Pat McFadden
MP for Wolverhampton South East · Labour · United Kingdom
“In his review Alan Milburn considered that issue and said that, “the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years.” As I said earlier, 400,000 more people are in work this year than last year, and the number of young people in employment is up since the election.”
“Since our last DWP questions, both Alan Milburn and the Pensions Commission have published their respective interim reports on young people and on the current state of saving for retirement. I look forward to receiving their final reports later in the year.”
“As Alan Milburn pointed out in his recent report, the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years. There are 400,000 more people in work than last year. The number of young people in employment is up by 74,000 since the election.”
“I thank the right hon. Gentleman and send him commiserations for whatever has left him reliant on his crutches today. I am happy to congratulate the businesses he mentioned in his constituency. He raises a serious point: it is important not only to come up with the right policy, but to make it simple for businesses to use.”
“My hon. Friend is right, and I thank Cardiff football club for being a partner. We are supporting nearly 1 million young people and creating up to half a million opportunities for jobs and training.”
“We are making strong progress on expanding youth hubs, with around 130 already in operation across Great Britain. In March, I announced the locations that we want to open in this year, and I have just announced a further 180 locations for the following two years.”
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“Those are shocking numbers, both financially and in the potential impact on police numbers. As I said, it is simply intolerable to expect the public to cope with the consequences if they unfold in that way. It is in those twin contexts—falling police numbers and rising violent crime, including a particular emergency relating to knife crime—that we must consider police resources. The origin of the changes to the pension scheme, which could affect these numbers further, are two changes in what is called the discount rate for calculating pension liabilities. The effect of the changes in the discount rate has been to increase the liabilities for employers—in other words, to increase their costs. My hon. Friend the Member for Harrow West (Gareth Thomas) just quoted the potential impact on London.”
“My hon. Friend has graphically set out the potential impact on a smaller police force such as Gwent. For my force in the west midlands, the commissioner and chief constable estimate that the extra costs from these pension changes could be around £22 million over the next two years. If these costs came from their budgets alone, the impact would be around 450 officers lost. That would be on top of the 2,000 that we have already lost. As I said to the Minister at the beginning of the debate, expecting the public to accept reductions of this magnitude in force levels after the cuts that have taken place over the past eight years would be intolerable.”
“The capital and budget reserves will be gone completely by the end of the next financial year, and on current plans, 70% of the total current reserves will be gone by 2020, so this money is already committed and not available to meet the pension costs. In a couple of years, all that will remain will be reserves for essentials such as civil unrest, terrorist attacks and the self-insurance of vehicles.”
“I want to deal with one more issue that often comes up in these debates: the issue of reserves. During last week’s urgent question, there were several references to these reserves, the implication being that there was a large unused pot of cash sitting there, ready-made to deal with such situations. My own force in the west midlands has publicly set out the position on reserves. It does have reserves, but they are there to deal with issues such as capital costs, the self-insurance of vehicles, protective equipment, major incidents and so on, and the West Midlands force is already committed to running down these reserves at around £20 million per year.”
“To add to the confusion, a written answer from the Chief Secretary to the Treasury on 9 November read: “Budget 2018 confirmed additional funding for expected costs in excess of the level envisaged at Budget 2016. Government will review police spending power and further options for reform at the provisional police funding settlement in December.” I hope the Minister can clear this up. Has the Budget set aside further funds for the police to cover these costs, so that the fears of chief constables about their impact need not come to pass, or as he has implied, is the matter undecided and to be settled in the CSR? It cannot be both: either it has been settled, or it has not. What is the correct understanding that the House should have of the financial position?”
“The picture is not really that clear though, because in response to an urgent question on Tuesday 6 November, the Minister for Policing did not say that the money would come from the reserve and go through Departments. In response to a question from me, he said that “it is my intention to work through the issue and come to the House in early December with a funding settlement that works.” —[ Official Report , 6 November 2018; Vol. 648, c. 1387.] He also said that the outcome of the question of where these extra costs would fall would be decided in the comprehensive spending review. These two statements appear to be in contradiction: either the Treasury will fund it, or the issue is not settled and will be settled, or not, in the CSR.”
“He said: “In 2018 the Government decided that it was necessary to reduce the scope discount rate still further but on that decision we decided that the Treasury would absorb the additional cost. We have added a sum to the reserve and Departments will be reimbursed for the additional costs of the 2018 scope change.” When asked if that would be for every year ongoing, the Treasury official accompanying the Chancellor at that evidence session said: “It is actually for every year”. On the face of it, that sounds as though the Government are ready to compensate Departments for the extra costs incurred. I hope the Minister will address this when he sums up, because if that is the case, it will be warmly welcomed by chief constables, the public and Members on both sides of the House.”
“It is not sustainable, which is why leading chief constables have said that forces are already stretched beyond sustainability. I turn now to how the changes might be paid for. The Budget allocated no extra money for local policing, but it did allocate extra funds for national counter-terrorism work, which I welcome. Of course, it is an essential part of protecting the public—we are all aware of the grave terrorist threat facing the country, so we all support extra funds for this essential counter-terrorism work—but it is not a substitute for the local neighbourhood policing that all our communities need on an all-year-round basis. In evidence to the Treasury Select Committee on Monday 5 November, shortly after the Budget, the Chancellor implied that the Treasury would meet the extra costs of the pension changes.”
“My hon. Friend has made an important point about reserves. One thing is clear in any budgeting exercise: the same money cannot be spent twice.”
“The pension changes that have been announced, should they all be loaded on to existing force budgets, will exacerbate the problems that we now face, and will make adequate levels of policing even harder to achieve. We cannot allow further cuts in police numbers to happen. The Minister and his Department must work with the Treasury to make sure that the changes are fully funded, so that the police can get on with the job we want them to do, which is protecting the public and ensuring that our constituents can live their lives and go about their business free from the fear of crime.”
“All the while, as funds from central Government funds are cut, the public are being asked to pay more and more for all this through rising precept levels. In other words, the public are paying more and getting less from their police service. That cannot be right, given that it is the Government’s duty to protect the public. It is bad for police morale, because the police want to do a good job, and it is not a good deal for the public. No wonder confidence in the police’s ability is being hit. I believe that we need a change of direction, a halt to the cuts in police numbers, and an acceptance that it is a right of citizenship, wherever people live, to be protected by an adequate level of policing. My contention throughout the debate has been that this is not just a matter of public protection, but a matter of equality as well.”
“It is exactly the same point. The Government cannot expect reserves which—as was pointed out by my hon. Friend the Member for Coventry South (Mr Cunningham)—are there to cover one-off costs, and which, in most cases, are already committed, to be used also to fund ongoing pension liabilities that will grow year on year. Policing faces a desperately difficult situation. Violent crime is rising, and a national crisis of knife crime is unfolding. That has to be a top priority for the Government. We have police forces saying that they cannot do what would have been routinely expected of them a few years ago, and we have some forces saying that they cannot respond in person to certain types of crime.”
“I will resist the temptation to go back over the crisis with the Minister. I thought he was doing all right until then. Instead, may I ask him to clarify a point? I read out statements made by the Chancellor to the Treasury Committee and a written answer from the Chief Secretary. I genuinely want us to leave the Chamber with the same understanding, so will the Minister confirm that no money has been set aside from the Government reserve for Departments and so on? This is an issue in which a cost has been identified, but, as yet, the question of how to pay for it remains unresolved. Will that be a correct understanding as we leave?”
“West Midlands police estimates that, if these changes go ahead in their current form, they will cost the force more than £22 million over the next two years, and the loss of hundreds of officers on top of the 2,000 who have already gone since 2010. The reserves that have been mentioned are already being used to fund current spending and will disappear by 2020. Does the Minister agree that it would be intolerable for the public to have to put up with the loss of hundreds more officers?”
“The country needs hope, but the tragedy of Brexit is that, having scapegoated Brussels, immigration and others, we are, in the act of leaving, making it much more difficult to give the country that hope and a plan for the whole country.”
“The greatest freedom people can have is to go about their daily business free from the fear of crime. In the west midlands, we have lost 2,000 officers. We have seen a 21% increase in violent crime, a 17% increase in crime involving offensive weapons and a 23% increase in sexual offences, and now we are faced, because of pension changes, with the prospect of losing another 450 police officers. This is an attack on people’s freedom, and it strikes the poorest in our society more than others. So the Budget does not present an end to austerity. There is a particularly absurd nature to the claim: it is being made as we are about to commit an act of enormous economic self-harm.”
“The Chancellor used an unexpected increase in tax revenues to fund the health service for the next few years—I welcome extra money for the health service, of course, although by historical standards the rate is unexceptional —but he did not end austerity in other services. Let us take schools, for example. In the first decade of this century, under a Labour Government, there was a 65% increase in funding per pupil. Since 2010, there has been a reduction of 8%. That is a difference between a Labour Government and a Tory Government. When the schools budget is cut, it is a cut in opportunity and in social mobility, there is a reduction in the potential of people to make the most of their talents and it reinforces inequality. The same is true of crime.”
“It is a pleasure to follow my parliamentary neighbour, the hon. Member for Walsall North (Eddie Hughes), though he will not be surprised to learn that I take a slightly different view of the Budget. The backdrop to the Budget was a singular political claim made a month ago at the Conservative party conference that austerity was over. Every Government is responsible for the consequences of its policies, but with that claim the Prime Minister and her Government took particular responsibility for every closed library, every universal credit rent arrears, every service denied to people. Let us look, then, at what the Budget really did.”
“The Minister has opened by saying that the Government support the EU’s international trade objectives. Is not the very purpose of leaving the EU to divorce ourselves from those international trade objectives?”
“May I ask the Minister to rewind 30 seconds? He said that the UK intended to replicate in any future FTAs the public service provisions that currently exist in European Union negotiated trade agreements. For my own benefit—I may have missed it—is this the first time that that has been said, or has it been said elsewhere by the Department for International Trade? If so, where?”
“Can the Prime Minister give the House an example of a greater voluntary surrender of sovereignty than the transition deal that she now proposes to extend?”
“Wolverhampton Homes, which runs council housing in Wolverhampton, reports that 67% of universal credit claimants are in rent arrears and that those rent arrears are going up by £60,000 a month. Will the Minister call a halt to the roll-out until the problems of debt, stress and, possibly, impending homelessness are addressed?”
“The issue over the Irish border is a direct result of the wilful dismissal of its importance before the referendum campaign and the wilful disregard of its importance by leading Brexit advocates since the referendum. They now advocate a Canada-style free trade agreement. Will the Prime Minister confirm that she rejects a Canada-style agreement as being completely unsuitable for the UK not only because of the huge economic damage it would do to industries dependent on multinational supply chains but because it would result in a hard border, which would break commitments that this country has made?”
“The Prime Minister has said that a Canada-style free trade agreement is nowhere near good enough for the United Kingdom. Does the Secretary of State agree?”
“Can I ask the Prime Minister what she and the Ministry of Justice can do in response to this report, to prevent something like this from happening again?”
“Q13. Yesterday, Her Majesty’s inspectorate of probation issued a devastating report on its findings relating to the murder two years ago of my constituent Lisa Skidmore. The report sets out catastrophic failures on the part of the probation service to act on warnings about the behaviour of her killer, Leroy Campbell—a lifelong violent sex offender—and concludes that Lisa’s murder was entirely preventable. Lisa Skidmore was a young woman with her whole life in front of her. Her family have been left completely heartbroken by her loss. She was let down in the most appalling way by a service that is there to monitor offenders and protect the public. In this case, it failed to do so, with the most devastating consequences.”
“The first duty of anyone occupying the Prime Minister’s office is to protect the public and to be clear-eyed about the threats that the country faces. I thank her for her statement today and echo the praise that she and other Members have given to the police and intelligence services for the tremendous work that has been done to enable her to come to the conclusions that she has shared with the House today. Given her responsibilities, may I ask her why she thinks that the Russian state authorised such a barbaric operation—this state-sanctioned attempted murder—on the streets of the UK?”
“When the Exiting the European Union Committee met Mr Barnier yesterday what we got was not a bit of questioning or pushback, but an emphatic and clear rejection of both the customs proposals and the idea of a common rulebook restricted to goods alone. They are the two central pillars of the Chequers plan, and the plan is in tatters without them, so what is plan B?”
“The Secretary of State said that the withdrawal agreement was 80% agreed, but he did not mention the biggest and toughest outstanding issue, which is that of the Northern Ireland border and customs arrangements. Will he tell us whether, in his discussions last week, Mr Barnier agreed to new clause 36 to the Taxation (Cross-border Trade) Bill, which was passed by this House last week and requires reciprocal differential collection of tariffs before the agreement can be put in place?”
“The White Paper says repeatedly that on services, which make up 80% of the UK economy, the Government’s proposals will mean less market access for UK businesses to European markets compared with at present. Have the Government made an assessment of the impact of this lower level of market access, either on the volume of trade or the impact on jobs?”
“It says that we should “stop people getting around the spending limits by coordinating several campaigns at the same time.” We have now established that spending limits were broken by the leave campaign precisely through separate legal entities following a common plan to get around the rules. Why is it that when such intent was reported four months before the referendum, it has taken two-and-a-half years to get to this conclusion? What does it say about the integrity of this result? Is it not ironic that the so-called people’s revolt against the elite was conspiring from the get-go to get around the rules with limitless money from goodness knows what source? Does the Minister not agree that this needs to be fully investigated to cleanse the cloud that has been cast over our democracy by these findings?”
“I reported the leave campaign’s intentions to both the Electoral Commission and the police two-and-a-half years ago, and four months before the referendum itself. In February 2016, the hon. Member for Wycombe (Mr Baker), who was then a leading figure in the leave campaign, wrote to colleagues saying: “It is open to the Vote Leave family to create separate legal entities, each of which could spend £700,000: Vote Leave will be able to spend as much money as is necessary to win the referendum.” The Electoral Commission’s rules are specifically designed to stop this kind of thing.”
“The post-war Labour Government played a pivotal role in the foundation of NATO because their Ministers understood the value and importance of collective security. As the Prime Minister said in her statement, article 5—its collective defence clause—has only ever been invoked once, in defence of the United States. Is she confident that the President of the United States is fully committed to article 5?”
“I have written to the Minister before about these questions. Carillion is a specific type of company. It was a private company, but it was engaged for much of its activity in the delivery of public services. Therefore, the responsibilities cross both the public and the private sectors. The National Audit Office report on this issue, published last month, says that the company, in its dying days, asked for a loan of £160 million from Government and a deferment in tax payments of £63 million. That is a difficult decision for Government. What do Ministers or officials do when a company comes and asks for such substantial funds? In those circumstances, Ministers and the government machine have to make an assessment between loaning that kind of money and letting the company go under.”
“I thank both the Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee for their joint report, which paints a very stark picture, describing a story of “recklessness, hubris and greed”. On the accounts of the company, it describes them as having “misrepresented the reality of the business.” The report sets out how the company collapsed, how the internal checks and balances failed and it makes damning indictments of the company’s leadership and the system of auditing, culminating in the recommendation that the whole audit system be referred to the Competition and Markets Authority. Others will focus on particular parts of this story, but the part on which I wish to focus is the role of Government and the decisions before Government when a company of this nature is in danger of collapse.”
“I shall endeavour to be brief, Madam Deputy Speaker, as many of the points about the collapse of Carillion have already been made by my hon. Friend the Member for Leeds West (Rachel Reeves) and the hon. Member for Harwich and North Essex (Sir Bernard Jenkin). Carillion’s headquarters was in Wolverhampton. Of its 18,000 or so UK employees, some 450 were employed in the headquarters, so the city that I represent has a particular interest in the story of the company’s collapse. Six months after the collapse, there are still major questions about corporate governance, audit, ongoing costs, and, perhaps most fundamentally, the policy implications raised by the collapse.”
“What does the Minister think are the lessons for Government decision making about: how procurement happens; whether a contract is to be tendered and how that tendering process is managed; and how they balance the risk of rescue and the cost to the taxpayer when a company engaged in the delivery of public services is in danger of collapse? Those are the fundamental public policy questions raised by this story.”
“It was a public policy decision to build a new hospital in Liverpool; it was a public policy decision to build a new hospital in Sandwell; and it was a public policy decision to build a new road in Aberdeen, so whoever is carrying out the project, the public policy responsibility, in the end, still lies with Government. Can the Minister confirm that at the moment of collapse, the Government thought that the cost might not be the £150 million that they set aside, but more than £300 million, as paragraph 13 of the National Audit Office summary suggests? This not just a story of corporate mismanagement; it raises major public policy questions.”
“There is the Midland Metropolitan Hospital, the Royal Liverpool University Hospital, which he raised earlier this week in Parliament, and the Aberdeen bypass. One question that I hope the Minister addresses is the one raised by my hon. Friend a moment ago. What will it cost to finish these projects and where will the money come from? The National Audit Office says that these projects face losses respectively of £91 million for the Aberdeen bypass, £83 million for the Royal Liverpool University Hospital, and £48 million for the Midland Metropolitan Hospital. In his winding up, will the Minister confirm how these projects will be finished and how they will be paid for?”
“That is a very good question and is exactly the kind of thing that Ministers had to look at when considering this request. In letting the company go under, the Cabinet Office realised that the taxpayer was still on the hook, because at the moment that it decided to say no to the company’s request for the loan, it gave the official receiver £150 million of taxpayers’ money to process the liquidation. Therefore, the taxpayer being on the hook does not stop when the decision is made to allow the company to go under. The taxpayer has been on the hook for the six months of this story, and it does not stop with the money for the official receiver. Public sector bodies are facing a 20% premium for some of the post-liquidation service delivery costs. As my hon. Friend just said, there are three major projects that lie unfinished.”
“On 18 December, the Prime Minister told the House: “We will be going in and negotiating for services and for goods.” —[ Official Report , 18 December 2017; Vol. 633, c. 761.] We trade at an annual surplus of £28 billion in services with the European Union. Why, other than for reasons of internal politics and ideology within the Conservative party, has she taken the profit-making trade aspect of the UK economy and thrown it under the Brexit bus?”
“The Home Secretary referred in his statement to the strong solidarity that Britain’s allies had shown to us in the wake of the Skripal incident a few months ago. Is he confident that we can maintain strong solidarity in the wake of this incident among liberal democracies, and does he agree that that is essential when the forces of nationalism are on the rise in a number of countries?”
“That should not be our role; we should be offering a chance, not a grievance. If we are serious about it, we should start in the early years.”
“It is good that we have a 30-hour offer for three and four-year-olds, but I would like to see a deeper and more universal early-years offer. The key point is that whatever the number of hours the Government offer, it is essential that the offer is funded properly in a way that recognises not just pupil numbers but the real-world costs of running a nursery school. In conclusion, the way in which we treat this policy area says much about our attitude to social mobility. If we get it right and give it the priority that it deserves, we can break through some of the barriers that hold people back. If we do something on this, we can offer a real answer to some of the grievance and disaffection that I spoke of. Plenty of politicians out there are content to pour petrol on anger.”
“There used to be a lump sum in the funding formula—on top of the hourly fee—that helped schools to plan in that way. That element has now gone, leaving staff living from year to year, if not month to month, without knowing what the future holds. Secondly, nursery schools need more certainty about the future of even the per-hour funding. At the moment, the impact of the new funding formula has been tempered by transitional relief, but as we have heard that is not guaranteed beyond 2019-20. What is going to happen after that? If the supplementary funding is not continued, it will be a disaster for these schools. One federation of two nursery schools in my constituency projects a loss in income of more than £100,000 per year per school, if there is no supplementary funding beyond 2019-20.”
“First, they say that the new funding formula, with its emphasis on per-pupil per-hour funding, does not reflect the reality of their costs. These are nursery schools with a fixed cost base. The emphasis on per-pupil per-hour funding, particularly in highly mobile areas where pupil rolls can go up and down, makes it almost impossible for them to plan for the future. They need to know whether they can employ a good headteacher. They need to know that they can invest in the development of staff. They need to know that they can continue to provide the essential help for special educational needs and for children with disabilities that they are so good at. They cannot do that adequately if they do not know what their budgets are going to be from year to year.”
“I regularly visit wonderful nursery schools in my constituency, including Windsor Nursery School, Bilston Nursery School, Phoenix Nursery School and Eastfield Nursery School. The staff in those nursery schools do a fantastic job. They are fuelled by a passion to give every child the best possible start in life, no matter what that child’s background is. No child is written off. The staff will accept second best for no one. They are conscious of the importance of their role and, rather than be daunted by it, they are inspired by it and are in turn inspiring to others through their efforts. When I visit these nursery schools, as committed and passionate as the staff are, they make two points to me, and I want the Minister to reflect on them.”
“When it comes to the cycle of disadvantage and lack of opportunity, inequality sets in early. We already know that when it comes to starting school there is a development gap, variously measured at 12 or 15 months, between children from the lowest-income backgrounds and those who are better off. If that development gap is not addressed early, it can affect people for the rest of their lives, holding them back from learning what they might have learned, cutting them off from opportunities and careers that they might have had, and reinforcing the inequality and lack of social mobility that is so prevalent in our country. If we are to address the cycle, we have to start in the early years, and our nursery schools are at the frontline of that effort.”
“We have to recognise that there are parts of the country where there is a deep political and economic disaffection: working-class areas where people feel, with some justification, that they do not get a fair share and that the best chances and the biggest rewards go to others and not to them. That is where education comes in. My constituency is at the wrong end of a lot of league tables. Our unemployment rate is around three times the national average; for those who are in work, their pay is around £100 a week less than the English average; we have something like three times the national average proportion of working-age people with no formal qualifications whatsoever; and we have a far lower percentage of people with higher educational qualifications than the national average.”
“It is pleasure to follow the hon. Member for Stoke-on-Trent South (Jack Brereton), whose constituency I suspect shares many problems with mine. We could range widely in this debate about education estimates, but I wish to focus on one particular area: the role of our nursery schools and their importance in opening up opportunity. I wish to begin by thanking the Chair of the Select Committee for pressing this debate. On this issue of nursery schools, I wish to thank my hon. Friends the Members for Batley and Spen (Tracy Brabin) and for Manchester Central (Lucy Powell), who, from the Front Bench and the all-party group on nursery schools, nursery and reception classes respectively, argue the case for these schools with skills and passion, week in, week out.”