until 2009, very few did, but in 2010-11, an extra £266 million was allocated to 36 authorities to provide primary places for September 2010 and 2011.
Oral Answers to Questions
Toby Perkins Excerpts(11 years ago)
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Michael Fallon
I completely agree with my hon. Friend, and I can tell him that of the 30 specific reforms requested by the business taskforce I chaired last year, nine have already been delivered, two further directives were withdrawn last month, and since the transposition rules were tightened three years ago there has been only one example of a European directive being gold-plated, which was the consumer credit directive that banned excessive payment surcharges.
Toby Perkins (Chesterfield) (Lab)
The Bathroom Manufacturers Association is just one trade body which feels that regulatory policy has too little focus on enforcement of regulation. That leads to the undercutting of compliant, high-quality British manufacturers by cheap, non-compliant foreign imports. When will the Government understand that a mature and consistent approach to enforcement of regulation is not a burden on high-quality British manufacturing business, but an aid to it?
Michael Fallon
I am happy to meet that trade association to follow up its specific concerns. The hon. Gentleman is right that business needs uniform and proportionate enforcement, and we are looking to deliver that through improved guidance with the relevant bodies, such as the Health and Safety Executive and the Environment Agency.
New Businesses: Loans
Toby Perkins Excerpts(11 years ago)
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Toby Perkins
To ask the Secretary of State for Business, Innovation and Skills how many Start Up Loans applications have been supported by each approved provider of Start Up Loans mentoring services in each region in which the new company was based or planned to be based.
[Official Report, 16 June 2014, Vol. 582, c. 425W.]
Letter of correction from Matthew Hancock:
An error has been identified in the written answer given to the hon. Member for Chesterfield (Toby Perkins) on 16 June 2014.
The full answer given was as follows:
Michael Fallon
All loan recipients in all regions receiving a start-up loan are offered mentoring, although take up of support services is not a mandatory condition of making the facility available. The number of loans made in each region will be placed in the Libraries of the House.
The correct answer should have been:
Birmingham Schools
Toby Perkins Excerpts(11 years ago)
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Michael Gove
That is a very good point. Today we have outlined that we plan to consult on independent school standards, so that schools that are not funded by the taxpayer must meet basic standards of promoting British values, or the Education Secretary will have the capacity to close them down. We are also taking steps to work with the Association of Muslim Schools UK to see what more can be done.
Toby Perkins (Chesterfield) (Lab)
The Education Secretary either omitted or did not get the opportunity fully to respond to the question from my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) about Park View. For the sake of clarity, will he explain why Park View was not allowed to open a free school but was allowed to sponsor Golden Hillock to become an academy?
Michael Gove
Before any free school can be opened a very high bar must be cleared. A separate set of criteria were judged in this case, and the Minister responsible decided that for that specific free school application, the bar was not cleared.
Oral Answers to Questions
Toby Perkins Excerpts(11 years, 2 months ago)
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Vince Cable
In many respects, the Welsh economy is sharing in the wider picture. Its unemployment rate is slightly lower than the national average. My hon. Friend the Member for Ceredigion (Mr Williams), who represents that area of Welsh Wales, is very active in promoting that part of the country, which benefits substantially from European assistance.
Toby Perkins (Chesterfield) (Lab)
The trend across the UK that the Business Secretary has just described is undermined by a report that shows it is 100 times easier to get a job in Cambridge than in Salford and that describes the gap as widening “dramatically”. The Public Accounts Committee exposed the incompetence and delays with the regional growth fund. Does not the Secretary of State know that every Tory Government leads to the imbalance in our economy not shrinking, but growing?
Vince Cable
Actually, the Greater Manchester local enterprise partnership is one of the best and most active and it is resulting in considerable improvements in that region. On the regional growth fund as a whole, we now have a formidable accumulation of results. We are talking about approaching £3 billion of commitments, 427 projects, more than 500,000 jobs safeguarded and created and, most important, £16 billion of private sector investment that has been brought in alongside Government money.
Oral Answers to Questions
Toby Perkins Excerpts(11 years, 4 months ago)
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Vince Cable
My hon. Friend is right and I thank her for her kind words. Ultimately, what will change the problem is breaking the traditional monopoly of the big four banks. Many new banks are now coming into existence, and the more flexible licensing regime operated by the regulators is playing a significant part. I believe that 20 new banks have recently been licensed and, within a few years, I think we will see real competition and diversity.
Toby Perkins (Chesterfield) (Lab)
The Secretary of State says that he is not complacent, and he has good cause not to be. Net business lending was down in eight of the past 12 months, and businesses will hear that in the past year, lending is down by £11.6 billion on the year before. How does he think those businesses will respond to the news that in the past year, Barclays and Lloyds made 508 people millionaires due to the bonuses they paid, at the same time as many small businesses are struggling to get access to finance? Is there a discrepancy between the Government’s performance on small business lending and the bonuses that continue to be paid by those banks?
Vince Cable
There are often bonus levels that are extreme, but it is important to recall that at the peak of the financial crisis when the Labour party was in charge, there was a bonus pool of well over £12 billion. That has now shrunk to a tiny fraction of that, and at least one bank to which the hon. Gentleman referred—Lloyds—is making a significant improvement in the supply of small business lending.
Oral Answers to Questions
Toby Perkins Excerpts(11 years, 6 months ago)
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Michael Gove
On all the visits that I have made to my hon. Friend’s constituency, I have always had cause to thank people not just for the superb way in which history is taught in Colchester and across Essex but for the distinguished contribution that public servants in Essex, both in uniform and out of it, have made to this country. The war of 1812 to 1814 was a cousins’ war, and it is only appropriate that we remember that as we attempt to—[Interruption.] I see that one of my ain folk is objecting to that. All I would say, brother mine, is that in the shadow of Burns week, we should extend the hand of amity, as I do to my American cousins. Even as we remember their valour, we should also celebrate the fact that we work together in the brotherhood of man today.
Toby Perkins (Chesterfield) (Lab)
The Minister for Skills and Enterprise is struggling desperately to understand the impact of his policy on the most deprived 18-year-olds, so let me tell him about the impact of that policy in Chesterfield. It means that 655 students in this year’s cohort would not get the funding, which the principal of the college in Chesterfield tells me will directly impact on those students who do not achieve well in GCSEs, and clearly be very divisive. The principal told me that the assumptions made for this policy are alarmingly naive and fundamentally incorrect—
Mr Speaker
Order. The hon. Gentleman’s inquiry has concluded. What does the Minister think of it?
Oral Answers to Questions
Toby Perkins Excerpts(11 years, 7 months ago)
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Toby Perkins (Chesterfield) (Lab)
Without wishing to show off, I am going to 20 small businesses on Saturday across Chesterfield and Staveley—my wife is bringing her purse.
The urgency of small business Saturday seems all the more serious after a recent report by the Association of Convenience Stores which shows that 55% of its owner members earn less than the minimum wage on an hourly basis. Is the Secretary of State really telling those people that further cuts to corporation tax for big companies are a higher priority than cutting their business rates, which are the most expensive commercial property tax in Europe?
Vince Cable
I am very sympathetic to the business groups that have consistently made representations over the past few months to say that business rates are a major burden. This Department has certainly made it clear that we regard it as a major issue. The hon. Gentleman will have to wait for an hour or so to find out what the Chancellor is doing about it.
Small Businesses
Toby Perkins Excerpts(11 years, 7 months ago)
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Justin Tomlinson
I very much love businesses, so I will send some love to my hon. Friend’s constituency.
It is great that businesses are suggesting the areas of red tape that need to be looked at, because they are very much at the coal face. Removing two regulations for every one introduced is a real challenge, but the initiative has certainly been welcomed by businesses in my constituency.
Several Members have talked about opening up local authority procurement, which is worth about £4.4 billion a year, and the Government have the commendable aim of getting SME participation in that to about 25%. My hon. Friend the Member for High Peak (Andrew Bingham), who has had to leave the Chamber, has got hold of some of the forms that small businesses have to fill in when bidding for such contracts. I know that, when I ran a business, it simply was not worth the hassle.
I also very much welcome the increase in the annual investment allowance from £25,000 to £250,000. One problem that we identified was the fact that, for the first time in living memory, businesses had more money in their current accounts than they were choosing to borrow, because they were worried about uncertainty in the market. Increasing the allowance is a brilliant way to encourage businesses to start unlocking some of that money, which will drive forward growth.
Cutting corporation tax always brings a cheer from Conservative Members. Although Labour says that it supports business, it is telling that that support seems to vanish as soon as a business makes a profit. I also welcome the extension of small business rate relief.
Toby Perkins (Chesterfield) (Lab)
The hon. Gentleman talks about corporation tax. Will he tell the House the rate of corporation tax when Labour came to power in 1997, and what it was when we left office in 2010?
Justin Tomlinson
I can tell the hon. Gentleman that, by 2015, we will have the lowest corporation tax market in the G8. That is what businesses are talking about, and I very much hope that the hon. Gentleman will join us in supporting that aim.
Many Members have highlighted the need to look at business rates. Greater minds than mine will solve the dilemma, but it is important to recognise that the world is changing. My hon. Friend the Member for Colchester (Sir Bob Russell) mentioned Amazon’s advantages over a traditional high street retailer because of the business rates that it pays. We must recognise that the world is changing and take that into account if we are to achieve a fair business rates system. The 27,000 business mentors are also crucial—I will come back to that subject in a moment—and the enterprise zones and the regional growth fund are kick-starting growth in key areas, which is most welcome.
Staying with the good things, I know that the Minister is particularly excited about the request that I am about to make—it is one that I make repeatedly—and that he is absolutely going to deliver on it. We as a Government are doing many good things, but business people are by their nature extremely busy and, all too often, these good schemes simply pass them by. However, the one thing that they cannot avoid is their bills, and every year they are sent a business rates bill. Even if they have nothing to pay, they are sent a bill telling them how much they would have had to pay but for the fact that the Government are allowing them not to do so. We should be communicating all the Government’s schemes through that mailer. The taxpayer has already paid for the mail, so let us include with it information on all the things that we are encouraging businesses to sign up for, and particularly on the advantages of taking on apprentices and of working with UKTI to develop exports.
I want briefly to focus on championing young entrepreneurs. I was the only one of the 350 students on my business degree course who went on to set up their own business. We all arrived at university keen to do just that, but we had entrepreneurial flair and risk-taking talked out of us. I obviously was not paying enough attention, because I ended up running my own business. The Government help to fund an organisation called the National Association of College and University Entrepreneurs, which encourages young people to take up practical, real-life opportunities for running a business. I have met a number of the young people who have taken advantage of those opportunities and who are now going on to be part of the next generation of wealth generators.
We need to look at what happens in business degrees. Along with all my fellow students, I was given a placement job in the corporate environment, rather than having the opportunity to test running my own business. We could use spare space at a university to run a retail business—that is very apt, given my forthcoming Westminster Hall debate. We could also consider whether part of a placement year could be spent running a business, as that might allow us to encourage a few more of those potential young entrepreneurs to take the step towards that.
We can also do a lot more for people before they go to university. For people who want to go to university, the UCAS system is in place—the conveyor belt is there. People choose their course and, if they get their grades, they head off to university. If people want to be an apprentice, they can look at the fantastic websites available, see what type of thing they would like to be an apprentice in, and go forward to the interviews. However, if someone wants to start their own business, it is pretty much up to them to work out how to do that, so we need to do a lot more to get those 20,000 business mentors to young people.
We have to celebrate schemes such as the Young Enterprise challenge, but we need to ensure that they are not just a one-off opportunity for enjoyment. I took part when I was at school—we worked for a week, made quite a bit of money and really enjoyed it. I recently did something with Swindon college students whereby we got stalls in the local market—a tough trading environment. Seven teams were each given £10 of seed money, and all the money raised on the day went to charity. We raised about £800 for the Prospect hospice, but the crucial bit was that we did not have mentors just at the beginning; we had them at the end.
One lady called Jessica ran a cake stall. Millions of people think about running such a stall, but she realised that the market had an older customer base, so she set up a 1950s-themed cake stall. She made more than £100 on the day. She realised that she had the customer service ability, the skills and the innovation to set up her own business, and now that she has finished at college, she has set up the Little Lemon & Poppy Bakery. We made sure that mentors were in place to help to guide her after she used her initial burst of enthusiasm and went on to do that. I ask the Minister to do all that he can to encourage young people. They have the energy and the enthusiasm, so let us make sure they are a key part of that next generation of wealth generators.
Toby Perkins (Chesterfield) (Lab)
It is a tremendous pleasure to speak in what has been an excellent debate. I congratulate the hon. Member for Newton Abbot (Anne Marie Morris) on securing it. She speaks about small businesses with passion, dedication, enthusiasm and considerable vim, which I can inform the House, having been at the National Association of Commercial Finance Brokers dinner with her on Tuesday, is also the way she dances.
We have heard a tremendous amount about the importance of small businesses. As the challengers of tired orthodoxies and the drivers of social mobility, small businesses share one nation Labour’s values completely. It is a path that several of us have followed, as reflected in the debate. I worked in the private sector for my entire life and was running a small business when I became a Member of Parliament. From my perspective and, clearly, that of hon. Members across the House, there are few more important questions for us to consider than how we support small firms, which we all know are the engines of growth, the biggest employers of the long-term unemployed, and key drivers of economic recovery.
It is important that we listen to what the voices of business are saying. On Monday, I was in Harlow in Essex with the local chamber of commerce, meeting small businesses there and listening to their priorities. Another organisation right at the forefront of the fight to support small firms is the Federation of Small Businesses, which does a tremendous job. A report in the Leicester Mercury this week highlighted how a delegation from the east midlands, led by David Nicholls, chairman of the Leicestershire branch of the FSB, got the chance to lobby the Chancellor on the issues that he should address in his forthcoming autumn statement. What did the delegation choose to highlight? Interestingly, the Leicester Mercury tells us that they demanded action on energy prices, a reduction in businesses rates, and the Government taking responsibility for setting up a business bank—very wise indeed.
I pay tribute to the hon. Lady for securing the debate, but think she may have done so with a slightly heavy heart, because when it comes to the main issues being raised by small businesses, it is Labour that is leading the way. I want to reflect on some of the contributions to this balanced debate that have demonstrated that.
In her excellent speech, the hon. Lady talked about the need for a culture change that recognises the importance of small business across Government. We could not agree more. My right hon. Friend the Member for Doncaster North (Edward Miliband) made making Labour the party of small business a priority in his first conference speech and he has talked about it many times since. There are some good Government schemes out there but, as the hon. Lady said, many businesses do not know about them. The signposting is weak, and she was right to say that.
My hon. Friend the Member for Glasgow North East (Mr Bain) discussed the lessons we can learn from the Sparkassen in Germany. He was right to say that, under the German system and at the height of the banking crisis, they lent more to small businesses, not fewer, as happened here. He was also right to focus on the important issue of the number of businesses claiming that access to finance is still their No. 1 priority, a theme that the right hon. Member for Hazel Grove (Sir Andrew Stunell) returned to a few moments ago.
The hon. Members for Norwich North (Chloe Smith) and for High Peak (Andrew Bingham) were right to focus on the difficulty faced by small and medium-sized enterprises in getting on to Government procurement lists. It has been an issue for many years and clearly there is a long way to go.
My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) also spoke.
Debbie Abrahams
My hon. Friend is making a powerful speech. He will be aware that earlier this year I chaired an all-party inquiry into late payments. The key finding was that late payment is a cultural issue that needs to be seen as just as toxic as tax evasion. Does he agree that we need to push the Government to make progress towards ensuring there is a cultural change so that late payment is unacceptable?
Toby Perkins
I certainly do. I was in the process of paying tribute to the work my hon. Friend has done on that issue. She is absolutely right.
The hon. Member for Rugby (Mark Pawsey), whom I usually regard as a sound voice on the issue of small business, said that if someone is paid late they should refuse to supply the company, but that does not recognise the difference in the relationship between a powerful customer and a struggling supplier. Every year, 2,000 businesses go under simply because they are not paid money that is owed to them, so I think he was wrong about that. My hon. Friend is right to say that we need the Government to be at the forefront of not just encouraging people to pay on time, but ensuring that that culture change passes right down the public sector procurement chain to second and third-tier suppliers.
My hon. Friend the Member for Rochdale (Simon Danczuk) made a lengthy advertisement—I sense it was somewhat to his embarrassment—for Danczuk’s deli. Numerous Members wanted to know about the excellent wares he will be providing. He has been in business before and it is great that he and his wife are opening a delicatessen in the centre of Rochdale and that he is putting his money where his mouth is.
The hon. Member for Brentford and Isleworth (Mary Macleod), my hon. Friend the Member for Rochdale and the hon. Member for Colchester (Sir Bob Russell) spoke, among many others, about the tremendous difficulties caused by the increase in business rates, which I shall return to.
My hon. Friend the Member for Ogmore (Huw Irranca-Davies) promoted the value of local innovative firms and also focused on access to finance. The hon. Member for Rossendale and Darwen (Jake Berry) is not in his place. [Interruption.] I see that he has moved—I do not know how I managed to miss that moustache. He encapsulated the bravery and pioneering spirit required to set up a business and he was right to say that it doesn’t half set the pulses racing. At such moments, people realise what colour adrenaline is.
My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) was entirely right to say that small businesses are undergoing a cost of living crisis, which I will reflect on in a moment.
The hon. Member for North Swindon (Justin Tomlinson) said that Labour always liked to increase corporation tax. If he was still here, he would be surprised to discover that corporation tax was actually 3% less after 13 years of Labour Government. Perhaps he should talk to the former Prime Minister about that.
The Minister for Skills and Enterprise (Matthew Hancock)
Will the hon. Gentleman confirm whether it is still Labour’s policy to increase corporation tax?
Madam Deputy Speaker (Dawn Primarolo)
Order. Before the shadow Minister answers the Minister, will they please remember that I will stop the debate at 3.45 pm? If the Minister is still on his feet at that point, he will lose the time, because we will have to start the next debate.
Toby Perkins
Our policy is well known, but I will go through it at length in a moment.
The hon. Member for Reading West (Alok Sharma) spoke for only five minutes, but he was wrong about just about everything he said. I will give two examples. He said that businesses want an EU referendum, but very few businesses are telling me that. He extolled the virtues of the arbitrary one-in, two-out red tape challenge and seemed to think that the Government have a good record on red tape, but he was unable to name any of their innovations that have made a difference.
The hon. Member for Rugby made an incredibly significant point about the importance of sales skills. I am sure he will be delighted to know that the Labour party is undertaking a large programme—headed by Kate Walsh, formerly of “The Apprentice”—on the importance of sales skills, and we will report on its work shortly.
The hon. Member for Carlisle (John Stevenson) focused broadly on the importance of small firms. The hon. Member for Daventry (Chris Heaton-Harris) was absolutely correct to say that the UK is right at the forefront of those places where it is easiest to set up a small business. The World Bank said that Britain was the fourth easiest place to set up a business in 2010.
I do not want to focus on the Government’s failures, but on the successful moves that a future Labour Government will make. We are considering the future of vital small firms, and Labour has the answers to their questions. The cost of living crisis for small firms is taking many of them to the brink, but Labour’s pledge to freeze energy prices until 2017 would save the average British small business £5,000. Hon. Members will be shocked to learn that business rates have risen by £1,500 a year on average under this Government, and that they face a further hike in April 2014.
To answer the Minister’s question, Labour proposes not to take forward the Government’s planned 1% corporation tax cut for 80,000 large firms, but instead to use all the money to cut the business rate bills of 1.5 million small firms. In a week of U-turns, it would be incredibly—
Madam Deputy Speaker
Order. I am sorry, but the hon. Gentleman has now had 10 minutes. This is a Back-Bench debate, and it will be followed by another Back-Bench debate. I want him to conclude in his current sentence, so that I can call the Minister, who will also have 10 minutes.
Toby Perkins
I will, Madam Deputy Speaker. On a range of issues from micro-business support to the need for Government to provide the necessary skills, small businesses are saying that the Government have more work to do. Labour is responding to that call from small businesses, and our message to them is, “We know how vital you are, and we are right behind you.”
Start-up Loans
Toby Perkins Excerpts(11 years, 7 months ago)
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Toby Perkins (Chesterfield) (Lab)
I thank the Minister for his statement. Given that I first saw it when I arrived at the House, I also thank him for not saying anything surprising during it. I want to place on record the thanks of the whole House for the work that has been done by James Caan and the Start-Up Loans Company to support people to set up their own businesses. I also record our congratulations to Allen Martin, the 10,000th recipient of a start-up loan.
I understand that Allen is one of the very first ex-servicemen to benefit from a start-up loan. It was immense good fortune—I am sure the Prime Minister, as a public relations professional, will have appreciated his luck—that the 10,000th recipient of a loan should happen to be a Royal Naval veteran who gave 22 years’ service to our country, is over the age of 30 and lives far away from London. Sadly, he is not all that typical of the people who are benefiting from the scheme. However, atypical as he may be, he is a great role model to inspire future business leaders.
Small businesses are the lifeblood of our economy, so the £50 million that has been lent to 10,000 new entrepreneurs is an important symbol of the enterprise spirit that runs deep through the proud history of our great island people. The Minister was right to broaden his remarks to address the broader context of the scheme. As we examine the performance of start-up loans in the context of the broader picture for small businesses and the support available, we will see that James Caan is right to say there is still much work to be done.
Does this scheme have a default target and, if so, how is it performing against it? A key lesson from the start-up loans programme is that access to finance schemes is only as good as the infrastructure that supports them and that the schemes rely on a wider system of business support, mentoring and signposting—the very fabric of support that is so lacking in many parts of the country in the absence of Business Link, the abolition of the regional development agencies and the impoverishment of local government.
That is borne out by the statistics that we are welcoming today. In every recession, there has been an increase in business start-ups. People faced with a flat job market and low demand for their skills will often seek to create their own job by setting up a firm. Desperation is not a bad motive for launching a firm—I have done it myself—but it is noticeable that far and away the most loans have been given where businesses support networks are strongest, namely London: 15% of the population lives in London, yet 36% of the start-up loans have been delivered there.
Does the Minister recognise the links between an integrated business support network and successful start-ups? If so, does he regret the destruction of Business Link and the failure to replace it with anything meaningful to provide support, not just to start-ups, but to developing small firms around the country?
Just as with the regeneration money from the Growing Places fund that went much more to London and the south-east, just 5% of the loans under discussion are going to areas such as the north-east, which has seen huge job losses and which we would have thought would be ripe for skilled workers looking to set up their own firms. What is the Minister doing to create a one nation business support network for those areas receiving the least of the start-up loans money? Although we absolutely recognise and welcome the scheme’s success in attracting people from black and minority ethnic backgrounds and the number of women who have benefited from it, it is important that that geographical aspect is recognised.
Is the Minister aware that James Caan has said that support and mentoring is a more important part of the success of this programme than the loan? Is the Minister therefore embarrassed that recent research has shown that people using the Government’s Mentorsme website are four times more likely to offer themselves as experts than as businesses needing mentoring? Does he think that a scheme with four times as many experts as recipients of that expertise sounds like a success?
Will the Minister promise that the success of this worthwhile scheme will not blind him to the fact that there is a crisis in business support in many areas of this country and that businesses that would have had a chance of success will fail because of a lack of signposting and mentoring?
The Minister spoke about commercialised British ideas going overseas, but this type of scheme, important though it is, is not likely to make a difference, because it seems to be targeting a very different part of the market.
The Government’s failure to support small firms with access to finance cannot be camouflaged by this worthwhile scheme. Given that the Government have overseen a £14 billion reduction in lending to small business, will the Minister, at the same time as he celebrates his £50 million scheme, recognise that total lending from it is less than 1% of the shortfall in net lending that British business has experienced? [Interruption.]
Mr Speaker
Order. May I gently say to the hon. Gentleman that I think he is approaching his last sentence?
Toby Perkins
You are very wise, once again, Mr Speaker, to notice that.
Will the Minister make a statement on the real access to finance crisis that he has done so little about? Will he recognise the need for radical change to the banks through the Labour party’s proposed network of local banks and support for challenger banks, which will lead to the desperately needed improvement in the position of small firms seeking access to finance?
Matthew Hancock
Mr James Caan, who runs the start-up loans scheme on our behalf and to whom I pay tribute, is absolutely right to say how important mentoring is—and I think we have just seen why. What a pity that the Labour party cannot be enthusiastic about and supportive of a scheme that has done so much: 37% of start-up loans go to BME entrepreneurs and more than a third to the unemployed. We are aiming for 30,000 and the pace of delivery is accelerating.
I will turn to the specific questions asked. I entirely agree with the hon. Gentleman’s point about business growth in hubs, which is why the development of Tech City UK and of start-up hubs around the country—in Manchester, Cambridge, Edinburgh and almost every city—is welcome and I hope it will get cross-party support.
The hon. Gentleman said that we need to ensure that this scheme is part of a package, but I am not sure whether he was listening to the statement. The whole point is that the scheme is precisely part of a plan to start improving access and helping people right at the start of their business careers, and to then expand the enterprise investment scheme, enhance the guarantees available, establish the business bank and, most importantly, turn around the banks. I think that a little more support from the Labour party for turning around the mess it created would be more appropriate.