Apprenticeships

Bill Esterson Excerpts

Wednesday 4th February 2015 Commons Chamber

[Mr Umunna]

My hon. Friend is absolutely right about that. I congratulated him at the time on his Bill, and we should continue to remind this House of the efforts that were made then and the wasted opportunity to which he refers. The reason he introduced that Bill was clearly because he read the OECD’s review of vocational education and training, which found that few countries achieve strong engagement in vocational education and training without a strong apprenticeship system. Now, that will not automatically happen on its own. Government must play an active role, not in a top-down, command-control fashion, but by using their convening power in an enterprising, entrepreneurial way, working in partnership with business to address the problem and to increase productivity. Before I explain how we aim to achieve that and consider what the Government have done during this Parliament, when I will touch on that 2 million figure, I want to say something about our record, because I am sure it will be referred to.

I accept that when Labour left office there was an outstanding need to increase the number and improve the quality of apprenticeships in our country, but before Government Members get too excited, I should say that it would be wrong to claim we did not make any progress. In government, we more than quadrupled the number of apprenticeship starts from a woeful 65,000 under the previous Major Government in 1996-1997 to 280,000 starts in our final year in office. Apprenticeships were simply not on the radar when we entered office; they were very much on the radar when we left office. We used the weight of government to begin the culture change we need. So from the 2012 Olympics to Building Schools for the Future projects up and down the country, we linked the creation of apprenticeships to public procurement across a number of Departments. We set up a dedicated National Apprenticeship Service to support and expand apprenticeships. I speak to many young people who tell me that they were signposted to the apprenticeship they are now doing by visiting the service’s website. Of course, it was also Labour in government that established national apprenticeship week in 2008, and the week is now an annual event in the national calendar. I am proud of our record. I am proud that this Labour party rescued apprenticeships from the scrapheap.



The current Government have sought to build on the foundations we put in place. They say that since we left office they have overseen the creation of 2 million new apprenticeship starts, and the hon. Member for Gloucester referred to those. I do not think there is any point boasting about numbers if the apprenticeships are not of sufficient quality. I will come to that in a moment, but first let us look at their claimed numbers. How many of the 2 million apprenticeships are really new apprenticeships and how many have emerged as a result of rebadging—in other words, re-labelling existing work a person is already doing in the workplace as an apprenticeship? A very large proportion of additional apprenticeship places created by this Government have come in the post-25 age brackets. The largest percentage rise in apprenticeships under this Government has actually been among the over-60s, where the increase has been 520%. According to the 2014 apprenticeship pay survey, 93% of adult apprentices already worked for their existing employer before starting their apprenticeship. That would suggest that many existing training schemes, such as those delivered under the old Train to Gain programme, have simply been rebadged and re-labelled as apprenticeships.

That is the situation on apprenticeships for adults. The shortage is perhaps most acute among young people, so what is happening to apprenticeship starts there? The number of 19 to 24-year-olds starting an apprenticeship has fallen by more than 6,000 in the past year. In fact, the number of 19 to 24 apprenticeship starts is currently falling in every single region outside London. Overall, the share of apprentices who are under 25 has fallen from 84% in 2009-10 to 64%, and the share of apprentices who are under 19 has fallen from 43% in the last year of the Labour Government to 28% under this one. So the simple fact is this: for all the boasts, there has been some jiggery-pokery with the numbers. The bottom line is that we need many more apprenticeships and we need to raise employer demand for them. Half our large employers do not offer any apprenticeships at all in Britain today—that is totally unacceptable. As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), the shadow skills Minister, has said previously, when it is harder to get an apprenticeship with Jaguar Land Rover than it is to get into an Oxford college, it is pretty obvious that more needs to be done.

The numbers are one thing, but I said that I would say something about quality. In most other northern European countries apprenticeships are level 3 qualifications lasting between two and five years, and they include at least one day a week of off-the-job learning, as well as significant on-the-job training. In England, most of the growth of apprenticeships in recent years has been at a level that would simply not be recognised in those countries. Just 35% of our apprenticeships are at level 3 or above, and just 2% are at level 4. In fact, according to the Department’s own figures, published in its apprenticeship pay survey, one in five apprentices does not even receive any formal training at the moment. The figure increases to almost a quarter of those in the 19 to 24 age bracket, who are not being properly trained. If we truly want to ensure more parity of esteem between the academic and the non-academic—between the way people view university degrees and the way they view these types of vocational and technical qualifications—how can we hope to do that when they are not of sufficiently good quality? We have got to raise standards. Even where apprentices are receiving training, far too many of them are still not receiving the appropriate minimum wage—15% are paid below the appropriate national minimum wage, with the figure rising to 20% for 19 to 20-year-olds.

I will come on to address how we intend to encourage more private sector employers to provide more and better quality apprenticeships appropriate to their needs, but surely government, as one of the biggest employers in the country, should be setting an example, both in recruiting as many apprentices as possible and in providing good-quality apprenticeships. The civil service apprenticeship scheme hired just 200 apprentices in 2014. That is 200 out of more than 400,000 civil servants, which is just not good enough. Never mind the Departments themselves, Government should be doing more in this area. They should use their clout as a procurer of goods and services to get more employers in the private sector to provide apprenticeships.

Our Labour colleagues in local government have already been leading the way in utilising procurement to boost apprenticeship numbers. Newham, Knowsley, Sheffield and Manchester have all developed strategies to use procurement contracts to create apprenticeship opportunities for young people locally. Central Government should do the same, as those opportunities are simply not happening to the degree and on the scale required.

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend makes the point about the importance of using the procurement system and Government money to drive improvement in apprenticeships. Does he agree that we need do that all the way through the supply chain so that smaller businesses, and not just larger ones, can and do take on apprentices?

[Mr Umunna]

We should do everything that we can to encourage all businesses to take on apprenticeships. We need to be mindful of the fact that sometimes that can be a bit more challenging for smaller businesses, and we should think how we can better support them to take on apprentices. It seems to me that, if there were fewer frameworks and more sector-driven apprenticeship frameworks, we could make the system less bureaucratic. But, absolutely, we should do as much as we can to make it easy for businesses to take on apprentices.

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[Vince Cable]

I am not disowning the report; it clearly exists. [Interruption.] Perhaps the Opposition could be a little less silly and just try to follow the argument. The key is in the word “formal”. Many people do good apprenticeships in business that involve informal work in the workplace, and many people define good training in that way. The survey that we conducted, which the hon. Gentleman is having a little giggle about, tells us very clearly that 90% of those trainees are satisfied with their apprenticeships, while 72% are very satisfied. Ninety-seven per cent. said that they had been trained—sometimes informally, sometimes formally—and 90% got a job. Perhaps most crucially, there is a very high earnings premium. I have quoted the figure for level 2, and for level 3 it is significantly higher—about 16% three to five years after graduation. The proof of the pudding in is in the eating: these apprenticeships do provide satisfaction, jobs and higher salaries for the people who do them.

Let me address the minimum wage. The survey shows that 15% of people are not being paid the minimum wage. That figure is clearly too high, and unacceptable. The motion says that it is “one in five”. I am not sure who did the maths on this, but one in five is not 15%. Perhaps we need compulsory maths for Opposition Front Benchers as well as apprentices. The key point is that 15% is way down on the 30% figure that we inherited. As the hon. Gentleman knows, because he has been part of these debates during the past year, we have significantly improved enforcement measures. We have increased penalties from £5,000 per firm to £20,000 per person, we have introduced naming and shaming, and we have increased the enforcement budget by 30%. We do take the minimum wage seriously. We believe that it must be enforced and that it should apply to apprentices as it should to anyone else.

The hon. Gentleman is right that procurement is a lever for the public sector to employ. We already have many examples of good practice in public sector procurement. Crossrail is a company that has really committed itself to high levels of apprenticeships. There are a couple of practical problems, as I hope he recognises; I think he hinted at one of them. First, for small and medium-sized enterprises and social enterprises, where we are trying to increase the share of public procurement, there is a conflict of objectives. Do we regard getting SMEs into procurement as more important than increasing their number of apprenticeships? There is no clear answer to that. Secondly, companies that are required to introduce apprenticeships would simply add that to the cost and it would be passed on to the public sector, so instead of a direct subsidy through our 50:50 payment system we would be providing indirect subsidies. These are not crippling objections. We need to reflect on how we can better use public procurement, but crude legislation and compulsion is probably not the best way. I accept that public procurement is a good vehicle, and we have to work on this.

[Bill Esterson]

I agree that it is a real challenge, given the current situation, to enable more SMEs, particularly the smallest businesses, to take on apprentices. Does the Secretary of State agree that countries such as Germany have cracked this problem over many years, and that there are things we can apply from Germany and elsewhere to achieve the goal of getting more small businesses to take on apprentices?

[Vince Cable]

The hon. Gentleman is right. There is a German model that seems to work for that country, and Austria is another example. Their approach is different from ours, but it has given them consistently high levels of skills in manufacturing industries, in particular. We should learn from that. There is an element of compulsion and levying that we have moved away from in the UK. However, I am certainly happy to learn from Germany on this and other things.

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[Bill Esterson (Sefton Central) (Lab)]

I am glad that the hon. Member for Eastbourne (Stephen Lloyd) mentioned the important role played by training providers in supplying the off-the-job learning that is such a crucial factor in apprenticeships. Hugh Baird college in Sefton does a fantastic job in partnership with the employers who look after the apprentices, across a range of sectors.

When I visited Michelin Tyre in Stoke a couple of years ago, I met engineers who were in their late 40s or early 50s. They were the youngest engineers in the company until a year or two ago, when the company suddenly realised that it had no way of replacing its engineers. We heard the same story from the hon. Member for Rossendale and Darwen (Jake Berry). Michelin now employs a number of young, high-quality apprentices, who are doing fantastic work and developing the skills that the company needs. As we have heard, that is a familiar story.

The construction industry in the north-west needs 1,500 new bricklayers and 1,500 new roofers each year. Where are those skilled jobs to come from unless we get the apprenticeship agenda right? I hear from schools in my constituency that fewer pupils are studying vocational subjects such as design and technology. Of course we need to encourage young people to go to university, but all too often we value academic learning and qualifications at the expense of vocational learning and qualifications. The culture needs to change, but I fear that we are far from reaching that point. Whether deliberately or not, we distinguish between the two, and that absolutely has to change. As I said in an intervention, it is simply not an issue in Germany, where the vocational and academic paths run alongside each other. As is implied in the motion, the technical baccalaureate is important in enhancing the status of technical education and qualifications, as well as addressing the shortage of skills in the STEM subjects.

Concern was expressed to the Education Committee about the damage caused by the reduction in the number of professional careers advisers, and the removal of work experience as an option for many young people. Businesses have told me in my constituency, as well as in evidence given to our Committee, about the difficulties that that causes in preventing young people from being exposed to the fantastic opportunity that is presented by apprenticeships.

We must increase the number of apprentices. We need to make it far easier for businesses to take them on. We also need to make apprenticeships far more attractive to young people, and to ensure that vocational qualifications and learning in this country are regarded as being of the highest standard and value. That is why the motion is so important. I hope that it is passed, so that both our young people and the country as a whole can benefit.

Young People in Care

Bill Esterson Excerpts

Tuesday 27th January 2015 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to follow the Chairman of the Education Committee, the hon. Member for Beverley and Holderness (Mr Stuart), who provided a very good summary and analysis of our report.

Like other Committee members, the hon. Gentleman will have heard from or met those from the Alliance for Children in Care and Care Leavers. They have given me a copy of their requests for inclusion in the manifestos of all parties. One of their points is that the average age at which young people leave home is 24; yet young people leave care at 18 and, sadly, it is often earlier—at 16 or 17—for the most vulnerable and disadvantaged children or young people in our society. As the Chairman of the Committee said very well, they are the group most in need of support, but we expect them to fend for themselves and to go into independent living.

The point about the difference in treatment at different ages and the way in which we, as supposed corporate parents, allow that to happen, says everything we need to know in summary, and the detail has now been published in our report. The life chances of children in care—whether in education, employment, relationships or housing—are all significantly lower than for other people in society. For example, many of the prison population were in care as children, and 60% of children in care have some kind of mental health problem.

The young people we met told us their stories, as do those who have met other Members at other times. Our report shows that leaving care is one of the key stages in their lives. It is very often a harsh cut-off date, whereas other young people usually have no arbitrary leaving date. Many young people go away and come back, so they leave home over a period; some parents would say that their young people never leave, as is sometimes their experience. However, that is not the case for this group of particularly vulnerable young people, so our recommendations are important.

Our chapter on “Staying Put” gives the figures for those who leave care as 16 and 17-year-olds, and for those who leave on their 18th birthday. A remarkably high number—in the thousands—leave care before they are 18, and many more do so on their 18th birthday, when they are no longer regarded as looked-after children. The questions we want to pose to Ministers and, for that matter, potential Ministers are: is everything being done to ensure that children do not have to leave care if they do not want to, and do local authorities and others apply pressure to get young people to leave? I have heard such a point more than once, and we refer to the financial pressures in our report’s conclusion, where we recognise the resource constraints in relation to the difficulty of extending “Staying Put” arrangements in residential homes.

One of the witnesses who gave evidence to the Committee was Ben Ashcroft, the author of “51 Moves”. He is involved in a campaign to extend residential care to the age of 21, which is as it should be. If as a society we have accepted that it is right for young people to stay in foster care until they are 21, it should be the same for those in residential care. As our report says:

“the young people in question have already experienced troubled and disrupted childhoods and are far too important for their welfare not to be prioritised.”

If we are serious about ensuring that support is available, we need to ensure that local authorities have the money. My council has lost more than 40% of its funding since 2010 and many other local authorities find themselves in that situation. If this Government or any future Government are serious about making a difference for these vulnerable young people and children, they, as well as local authorities, need to ensure that the resources are available. If that does not happen, we will continue to spend far more in later years on looking after the adults that the children and young people become, whether through the high cost of prison, the benefits system or mental health care.

If we are talking about finding extra money to fund the long-term solutions that our report suggests, has the time come to consider which Departments or budgets it will come from? The justice budget and the health budget are two possibilities, but the housing budget, the Department for Work and Pensions budget and the education budget also spring readily to mind.

As we heard from the young people we met and as other young people have told me, when young people leave care, they are often leaving a situation where everything is done for them, with little preparation for having to look after themselves. All too often, they have no concept of how to pay the rent or other bills, how to shop or cook, or how to get education or work. It is no wonder that so many of them end up struggling. A third of young people who leave care end up homeless between six and 24 months afterwards. That is a staggeringly high proportion.

[David Simpson (Upper Bann) (DUP)]

Does the hon. Gentleman agree that a percentage of young people leave care homes not because they are forced to do so, but because of difficulties that they experience in their lives? Such young people become vulnerable and can then be trafficked and cannot be found again.

[Bill Esterson]

The hon. Gentleman is absolutely right. He is talking about people who leave residential care. The Committee came across evidence of that during our inquiry on residential care and I suggest that he reads the report. It is worrying that society loses track of such a high number of young people.

In this inquiry, we found a clear need for action, whether by doing better with existing resources, providing extra resources or both.

[Mr Graham Stuart]

Further to the question from the hon. Member for Upper Bann (David Simpson), we recommended in this report that there should be greater awareness of the right of young people who leave care and get into difficulty to come back into care. The Government said that they would look into that more closely. Perhaps the Minister will reflect on that in his remarks and let us all know what progress has been made.

[Bill Esterson]

I thank the hon. Gentleman for making that point. He is absolutely right.

We made recommendations about better preparation for young people who are leaving care, including through the development of life skills. We highlighted a number of areas where support was crucial, based on the evidence that was presented to us.

The concept of instant adulthood has been raised with me. It describes the sudden change in the lives of people who have been very much looked after and who have had everything done for them and everything provided for them. It describes how corporate parenting is not working in the way we would expect for this group of young people. The concept of corporate parenting had been used as a way of identifying how we should look after such young people.

A point that has been made to me is that young people must value the support that they receive. It is not good enough for the authorities to describe what type of support should be available and who should provide it. Young people often have relationships with those they do not necessarily want supporting them, whether a social worker or somebody else they come across while they are in care. It is really important to listen to young people in deciding who is best placed to provide support for them. It is a matter of trust—I have heard that word mentioned a number of times.

[Tim Loughton (East Worthing and Shoreham) (Con)]

I refer the House to my entry in the Register of Members’ Financial Interests.

The hon. Gentleman is talking about the “Maintaining positive relationships” part of the Select Committee’s report, which I thought was interesting. It mentions how we can do better with personal advisers, but it also refers to sibling groups. Does he share my concern that a report issued today by the Family Rights Group shows that half of all sibling groups are split up in foster care? Does he think that more could be done, as those children leave care, to re-establish relationships with other family members that have been denied them in the care system? That could prove important in anchoring them and giving them stability, so that they can move into adulthood with trusted relatives.

[Bill Esterson]

I am extremely grateful to the hon. Gentleman for making that point. As an adoptive parent of a sibling group, some of whom are still in care, I know from experience that that is incredibly important to my own children. He hits the nail on the head—sibling groups should be kept together wherever possible, and every effort should be made to keep siblings in touch while they are in care and into adulthood. As he says, we touch on that in the report. Such relationships can really help young people as they leave care and move into adulthood. What came out strongly in the evidence that we took, and in the evidence that I got from elsewhere, was the importance of a young person having someone to advise and support them, whether it is a sibling group, a friend, a trusted professional adviser or the parent of a friend.

I have had some good information provided to me by Barnardo’s, with examples of what goes on. It says that there are a number of examples of good practice around the country. The Chairman of the Education Committee mentioned what goes on in Wiltshire, and I am aware of good practice by Barnardo’s in Merseyside, for example, where it provides support not just for care leavers but for other young people in the same age group.

Barnardo’s also gave me examples of nightstop, crash pads, supported lodgings and supported housing projects. Crash pads are short-term emergency supported lodgings. They are temporary forms of family-based accommodation, with placements lasting up to eight weeks. They provide specialist support to young people who need somewhere to live on a short-term basis.

Supported lodgings provide family-based support to vulnerable young people aged 16 to 25 who cannot live with their own family and are not yet ready for independent living. Young people are provided with places to live in the homes of local people, from whom they receive varying levels of practical and emotional support, enabling them to develop the confidence and capability to live independently. Young people normally stay in supported lodgings for up to two years, but they can also be used to provide shorter-term emergency housing.

Supported housing projects offer high levels of support to young people for up to two years, although some have a small number of emergency beds available at short notice for a few days at a time. They tend to house a group of young people with more complex needs, and they usually have 24/7 on-site support from staff.

I give those examples to address the point made by the Chairman of the Committee about emergency accommodation—what is sometimes called bed and breakfast. Some of those examples are from Barnardo’s and other providers. I hope that the Minister and shadow Minister will look at what is out there already, because if we are to provide the range of alternatives that our report calls for, we should learn from good practice and share and apply it, so that—in the shortest possible time—better opportunities are available for this group of young people. I hope that the Minister will take my comments on board and perhaps respond when he winds up the debate.

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[Craig Whittaker]

I thank my hon. Friend for that intervention. He raises some valuable points, particularly on the turnover of staff in residential homes. The point is that a lot of young people in residential homes have a stigma attached to them. Not only that, quite often a foster placement has broken down. One could argue quite easily that they are the more vulnerable of our children in care. That being the case, to turf them out by themselves at the age of 18, often with very little support, is not the way forward. That will not be the case for all young people in residential homes—of course not. Some will be robust enough to take that step. For those who choose to stay, we feel strongly that that option should be open.

[Bill Esterson]

One challenge in residential and in foster care of “Staying Put” is that it leaves fewer places for other children to enter the care system. Does the hon. Gentleman agree that one of the very big challenges in foster care is to find more foster carers, and in residential care, as the hon. Member for East Worthing and Shoreham (Tim Loughton) pointed out, it is to find staff who will stay long-term so that we have a more experienced, quality work force?

[Craig Whittaker]

Of course the hon. Gentleman has a point, but it does not make sense to allow young people in foster care to stay on until the age of 21, but exclude the 9% in residential care homes—the most vulnerable young people—particularly given that the 91% are arguably the ones clogging up the system.

The scoping exercise discussed four options, and the results were interesting: 25% of the young people preferred option 1—care leavers live in the same children’s home until they are 21; 13% preferred option 2—care leavers live in a separate building but in the same grounds as the children’s home; another 13% preferred option 3, which was like supported lodgings—care leavers live in a different house and need to be at least 16; and 25% preferred option 4, the staying close agenda—care leavers live independently in their own flat down the road or close to the children’s centre, and they have a key worker. It was clear from the scoping exercise that young children in residential homes would prefer those types of options.

The cost of extending those four options to all children—if we do it for one group, surely we must do it for all young people in care—would be about £75 million a year. It is not a small sum by any stretch of the imagination, but the cost of not giving any such option, particularly to residential care leavers, is many times that amount, and let us not forget the 23% who end up in our penal system, the cost of NEETs, drugs, crime, mental ill health, homelessness—to name just a few aspects.

The scoping exercise made several recommendations, and here are three of them: that the Department for Education develop plans for a new overarching duty of continuing wide-ranging support up to the age of 21 for all young people leaving care and, in doing so, draw on the learning of the Scottish reforms; that Ofsted work with stakeholders to clarify the ability of children’s homes to maintain registration when they routinely cater for young people over 18 and how children’s homes’ provision of accommodation and support for young people over 18 will impact on the inspections process; and that the Department for Education and the Department for Communities and Local Government review the option of extending regulation to a wider range of support and accommodation options for young people.

To summarise, may I ask the Minister when young people in residential homes can expect the Government to remove the discrimination and unfairness in the system and provide a range of options to all young people leaving care, as recommended by the scoping activity, and when he is likely to respond to that exercise?

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[Steve McCabe]

I entirely accept the point that the Committee Chairman is making. The hon. Member for Calder Valley said that there may well be options. My point is simply that the situation is not directly comparable. I am minded that we look at this carefully. We cannot say that children in foster care get the benefit of “Staying Put” until the age of 21 and children in children’s homes are completely disregarded. That would not be acceptable, and I do not think that anyone is saying that. I am simply suggesting that the situation may be slightly different.

I want to take up the Committee’s point about the problems of making full-time education and training central to continuing support until the age of 25. We were all rather encouraged when the Minister said in Committee that he intended to rewrite the guidance so that it would be sufficiently clear that he was concerned about those who were in danger of falling through the net. So far, the rewritten guidance does not appear to have achieved that. Surely the real issue is that it is too easy for those we refer to as NEETs— not in education, employment or training—to disappear. Unless directors of children’s services and others are under a specific obligation to track and monitor these young people, there is every danger that they will fall by the wayside.

I want to turn to “other arrangements”. As we have heard, the Committee was very concerned about accommodation that it felt was not of an acceptable standard and might fail the statutory guidance tests of being suitable for the child in the light of his or her needs, including health needs, and of the responsible authority having satisfied itself as to the character and suitability of the landlord. I acknowledge that the YMCA said in evidence to the Committee that some local authorities provide a decent variety of accommodation, and I do not dismiss the fact that there are examples of success out there. However, Ofsted found significant variations in the quality and sufficiency of accommodation for care leavers. The Who Cares? Trust has also reported examples of unsafe and unsuitable accommodation. I will not go over them all, as they have been mentioned by other speakers, but they include people being threatened or assaulted; living with those with drink and drugs problems; and having dirty accommodation infested with bedbugs and cockroaches. The British Association of Social Workers has said that it is

“firmly of the view that the government needs to apply regulatory duties to all accommodation providers who accommodate looked after children in order that they are appropriately safeguarded and the provision meets acceptable standards.”

I noticed that the report highlights an interesting dilemma on regulation. It is fair to point out that one witness warned of the risk that if regulation is too onerous it will stifle creativity in support arrangements and inhibit independence projects. I was interested in Catch22’s suggestion for a national standards framework, which, if I have read the report accurately, the Committee appears to have liked. I am not sure that the Government’s proposals go anything like far enough, and I urge the Minister to reflect again on that point. About 3,000 young people are covered by other arrangements, and that is an awful lot of lives at risk.

[Bill Esterson]

On what my hon. Friend is saying about our recommendation for a framework of individual regulatory oversight, I confirm that we recommended that the DFE consult on setting one up. Does he agree that that is a sensible way forward?

[Steve McCabe]

I would welcome that, and I urge the Minister to think again.

Finally, there is general consensus that bed-and-breakfast accommodation is unacceptable and that a deadline must be set for phasing it out altogether, although I acknowledge that that cannot happen until more work has been done on developing alternatives. I welcome the fact that the Minister has set a maximum of two days for the time a child can spend in a bed and breakfast. How will that guideline be monitored, because that will be the first test of whether it is having any impact?

I must say that I am disappointed that the Minister does not seem to have accepted the need to set a date by which the use of bed and breakfasts must be phased out. I welcome the decision to collect more data on the use of this arrangement, although I am not clear why he did not accept the suggestion that the Department simply mirror the current arrangement for housing authorities to report to the Department for Communities and Local Government. It seems to me that that is a tried and tested system, so it would make sense and be quite helpful to repeat it.

Will the Minister say when the Department will commence work with stakeholders to understand the issues better, as was mentioned in the Government response? When can we expect to see substantial progress? The use of bed and breakfasts for vulnerable young people who need care must rank alongside other great housing scandals of the past, such as those highlighted by the drama “Cathy Come Home”. I do not accept that it has a continuing place in the plans to care for vulnerable young people.

I again thank the Committee for its excellent report and the Minister for the Government response, but I feel that there is more to do before we can be satisfied that the arrangements for children over the age of 16—for whom we, the state, are responsible—are adequately cared for.

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

I thank the Chairman of the Education Committee, my hon. Friend the Member for Beverley and Holderness (Mr Stuart), who secured this important debate. I also reiterate my gratitude to his Committee and its members for their continued interest in our collective efforts to improve the lives of children in and leaving care—a group of young people who are among the most vulnerable in our society and who have not always received the support that they need to overcome the difficulties they often face in making a successful transition to adulthood.

Before dealing with the specific points that have been raised by hon. Members in the Select Committee report and in the thoughtful contributions today, I will take a few moments to set out the wider work of the Government on our commitment to improve the lives of care leavers. As the Chairman of the Select Committee fairly set out, since 2010, we have put in place a series of measures that mean that young people who leave care receive more help than ever before. In 2013, we published the first cross-Government care leavers strategy, which illustrates the priority that the Government give to improving the lives of care leavers. It includes measures to improve care leavers’ access to education, training and employment; help to access appropriate benefits and health support; and extra support for care leavers who have unfortunately ended up in the criminal justice system. Many of those measures cut across departmental budgets.

The strategy was preceded by a number of important changes that were designed to improve the level of support that care leavers receive from their local council. We have made it clear in statutory guidance that all care leavers should receive support from a personal adviser up to the age of 21, or 25 if they are in education or returning to education, or if they have a desire to do so. We have introduced bursaries for those who are participating in further or higher education. We have pushed all local authorities to provide a setting up home allowance of at least £2,000. We have been responsible for the introduction of more than 54,000 junior individual savings accounts for children in care. We have made it easier for care leavers to access their social care records. I am pleased to report that the vast majority of local authorities have signed up to delivering the care leavers charter.

Since launching the care leavers strategy, we have continued to look at further ways to support care leavers. Most notably, we have introduced the “Staying Put” duty, which will allow thousands of children in foster placements to remain with their foster carers until the age of 21. We are providing local councils with more than £40 million over three years to implement the new duty. I will return to that later.

We have strengthened the Ofsted inspection framework so that it includes a specific judgment on the quality of care leavers’ services. As Ofsted told the Education Committee:

“The quality and suitability of accommodation for care leavers contributes significantly to the judgement that inspectors make on the experiences and outcomes of care leavers.”

As the hon. Member for Sefton Central (Bill Esterson) and my hon. Friend the Member for Calder Valley (Craig Whittaker) said, care leavers often have difficulties accessing mental health support when they need it. We are determined to address that problem and have announced the creation of the children and young people’s mental health and well-being taskforce to consider what changes are needed to improve outcomes for children and young people with mental health difficulties. Crucially, that work will include a focus on the needs of vulnerable groups, including those who have been in the care system.

[Bill Esterson]

I know that the Minister is aware of the shortage of CAMHS workers. He will appreciate that unless that is addressed, it will be difficult for him to live up to what he has just pledged. What work is he doing with colleagues at the Department of Health to ensure that there is an increase in the number of staff who are available to deliver what he has promised?

[Mr Timpson]

As is often the case, the strange dissection of responsibilities across Government means that ministerial responsibility for CAMHS resides elsewhere in the Department, but the Under-Secretary of State for Education, my hon. Friend the Member for East Surrey (Mr Gyimah) works directly with the Department of Health, through the taskforce, to look at what resources are required. In recent weeks, it has been announced that further money has been made available to improve the services that are available to children who have mental health problems.

Every party in the House recognises that the mental health services that are on offer to children, particularly those who are in care, on the edge of care or leaving care, are simply not good enough. That is why we need a fundamental review of how we commission, deliver and review the progress of children and young people who should have access to those services. We have made some significant changes to how we approach special educational needs—there is joint commissioning, and we are looking at a system that can be used from birth to 25—and we can learn a lot of lessons from that in how we deal with mental health services, particularly for children in care and care leavers.

As part of our commitment to improving services for care leavers, we have funded a number of projects designed to stimulate new and innovative approaches. For example, we have given funding to the Care Leavers Foundation to run the New Belongings project, in which care leavers play a central role by helping to identify barriers and find solutions to improve services in nine local authorities. I am pleased to tell the House that we will provide further funding to extend the New Belongings project. The second phase will be rolled out shortly and will involve embedding progress in those nine councils. It will also extend the project to more local authorities. We will also continue to fund the From Care2Work programme, which helps care leavers to get a foot in the door with some of our major employers, providing work experience, apprenticeships and employment opportunities. It is only right that we record the progress that has been made in recent years, but as the debate has shown, we clearly still have some way to go before every care leaver will be getting the support they need.

I turn to the specific issues that have been raised in the Education Committee report and by hon. Members today, beginning with the difficult but important issue of bed-and-breakfast accommodation. I agree with all Members, led by the Chair of the Education Committee, who have said that bed-and-breakfast accommodation is not suitable for care leavers. That is, of course, what the law says. However, as I said in our response to the Committee’s report, we do not think an outright ban is the right approach. We are not a lone voice—the chief social worker for children and families has said:

“A total ban on bed and breakfast restricts the ability of professionals to exercise their judgement in making best interest decisions about young people’s safety and welfare.”

The charity Catch22 has said:

“The reality is that there is a need for emergency, crash-pad accommodation for a very distressed young person who is in an urgent situation and needs accommodation. An outright ban could deny them access to much needed support in an emergency.”

That position is supported by the Association of Directors of Children’s Services and by the Local Government Association. The Care Leavers Foundation has said that it

“reluctantly concedes that permitting use of B&B in emergency situations is probably a necessary caveat, as there may be circumstances where in the absence of a B&B option a care leaver could potentially be at risk of street homelessness or being warehoused in a hostel.”

As I indicated to the Education Committee, in light of those concerns we want to test further the practical implications for local authorities if a total ban were introduced. We have started that process and are continuing to talk to relevant parties such as the independent reviewing officers group, Barnardo’s, Catch22, the Care Leavers Foundation, homelessness charities and others to better understand the issue. I know that the hon. Member for Strangford (Jim Shannon) raised that point.

We know that there are some excellent examples, which hon. Members have noted today. The hon. Member for Stockton North (Alex Cunningham) mentioned Hartlepool and other parts of the north-east, and Wiltshire has also managed to find ways to provide suitable accommodation without needing to resort to bed and breakfast, so it can be done. I should add that the Department for Communities and Local Government has provided £1.9 million to support local authorities in developing sustainable solutions to stop the unlawful use of bed and breakfast for families and children. The seven funded councils have achieved and sustained a 96% reduction in the number of households with children in bed and breakfast for longer than six weeks.

Ofsted

Bill Esterson Excerpts

Wednesday 10th December 2014 Westminster Hall

[Mr Chope]

I do not have those figures in my head, but I have figures showing that, in the period since the inspection, there has been a significant increase in GCSE performance at A* to C. Those figures compare very favourably with many other schools in Dorset that are rated not inadequate but good. If in due course I look at the detailed material I have here, I might be able to answer the hon. Gentleman’s specific question.

The school and its governors decided to appeal against what they regarded as an inadequate conclusion to the inspection. The report was published on 19 March 2014, and when the head distributed it to parents, as he is obliged to do, he said that the inspectors had ignored various issues. He said that, although

“there remain areas for improvement, the Governors and Senior Leadership Team of the school share with the whole staff the belief that this inspection was unfair and deeply unjust…We knew and accepted that English had under-performed”.

He stated that the school was taking action about that, which is why the school was

“predicting…good results in English this summer”.

Indeed, the school did get good results in English in the summer of 2014, and the head expressed concern about predictions for the future:

“a point the inspectors seem to have ignored. Instead they focused on data from the last 3 years, including 2012, the year in which grade boundaries were suddenly changed leading to a national outcry. This directly contradicts their own guidance which urges inspectors not to focus just on the last 3 years but to take into account current progress.

Inspectors also appear to have ignored the wealth of opportunity that the school continues to offer through the wide variety of trips, activities, clubs and achievements that cannot be measured as easily as English results.”

He drew a contrast with the inspector’s report from 2010, saying that

“everyone who knows the school well would say that it is actually a better school today than in 2010!”

One of the concerns the head and the governors have is that Ofsted compared the school’s attendance and exclusions—the inspection was carried out not by Ofsted inspectors but by Tribal, a subcontractor to Ofsted—with secondary schools that were not comparable. Ferndown upper school has only years 9, 10, 11 and a sixth form, whereas the schools with which Ofsted compared it also have years 7 and 8. Obviously, in years 7 and 8, as national figures make clear, attendance is better and exclusions are fewer. Ofsted was not comparing like with like, which is a fundamental error.

[Bill Esterson (Sefton Central) (Lab)]

I congratulate the hon. Gentleman on securing this debate. Using the evidence of one school, he seems to be saying that there are concerns about standards within Ofsted. He just mentioned that the inspection was carried out by a subcontractor. Does he agree that the answer to improving the consistency and quality of Ofsted is to ensure that all inspectors are directly engaged, as Sir Michael Wilshaw has recommended in recent months?

[Mr Chope]

Indeed, Sir Michael Wilshaw has recommended that, and I assume that the only reason he has done so is because in his experience there has not been such consistency and quality assurance under the old regime. I support his judgment on that, but it is no consolation for a school that has fallen foul of the old and inconsistent regime. Future improvements may lead to more consistency; indeed, the purpose of this debate is to try to find out what can be done to ensure consistency. So much turns on Ofsted’s judgment of a particular school.

What happens if a school is dissatisfied with an inspection? All it can do is appeal. Under Ofsted’s internal appeals process, Ofsted inspectors judge the work of other Ofsted inspectors. In the case of Ferndown upper school, a more junior Ofsted inspector judged the work of a more senior inspector, which I would submit is quite an invidious position to be put in—it certainly lacks the transparency and objectivity that we should demand of such organisations.

The school then appealed to the Independent Complaints Adjudication Service for Ofsted, which deals with appeals against Ofsted. Unfortunately, the ICASO is effectively toothless because it cannot adjudicate on the important issues. The school made what is called a stage 4 complaint, which said, for example, that the inspectors who went to the school made notes and said orally to the school that they found that the pupils’ behaviour was good and that there were no examples of bad behaviour, but that they changed their judgment at a later stage in the process and said that they were concerned that there had been examples of bad behaviour.

Not surprisingly, the school said, “Well, let’s see where those examples of bad behaviour were noted by the inspectors at the time.” The school was told, “That’s all confidential information and it’s not available under freedom of information.” The school raised that issue with ICASO. The response from ICASO, which came through in the summer, stated that the complainant’s concerns relating to the Freedom of Information Act lie entirely outside ICASO’s remit, so it was not able to look at that. ICASO also said that it is not within its remit to overturn Ofsted judgments or to scrutinise its inspection criteria. Indeed, the only thing ICASO can do is look at the process, which is not really what we want in an appeals system.

Once a school has gone through that stage and had its ICASO adjudication, what can it do next? All it can do is send the matter to the parliamentary ombudsman. If ever there was the long grass, it is the parliamentary ombudsman—I am not insulting him, but the parliamentary ombudsman, again, can only consider administrative processes. Because of his work load, a complaint referred to the parliamentary ombudsman is unlikely to be determined for a significant period of time, by when the school will have a completely different cohort of pupils. That does not seem to be an adequate process of accountability. I would be interested to know whether the Minister—whom I am delighted to see in his place—agrees and whether he has any proposals for change, because the more emphasis we put on the regulatory and inspection process, the more important it is that it should be seen to be objective and above reproach. The trouble is that the consequences of such judgments feed into the school’s morale and the esteem in which it is held by potential pupils. That in itself can result in it suffering to a greater extent.

The school has now shown, through its results in the July exams, a significant improvement in the quality of its education. That is surely good news, but when one looks at the inspector’s follow-up letter, one does not get the impression that he is as pleased as the school is with the progress made and the way in which it is now outperforming many other schools in Dorset in the exam league tables. That raises another issue: because the school has a grade 4 assessment from Ofsted, while comparable schools in Dorset have grade 2 assessments—that is, good—people immediately reach the conclusion that it is less good than the others. However, because of when those other schools had their inspections, we may well not be comparing like with like.

That is one of the problems, which we know is not unique to Dorset or to Ferndown upper school. Evidence from throughout the country shows that Ofsted will quite often fail to see things in a school that are going badly wrong. Just to show that the debate is not purely about the Christchurch constituency, I will refer briefly to what happened at Saltley school and specialist science college. The International New York Times had an exclusive interview with the former principal of that school who talked about “harassment” from the local board over courses. He referred to the “relentless criticism” that he faced from a “Muslim-dominated school board”—he being a Sikh—and spoke about how he was eventually forced to step down as principal.

We now know that that school was the subject of an emergency report, “Report into allegations concerning Birmingham schools arising from the ‘Trojan Horse’ letter”, which was published in July 2014 and made severe criticisms. In a statement issued to Parliament yesterday, the Government drew attention to the gross inadequacies of Birmingham city council in dealing with those and other issues and they have proceeded, as near as they can, to put Birmingham city council under special measures. At a time when the Government are talking about the importance of devolving even more power to local authorities, that finding shows that one of the largest local authorities—I think Birmingham has more children under its control than any other local education authority—is severely lacking.

One might ask, “What do Ofsted think about Saltley school and specialist science college?” It was inspected on 9 and 10 May 2013 and under every category—achievement of pupils, quality of teaching, behaviour and safety of pupils, and leadership and management—it was marked as good. The report said that the school was “good” and that:

“Students made good progress from their low starting points,”

and so on. It also said:

“The new head teacher and senior leaders have accurately identified strengths and weaknesses in the school and have continued to improve teaching and raise achievement.”

We now know that that was substantially wide of the mark, yet does anything in Ofsted’s annual report explain how it was able to produce that inspection for Saltley school on 9 and 10 May 2013, when just over a year later, in July 2014, it became clear that what was alleged to be a really good school was far from that?

I give that as another example of Ofsted’s inconsistency and lack of accountability. When parents who were thinking about sending their children to Saltley school and specialist science college looked at the Ofsted report, they must have thought, “This is brilliant; this is fantastic.” Yet just over a year later, they would have been ashamed about having made that judgment.

Preparing Young People for Work

Bill Esterson Excerpts

Wednesday 10th December 2014 Commons Chamber

[Nicky Morgan]

I thank my hon. Friend for that question. He is absolutely right. One of the issues for smaller businesses is that it is difficult to build links with schools—it is often difficult to know who to contact. As I said in my statement, when schools are busy it is difficult for them to know which businesses they should be contacting. The company we are setting up today will have advisers in all parts of the country to broker those links and to ensure that our young people find out about all careers, whether they are in big or small companies or in the public sector, and apprenticeships and going on to further study.

[Bill Esterson (Sefton Central) (Lab)]

When I heard there would be a statement from the Secretary of State for Education today I thought it might be about the warnings from Ofsted about low standards in secondary schools. I thought it might even have been about the tender opportunity that has appeared on the Department for Education website for the privatisation of children’s social care. I was therefore very surprised at the actual choice. As the statement was on preparing young people for the world of work, may I tell the Secretary of State what the witnesses to this morning’s Select Committee on Education had to say about 16-to-19 apprenticeships? They all agree that her proposals for apprenticeships are nothing short of a train wreck. I urge her to listen to their calls for greater quality apprenticeships that are matched to each individual, and to have a complete rethink to get rid of the increase in bureaucracy that she is proposing.

[Nicky Morgan]

First, the hon. Gentleman’s interpretation of the proposals for children’s social care services is absolutely wrong. We have absolutely and categorically ruled out any form of privatisation in relation to those services. I have no idea where he has got that from. All we hear from the Opposition Benches is more negativity about the proposals to inspire our young people about all the options open to them. He mentioned apprenticeships. He ought to reflect on the fact that we have seen more great apprenticeships right across the country. Already this week, we have celebrated the 2 millionth apprentice and she is to be congratulated on signing up to it.

Oral Answers to Questions

Bill Esterson Excerpts

Monday 1st December 2014 Commons Chamber

[Mr Laws]

My hon. Friend is exactly right that we need not only to get talented head teachers and leaders into those schools, but to ensure that other members of the school community are part of that. That is why, under this programme, each school will be entitled to a leadership sustainability grant of £50,000, which is ring-fenced for staff and governor development in order to build leadership capacity for the future.

[Bill Esterson (Sefton Central) (Lab)]

For the third year running the Government have missed their teacher recruitment targets. For example, only 67% of physics places have been filled—the figures are 88% for maths and 44% for design and technology. Does the Minister accept that the teacher recruitment crisis is leading to real problems in key subjects and in leadership roles right across the country?

[Mr Laws]

We certainly accept that for some time now there have been challenges when recruiting to some of the core subjects, including some of the core scientific subjects, and that is why we have significantly increased the bursaries available in those areas. However, we should also acknowledge the great successes there have been in recent years in getting more outstanding graduates into the teaching profession, and we will do more of that in future.

Oral Answers to Questions

Bill Esterson Excerpts

Thursday 20th November 2014 Commons Chamber

[Vince Cable]

I do not believe in quotas for ethnic minorities, women or any other group. I have never ever said anything about 20%. If he reads the correspondence from Trevor Phillips, he will acknowledge that I never endorsed that view. However, there is a problem, which I hope the hon. Gentleman acknowledges, that more than half of the boardrooms in the UK have no non-white representation whatever. Only one in 16 senior managers comes from our very talented ethnic minority groups, and they should be better represented.

[Bill Esterson (Sefton Central) (Lab)]

The Secretary of State mentioned earlier the importance of regional networks. I wonder whether he thinks the same when it comes to banks? Regional banks have the advantage of understanding their local community and economy and their customers. When banks are not lending to small businesses in my constituency and others around the country, are not regional banks the answer to the problem of getting the growth and support that small business needs?

[Vince Cable]

We warmly welcome challenger banks offering a service to small business. If they can be organised on a local and regional basis, so much the better. There is an organisation called Cambridge and Counties, which is performing this role in the east of England, and I know that Airdrie bank does so in Scotland. We would like to see many more. The liberalised process of licensing means that these things can come on stream rapidly when they are put forward.

Small Business, Enterprise and Employment Bill

Bill Esterson Excerpts

Wednesday 19th November 2014 Commons Chamber

[Sheila Gilmore]

I agree with my hon. Friend.

The hon. Member for Burnley (Gordon Birtwistle) seems to believe that the last Government did nothing on this issue. I do not agree, but even if that were true, it would not be a reason for not dealing with the issue now. On that basis, we would never do anything different or new because a previous Government had not done so. That would be a very strange way of doing politics.

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend is quite right. This has become a huge problem in the past four and a half years, so much so that people in this country are, on average, £1,600 a year worse off since 2010. That is a direct result of the failures of the Government who are now in power. That is the reality for people up and down the country.

[Sheila Gilmore]

I thank my hon. Friend for his pertinent intervention.

--- Later in debate ---

[Sheila Gilmore]

My hon. Friend echoes the point that I was seeking to make. If there were equality of arms and people were negotiating on an equal basis, that would be different from a situation of “take it or leave it, and be grateful for what you’re getting. Arrange your life around all the constraints.”

In many ways, the Opposition’s amendments are modest. They are not asking for huge changes, but they go beyond the miserly reforms to zero-hours contracts that the Government are offering. I think the Government want to get brownie points by saying that they are now dealing with the problem of zero-hours contracts—the Prime Minister mentioned them today—but the Bill’s provisions simply do not go far enough. I urge the Minister, even at this late stage, to consider supporting the Opposition’s amendments and strengthening the Bill’s provisions so that the Government can say that they are making a proper effort to deal with the problem.

[Bill Esterson]

In evidence to the Committee, Sarah Veale from the TUC said that there is a significant difference between what she called the higher end of the employment market, which is often where trade unions are organised and staff are well paid, and other areas. She stated:

“Our worry is with the unscrupulous employers who use these contracts deliberately as a means of cutting wages and having people available, the flexibility being to their advantage and not so much to the advantage of the worker”.

When talking about provisions in the Bill she said:

“A lot of work will need to be done with the regulations for this to ensure that there are no easy avoidance tactics used by unscrupulous employers.”

That is what the TUC said about what the Bill sets out to do, where the gaps are, and how much more work is needed to make it effective for staff who otherwise would be exploited.

Yesterday we talked about the impact that uncertainty has on people—whether tenants in pubs or small business owners and managers more generally—and on their communities and staff. Today we are considering people in employment, and my hon. Friend’s amendments set out how important it is to look after people who otherwise face uncertainty and difficulty as a result of low pay and everything that follows from it.

[Andy McDonald]

Does my hon. Friend agree that the impact of people being subjected to zero-hours contracts inhibits their ability to economically engage? It is bad for our communities and economy if people do not have that regularity of income and cannot plan for their future and families.

[Bill Esterson]

That is exactly my point, and I will be developing it during my speech. The lack of certainty leads to difficulties for a large number of people in our society. Whether caused by zero-hours contracts, part-time employment, general low pay, undercutting, a lack of payment or the minimum wage, bogus self-employment or, indeed, a combination of those factors, it all leads to a situation where the reality of the economic recovery is no recovery at all. I mentioned earlier that on average people are £1,600 a year worse off, and although apparently we have an economic recovery, that is not what is happening for the majority of people and their families in everyday life.

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) mentioned the care sector, which is important in the context of the amendments. Before she died earlier this year, my mum was looked after by some wonderful women. Two of them came at weekends to look after her, and they visited four times a day. They told me that their working weekend was, on average, 25 hours long, yet they were paid for only 10 hours. Far from getting the minimum wage, they were being paid less than half that for their work, because they did not get money for their travel time and were paid only for the 15-minute slot when they were with the vulnerable elderly or disabled person they were caring for. In addition, a draconian system was about to be introduced in which they had to phone on arrival and when they left, to ensure that their employer knew they had carried out the visit. Whose phone they were supposed to use was a matter of conjecture, and whether they were supposed to ask the householder or vulnerable person, or use their own mobile—presumably at their own cost—was not made clear. The reality was a low-paid existence for people doing one of the most important jobs that anybody can do, which is look after the most vulnerable people in our society.

--- Later in debate ---

[Tom Blenkinsop]

Proposed new section 6A(c) in amendment 8 states

“changes in provisions relating to the national minimum wage improving other measures of pay in the labour market.”

That obviously means that Labour wants better collective bargaining in workplaces. The best way of ensuring any minimum standard is to have collective bargaining on site as that would reduce the costs of enforcing the national minimum wage at a later stage. Does my hon. Friend agree that one good measure for the care sector and other small SMEs is more collective bargaining in the workplace?

[Bill Esterson]

That is absolutely right, and as evidence from the TUC that I mentioned earlier made clear, where we have organised workplaces, we have a better system of pay, conditions and support, and as a result better services in sectors such as the care sector.

[Tom Blenkinsop]

Does my hon. Friend agree that the best way to have collective bargaining on site is to pay subscriptions to a trade union? Traditionally, of course, that has been done through check-off. Does he agree that the Government’s current position on check-off, as an employer of their own employees in the civil service, is a demonstration of their lack of commitment on this issue?

--- Later in debate ---

[Bill Esterson]

My hon. Friend raises an incredibly important point and is absolutely right to raise it in the context of this debate. It is extremely relevant to the points I have been raising, as I am sure you will agree, Mr Speaker.

[Graham Jones]

My hon. Friend referred to the Government policy of name and shame, which I understand has been announced four times. Only 25 firms have been named, despite evidence that as many as 300,000 people in the UK earn less than the national minimum wage.

[Bill Esterson]

My hon. Friend must have been reading my speech, because I was about to make exactly that point. He has made it for me. The reality of the naming and shaming policy is that it has not worked: it has not delivered an improvement in the enforcement of the national minimum wage. If 300,000 people are being paid less than the national minimum wage, Government Members should be ashamed of that.

[Mr Donohoe]

Even if they were paid the minimum wage, working for three hours a week does not, in any shape or form, allow them to live, does it?

[Bill Esterson]

We should undoubtedly do everything we can to encourage employers to pay a much higher rate. The real level of the national minimum wage has fallen year on year. I agree that we should push employers to pay the living wage, too.

[Mr Donohoe]

I am talking not so much about the living wage or the minimum wage as the number of hours people work a week. People cannot pay their keep if they are not working a particular number of hours a week. Regardless of what they are being paid an hour, they need the hours. The introduction of zero-hours contracts has surely been the biggest mistake.

[Bill Esterson]

My hon. Friend rightly brings me back to zero-hours contracts and the problems and difficulties they create for people. Working a very low number of hours causes enormous hardship and difficulties: the difficulty of working an uncertain number of hours that can go up or down; the difficulty of claiming benefits to cover some of the gaps when going on and off benefits; and the difficulty in trying to navigate a system deliberately put in place by the Government to restrict what people, who are in work mostly, are paid in social security. I am glad he has made that point.

The use of agency workers, typically from eastern Europe, by companies in this country to undercut local staff is wholly unfair on the migrant workers who work for very low rates of pay and wholly unfair on local staff who are pushed out of the picture by being undercut. That is disastrous both for them and for the workers who are brought in. The knock-on effect is very damaging to the local economy too, because often any money earned, even in such low amounts, is sent back home and not spent locally and circulated around the local economy. The agencies have to be stopped. I am glad that it is Labour policy to take action to reduce the abuse perpetrated by such agencies. My hon. Friend the Member for Edinburgh South (Ian Murray) made the point very well: good businesses want to pay decent wages, but they are undercut in so many ways that they find it difficult to do so when unscrupulous employers exploit the system. Agencies’ use of overseas staff on low rates of pay is just one of the ways in which that happens.

The Bill introduces a penalty for employers who do not pay the national minimum wage. The problem is that there will be no improvement in enforcement. I mentioned the cuts in the number of staff at Her Majesty’s Revenue and Customs.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

indicated dissent.

[Bill Esterson]

The Minister shakes her head. Is she telling me that I am wrong when I say that the people who used to work in this sector for HMRC in my borough and have told me they have lost their jobs and that they are not telling me the truth?

[Jo Swinson]

I am not telling him that his constituents are not being truthful in relation to their circumstances, but I am saying that the Government have invested more money in the enforcement of the national minimum wage. HMRC has employed more compliance officers in this area of work. I am sure that on behalf of his constituents he would wish to take up his concerns with the Treasury, but national minimum wage enforcement work has received additional investment from the Government.

[Bill Esterson]

I am glad the Minister has made that point. The reality is that those who used to work for HMRC would be very puzzled to hear it. Many staff working at HMRC, whose numbers have fallen in the past four-and-a-half years, would be puzzled by it, too.

The lack of improvement in enforcement is a worry, which is why our proposal to give the responsibility and power to local councils is so important. We propose the real deterrent of a £50,000 fine—the Government have not come forward with anything on that scale—and the aspiration of £8 an hour for the national minimum wage. That would move things forward significantly, while at the same time encourage the payment of a living wage.

All these low pay issues—the people who have to put up with low hours on zero-hours contracts, as my hon. Friend the Member for Central Ayrshire (Mr Donohoe) pointed out; the part-time nature of many of the jobs created in recent years, which the Government are so keen to trumpet; the way in which the minimum wage is undercut; the lack of a living wage; and the fact that people are £1,600 a year worse off—show why it is so important for proper action to be taken. The national average for the number of people in work on low pay is one in five. In my constituency, two in five are paid less than a living wage. For my constituents, the issue of low pay is absolutely crucial. They are crying out for an improvement in the way the economy is balanced, so that far more people benefit from economic recovery and we see a reversal in the year-on-year fall in living standards they have suffered under this Government.

There are very high numbers of people on low pay, which—the point was made in an earlier exchange—has led to low tax receipts. That explains why the apparent improvement in the number of those in employment has not been linked to a reduction in the deficit. The deficit is now going up again, despite the draconian cuts in public spending.

--- Later in debate ---

[Bill Esterson]

The economic indicators tell the story. Whatever the Government are doing and whatever is happening in the economy, for the majority of people it is not working, but it is certainly hurting. That is the reality for many of my constituents: two in five earn less than the living wage. They are hurting and finding it difficult to make ends meet—to pay their mortgages, their rent, their food bills—and many people in work are going to food banks because they cannot survive otherwise.

I was talking to a nurse the other week on the picket line outside Ashworth hospital. He felt he had no alternative, because of the dire situation he was in, but to strike for four hours over the 1% pay rise he had been denied by the Government. One per cent.—how mean can you get? When it gets to the end of the month, he has to choose between putting fuel in his car to get to work and buying food. That is how precarious an existence he and many in the country are living because of low pay.

As others have mentioned, more and more people are entering self-employment, and their position is incredibly insecure. As anyone who, like me, has run their own small business will know, there are times when money is not coming in and there is no guarantee of a wage. It is a difficult situation and one facing a growing number of people. For some, it is a choice, but many more are forced into self-employment for a variety of reasons, and it is a very insecure way of life.

With all these different forms of low pay, I am afraid that the prospects for prosperity or a recovery in living standards will not be good for many people unless we significantly change how our economy operates and the way we deal with issues such as low pay. For that reason, interventions of the kind proposed by my hon. Friends on the Front Bench are important; they give support and encouragement by ensuring that the rules are enforced, that people are paid according to the law and that action is taken to improve pay.

Amendments 8 to 10 are designed to help raise the pay of the lowest paid in the country and those most affected by our low pay economy and to boost the economy in parts of the country, such as my constituency, where there is a big problem. They are designed to protect workers, enforce the law and support businesses that are being undercut and trying to do their bit. The point my hon. Friend the Member for Edinburgh South made about his own experience in business was a great example of what a good employer should be doing—making absolutely sure they pay their staff decently. My granddad used to run a corner shop, and he said, “If you can’t afford to pay people a decent salary, you should not employ anyone.” If that was good enough for him back in the 1940s and ’50s, it should be good enough for us now. That is how good employers operate. Sadly, however, there are unscrupulous people around who will seek to take advantage where they can, so we need to take action to help the lowest-paid in our society. I hope the House will support amendments 8 to 10.

--- Later in debate ---

[Jo Swinson]

The evidence submitted in the reports is pretty comprehensive, so I think it does meet the requirements set out, particularly when combined with the assessment of the latest hourly earnings and the impact of the minimum wage and what it does to living standards and hourly earning. I think that the existing reporting requirements are adequate and that the amendment would bring about a duplication. I welcome the interest in the issue, however, and I welcome the fact that as well as those formal reporting requirements, we have had various debates—sometimes in Westminster Hall, sometimes here in the Chamber—on these issues. Furthermore, these topics are returned to frequently at BIS oral questions, and I expect that to happen tomorrow. It is right that we have these opportunities to discuss these issues because they are important.

Let me deal with some of the specifics that came up in the debate about enforcement of the national minimum wage. In particular, we heard the charge that the number of investigations had gone down and that this was some sign of failure, but I believe the picture is more nuanced than that. Since the national minimum wage was introduced and HMRC has been the enforcement body, that body has continually assessed how it undertakes enforcement activity and how it can be improved. It is true that the number of individual investigations has gone down, but that has been coupled with a much more efficient undertaking of investigations. In particular, HMRC often now has larger and more complex investigations as part of the risk assessment work being undertaken. Sometimes those cases take longer to complete, so there will be fewer overall cases. The number of people covered by each case, however, has been increasing.

In addition, when someone makes a complaint to HMRC about the national minimum wage, rather than just going in to investigate the particular worker, Joe Bloggs, and their circumstances, HMRC has the power to widen the investigation—not only to ensure that the anonymity of the complainant is preserved, but to recognise that if there are anomalies in one particular worker’s payment, it might well be the case for other workers within the organisation. It has the power to expand the investigation more widely. Although that has reduced the number of cases that have been completed, the number of workers helped and the amount of arrears recovered has increased, so that is a good thing.

The number of workers helped, for example, has risen between 2009-10 and 2013-14 by more than 17%. The average number of workers per case has nearly tripled, and the average amount of arrears per case has increased by 260%. I think that is a good news story on enforcement, particularly concerning the resources available for enforcement, about which the hon. Member for Sefton Central (Bill Esterson) was concerned. Some 144 officers have been involved in HMRC. As a result of the additional resource dedicated by BIS—the budget has increased by £1 million to £9.2 million—a further 26 individuals have just been hired. A team of 170 is now working to ensure that there is compliance with the enforcement of the national minimum wage. It is clear from the figures that that significant increase in resources has already been delivering, and it will continue to deliver.

[Bill Esterson]

I am pleased that the Minister has given us those figures, but if so many people are involved, why have so few employers been named and shamed under the Government’s policy? The numbers do not seem to stack up.

[Jo Swinson]

So far 30 employers have been named and shamed, and, as I said in Committee, there will be a further tranche of naming and shaming shortly.

The previous system was much more permissive in terms of the number of cases in which naming could operate. Until the new rules were introduced, only one employer had been named over a period of many years. We introduced those rules on 1 October 2013, but they did not operate retrospectively, and hence applied only to investigations that began on or after that date. The previous criteria apply to the many current investigations that began before 1 October 2013, and in those cases employers are much less likely to be named. Many other investigations began on or after 1 October 2013 and are still ongoing, so the final stage of the issuing of a notice of underpayment and the consequent ability to name and shame has not been reached.

As I think has been recognised, the numbers are already increasing, but given that this is a new scheme, it is inevitable that they will start small and become larger as cases work their way through the system.

--- Later in debate ---

[Bill Esterson]

I do not remember whether the Minister gave these figures in Committee, but she said a few moments ago that 30 companies had been named and shamed. Does she accept that up to 300,000 staff are affected, and if she does, can she tell us how many of them are employed by those 30 companies?

[Jo Swinson]

I think that the hon. Gentleman is comparing apples with oranges. According to the most recent estimate, the number of employees who are paid less than the national minimum wage is lower than 300,000—about 236,000, I believe. I stress that that is an estimate. Obviously we do not have data on every single person in the country; such estimates are based on surveys. The figure of 30 companies is not an annual figure; those are cases that have been completed since the new rules came into force.

I can assure the hon. Gentleman that the vast majority of cases in which the national minimum wage law has been found to have been breached are being named and shamed once the notices of underpayment have been issued. Obviously there is still a job to be done: people must be informed about how they can ensure that their rights are being properly enforced. Let me say yet again that if people fear that they are not being paid the national minimum wage when they should be, they should ring the pay and work rights helpline, which is a free service and totally confidential. The number is 0800 917 2368, and I shall continue to take every opportunity to publicise it, because it is important for people to know that they can receive advice on a confidential basis and then make a complaint if they decide to do so.

Local authorities have been mentioned. I think it right that HMRC works in partnership with authorities—with some success—to ensure that enforcement happens, but I also think it right for there to be a national enforcement body. The issue of social care has been raised, along with the issue of travel time, which is well documented. Travel time, other than the times involved in travel to and from work at the beginning and end of the day, needs to be included in the national minimum wage. We are well aware of that, and HMRC is enforcing it.

We know that there are issues in the care sector. That is why targeted enforcement was carried out, and why my colleagues at the Department of Health have been working closely with local authorities to produce guidance to ensure that they contract providers who can provide quality care, along with fair terms and conditions for their work force. Authorities should not be pricing contracts at a level that prevents their basic national minimum wage obligations from being met.

Amendments 9 and 10 concern zero-hours contracts. We have already discussed the question of whether or not they are sometimes a good thing. It was the former Member of Parliament for Sedgefield, Tony Blair, who said, on 3 October 1995,

“There will be an end to zero-hours contracts.”

However, the Labour Government did not deliver that, perhaps because there are people for whom such arrangements work well, as we heard from the TUC during the evidence session in Committee.

While there are undoubtedly problems with zero-hours contracts, and I do not wish to dismiss them, I think it important to introduce some perspective to the debate. Last year the Chartered Institute of Personnel and Development conducted a survey to establish what was happening on the ground, and produced a report. It found that zero-hours contract workers were just as satisfied with their jobs as the average United Kingdom employee, that they were happier with their work-life balance, and that they were less likely to feel that they were being treated unfairly by their organisations.

--- Later in debate ---

[Matthew Hancock]

No. As the hon. Gentleman knows, no amendments were moved yesterday on family brewers. We will reflect on the vote on the larger pubcos and the mandatory free-of-tie option as the Bill continues its passage in the other place.

[Bill Esterson]

The Minister says he is going to reflect on the vote, with the will of the House being the market rent only option. I know he has spent his time apologising to the Prime Minister for losing that vote, but perhaps I may press him on the point. This will be taken to the House of Lords. Is he going to try to overturn the will of the elected House or not?

[Matthew Hancock]

As I have said, the House has made its position clear and we will reflect on that vote ahead of consideration in the other place. That is a very clear exposition of the position.

On the question of how we can ensure that Britain can compete in the future, that we can support businesses and the jobs and prosperity that they bring, that this country is the best place in the world in which to start and grow a business, and that we make things as easy as possible for all those who have the spark of an idea and want to turn it into commercial reality, I say that there have been few Governments in history that have done more for small businesses than this one. For the first time in modern history, we are on track to reduce the burden of domestic regulation—something that was never achieved by the Labour party. With these measures in the Bill adding to a multitude of others that have already been taken, we are doing all we can to support the British people and to ensure that we have a long-term economic plan that can secure for you, Madam Deputy Speaker, and for families across the country, the prosperity that we all want to see.

--- Later in debate ---

[Bill Esterson]

Will my hon. Friend give way?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before the hon. Member for Chesterfield (Toby Perkins) considers giving way, I must point out to him that this is an extremely short debate, that he has had plenty of time to speak over the past two days, that many Members in the Chamber have not spoken on the Bill at all in those two days, and that he has spoken for longer than the Minister. However, I leave it up to the hon. Gentleman; he has the floor.

--- Later in debate ---

[Bill Esterson]

The Bill has the words “Small Business” firmly in the title, but the measures it introduces also cover employment. We did not discuss what the hon. Member for Huntingdon (Mr Djanogly) talked about at all, but a strong theme running through much of what we did talk about was the insecurity that is endemic in our society today, whether for small businesses or in employment. The question that I do not think has been answered in Committee, on Report and on Third Reading is whether the measures in the Bill will address that insecurity.

We had some very good debates on pub companies, and an amendment that will help family brewers was made in Committee. That will go a long way towards helping that sector. Then we had yesterday’s fantastic decision by the House to support the market rent only option, which Members across the House and many outside have long campaigned for. I know that Elaine Lynch of the Weld Blundell in Lydiate will be one of many publicans in my constituency who will welcome that decision.

Another issue we debated long and hard, including on Report, was late payment. As my hon. Friend the Member for Coventry South (Mr Cunningham) said, we will have to wait and see whether the Bill makes a difference in practice. One in five business failures are the result of late payment. Some £39.4 billion in late payments, or £38,000 on average, is overdue to small businesses. The Government have missed an opportunity by not supporting our amendment on an automatic 8% charge on late payments. As the Forum of Private Business has stated, that would have made a significant difference and gone a long way towards reducing the time and cost that small firms spend chasing late payments, allowing them to concentrate on growing their business and creating jobs.

I think that opportunities have been missed with regard to employment, zero-hours contracts, the exploitation of workers and abuse of the national minimum wage. The Government have promised to do things without actually putting measures in the Bill. We will have to wait and see whether they make a difference or not. In my constituency, 40% of workers are paid less than the living wage. Across the country that is a huge problem for many people and their families, whether as the result of the growth in part-time work, zero-hours contracts or bogus forms of self-employment. The reality is that the change in the nature of employment and the growth in low pay are fundamental reasons why the deficit has gone up, despite the Government’s claim that they would get it down, because tax receipts are not being collected. That is the reality of what life is like—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I asked the hon. Gentleman to be brief. I trust that he will listen to the Chair.

[Bill Esterson]

Thank you, Madam Deputy Speaker. I made that point because the Bill was an opportunity to tackle some of the problems at the heart of our economy, to build an economy that works for small businesses and for ordinary people, and I do not think that the Government have come anywhere near that. That is why we need a Labour Government to support small business and people on low pay. This Bill is a missed opportunity. I hope that the Government can deliver on some of the things they said in Committee and on Report, but we will have to wait and see.

Small Business, Enterprise and Employment Bill

Bill Esterson Excerpts

Tuesday 18th November 2014 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

Does my hon. Friend agree that all the ins and outs, ups and downs and unknowns of what the Government will end up bringing forward, either here or in the House of Lords, show why it is important that we support new clause 2, which 91 of us, including me, have signed?

[Toby Perkins]

I do. You will be glad to know, Mr Deputy Speaker, that I will come on to new clause 2 in more detail in a moment, but I basically agree with my hon. Friend’s point. His constituents in Sefton, who feel strongly about their local pub industry, will be glad to know that he took part in debates in the Public Bill Committee and has signed new clause 2.

That brings me nicely on to the contributions that a variety of Members from throughout the House have made on the subject in recent years. The hon. Member for Salisbury (John Glen) told the House about the landlords of the White Horse in Quidhampton, alleging that Enterprise Inns had

“signed them up to a lease on a false prospectus and…made their business completely uneconomic and unsustainable”.—[Official Report, 13 June 2013; Vol. 564, c. 476.]

The hon. Member for Meon Valley (George Hollingbery) has confirmed that the closure of the White Hart in South Harting was caused by

“unsustainable rent demands...from Enterprise Inns”.—[Official Report, 13 June 2013; Vol. 564, c. 476.]

The hon. Member for Romsey and Southampton North (Caroline Nokes) wrote to Enterprise Inns to inform it that the Abbotts Mitre public house in Chilbolton was

“under threat largely due to unrealistic rents and changes in terms and conditions”.

The hon. Member for Bristol North West (Charlotte Leslie) wrote to Enterprise Inns asking it not to close the Lamplighters in Shirehampton, and the hon. Member for Cheltenham (Martin Horwood) has bemoaned Enterprise’s decision not to save the Little Owl. As a Sheffield United fan I am not generally in favour of saving the Owls, but in this case it would have been important. He said that

“a big company has failed to recognise a pub’s value to the community.”

The hon. Member for Pudsey (Stuart Andrew) was also concerned with saving the Owl, this time the one in Rodley, whose threatened closure he blamed on

“the mounting costs imposed by the building owners, Enterprise Inns”.

The hon. Member for Bromley and Chislehurst (Robert Neill) said of the sale of the Porcupine in Mottingham that the public were

“incensed that their right to bid for the pub has been bypassed deliberately by Enterprise Inns and LiDL”.

--- Later in debate ---

[Toby Perkins]

I take issue with the idea that the only pubs that are being closed and turned into supermarkets are unsuccessful ones. The Crispin in Chesterfield is a successful pub that makes good profits, but it does not offer Enterprise Inns the 25-year lease that Tesco is willing to offer, and that is why it is being shut down. Pubs that are turning into supermarkets should not necessarily be described as unsuccessful.

I thought that I had responded to the hon. Gentleman’s point, but I will do so again. Of course we are supportive of steps to support larger pubs, and we think that is important. The specifics of the Government’s proposal and whether it has implications on the right of a community to have its voice heard on such issues is a matter that my hon. Friends in the communities and local government team will consider at greater length. Of course we support pubs that are successful and want to expand, but we also want to defend pubs that have a future in the community but often fall victim to the vagaries of pub companies’ operations, particularly when pub companies close pubs that are successful.

In response to the hon. Member for Burton (Andrew Griffiths) let me turn to the specifics of new clause 2. When debating pub tenants we are talking about a group of people who often work as many hours as anyone, but who earn less than they could legally be paid by an employer on the minimum wage.

[Bill Esterson]

The hon. Member for Burton (Andrew Griffiths) asked my hon. Friend what he is doing to help, and he was just starting to explain. My hon. Friend supports the market rent only option in new clause 2, so that is exactly how he, and the 91 hon. Members who have put their name to the new clause, are supporting pubs in our communities. When mentioning those Members who have referred to pubs in their constituencies, I hope my hon. Friend also expects them to support new clause 2, as do I.

[Toby Perkins]

I certainly do. The hon. Member for Burton had the unrivalled pleasure of listening to a day and a half of debates to which I made a fairly significant contribution—I appreciate that he cannot get enough of my contributions on pubs, but he has had a significant opportunity to hear my thoughts on the matter.

Pub tenants are those who clean their pub and get it ready for the next day’s trade. They are working at the bar, handling supplier relationships, generally keeping a cheerful presence, wearing the mask, and closing up long after most people have finished work, and all the while they know that the unfairness of their relationship means that the whole day’s work has been for nothing financially. Latest figures show that more than half of tied licensees work for less than £10,000 a year. Indeed, during the recent mini-recess I spoke to three pub tenants in my constituency who run pubs owned by the big pub companies, and none of them was taking a wage out of the business. By voting for new clause 2 and amendment 5 we can take a significant step towards preserving pubs for the next generation, and hardwire fairness into that longstanding business relationship.

Amendment 5 is simple but important and should reassure people who have concerns about these complicated issues. The Minister attempted to say that she believes the Government have found a different way to achieve broadly the same thing, but the specific wording of our amendment leaves a lot less potential for businesses to get out of saying that they are covered. To my mind, there are two ways in which the pubs code could fail to deliver what we want—first if the code is too weak and allows pub companies to comply with it while continuing unfairly to disadvantage their tenants; and secondly if we end up with a code that strikes the right balance for our expectations about the behaviour of pub companies, but is drafted in a way that allows pub companies to exempt themselves, or creates confusion as to who is covered.

Already the big pub companies have attempted to create confusion over definitions. The Government were right to acknowledge that they dropped a clanger with the phrase “tied pubs”, which in their definition is supposed to mean those on a tenanted or leased model in England, Scotland and Wales, although the code would need to be enacted separately in Scotland. The phrase “tenanted, leased” is the type of tenure clearly defined and easily established. We remain of the view that amendment 5 will provide the greatest clarification on exactly who should be covered by the Bill.

--- Later in debate ---

[Gordon Banks (Ochil and South Perthshire) (Lab)]

It is a pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas), and I should like to speak to new clauses 3 and 4. Before I so do, I should like to draw the House’s attention to my entry in the Register of Members’ Financial Interests.

New clause 3 is designed to flush out late payers. It seeks to press, or perhaps encourage, FTSE 350 businesses that have not signed up to the prompt payment code to do so. It would also empower the Secretary of State to publish a list of such companies on the Government website, thereby highlighting those that had not committed to the code. I support those ambitions. The new clause sets out to do what the Government said they would do—name and shame large companies that did not commit to prompt payment practices. However, they have now reneged on that promise. New clause 4 proposes that the Government conduct a review into how the payment publishing regime could be adapted to ensure that late payments would be automatically accompanied by a compensation payment, and how the onus of reporting late payment could be moved away from the customer waiting to be paid.

Why are the new clauses so important? Any small business owner will know that a late payment can often mean the difference between continuing to trade and business failure. Insolvency specialists have estimated that one in five business failures are down to bills not being paid on time; they are nothing to do with a failed business model and and purely down to cash being withheld from the business by its customers. The Scottish Building Federation has highlighted the fact that four out of five building firms have reported instances of late payment in the past year. I can assure the House that the overwhelming majority of those businesses will not have considered seeking redress through interest payments.

The problem that the Bill will not solve is that it will still be up to the supplier—usually a smaller business—to pursue its customer for prompt payment. The supplier will either lose the argument, and lose the prompt payment, or win the argument and put at risk its relationship with that larger customer.

[Bill Esterson]

My hon. Friend is absolutely right to make the case for a level playing field when it comes to the payment of smaller suppliers by larger organisations. He has also made the point about the human and social cost of late payments to the people who run and work in small businesses. Does he agree that it is incredibly short-sighted of larger businesses to disrupt their own supply chains by delaying payments in that way? Is not that another reason to deal with this issue once and for all by adopting these important amendments?

[Gordon Banks]

I thank my hon. Friend for making that valid point. The bigger companies have to understand that there is a need for smaller companies in the supply chain. They should view the situation in the round and acknowledge that not every company is big enough to withstand late payments in the same way that they perhaps could. There is a moral argument running through this as well. If I supply goods and services to someone on a Tuesday and they agree to pay me a particular sum by 1 August, for example, why should they not pay me by that date? It is simple: if I keep my part of the bargain, I expect them to keep theirs.

--- Later in debate ---

[Gordon Banks]

I absolutely agree with my hon. Friend. It is not morally or structurally fair for a small business to be trying to squeeze a few hundred or a few thousand pounds—perhaps even tens of thousands of pounds—out of a large multinational company. That onus must be shifted away from the small company. After all, the company is only endeavouring to get what it is owed. If the larger customer is made to pay its bills on time, it will take the onus away from the small supplier.

[Bill Esterson]

One reason why a fair system for recovering payment is needed is that small businesses do not have the people, time or money to chase late payment. Large businesses do, and they can defend themselves against smaller businesses. This is really about making it fair and equitable, and ensuring that small businesses can compete on equal terms with large ones.

--- Later in debate ---

[Ben Gummer]

I can only speak from personal experience, which is what I have tried to do, to explain why I think it makes sense to go down the Minister’s route and why we would end up with perverse consequences were we to go down the route of mandation. Many small businesses are not members of the Federation of Small Businesses, and the Federation of Small Businesses is not absolutely right in everything it suggests. All I would say is that, in this instance, my own experience is that mandation would have a perverse consequence that would be inimical to the well-being of all small businesses. As a good first step, transparency, as the Government suggest, will create a new environment for businesses, which will change things for the better for people trying to build wealth and prosperity in our nation today.

The shadow Minister intervened on me to suggest that something better could be done. All I will say to him is that, when in government, his party did absolutely zero. They were, if I may coin a phrase, a zero-zero Administration when it came to small businesses. In 13 years, they did nothing apart from put up taxes on small businesses. They did nothing to cut red tape. Labour Members oppose the Minister’s efforts to tackle bureaucracy and claim that they can do better, but that sits a little ill in their mouths. I know that most business people—this is true of almost everyone I speak to in my constituency—think that it sounds a little false, and there is a reason for that: it comes neither from the heart nor from a real desire to do anything right. The difference is that the Minister understands what needs to be done and he is doing it.

[Bill Esterson]

Like the hon. Member for Ipswich (Ben Gummer), I have run a small business—for 15 years, in my case. The reason new clause 4 is so important is that the status quo just is not working: small businesses are not in a position to chase late payments. In Committee —the Minister will probably repeat what he said then —members on both sides came up with examples of why action is needed, but I am afraid that what is being suggested just is not adequate. That is why we need measures such as new clause 4, which goes so much further.

As my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) has said, small businesses account for half of our economy. They are a crucial part of the economy and of prosperity and future prosperity. Very many small businesses are struggling at the moment and late payment is one of the main reasons for that. They are used by suppliers for working capital—in fact, they are used as a bank. We have heard about how accounts departments are available only on Tuesday at 5 o’clock or Friday at 3 o’clock, and if people cannot get hold of them at those times, they have had it. When I was in business, there was only one payment run a month, and if people missed that, they had had it for a month. The following month’s invoice would then be queried and sent back to them, so they would miss two payment runs and two months’ worth of pay. I am afraid that that sort of practice goes on all the time, which is why action is needed to go further than the Government’s proposal.

A total of £39.4 billion is overdue in payments to small businesses. On average, small businesses are owed £38,000 in overdue payments. One in four companies spends 10 hours or more a week chasing late payments.

[Gordon Banks]

Given the time in the calendar that we are now approaching—November, December, January, February—does my hon. Friend share my experiences of and concerns about what happens to cash flow and cash collection over these months, when for a number of reasons, or rather excuses, cash collection during the winter months, when in some ways it is needed more, is greatly reduced?

[Bill Esterson]

That is absolutely true. It is certainly my experience that the delays at this time of year are an additional burden on small businesses. They of course have a knock-on effect not just on the businesses themselves, but on the staff, who potentially lose out in the run-up to Christmas, when families need support more than at almost any other time of the year.

The proposal is about unlocking the potential of small business to do so much more for our economy and our future prosperity. As I said at the start, the status quo is not working, and we need something to change.

As we have heard from other Members, 10% of small businesses have considered using late payment legislation, but they have not actually done so. At the same time, 22% of them have ended a relationship because of late payment. That is a demonstration not that the system is working, but that it is not working.

Small businesses cannot and will not challenge their larger customers for fear of losing them. As I said in an intervention, there are moral reasons, community reasons and other good reasons for ensuring that payments are made on time, including to support the supply chain and the bigger business, as well as to benefit the wider economy and individuals in our country.

The issue is crucial, and we must make sure that the right solutions are brought forward to support small businesses and everybody who owns them or works in them. The system is not working at the moment, which is why the concept of automatically having to pay an 8% penalty on late payments is so important. Such behaviour will not change on its own. My hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) made that point very well by saying just how few businesses in Scotland have signed up to the prompt payment code. It is a derisory number: is it 43?

[Gordon Banks]

indicated assent.

[Bill Esterson]

I do not know how many businesses there are in Scotland, but there are 5 million in the UK as a whole, and it is not too hard, by scaling that up, to calculate that the number signing up to the prompt payment code overall is not very big.

There is support for new clause 4 from across the business community. Phil Orford from the Forum of Private Business has said that it would be

“a welcome addition to the proposals outlined in the Small Business, Enterprise and Employment Bill and would go a long way to reducing the time and cost small firms spend on chasing late payments and allow them to concentrate on growing their businesses and creating jobs.”

Government Members must accept that it is supported across the business community. As my hon. Friends have said, the only way to support small businesses is to make the proposal mandatory to ensure that big businesses pay on time. New clause 4 does just that, and I hope that the House will support it.

[Toby Perkins]

I am in the rather unusual position of speaking to my new clauses and in effect winding up the debate at the same time, but it is a challenge I relish.

There have been some very valuable contributions to the debate. I reiterate my admiration of the campaign on late payments led my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams). She has been a really doughty fighter on the issue, and there is no doubt that late payment is a key factor in holding back small business growth. Suppliers frequently report that it is one of the key hurdles that they face, alongside access to finance, because small businesses do not have the cash flow buffers of their large competitors.

The hon. Member for Ipswich (Ben Gummer) has been forced to leave his place—he arrived in rather a rush and left in rather a rush. Let us hope he is properly dressed when he returns. He said, rather ungenerously, that I was in a lonely position as a Labour Member in having run a small business. However, we all know that my hon. Friend the Member for Edinburgh South (Ian Murray) was a small business owner, as were my hon. Friends the Members for Ochil and South Perthshire (Gordon Banks) and for Sefton Central (Bill Esterson) and many of my other colleagues. And so are several of Labour’s parliamentary candidates, who we hope will be joining us here in just a few months. Conservative Members often try to create the impression that they are the only ones who have ever been in business and that all Labour Members were previously engaged in social work, school teaching or whatever they think is not worthy.

--- Later in debate ---

[The Minister for Business and Enterprise (Matthew Hancock)]

We have had a good-natured and largely well-informed debate on these new clauses and amendments.

I shall deal first with late payments. We have heard passionate speeches from Members on both sides of the House on the importance of tackling late payment. I will start by addressing a comment made by the hon. Member for Sefton Central (Bill Esterson), who performed admirably on the Public Bill Committee and made many important interventions. He argued that the current situation in the country on late payment is not acceptable and is not working, and I think he is right. The question is what to do about it.

We consulted broadly on all the potential options surrounding late payments, including many of the options covered by the amendments, and we listened carefully to the responses to the consultations. There was a range of responses, including from those who would firmly regulate all private contracts and from those who did not want any change at all. It is important for us to take steps that will have a positive impact, and to think about the unintended consequences. If we introduce into English law a requirement for a contract to take a specific form, we will remove a freedom of contract that has served the country extremely well for a long time.

We have today heard passionate arguments about the importance of dealing with late payment, as we did on Second Reading and in Committee. We have heard them from my hon. Friend the Member for Ipswich (Ben Gummer) and from Opposition Members. I bow to none in my passion for sorting out the problem of late payment, because the family business in which I grew up nearly went under thanks to it, but let me point to the big picture. The hon. Member for Ochil and South Perthshire (Gordon Banks) argued that there was a moral case, and I agree with that. He also observed that the problem arose when there was a cascade of companies paying late—when, because some paid late, others had to do so, and then others had to as well. I have been at the receiving end of that, as I am sure he has. He is nodding now. The best way to tackle the problem of companies going bust and others paying late is first to establish a stable economy, and then to establish a culture of payment that is stronger and better.

[Bill Esterson]

Will the Minister give way?

[Matthew Hancock]

I will in a moment. Many Members have ignored the fact that the Bill already contains measures to improve transparency and increase prompt payment in the public sector. My Department pays within five days of receipt of 95% of undisputed invoices, and within 30 days of receipt of 99%. That excellent performance—which is what I would call it—must be rolled out much more widely in the public sector if the culture is to be changed, but we also need transparency.

[Bill Esterson]

I am glad that the Minister did not give way to me earlier, because he has made my point quite well. By improving its payment terms, the public sector is helping the economy. Rather than concentrating on putting the economy right in order to boost prompt payment, we should bear in mind that boosting prompt payment will help us to grow the economy, and if that is right in the public sector, it will be right in the private sector. We merely want to start the ball rolling. We in the Chamber do not have the perfect answers; it is for others to go away and design a system that works. If we assumed that all amendments must be perfect, we would never agree on anything here.

Nursery Schools

Bill Esterson Excerpts

Tuesday 9th September 2014 Westminster Hall

[Pat Glass]

I absolutely agree, and I will come to that. I thank the right hon. Lady for her intervention.

What is happening to nursery schools now and why should that matter? As I said at the beginning, all Governments—this Government, the previous Government and no doubt the next Government—periodically state that they want good schools for every child, the best possible start in education, particularly for the most vulnerable and disadvantaged, and good outcomes. Yet successive Governments have failed to recognise that that is exactly what they have in nursery schools.

Every Government say that they are not in the business of closing good schools, and yet that is precisely what is being allowed to happen through the neglect of this sector. Historically and currently, nursery schools have provided the best educational outcomes of any model in the early-years sector for all children, particularly those who would be described as vulnerable or disadvantaged. That is why what happens to nursery schools now matters and why it is important that we intervene.

Everyone is talking about school readiness as the silver bullet to improved early-years outcomes, but Ofsted’s evidence to the Education Committee’s recent inquiry into early years and child care showed us very clearly that when it comes to school readiness, nursery schools are the most successful delivery model. They are also the most successful model when it comes to integrating pupils with SEN, including the most severe SEN, into mainstream schools, and I will talk a little more about that later. Furthermore, they are the most successful model for narrowing the gap in the early years, for helping to get vulnerable children and families into a more secure place and for long-term outcomes for their small pupils.

I do not just rely on Education Committee evidence. Ofsted evidence clearly demonstrates that 90% of nursery schools are judged to be good or outstanding. That goes way, way beyond any other form of early-years provision in the system—here or in any other developed country, so far as I am aware.

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend is explaining that stand-alone nurseries are the best form, and all the evidence points to that. Is the key factor in that the quality of the staff? By improving quality and standards and providing qualified teacher status for all lead staff in all nursery settings, can we have the same standards in other nursery settings or does she think we should be moving towards having a greater number of stand-alone nurseries?

[Pat Glass]

I will discuss leadership in nursery schools shortly, but the Education Committee model suggests that nursery schools should stand at the centre of the hub-and-spokes model, providing good practice out to nursery classes across their region.

I expect the Minister to tell me in his response that primary schools are judged as a whole, that there is no separate Ofsted inspection of nursery classes in a primary school and that nursery classes cannot therefore be judged against nursery schools, but I remind him of what I just said: 90% of nursery schools are judged to be good or outstanding, with the same results in disadvantaged and affluent areas. That goes beyond what we can say about the primary sector across the country.

Of nurseries inspected between 1 January and 31 March 2014, 55% were judged outstanding in comparison with 8% of primaries and 14% of secondaries. The disparity is huge. I also remind the Minister that I do not have to rely solely on statistics to support my case; I can draw on 25 years of direct experience in education, and I know what I have seen over and over again in nursery schools.

Of nursery schools judged by Ofsted up to 30 June 2013, 58% were rated outstanding in leadership and management, which compares with 20% in primary, 29% in secondary and 39% in SEN. Nursery school provision is extremely well managed and is recognised as such by Ofsted. I ask the Minister to consider that 62% of nursery schools are in 30% of the most disadvantaged areas in England, so we are getting outstanding results and leadership despite the fact that the schools largely operate in such areas. There are a higher proportion of nursery schools in the north-east—it appears that there may be slightly fewer in future—than we would see nationally, and those nursery schools are concentrated in the most disadvantaged areas of the most disadvantaged region. Yet we are seeing incredibly good results.

Nursery schools admit children from many different backgrounds and give priority to children in social and medical needs categories. That is confirmed by the Department for Education’s survey statistics: at least 11% of children at 47% of nursery schools have special educational needs. No other category of school, except special schools, comes anywhere close to that level of admission and yet no other category of early-years provision comes close to the outcomes that nursery schools achieve with SEN pupils. Ofsted has highlighted that nursery schools have particular expertise in the teaching of young bilingual children. Children from BME backgrounds make up 33% of nursery school pupils and yet have outcomes that outperform BME children of a similar age attending nursery classes, even in the most affluent areas. The statistics really highlight the quality of the provision that nursery schools provide.

A significantly higher proportion of maintained nursery schools offer wrap-around day care provision than any other form of maintained early-years provision—just the kind of provision that the Government say that they want to support working parents and parents training for or looking for work. Nursery schools often provide it much cheaper than can be achieved in the non-maintained sector, which is one of the reasons why parents like them so much. Why on earth have successive Governments not recognised the value of nursery schools and stopped the threats to their future? It is beyond me. The Government say that they want good schools and these are the best in their sector by far.

In her last appearance before the Education Committee on 18 June, the previous Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), appeared to give just two reasons why she was not wholly supportive of nursery schools. She told me that

“49 local authorities do not have any maintained nursery schools at all”

but I reminded her that that meant that 153 or 154 local authorities have at least one and that many have more. It seemed sensible to the Select Committee that local authorities and the Government should use these highly-specialised beacons of excellence to build good practice across authorities. The Minister also told me that nursery schools are expensive, and they are—this is where things do become slightly political, because it is about priorities—because they employ a head teacher, a higher proportion of graduate staff and qualified teachers. That, too, is why they are so successful.

Yes, these tried and tested, highly successful schools may be slightly more expensive than nursery classes, but they are nowhere near as expensive as the experimental, untried and untested free schools programme that the Government are pushing so hard and that has a budget overspend, at the last count, of well over a billion pounds. It is not only me who recognises the value of nursery schools and is concerned about Government policy. The British Association for Early Childhood Education described them as “beacons of high quality” and as playing

“a leading role in developing the early years work force”.

The Ofsted chief inspector’s first annual report in 2014 on early years noted:

“The only early education provision that is at least as strong, or even stronger in deprived areas compared with wealthier areas is nursery schools”.

If we are concerned about narrowing the gap and, like the Education Committee, about outcomes for white working-class children, nursery schools in deprived areas seem to be the most successful model.

--- Later in debate ---

[Mr Graham Stuart (Beverley and Holderness) (Con)]

It is a pleasure to take part in the debate under your chairmanship, Sir Roger, and to follow the hon. Member for North West Durham (Pat Glass), who is a distinguished member of the Education Committee. As she showed in her powerful and passionately argued speech, she is deeply informed about education and the welfare of young people.

The future of nursery education is an important issue, and one at which the Education Committee looked closely during our inquiry into Sure Start children’s centres last year. As I touched on, we visited the Pen Green centre for children and families in Corby, run, as the hon. Lady said, by the brilliant Margy Whalley. We also visited the Netherlands and Denmark in February 2013 to compare provision for early years in those countries with that in England.

The clear message we heard is that education is too important to wait until children reach school age. In particular, we concluded that if we are serious about closing the attainment gap for disadvantaged children, it is imperative that Ministers should set out coherent, long-term thinking on early years and children’s centres. It is worth asking the Minister—a central message from many of us today—not to let coherence or a desire for uniformity and equity to allow or excuse the destruction of rare, peculiar centres of excellence that do a brilliant job and that are found to be doing so by everyone who looks at them.

The Government have a vision of doing more through schools, utilising the resource, and we heard during our hearings on the children’s centres that perhaps the previous Government made an error in building entirely new things, rather than better utilising the infrastructure that they had. None the less, it is possible to allow infant schools to do more for younger children and to provide good or, I hope, excellent provision in an area, without destroying those often long-standing nursery schools that are brilliant today. That is the appeal to the Minister: not to get so caught up in coherence and uniformity that we end up, inadvertently, destroying jewels that might not be everywhere, but certainly are present and deserve to be preserved. At that point, I could sit down—

[Bill Esterson]

rose—

[Mr Stuart]

And I will, to give way to the hon. Gentleman.

[Bill Esterson]

I am giving a chance for a pause for thought. The hon. Gentleman mentioned Denmark and Holland—I went on those visits—and much higher spending is clearly committed to early years in those countries, as part of the contribution of having such well-trained and excellent staff. Does he agree that that is the route we need to go down in this country? To do so, to make the case and to be accepted by Governments of whichever colour, do we need to demonstrate that that would be not only a cost, but a long-term saving?

[Mr Stuart]

I will come on to funding and raising the status of early years. If the hon. Gentleman will allow me, I will come back to that, but he is right.

Nursery schools do a particularly good job of supporting children from poorer homes—that is worth saying. The Government’s educational reforms have two main aims: to raise standards for all and to close the gap in attainment. If we have things that do a peculiarly good job in looking after the interests of disadvantaged children, we should be extremely wary before risking, inadvertently or otherwise, their destruction.

Ofsted’s early-years report, published in March, stated that only just over a third of children from low-income backgrounds reach a good level of development in the early years. In some local areas, that figure is less than a fifth. Crucially, some types of provision, such as childminders, are considerably less likely to be good or outstanding in deprived areas. By contrast, Ofsted found that children from low-income families make the strongest progress when supported, as has been said, by highly qualified staff, in particular with graduate-level qualifications. Where are such staff most frequently found? In nursery schools.

To quote Ofsted’s report:

“Nursery schools have high levels of graduate level staff and perform as strongly in deprived areas as in more affluent ones.”

Of how many types of educational provision can we say that they perform as strongly in deprived areas as in more affluent ones? I cannot think of one, actually, but we have nursery schools managing to achieve that, to achieve what the previous Government and this Government want to do for social justice, delivered through education. I again make the case: let us ensure that we do not inadvertently lose them.

Despite that, the Government’s policy seems a little confused. The Education Committee expressed regret that the right hon. Member for South West Norfolk (Elizabeth Truss), the then Parliamentary Under-Secretary of State for Childcare and Education, now the Secretary of State for Environment, Food and Rural Affairs, showed little enthusiasm for maintained nurseries, many of which have closed over the past decade. Likewise, my Committee expressed concerns about how the Government’s ambition to create an integrated nought-to-18 teaching work force will be delivered successfully. It is important to focus on that, although it sounds like a soundbite. An integrated nought-to-18 teaching work force is the Government’s stated policy. The then Minister told us that she wanted

“to see a much greater consistency across the teaching workforce and much less of a silo between the early years and primary school”.

Who can say, in any party, that she was not right to do so?

With that in mind, Ministers have set out their plans to reduce the number of different early-years qualifications, to improve the quality of training and to raise the status and quality of the work force by replacing the current early-years professional status qualification with new grades of early-years teacher and early-years educator. Early-years teachers will be graduates and will need to meet the same entry requirements and pass the same skills tests as trainee school teachers. So far, so good: there is an inspiring vision of integrated nought-to-18 teaching work force, with an upgrading and re-engineering of the training, requirements and qualifications of those working in that sector. They will not, however, be accorded qualified teacher status in the same way as primary and secondary teachers. That is not to visit the obsession of the shadow Secretary of State for Education, the hon. Member for Stoke-on-Trent Central (Tristram Hunt), with the tiny number of people who are not qualified teachers, which seems to be a sideline in the overall education debate; it is to go to the heart of the status of those people in relation to those who work in primary schools.

My Committee concluded that the Government are right to want to increase the qualifications of the early-years work force. As Susan Gregory of Ofsted reminded us, the historic situation is that

“you need a higher qualification at entry level to work with animals than you do to work with young children.”

[Mr Stuart]

I agree with the hon. Lady that that is an anomaly in the Government’s vision for the future. There is an inconsistency. However, I would gently chide her by saying that the money has to be found from somewhere, because there are real cost implications. If we are going to will the ends, we have to will the means, and that will mean taking tough decisions—unless people think that there is an infinite money tree somewhere. We will have to take the existing budget and orient it more to the early years. It could be said that this Government have done that in a number of ways, from abolition of the education maintenance allowance—that act was enormously unpopular—at one end to the introduction of the offer for two-year-olds and its extension from 20% to 40% at the other.

The truth is that considerably more money is being spent on early-years provision, despite overall constraints on spending. I would imagine there will a combination of some re-engineering—a lot of which will be unpopular, as anyone we take the money away from will hate us for it—and potentially finding additional funds. However, given that this supposedly austere Government are still spending over £100 billion a year more than they have coming in, I am not clear that additional funding outside the budget could easily be found.

[Bill Esterson]

I probably did not make myself clear enough in my earlier intervention. The point I was driving at is how we make the case for using money further upstream. It is about the costs of social failure that are avoided by getting early-years provision right. Does the hon. Gentleman agree that if the case can be made for saving money later in life by getting early-years provision to the highest standard possible, that will deal with the point he is making?

[Mr Stuart]

Well, it will, but not for a Treasury Minister. As the hon. Gentleman will know, every Department comes along and says, “If only you gave me more money, you’d save so much later. No one would go to prison and you’d be saving money all round.” Understandably, the Treasury is a little sceptical. On that basis, we would for ever simply throw more money at the education system, because if we only provided the right start in life, we would have greater economic success and more highly skilled industries, and would live in nirvana.

The greatest thing I can say about the previous Government’s education policy is about how much they spent on education. The fruits are slow to emerge, but that is not to say that there are not benefits to be had if those resources are used well. Given the constraints we are under and the overspending by Government today, let alone five years ago, we are going to have to find the money for early-years provision from re-engineering our education budget. That could be said to be the more mature debate. It is always easy to say, “Oh no, we should just find the additional money.” The truth is that that will be very difficult.

On status, the Committee said in our report that the message that early-years teachers will not be equal to teachers in schools is “strong and unjust”. On pay, we said that it is not enough simply to set out a vision of equality with other teachers: if we accept the premise that the early years are a peculiarly critical time in a child’s development, Ministers need to set out—and this is the key point, whether it is done through finding more money or re-engineering the budget—

“a course of action…to a position where equal pay attracts equal quality”

of applicants. That is the key. We cannot have Government setting out an aim of an integrated work force, with that equality as a premise, and then failing to put in place any of the building blocks to take us there. At the moment, it seems to be all aspiration, with very little evidence of a closing of the gap. Even if it were to take 10 or 15 years, we would at least have a vision of how we were going to create a genuinely integrated work force, in which early-years teachers were given pay and status equal to that of teachers elsewhere in the education system.

At present, figures from the Pre-school Learning Alliance reveal that pre-school staff earn, on average, £17,000 a year, which is only around half as much as primary school staff, who earn an average of £33,000. The former Minister, my right hon. Friend the Member for South West Norfolk, confirmed that England has the biggest gap in salaries between those who work in nurseries and those who work in schools of any country in western Europe. As all members of the Select Committee here today, and others, know, the key issue in raising educational quality for anyone, at any time, is the quality of the teacher. That is what counts. If we pay people half the rate of what is paid to those working with children who are just a little bit older, is it any wonder that we struggle to bring in the innovators, pioneers and greatest communicators? We need to set out a plan—it would be good to hear the Opposition’s funded plan from their Front-Bench spokesperson—to bring about that outcome.

It can be no surprise that there is a continuing disparity of status between early-years and school-based teaching. The impact of that lower status is felt beyond the issue of attracting high-quality recruits into the nursery sector. Naomi Eisenstadt told us that the perceived low status of children’s centre staff can create a barrier to successful multi-agency working, adding that

“if you do not have status within the community and you ring the health agency, they are not going to ring you back.”

Delivering equal pay for early-years teachers would of course require the extra resources I have talked about.

--- Later in debate ---

[Mr Gyimah]

I suggest that the hon. Gentleman write to me, and I will then respond accordingly and get my officials to look into the matter.

I am conscious of the time, so I shall race quickly through my remaining points. Closures have been mentioned several times. The small number of closures that have happened are not necessarily a sign of a long-term trend or a decline in the number of maintained nursery schools. Some have merged or federated with neighbouring schools, so some of the reduction in the overall numbers from 468 10 years ago to 414 now is down to sensible restructuring based on assessment of local need. Despite that reduction, I can reassure all hon. Members that the number of pupils attending maintained nursery schools has increased over the same period, from 39,000 in 2004 to 40,000 in 2014. The hon. Member for North West Durham would describe that as static, but it is a modest increase, and it does not seem at all like a decline to me.

There is as much protection for maintained nursery schools as there is for any other school, if not more. Local authorities cannot close maintained nursery schools without following due process. In fact the current school organisation guidance, published in January 2014, states clearly that

“there is a presumption against the closure of nursery schools”.

That does not mean that a nursery school will never close. Indeed, it cannot be right to guarantee that maintained nursery schools will stay open at all costs, without ensuring that they provide sustainable, high-quality provision that meets the needs of local parents and children. Nevertheless, the case for closure should be strong. The guidance requires that

“any proposal to close should demonstrate that: plans to develop alternative provision clearly demonstrate that it will be at least as equal in terms of the quantity as the provision provided by the nursery school with no loss of expertise and specialism; and replacement provision is more accessible and more convenient for local parents”.

[Bill Esterson]

The Minister’s predecessor made it clear that her preferred route was for nurseries to open in schools, at the expense of stand-alone nursery schools in the maintained sector. Will the Minister clarify his position?

Infant Class Sizes

Bill Esterson Excerpts

Wednesday 3rd September 2014 Commons Chamber

[Nicky Morgan]

I will make some progress.

We had a long-term economic plan to get the economy back in shape. [Interruption.] The hon. Member for Stoke-on-Trent Central yawns, but if, after the note left by the former Chief Secretary to the Treasury saying that there was no money left, he does not think that getting our economy back on track was important, he has missed the entire point of this Parliament.

We wanted to invest an additional £7 billion to fund a further 500,000 school places by 2021, and we had a plan to help teachers and parents open an unprecedented number of new schools. More than 300 new free and technical schools have been opened across the country since this Government came to office, and a total of 400 new schools have been opened or approved that would simply not exist if the hon. Gentleman was standing at the Dispatch Box instead of me.

[Bill Esterson (Sefton Central) (Lab)]

May I tell the Secretary of State about a free school that has opened? The Hawthorne’s free school in Sefton, which was opened in an area that had surplus secondary places in 2011, has had a knock-on effect on two neighbouring secondary schools, which have seen their rolls decline, and is now less than half full. At the same time, primary schools across Sefton have had 500 more pupils in classes over 30 in size, which is an increase of 321%. How can that possibly be the best use of such money?

[Nicky Morgan]

Let me tell the hon. Gentleman that investment in Sefton has gone from £2.6 million to £3.6 million in the course of this Parliament. The fact is that seven out of 10 free schools have opened in areas of basic need. I wonder whether he has listened, because free schools are opened in response to parental demand. The parents and the local community wanted a free school to be opened.

--- Later in debate ---

[Nicky Morgan]

I thank my hon. Friend for his intervention and I know he is passionate about this issue. The fact of the matter is that by 2010, one in three primary school age children were leaving school unable to read and write properly. Anyone who is a parent, godparent or who has a relationship with young children and visits schools will know that if someone cannot read and write they cannot play a full part in modern Britain. It is deeply unfair on any education system to leave its children poorly educated.

Let me turn to class sizes as they are mentioned in the Order Paper today. The motion claims that

“the number of infants taught in classes of over 30 has risen by 200 per cent”,

but as we shall see, the shadow Secretary of State based his entire case on one snapshot of the school year, which he has used—whether knowingly or not—in an opportunistic way. I know hon. Members will find that hard to believe, but let me set the hon. Gentleman right. The truth is that despite everything we inherited, the proportion of infant pupils in classes of more than 30 has gone up by just three percentage points, while the number of pupils requiring a place has risen by 11%.

[Bill Esterson]

rose—

[Nicky Morgan]

I will make some progress. In fact, the proportion of primary school pupils in very large classes has fallen under this Government. How has that been possible? How have we managed to keep class sizes down despite the huge rise in the number of pupils requiring a place? It is because we have added almost 4,500 infant classes since 2010, which means that there are more infant classes today than at any time in the past decade. The motion notes that

“the Government relaxed the rules on infant class sizes”.

That is true. We have made it easier for parents with twins and multiple births, the children of members of our armed forces, and looked after children, to get a place in their chosen school.

--- Later in debate ---

[Nicky Morgan]

My hon. Friend hits the nail on the head.

Every time the shadow Secretary of State makes the claim, he ought to think about the impression he is creating on teachers and head teachers, who roll their eyes in frustration. Mr Andrew Smith, executive head of White Hall academy in Essex, says that his claims are not only wrong, but potentially damaging to his school, and he wants the record put straight. So let us put this to bed once and for all: the hon. Gentleman has misread the facts. There is absolutely no foundation to his claim, and it is nothing but scaremongering of the worst kind. He is not just wrong about children regularly being taught in classes of more than 70, but wrong about them being taught in classes of more than 60, 50 and 40, and it is doing him no favours with teachers and head teachers up and down the land. I give him the opportunity to withdraw his claim, strike it from the motion and commit to never using it again.

[Bill Esterson]

rose—

[Nicky Morgan]

Will the hon. Gentleman withdraw the claim on his hon. Friend’s behalf?

[Bill Esterson]

The Secretary of State talks about facts. Will she confirm the fact—stated in evidence to the Education Committee—that £400 million of basic need money has gone into the Government’s free school programme, and that that money, as I demonstrated earlier, has been spent in areas with surplus places, not areas of need?

[Nicky Morgan]

I will touch on that point in a moment, but I dispute that evidence. I note, however, that the hon. Gentleman did not dispute what I was saying about classes of 70 and more. It was just a snapshot. He thinks it perfectly acceptable to upset teachers like this. We can have a legitimate debate about school places, we can disagree about how we got into this situation and what we are doing to sort it out, but there is no place for scaremongering on such an emotive and important issue.

We have learned today that the shadow Secretary of State is opposed to free schools, although I am not sure because it is hard to keep up. It is Wednesday. It could be anti-free school day on the Opposition Front Bench, but he had better ensure that the 21 Labour MPs and his three shadow Cabinet colleagues who have publicly backed free schools in their constituencies get the memo.