Special Educational Needs and Disabilities Funding

Debate between Vince Cable and Ed Davey

Tuesday 12th February 2019 Westminster Hall

[Sir Vince Cable]

My hon. Friend is right; that is one of many anomalies. Many such issues were not properly accounted for and are not being fully funded. I will come to others in a moment.

The consequence of the growing demand is that many local authorities, which are genuinely trying to do their best in most cases, are accumulating large financial deficits. The Local Government Association, which has done lots of research on it, believes that there will be a gap of about £1.6 billion at the end of the next financial year. That is unaccounted for at present.

Some London authorities—I speak as a London MP, but I know that other parts of the country have similar problems—have a shortfall from the high needs block of about 7%. For about six boroughs in London, it is more than 10%. For my borough, Richmond, it is 20%, and I think three others are in an even worse position, including the borough of my right hon. Friend the Member for Kingston and Surbiton (Sir Edward Davey). For his borough, I think it is 40%.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

My right hon. Friend is right that the situation for Kingston is the worst of any London borough. We are spending more than 40% above our allocation, with a potential knock-on to the budgets of schools across the board, and potentially even the solvency of the local authority. Given how serious that is, does he agree that Ministers need to take action now and that we need to talk to the Department of Health and Social Care? The health service is often not paying for the health part of EHCPs.

[Sir Vince Cable]

My right hon. Friend is absolutely right: those are both key parts of the solution. For example, I have discovered that there are children whose need for wheelchairs—clearly a health requirement—is treated as an educational need. There are many such cases in which the finance sits in silos and is not sensibly dealt with.

South Western Railway Franchise

Debate between Vince Cable and Ed Davey

Wednesday 5th December 2018 Commons Chamber

[Sir Vince Cable]

I thank the hon. Lady for that additional information, which is germane and extremely useful.

There have been a couple of serious and authoritative reports by the Office of Rail and Road. Sir Michael Holden was invited to carry out a study, and he has actually run railways, so we think he can be trusted for technical judgment. The analysis that is now available suggests that the following are the main sources of disruption. The first is that the franchise itself was not properly conducted. The company overbid or, to put it another way, underbid for subsidy and is now financially stretched. It appears to be struggling to maintain payments to its financiers, and the consequence is that passenger welfare is being sacrificed and the promised investment is not materialising. There are serious questions for the Department and the Minister about to how the franchise was allowed to take place and result in a serious deterioration of standards. The Government have plenty of experience of refranchising, and why they were allowed to disrupt what was a perfectly serviceable arrangement with the previous franchisee is unclear.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

My right hon. Friend is right to say that the all-party parliamentary group that I set up is looking at this matter in detail. We have a draft report called “Passengers must come first” which focuses, among many other things, on the fact that South Western Railway does not have the money to do what is right for passengers. It is looking after the investors first, and it is not putting money in to deliver on what it promised in the franchise. Unless the Government act, either by taking the franchise away from SWR or by imposing a new contract, passengers are going to keep suffering under shocking performance.

[Sir Vince Cable]

That is a helpful intervention that anticipates what I am now going to say. Many of the problems do originate with the franchise and the franchisee, but there is some shared responsibility with Network Rail, which of course is a nationalised industry. Network Rail’s failings have been exposed throughout the network, but they are particularly serious here, because the decision was made several years ago to switch the control centre from Waterloo to Basingstoke. As a result, many staff were shed, and a disconnect was established between the running of the trains and the running of the crews, so at least part of the disruption is attributable directly to Network Rail. I think the common consensus is that the nationalised company suffers seriously poor management and many failures, among which is the fact that Network Rail has not updated any of its contingency planning since 2011. It is important to accept that it is not just the franchisee that is responsible for the many failures.

An additional problem is the lack of integration between Network Rail and the franchisee. Under a previous dispensation, the two things were run together. It would probably have been better if the original rail privatisation had properly integrated the franchise and the network, but that was done informally in the south western area under the previous franchise, and it has now completely broken down. There appears to be no integration at all, minimal co-ordination and just an instinct for blaming each other.

The combination of those all factors has led to the serious situation that we have at present, and I would hope that the Government recognise that. To prevent the situation disintegrating to the point at which we have another Southern railway scandal, the Government might intervene now to prevent the situation slipping further. There are several actions they can take, and my right hon. Friend has just summarised them. In relation to the franchise, there are essentially two options, one of which is to take the franchise away and replace the existing company with another—preferably a public service company, but there is a variety of options—and the other is to impose on the franchise a set of performance-related measures so the company is paid only when it delivers on its undertakings.

There are various ways of dealing with this problem. Unlike the Labour party, I do not believe nationalising the franchisee would necessarily help, but we have to find a mechanism by which it can be properly held to account and rewarded for success, rather than rewarded for failure.

The second area of activity that is needed is within Network Rail itself. It is fortunate that Network Rail has just appointed Andrew Haines as its head. I dealt with him extensively when he ran South West Trains, and he is generally thought to be a good manager. Whether he can personally turn this around, I do not know, but it would greatly help if there were proper integration of Network Rail and the franchise in this section of the system. I would be grateful if the Minister could indicate how he can help achieve all of that.

There are clearly questions for the Department to answer, notably on the franchise, how it has allowed this to happen and the options available to it to turn the situation around. Although Network Rail is a free-standing operation, though nationalised, it would be useful to have some indication from the Government on how they can push it in the direction of better management and better attention to the serious problems in this region.

[Sir Edward Davey]

I am grateful to my right hon. Friend for giving way a second time.

The point on Network Rail is crucial. Like my right hon. Friend, I have a lot of time for Andrew Haines given our mutual experience of him. However, Network Rail will not be able to get to grips with the challenges of an extraordinarily high level of emergency speed restrictions and temporary speed restrictions across the network. A decade or so ago, there were zero speed restrictions; now there are 70 or 80, which is because of the lack of essential investment. Unless the Department for Transport supports Network Rail with more cash to solve those restrictions, we will get nowhere near the level of timetable resilience that will prevent cancellations and delays, meaning that people’s trains actually run on time.

[Sir Vince Cable]

My right hon. Friend is absolutely right, and he leads me to my concluding point on the role of the Department itself.

The national rail review is looking at overall performance, and I hope it is able to look at the role of the Department and not just of the rail companies, but there is the additional and crucial point, as my right hon. Friend has just said, that a lot of this depends on available investment. Some of that, of course, has to come from the franchise company, but Network Rail ultimately depends on the willingness of the Treasury and the Department for Transport to make capital spending available in light of what is necessary.

Leaving the EU: Negotiations

Debate between Vince Cable and Ed Davey

Tuesday 10th July 2018 Commons Chamber

[Sir Vince Cable]

The European Union over many years has developed a sophisticated rules of origin system in order to develop an answer to precisely the problems presented by the complex nature of modern trade. They are quite right to say that in an environment of uncertainty, there is very little merit in pursuing an agreement.

The other major disadvantage of what the Government are proposing is, as several Members pointed out yesterday, the complete neglect of the services sector. It is not just 80% of the British economy, but includes extremely important industries—notably financial services, but also creative industries, the digital sector and entertainment, and of course much manufacturing happens through services exports. Rolls-Royce earns as much from its maintenance contracts as it does from selling its engines. When we send cars to the European Union, we sell them with a package attached to financial services. It is not at all clear how the Government propose to unscramble those very complicated relationships.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Does my right hon. Friend remember that when I was junior Minister to him as Secretary of State for Business, Innovation and Skills, we spent a long time arguing for more liberalisation of services, because it was in the UK’s interest to widen and deepen the services market in the EU? Is it not therefore ironic that a Conservative Government want to turn their back on service liberalisation and put up barriers? We could not get a more anti-business approach from the Conservative party.

--- Later in debate ---

[Sir Vince Cable]

It is a lot more than ironic, because this goes back a long way. There has been consensus among successive Governments, starting with Mrs Thatcher and Lord Cockburn through the Blair Government and the coalition Government, on accepting that services exports to the European Union were a major objective of British Government policy. I recall being sent to Berlin and elsewhere to denounce the Germans for their failure to open up their market for services trade and the mutual recognition of qualifications. For example, European countries currently decline to accept British ski instructors, as they do not have mutual recognition of qualifications. A great deal has, however, been achieved, and the Government are now inclined to turn their back on it.

The reasons the Prime Minister advanced for doing so yesterday are partly simply foolish and partly bogus. The folly lies in saying that any services transaction that involves people crossing the border, however valuable, is adding to our net immigration target and is therefore unacceptable, regardless of the economic merit. The bogus argument is to say that this is a problem within the European Union, but it is not going to be a problem if we have trade deals with other countries, because we will be able to proceed with services agreements with them.

However, we already know from the two failed attempts so far to negotiate an outline agreement with India that services trade, wherever it is—within the European Union or outside it—involves the free movement of people, and the Indians are insisting that if we are to have a bilateral trade agreement with them, part of the package will be importing Indian services in the form of IT consultants and much else. If we look around the other big emerging markets—Brazil, Indonesia, Pakistan, Nigeria—we can see that what they have to export is people. This is going to be an enormous obstacle to the Government reaching any kind of agreement with any country outside the European Union.

[Sir Edward Davey]

My right hon. Friend is being generous in giving way yet again. Does he remember that when he and I served on a Cabinet Committee looking at trade, we pushed just the arguments that he is now making, and the one person getting in the way of those arguments was the then Home Secretary—now the Prime Minister—who stopped a major trade deal that would be in this country’s interests?

[Sir Vince Cable]

My right hon. Friend is absolutely right. We could of course have had a trade deal with India already under the auspices of the European Union, as we do with South Korea, Canada and various other countries. The country that blocked the deal was the UK, because increased services trade would involve increasing numbers of people crossing over to the UK.

I was struck by the comment by one of the more strongly pro-Brexit Conservative MPs—the hon. Member for Gainsborough (Sir Edward Leigh)—when he was being critical of the Government yesterday. If I am correct, he said that he had no objection to cherry-picking, but that the Government are picking “the wrong cherry”. Actually, services are fundamental to our trade, and the Government have put us in a very difficult position.

The question now is: what should be done? The first step is for those on both sides of the House who believe that we should maximise the closeness of the economic relationship through the customs union and the single market—there are people of a similar persuasion in all parties—to try to achieve that. The right hon. Member for Haltemprice and Howden says we have a customs union already, which is exaggerating, but we can certainly converge on having a common approach. Of course, the nearer we get, the more the question arises of why on earth Brexit is happening at all. That leads us back to the question we started with about the need for the public to have a say on the final deal.