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Category Archives: Equality

‘The market is failing – we need a new way forward’ my piece for the Evening Standard – 17 July 2014

 

Dear friends,

 

 

Earlier this week I became Chair of the APPG on Inclusive Growth at the group’s inaugural meeting.

 

 

To mark the occasion I have written a piece for the Evening Standard which was published this afternoon. See below.

 

 

All the best

 

 

Liam

 

 

 

 

Liam Byrne: The market is failing – we need a new way forward

 

A fresh consensus is emerging about how Britain must think long-term to remain globally competitive

 

 

The puppets are for the chop. Earlier this week, Wonga’s loveable grandparents flogging payday loans on children’s TV were dispatched in the UK by the firm’s new chairman. It comes at a time when shareholder activism is on the rise, with a number of eye-wateringly large pay deals for top executives shot down by shareholders. The conscience of corporate Britain is rumbling as unease with Britain’s malfunctioning marketplace deepens.

So it should. With this week’s good job news has come fresh evidence of the squeeze on pay packets. Inflation has jumped to a five-month high. Meanwhile, the Institute for Fiscal Studies reports that the under-30s lost 13 per cent of household income, from 2007 to 2013 — nearly twice the hit taken by the older generation.

 

It is becoming harder than ever to earn a decent living — and if we don’t fix this soon, we’ll face not just an economic problem but a profound moral challenge. Hard work is hard-wired into Britain’s psyche and our moral code. This was supposed to be the deal: hard work got you on in life. Yet Britain’s families are working harder and going backwards, £1,600 a year worse off now, on average, than in 2010.

 

It’s not just a question of fairness: it doesn’t make business sense either. As someone who established my own company, I know very well that virtues such as trust, integrity and stability drive consumer confidence. They are the keystone of capitalism.

 

We can’t go on like this. Nearly 30 years ago, Ronald Reagan spoke for a new generation of neo-liberals, declaring that “government is not the solution to our problems, government is the problem”. Today the market is the problem: together, business and policy-makers are going to have to fix it.

 

So this week a cross-party group of parliamentarians has come together to find answers to the challenge of how we fix our malfunctioning markets and reconnect hard work with getting on in life. Our goal is simple: to build a new consensus on how we can change the rules of the game.

 

Since the Second World War we’ve enjoyed two grand phases of consensus that connected business and government in pursuit of the common good. After the war, we called it “Butskellism”, a marriage of ideas epitomised by the calm moderation of the Tories’ Rab Butler and Labour’s Hugh Gaitskell. The second phase was the neo-liberal consensus, born in the storms of the late Seventies and now in its death throes.

 

It’s time for a new approach: a “third wave” of consensus to reset the rules. There’s already plenty on which we can agree.

 

First, business and politicians know money markets need to act for the long term rather than the short term. The disastrous behaviour of the interest-rate riggers and the high-frequency traders portrayed in Michael Lewis’s new book Flash Boys epitomises a fill-your-boots piracy that destroys a firm’s ability to think long term.

 

It’s not just capital markets that need reform — it’s labour markets too. Unless we boost skills, it’s hard to give workers a pay rise. I think there’s wide consensus about what needs to change.

 

Lord Baker’s work on university technical colleges exemplifies an ambition to build a high-quality vocational route to better skills. Ed Miliband, Tristram Hunt and I have put that at the core of a new offer for a vocational path to degree-level training for the “forgotten 50 per cent”, those who do not want to pursue the traditional academic route.

 

Third, we can agree that a bigger, better business-government partnership in science and technology is vital to winning the race to the top, boosting productivity and jobs in and around Tech City, the Crick Institute and the spin-outs around London’s universities. The foundations of this “supply side” boost were built by Peter Mandleson and Lord Sainsbury, and were respected by the Tories’ David Willetts, who left government this week.

 

Abroad, business and government should agree that “good growth” is easier if markets are bigger, which is why we should be at the heart of Europe. At home, there is broad agreement that a radical devolution of power is vital if big parts of Britain aren’t left to languish. “Inclusive growth” is not just about who prospers, it’s about where prospers — an idea championed by Lords Adonis and Heseltine in their plans to return power to our cities.

 

We cannot avoid some issues where consensus will be harder but where the status quo is not an option: making sure companies pay their taxes and don’t rig markets to short-change consumers and cheat their competition.

 

Indeed, hard-headed Tories such as Lord Heseltine and Richard Harrington, who have real experience of running large businesses, recognise that the market needs to work in a more sustainable way. It needs to respect its consumers and its employees, making a profit while not becoming immersed in a race to the bottom that, in the end, hurts most businesses as much as it hurts working families.

 

From boardrooms to Westminster, we need to crystallise this “new consensus”. For a decade and more, the price and prize of globalisation have not been fairly shared. Yet we risk a new era of inequality if we don’t get our act together. The new potential of trade and technology is accelerating the “second machine age”, where from driverless cars to automated checkouts, technology wipes out both blue and white-collar jobs, concentrating riches in the hands of a tiny global elite.

 

The founders of the greatest traditions in British capitalism — leaders such as George Cadbury, William Lever and John Spedan Lewis — knew that “enlightened self-interest” was always the best way to do business. If we want to build a great society in a global economy, reformers need to join together now: we’re running out of time.

 

Rt Hon Liam Byrne MP is chairman of the newly formed All Party Group on Inclusive Growth.

 

 

My speech to Parliamentary Links Day 2014 – Launching Labour’s Green Paper on Science – 24 June 2014

 

Dear friends,

 

It was an honour to launch Labour’s Science Green Paper, entitled: Agenda 2030: One Nation Labour’s Plan for Science and Innovation, this morning at the annual Parliamentary Links Day 2014.

 

You can read the paper here.

 

My speech is in full below:

 

————————————————————————————————————————–

 

Strengthen British Science and Strengthen Britain

Launch of Labour’s Green Paper, Agenda 2030: One Nation Labour’s Plan for Science and Innovation

Rt Hon Liam Byrne MP

Speech to [Parliamentary Links Day], House of Commons, London. Tuesday, 24th June 2014

Check against delivery

Chairman

It is a tremendous honour to help mark the greatest day of the year for science in parliament.

I want to pay an enormous tribute to Dr Stephen Benn and the Society of Biology for helping bring the day together.

I want to commend you all for the way so many people and so many organisations have come together from across the worlds of science and engineering to talk, debate, speculate and lobby and leave us here in parliament with fresh impressions, fresh analysis and fresh evidence of how important both science and engineering are to the future of our world.

I want to thank you above all for the inspiration of your example.

I count myself as very lucky to have known an extraordinary scientist from a very young age.

She was a biologist and a teacher and a head of science at comprehensive schools including my own.

She was someone who inspired in me a lifelong wonder for science, a curiosity, and an admiration.

Ruth Byrne was not only my teacher, she was my mother.

And when she died at the age of 52 from cancer of the pancreas, she left me not only with a sense of scientific possibility but a sense of how much work still lies ahead.

 

 

 

Science and Parliament

Your theme this year is about Parliamentary links to Science and Engineering. I want to offer you a view about how we cement science and engineering centre-stage in the run-up to the General Election. As we are in Parliament I thought it would be apposite to reflect on the way science and engineering, industry and politics come together today and the relationship that lies ahead.

Around 300 years ago, a very great writer left London on his travels around the country to write a book, which is today one of our finest records of Britain on the eve of the industrial Revolution.

Daniel Defoe’s ‘A plan of the English commerce, being a complete prospect of the trade of this nation’ paints a portrait of a country amidst tremendous change.

‘The most flourishing and opulent country in the world,’ he called it and the cause he said was clear; ‘Trade’ and its two daughters, ‘Manufacture and Navigation’

Defoe suspected that for all the advance he saw, something bigger was coming.

And he was right.

By the time ’A Plan’ was published in 1728, the Royal Society, founded in Gresham College, was 50 years old. Sir Isaac Newton, its great master, had died the year before and in Birmingham, one of founders of the industrial revolution, Matthew Boulton was born.

Over the next six decades, Boulton, together with his friends in the Lunar Society in a story wonderfully told by Jenny Uglow, took the traditions and methods of those great founders of the Royal Society and fused them to industrial method, helping trigger the industrial revolution.

A nation of explorers and traders quickly became a nation of inventors and industrialists. The worlds of science and industry were irrevocably connected.

Back in the early days of the Enlightenment, the French writer Diderot had observed that uniquely in Britain:

‘philosophers are honoured, respected; they rise to public offices, they are buried with kings’.

Well, it wasn’t long before we were putting great inventors and industrialists like James Watt alongside our philosophers and our kings.

But it was to take another century before science and industry were really fused with the dirty and difficult business of politics.

From the 1850s and 1890s, concern with the state of our science base, and the state of our schools gathered pace until under the burning pressure of world war one a real partnership came together;

-          The Department of Scientific and Industrial Research was founded in 1915.

-          Universities came to play a mission critical role in the work effort and crucially a new alliance between science, industry and government was hard-wired together.

And we’ve been trying to get the relationship right ever since.

Now that alliance has never been more important.

The scale of the problems, which I realise are merely solutions in disguise and which we are tackling today, are simply too big for one scientist, one university, one company, or one government to tackle alone.

The new partnerships that you see in such spectacular collaborations like the Gaia One Billion Star Surveyor, or the Hadron Collider are gigantic incarnations of the same ethos and approach that drove the Lunar Society, but they are global in scale.

These journeys of curiosity, exploring the endless frontier, are rightly your principal concern.

But there is a second reason the alliance is so vital.

Your country needs you.

Searching for some inspiring words for today’s speech, I stumbled across these in the House of Commons library last week;

‘the position of Great Britain as a leading industrial nation is being endangered by a failure to secure the fullest possible application of science to industry; and second that this failure is partly due to deficiencies in education’

Those were the words of Lord Percy, Rector of the Newcastle Division of Durham University, reporting to the government in 1944.

They could have been written last week.

Two years later, Lord Barlow agreed;

‘If we are to maintain our position in the world and restore and improve our standard of living’ he wrote ‘we have no alternative but to strive for that scientific achievement without which our trade will wither’.

What was true back in 1945 is true again today.

 

 

The Challenge Today

Our old enemy, ‘British disease’ is back with a vengeance.

That traditional crisis, of extremely low productivity while other nations streak ahead, now scars the recovery and haunts industry, making it even harder to escape today’s cost-of-living crisis.

Producing more with less, as every business owner knows, is the key to doing well and the fastest way to give your workers a pay rise.

But look at the figures today.

Since the last election, output for every hour worked has not gone up; it’s actually gone down. Equally, output per worker has not gone up. It’s gone down. We’re actually less productive than we were four years ago.

This appalling record is far worse than the last years of the 1970s, long deemed the moment when ‘British disease’ reached its peak but a period when output per worker, and output per hour worked actually rose by over 5%.

Worse, we’re now falling rapidly behind our competitors. The gap in productivity per hour between the UK economy and G7 average is now 21 per cent – the widest gap there has been since 1992.

This is absolutely fatal for any escape from the cost of living crisis. If companies can’t produce more then it’s not easy for firms to give their staff a pay rise.

As someone who started work behind a fry station in McDonalds, I know that any job is better than no job.

But I also know that a good job is better than a bad one and right now we’re simply not producing enough good jobs.

Today, the average full-time worker has to work an extra one hour and 52 minutes a week in 2013 to earn what they earned in real terms in 2010.

Look at our ‘knowledge economy’ and it becomes clear what is going wrong.

Economists and scientists now know[1] that science and research is the key to growing productivity.

As the breakthrough report from Research Councils UK put it;

‘The greatest long-term productivity advances come through breakthroughs in basic knowledge’.

In the US, the authors of the Gathering Storm remind us that 85% of growth in wealth per capita is driven by innovation[2].

The knowledge economy is the powerhouse of productivity growth, creating better jobs with better wages.

Yet, with the honourable exception of automotive and aerospace, which Labour did so much to save during the global crash, the story isn’t good.

Getting innovation policy right is not actually rocket science. It is about people, ideas and money. You need great people, great institutions and strategic investment.

Yet, look at what is happening in the UK.

In 2012, the last year data is available, UK investment in R&D by government and business together has fallen by nearly £1 billion – (£923M) – the largest annual fall since consistent records began in the mid-1980s.

Amongst advanced Western nations, Britain now ranks 23rd out of 33 in the league table of R&D spenders.

In our most important research industry – pharmaceuticals – which accounts for a quarter of all UK R&D spending, research budgets have fallen by a huge £467 million since 2010, that’s a 10% fall.

In telecoms, one of our other leading R&D sectors, budgets have fallen by 20% – that’s £240M.

 

Look at our great institutions.

In our universities, the great epicentres of science and knowledge, we have the world’s best thinkers.

But their labs and classrooms now rest on a mountain of debt. University borrowing will reach £7.3bn worth of debt by 2015, an increase of £1.8 billion from 2012. That’s £45.6 million for every university in the UK.

Vice-chancellors tell me that falling research budgets now mean that the brain drain has been gathering pace for at least the last 18 months.

And that’s nothing when we consider the black hole that’s been created in the finances of the Department for Business, Innovation and Skills by the Government’s unsustainable funding system.

The Public Accounts Committee now estimates that at current rates, students will be borrowing nearly £200 billion over the next twenty years to fund their studies and 45 per cent of this will be written off. It’s universities and our researchers of the future who will be paying the price.

And let’s not forget that other great institution that is important here.

The European Union.

European policy makers now understand that innovation is the only way out of austerity.

And the creation of the Horizon 2020 programme is proving crucial for the strength of British science, as UK universities, research centres and businesses can expect to receive £2bn in the first two years of the new funding round.

Leaving the EU, as some propose, would be absolutely catastrophic for science funding.

Third we must address human capital. The skills gap across the country grows worse. A fortnight ago, KPMG reported that skills shortages are bringing to a halt the plans of manufacturing firms to ‘re-shore’ work.

Since 2010, the number of people working in ‘Scientific research and development’ has fallen by over 12,000.

The Migration Advisory Committee has now added 117 high skilled roles to the shortage occupation list, which employers can fast track onto visas, because there are not enough skills in Britain.

The Royal Academy of Engineering estimates that we’re currently 36,000 short and at the rate we’re going there will still be big gaps to fill.

In our schools, Michael Gove’s disastrous School Direct scheme for teacher training has produced a huge shortage of physics teachers.

Half of state schools now send not one girl to do A Level physics.

Practical experiments have been taken out of the exam curriculum. The careers service has been destroyed. Apprenticeships for the under 24s are actually falling.

We cannot go on like this.

That’s why today I am pleased to be launching our green paper on science and innovation.

Our message is simple.

We need to strengthen British science – because British science will strengthen Britain.

We want to start a big debate on how business and government come together to grow the strength of science.

We want to work with the science and engineering community, in all parts of Britain to get the answers right.

We want to work across parties – because wherever we can maximise cross-party consensus we will.

We know that predictability and certainty are important; that they help make your work easier.

We want a new culture of science and evidence in public policy.

We want stronger universities with a bigger share of global science budgets and a bigger role in their regional economies.

And crucially we want to strengthen every rung on the ladder up into a science and engineering career for our young people.

 

Conclusion

As NESTA argued two weeks ago, the debate around science and engineering is seen by the public as vitally important.

In part, that’s because the public knows science, engineering and the business of innovation is key to the development of new cures for diseases, earlier diagnosis, greener, cheaper energy and crucially the jobs of the future.

The public knows that if we are not the pioneers then others will be.

If we don’t develop the jobs of the future, then others will.

And that will irreparably damage the opportunities of our children and our grand-children.

After all they are the very people for whom we want better chances than the chances that we enjoyed.

I think we know how futures are really built.

I think we learned that lesson a long time ago.

And now is not the time to ignore the lessons of history.

[2,245]



[1] http://www.rcuk.ac.uk/RCUK-prod/assets/documents/publications/researchforourfuture.pdf

[2] [2] http://www.nap.edu/openbook.php?record_id=11463&page=1. The 85% refers to the work of Robert Solow and Moses Abramovitz published in the middle 1950s demonstrated that as much as 85% of measured growth in US income per capita during the 1890-1950 period could not be explained by increases in the capital stock or other measurable inputs. The unexplained portion, referred to alternatively as the “residual” or “the measure of ignorance,” has been widely attributed to the effects of technological change

 

 

 

 

 

One Nation Labour’s Plan for Science – 24 June 2014

 

Dear friends,

 

This morning I will be sharing our Green Paper on Science entitled – ‘Agenda 2030: One Nation Labour’s Plan for Science.’

 

If we are to build an opportunity economy with high skilled jobs and the wages to go with them then science and innovation have to be central to our strategy. Britain needs a long-term vision for science and this paper intends to start a discussion about what that vision should look like.

 

Please do read the document here and share your views.

Science Green Paper front cover

With all best wishes

 

Liam

 

 

My letter to Michael Gove on Hodge Hill Schools – 9 June 2014

 

Dear friends,

 

My question to the Secretary of State in Birmingham was unfortunately cut short by the Speaker today. Here is the full text. I have written to the Secretary of State to put across my questions in full.

 

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Dear Michael

 

The Speaker cut me short today; unfortunate given the importance of the schools to my constituency. My questions to you were these.

 

First, parents would welcome an apology from you for the contempt in which they held by those who systematically leaked these reports to the media.

 

Second, four out of the six schools placed in special measures are academies. They report to you. One school detailed in the Ofsted report, was listed with by my count, some 15 breaches of funding agreement with you. Given these academies reported to you, I have to ask, how did you let this happen?

 

Third, I am assuming that given there are 234,000 Muslims in Birmingham and only one Muslim faith school (compared to 44 Church of England schools), that any change of governance will result in a consultation with parents on whether they wish to change Park View Trust to a faith school?

 

Fourth, I am afraid the way you have allowed this debate has divided people, when we should have been seeking to unite.

 

The Cabinet is clearly divided. You rejected the appeal of ten Birmingham MP’s calling for a single independent enquiry.

 

And today, Muslim parents in Birmingham feel they now have second class access to the freedom we all enjoy to bring up their children according to their faith. Do please let me know therefore, how you propose to put this debate on a more balanced foundation.

 

Yours ever

 

 

Liam Byrne MP

 

 

Letter to the Bishop of Birmingham from Shabana Mahmood MP & Liam Byrne MP

 

Dear friends,

This morning Shabana Mahmood and I have written to the Bishop of Birmingham on the subject of a inter-faith panel on education in Birmingham.
You can see the text of the letter below:

 

Your Grace

 

Inter-faith Panel on Education in Birmingham

 

Further to conversations on Friday with yourself and Mark Rogers, we write to ask whether the Birmingham Inter-faith panel might consider creating a special task-group to advise the city’s education leaders, at all levels, on how excellence in standards and strength of faith can be coupled better in our state schools.

 

We believe that faith can play a crucial role in educating the children in our city for whom faith is an essential element of their lives. The divisive nature of the debate around the so-called Trojan Horse allegations risks damage to this view, damage which must not be allowed to go un-checked.

 

In particular, thousands of Muslim parents feel under seige. Values and practices associated with their faith are being incorrectly defined, in our view, as extremist.

 

This cannot be right.

 

The Birmingham Inter-faith panel is a unique group with a unique capability to offer advice and crucially set about the task with a spirit of unity that is desperately needed.

 

We stand ready to offer whatever support we can to such crucial work.

 

Yours, in hope and solidarity.

 

Liam Byrne MP
Shabana Mahmood MP

 

 

Don’t Lose Faith – a message from Liam Byrne MP and Shabana Mahmood MP

 

Dear friends,

 

See below for a message from myself and Shabana Mahmood MP:

 

Don’t Lose Faith

Liam Byrne MP and Shabana Mahmood MP

 

The allegations made about some Birmingham schools are incredibly serious. From the word ‘go’, we demanded that nothing be swept under the carpet, that parents have the facts – and fast.

 

We want specifics; has gender segregation taken place in mixed schools, yes or no? Have extremist preachers been invited to give assemblies, yes or no?

 

Why is this necessary? Because Michael Gove’s education policy has left our city with a fragmented school system over which no one has control. Michael Gove and the DfE are theoretically responsible for the numerous academies in our city but how on earth can they do that from Whitehall?

 

The fact is they can’t and everyone knows it. This has allowed claim and counter claim to flourish – in this context the truth is hard to find.

 

As the net has widened, these investigations have left local parents with an anger-making sense that schools have come under suspicion merely because they serve a population that is predominantly Muslim; that state schools which make reasonable accommodations for local needs – like allowing a day off to celebrate a religious festival, or allowing pupils to use a school room to pray during the lunch break – might be fine for some – but not for Muslims.

 

Schools take these steps because they respect students with strong religious convictions and recognise that faith plays an important role for those students in driving their aspiration and every child we inspire helps make our city a richer and better place.

 

Yet now thousands of Muslim parents feel that they and their children are automatically under suspicion, and that the education they receive will be viewed through the prism of counter-terrorism.

 

We simply do not accept this.

 

For many people faith is an integral part of their daily lives. It is a strength to be harnessed which is why today we call on the city’s faith leaders to come together to show the city just how excellence in standards and strength of faith can be coupled better in our state schools.

 

At the same time we hope that the lessons will be learnt. Ofsted must ask some searching questions about how it so misjudged standards in the past. Michael Gove has to tell us how he let things get out of hand. Of the five schools allegedly bound for special measures, four are academies for which he and no-one else is accountable.

 

Faith has inspired greatness in our country – and has done for centuries. Let’s build an education system in which it can flourish.

 

Not just for some.  But for all.

 

 

Families, carers and people with disabilities are making clear that the Government needs to change course fast

Liam Byrne MP, Labour’s Shadow Work and Pensions Secretary, speaking as people gathered across the country for events organised by the Hardest Hit campaign, said:

“Families, carers and people with disabilities are making clear that the Government needs to change course fast. This Tory-led Government is breaking its national duty to care for those who need help. Reform to disability benefits needs to be done carefully and should be designed to help people live a full life. Instead, we’ve seen top down changes that are just unfair, like cutting mobility allowance for those who live in residential care. Today, the Government should tell us loud and clear that they’ve heard what campaigners gathering up and down the country have said – and that they will act.”

Hardest Hit report is fresh evidence that Labour is right to call for fast and fundamental reform of the Work Capability Assessment

On the recently published Hardest Hit report, “The Tipping Point”, Labour’s Liam Byrne said:

“This report lays bare the divided nation that David Cameron  is creating. The government is creating a climate of pure fear amongst disabled people who are now set to lose more than David Cameron is taking off the banks. Today’s research is fresh evidence that Labour’s call for fast and fundamental reform of the Work Capability Assessment is right. What disabled people need is a team behind them not a bureaucracy against them.”

The Hardest Hit Report, “The Tipping Point: the human and economic costs of cutting disabled people’s support”, can be found here.

Labour Challenges Tories on Childcare

Liam Byrne today warned Iain Duncan Smith that childcare will be Labour’s key battleground for the Welfare Reform Bill as debate begins in the House of Lords. Byrne has challenged the Tories to accept a slew of amendments Labour will be tabling, which are designed to ensure that parents don’t lose out on childcare entitlements when Universal Credit is introduced.

Highlighting new figures from the House of Commons library, Byrne will point to lost tax of £47 million from 32,000 parents – mainly women – who have given up work in the last year mainly because they can no longer afford childcare.

The Government has over the last year slashed family’s entitlements from 80pc to 70pc of costs. But Universal Credit is set to make the problem worse as eligibility for childcare is widened with no top up funding to plug the gap. Parents’ maximum entitlements could therefore fall, locking second earners and single parents into part time work.

Byrne also pointed to recent research from the Resolution Foundation and Gingerbread which shows that at the moment parents could face effective tax rates of 94% on every additional pound they earn due to the lack of affordable childcare.

Labour’s amendments first tabled by Stephen Timms in the Commons establish a principle that families working more than 16 a week should not lose out. Chris Grayling however, brushed the concerns aside saying “…we do not intend to make any further changes to the amount of money available for child care”.

The battle comes as polling from Lord Ashcroft shows support for the Conservatives amongst women on middle-to-low incomes melting away in marginal seats.

Liam Byrne said:

“The government has got to call off its attack on Britain’s childcare. With parents struggling to make ends meet, it beggars belief that the Tories are stopping parents working the hours and shifts they need by taking away their childcare. Quite simply they are planning to lock parents into poverty.

“We need a new bargain that rewards people doing the right thing rather than penalises hard-working families.

“The Tories are out of touch with most people’s lives and unable to address the big challenges facing Britain in the future.”

ENDS

Notes

1.      32,000 more women choose to look after their family and home rather than seek employment

“With average monthly costs associated with working (£120), childcare (£288) and schooling (£147) mounting up, some people (usually women) find that it is simply uneconomical to work and we have seen 32,000 more women choose to look after their family and home rather than seek employment since Q3, 2010.”

Aviva Family Finances report, page 15

http://www.aviva.com/data/media-uploads/news/File/pdf/2011/family_finances_report_3_aug2011.pdf

2.      House of Commons Library research commissioned by the office of Liam Byrne MP on cost to Exchequer of 32 000 not working due mainly to childcare costs

“A full time employee on £17513 pays around £3240 a year in income tax and NI.  If 40% of the 32,000 are full time this gives 12,800 full time employees leaving work.  At £3240 each, this gives a loss of around £40 million.

Adding the full time and part time figures gives £47 million for income tax and national insurance lost.” 

3.      Daycare Trust concerns on childcare cuts

“Parents in the UK contribute more towards childcare costs than any other country in Europe, and costs have risen every year for the last ten years.

 

“At Daycare Trust we are particularly concerned about the recent cuts to the childcare element of working tax credits. Too many parents are already making the tough decision to give up their jobs because the extortionate costs of childcare do not make it worth their while. We fear that these tax credits cuts will mean that many more parents could also be priced out of the job market.”

 

Anand Shukla, Chief Executive, Daycare Trust, Aviva Family Finances report, page 14

http://www.aviva.com/data/media-uploads/news/File/pdf/2011/family_finances_report_3_aug2011.pdf

4.      Parents face losing over 94p in the pound as they increase their working hours beyond 24 hours a week

The Resolution Foundation and Gingerbread say in a joint report that the government’s funding of childcare under universal credit “could shatter its commitment to make work pay”. They say parents face losing over 94p in the pound as they increase their working hours beyond 24 hours a week. If you are on the minimum wage, 24 hours a week earns you under £7,000 a year.

http://www.resolutionfoundation.org/media/media/downloads/Childcare_support__the_hours_trap.pdf

5.      Labour’s amendments in the Commons, which will be closely mirrored in the House of Lords:

Welfare Reform Bill 2011 – Childcare Amendments tabled in the Commons

Debated on the 5th April 2011, committee stage:

In Clause  12,  page  5,  line  32,  leave out ‘such’ and  insert ‘childcare costs in prescribed circumstances (up to a maximum of not less than 80 per cent. of the prescribed allowable amount) and such other.’

This amendment would restore the level of childcare support to 80% of total costs, as it currently is under Tax Credits.

Debated on the 13th June 2011, report stage:

 

(1) The amount in respect of other particular needs or circumstance, under section 12, shall include a childcare element for claimants who are in work, except in prescribed circumstances.

 

(2)The maximum award of the childcare element shall be a prescribed proportion of childcare costs (not less than 80%, or 90% where the element contributes to care for a disabled child), up to a prescribed maximum value (not less than £175 per week for one child and £300 for two or more children).

 

(3)    “Childcare charges” are charges of a prescribed description incurred in respect of childcare by the claimant or claimants by whom a universal credit claim is made.

 

(4) “Childcare”, in relation to a person or persons, means care provided for any child up to the last day in the week in which 1 September falls following the child’s 15th birthday or their 16th birthday if they are disabled, for whom the person is responsible, or for whom either or both of the persons is or are responsible; and by a person of a prescribed description.

 

(5) Except in prescribed circumstances, the childcare element shall not be paid where a claimant is in work for fewer than a prescribed number of hours a week or, in the case of a couple, where one or both of the claimants are in work for fewer than a prescribed number of hours a week.

 

(6) For the purposes of this section, regulations are to provide for a definition of “work.”’.

 

This new clause would have retained the current upper limits on the amount any household can receive in childcare payments. It would increase the percentage paid from 70% to 80%. It requires there to be a definition of ‘in work’ so that only people working a minimum number of hours would be eligible, in order to make the proposal more affordable and to support working families.

6.      The Government was all over the place during the Commons Committee Stage of the Welfare Reform Bill, they failed to give the information promised.

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Mr Duncan Smith: Those are one and the same question, so if I deal with them within child care, I can deal with it more generally as well. It is my intention, as far as is humanly possible, to make sure that when you reach that stage of the Bill, I can give you all this information….I hope to be able to come forward to the Committee with those sets of options so that there can be some greater decisions made in time for that part of the Bill. I promise to try to do that but if I do not, it will certainly be done within the Committee stage.

http://www.publications.parliament.uk/pa/cm201011/cmpublic/welfare/110324/pm/110324s01.htm

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Mr Chris Grayling: “…we do not intend to make any further changes to the amount of money available for child care”

http://www.publications.parliament.uk/pa/cm201011/cmpublic/welfare/110405/am/110405s01.pdf

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