§ Mr. Matthew Taylor (Truro and St. Austell)
I start by saying that I have a bad cough. If I descend into a coughing fit, I hope that the Minister will intervene briefly to help me out.
I want to raise a serious issue that I have discussed with Ministers over the past few months, which is badly affecting a group of people whom I would have thought the Government would most want to help.
The educational maintenance allowance scheme is currently being piloted, and Cornwall has been a pilot area from the beginning—rightly, because it is an area of very low incomes and high need. Liberal Democrats strongly support the process of giving assistance to 16 to 19-year-olds to enable them to go to college and continue their education in the county in which their parents are on low incomes and find it difficult to support them. That is in line with proposals that we made, and I was delighted to see the scheme piloted in Cornwall.
The scheme is targeted at people from low-income families to encourage them to stay on full-time at school or college and to attend regularly. The Department has described it as a genuine experiment to test whether paying a weekly allowance increases post-16 participation, retention and achievement. According to Cornwall local education authority, it has been extremely successful. The authority told me:The EMA Scheme is of great benefit to Cornish students and their families who are receiving financial support at a level which enables them to access further education and which could not have been provided from the Authority's diminishing discretionary awards budget.A substantial number of students in the county are receiving such support; nationally, some 14,000 young people are benefiting.
It should be clear from what I have said that I have no disagreement with the principle of the scheme; I welcome it and believe in its importance. I requested the debate because a specific problem has hit some of the county's neediest families this year. Initially, I assumed it to be a result of a direct change in the rules. More accurately, however, it stems from the fact that, last year, Cornwall local education authority decided to interpret the rules in a certain way—legitimate and right in the context of the needs and circumstances of single-parent families—and the Department's officials told it that it could not continue to do so this year.
Last year, in the first year of the scheme, the LEA took the absent parent's income into account if the income was known and declared in accordance with the regulations. If the absent parent was paying maintenance—for example, through the Child Support Agency—the eligibility of the student for support was assessed taking into account the amounts that were paid and not the income of the absent parent, which might bear no relation to the amounts paid. In cases where income was not known but maintenance was being paid, evidence of the maintenance was taken into account.
When a family has broken up and one parent is absent, perhaps never having been part of the family unit, the absent parent—often a man, but not always—is frequently on a much higher income than the parent 26WH who is caring for the young person. Taking the absent parent's income into account can lead either to a substantial drop in the allowance payable or—if it takes the joint income to over £30,000 a year—nothing being paid at all.
At the beginning of this academic year, the Department told the county that it was unlawful to take maintenance payments into consideration and that the absent parent's income had to be included in the calculation where it was known. In 1999-2000, some 3,500 students in Cornwall received EMA, 75 per cent. of whom receiving the full amount. However, some 123 current cases have been refused because both parental incomes were taken into account and the £30,000 threshold was thereby crossed. Of those 123 cases, 55 received EMA last year, so in terms of payments made, new and existing students have been affected.
Cornwall education department confirmed what parents have been saying. It stated that the provisionhas caused financial hardship to this group of students whose single earning parent may be on the lowest of incomes.I want to make clear to the Minister what is happening. This is an example of Government thinking that is in no way joined up. In many cases, the CSA is already assessing the absent parent for a contribution. All Members, including the Minister, will be aware of the controversy surrounding CSA assessments. The EMA system assumes that the absent parent will, in some cases, pay substantially more than any CSA assessment. However, the parent with care and the student have no means of requiring that payment, so there is no way to obtain the money if the absent parent refuses to pay. If the Minister's work load of CSA cases is anything like mine, he will know that many such people refuse to pay. Either they are not co-operating with their former partner and family, or they claim that they cannot afford the payments. Moreover, there is no other system for accessing such money.
The CSA system specifies a particular amount—which was established by the Government—that the absent parent should contribute, but the EMA system specifies a different amount. Why do those amounts differ, and how will the absent parent be forced to pay? To put it simply, they cannot be forced, and some of the most needy people are being left without support.
I want to discuss some of the people who have written to me on this issue. I shall not mention their names, although I have given details on a substantial number of these cases to the Minister. In the first case, the parent with care said:My own situation is this. I am divorced with three dependent children who all have the same father. I work part-time as a nurse and receive the maximum amount of working families tax credit to bring my salary up to a living wage.My ex-husband earns a great deal more than I do and, under the terms of my divorce settlement pays the mortgage on the property in which I and the children live. I get no other financial help from him or anyone. As you may imagine, money is extremely tight and it is a struggle to get by each month. When my eldest son was considering his options post-GCSE, I was told of the EMA scheme and that, due to my financial circumstances, he would almost certainly be eligible for this. It has come as a bitter blow to learn that he will not be able to get this help. It has left me wondering if I will be able to let him continue his A-level studies due to the expense involved.I do understand the basic principle under which the EMA operates—that of parental responsibility—and that is all well and good if both parents accept that responsibility. In my own 27WH situation it is of no help at all. I understood that one of the purposes of the EMA scheme was to encourage young people to stay on in further education and realise their potential. My son achieved 10 GCSEs—seven of them at grade A—and now there is the very real possibility that I will have to withdraw him from college study.In the second case, the parent with care—who earns just £106 a week—said:I have recently been informed that my son won't be in receipt of this allowance because his father earns too much. My son lives with me and his father is absent, I am unable to work because I am disabled and so I am in receipt of income support and disability living allowance. We live on the bread-line, scraping by each week.My son's father pays Child support each week that is paid to the Child Support Agency—I do not receive this money in addition to my income support…From the income we have I am already paying £75 per term for his bus fares to and from college and also money for courses he needs to do which adds up to about £5 a week, then there is money for his lunch each day…£10 per week…My son was going to pay these from his allowance every week.If this allowance was meant as an incentive to keep young adults in further education it won't work. My son will now be feeling the need to not be a burden on our already stretched budget. What am I supposed to tell him?In the third case, the parent with care said:I am a single parent working part-time and claiming working families tax credit and also Housing Benefit. I also receive maintenance for my daughter from her father via the CSA.On my total income, Karen should have been entitled to the full amount of EMA which is £30 a week, but because of the unfair way in which it is calculated, Karen will only be receiving £18.15 a week, a drop of almost 45 per cent. The rule that governs this drop is because her father's income has to be taken into account, regardless of whether the father is still at home or divorced or separated. It makes no difference to them, which is totally ridiculous…I have spoken with the CSA—as, incidentally, have many of these people, who thought that, if the EMA system assumes that the father should pay more, they can get the extra money from the CSA—and according to their rules he is already contributing the maximum that the law allows, so how can the EMA expect him to pay another £12 a week and not even make it compulsory.I feel the system is totally unjust…There isn't even an appeal system in place. The only thing I was told I could do was to write and complain and maybe things will change next year—but what use will that be to us?I have encouraged Karen to stay on in further education (as I believe the Government has also encouraged) but with the mounting cost of books etc. required for the course I am uncertain whether I will be able to afford for her to complete the course.In the final case, the parent with care said:I understand from the young lady on the telephone that the Government has now decided that my ex-husband's income must now be taken into account when calculating my daughter's EMA, despite the fact that I have sent you a Court Order as proof that all we receive frm my ex-husband is £15 per week maintenance…It is incredulous that an income which I do not receive can be used in any calculation to assess my income and used as a basis for calculating my daughter's EMA. I see that for my daughter to receive the amount of £17.59 my income has been assessed as between £20,000-£22,000 and, as you can see from my application form, my income does not even reach the minimum, so surely it is grossly unfair to penalise my daughter for her father's income which we do not benefit from. He has a new family now and they benefit from his income, not us.28WH Those cases illustrate several key points. First, it has been suggested that the EMA is up for review, and although it will not be changed this year, it might be changed next year. However, the problem is that the EMA is currently affecting people at college who have to decide whether they can afford to stay on. In one case that I have taken up, a child had to withdraw from college as result of that inaction. Incidentally, they withdrew not because the parent wanted them to, but because the child felt unable to continue to ask for support from a parent who was on benefits and unable to support them adequately.
Secondly, the cases that we are discussing concern single parents on low incomes. They are not on sizeable incomes, and cannot afford to make a contribution. Obviously, the people that I have discussed are extremely needy—indeed, they are the very people that the scheme is aimed at—which is why the Liberal Democrat party welcomed the scheme in the first place. Presumably, if the Government thought that the payments were unnecessary, they would not have introduced the scheme.
Thirdly, we are not talking about attempts by parents with care to protect absent parents from making payments. If they could get the money from absent parents, they would. In many of these cases, the family circumstances are such that the parents are not on speaking terms, and where they are speaking the terms are not polite. As a result, the parent with care cannot extract money from their former partner. Several of my constituents have approached the CSA in an attempt to force absent parents to make up the difference. The CSA said that absent parents should make up the difference, but that it had already assessed them at the maximum amount. As I suggested to the Minister, that begs the question why the Department for Education and Employment says that absent parents should pay more than the Child Support Agency requires them to pay. If the CSA believed that they could pay more and that it was right to do so, it would ask for more. One Department is saying that absent parents are paying as much as is reasonable and another is saying that they should pay more towards maintenance.
The Government's policies are contradictory, but it is worse than that. When absent parents have been assessed by the Child Support Agency, they will say volubly that they have been assessed and are paying as much as they should. If the parents with care then say that the Government require another £15 to be paid, the parents without care will refer back to the CSA assessment. Without a CSA assessment, it might be possible to persuade absent parents to pay, but with a CSA assessment, it is almost guaranteed to be impossible because, not unnaturally, parents without care will say that they are already doing all that is required.
§ Ms Candy Atherton (Falmouth and Camborne)
I have a great deal of sympathy with the hon. Gentleman's arguments, but does he agree that there are other issues? For example, a student who does not attend for a full week does not receive a full week's payment. There is also the issue of non-sickness-related absence. A web site winner in my constituency could not 29WH come to Westminster for a day last week because his EMA would have been stopped. I hope that my hon. Friend the Minister will examine that.
§ Mr. Taylor
There are several issues but, to be fair, it is a pilot scheme and I am sure that all hon. Members in Cornwall have received similar comments from their constituents.
I sought a meeting with the Minister's Department but, unfortunately, my request was declined. I am pressing the matter because the Government's policy seems to contradict their policy in other Departments. Losing money for a week or two because of sickness may be annoying, and the policy hits some of the neediest parents and students from difficult backgrounds for whom the educational opportunities for 16 to 19-yearolds are the gateway to breaking away from those difficulties in their families. I hope that the Minister will consider whether something can be done about this genuine issue this year.
I first raised the matter at the start of term. We are now well into the term, but some people are hanging on in the hope that there will be a satisfactory resolution of the problem. The Government have accepted the case when CSA payments are not being made and I hope that, having made one change, they can make a slightly more substantial change. The problem affects around 123 students; that is not a vast number, but it is important for them.
§ Mr. Andrew George (St. Ives)
Although there are only a few such cases, does my hon. Friend agree that it would be helpful if the Minister could engage local Members of Parliament in the review because they have a lot of casework that could help in completing that review?
§ Mr. Taylor
That is why I proposed a meeting, but I hope that this debate will have the same effect.
§ The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks)
I am grateful to the hon. Member for Truro and St. Austell (Mr. Taylor) for raising this important matter. We are actively involved with it, not least because it is a pilot scheme, and I am happy to meet the hon. Gentleman and his hon. Friends at any time to discuss it. We need to balance the strategy and principle with the casework that we all receive.
I shall start by commenting generally on educational maintenance allowances, not least in Cornwall, and then turn to the complex issues of equity. EMAs have the potential to make a real difference to the life chances of many thousands of young people. The hon. Gentleman acknowledged that we are only discussing the matter and the inevitable complexities of any means-tested scheme because there is a scheme in place. A year or two ago there was no scheme to discuss, so we are making progress. We are at an early stage. I know that there is more to be done, but we are encouraged by what we have seen so far.
I shall start with a reminder of why we introduced EMAs and the pilot scheme. It was simply because too many young people from certain socio-economic 30WH backgrounds left education at 16. More than 90 per cent. of young people from professional and managerial families stay in education or training after they are 16, compared with only 60 per cent. of those from unskilled and semi-skilled families. Many of those who leave school at that stage do so for financial reasons, as the hon. Member for Truro and St. Austell acknowledged. They feel that they cannot afford to stay on. Often there is family or peer pressure to get a job, sometimes any job. However, many of those young people end up doing nothing, or at best enter low-skilled work with little or no training and no real prospects. They do not have the opportunity to reach their potential. Many end up with severe long-term social and economic problems, and most never return to learning.
Of those who stay at school or college, too many drop out before the end of their courses and so do not achieve the qualifications for which they set out. Recent research showed that more than one third of college students considered dropping out of their courses for financial reasons. A similar proportion felt that they worked too hard in part-time jobs while they studied, and that that had adversely affected their studies. As a nation, we cannot afford to waste such talent.
Before we introduced EMAs, the system of financial support for young people was not good enough. It was inconsistent, unresponsive and mainly discretionary. Most young people received little or nothing. That was the background to our decision to pilot EMAs in 15 areas, including Cornwall, in September 1999.
Some 70,000 young people now benefit from EMAs. The first-year findings have been encouraging. Post-16 participation in EMA pilot areas went up by more than five percentage points, compared with two percentage points nationally. That was all the more impressive given that many year-11 students had already made up their minds what to do before they knew about the allowance. In Cornwall, more than 400 extra young people stayed on at school or college in 1999-2000 than in the previous year. I want to give the full information, so I should say that the extra take-up was rather less than in the country as a whole.
According to the 1999 careers service activity survey for post-16 participation in Cornwall, participation went up from 75.2 per cent. to 77.7 per cent., which is an increase of 2.5 per cent. When the hon. Gentleman and his colleagues come to see me, it might be interesting to discuss the situation in Cornwall.
§ Mr. Taylor
For the record, I should say that I spoke to the county council about participation, so I am aware of the facts. Participation levels were already quite high in Cornwall because of high unemployment. Some of those young people do not have the same opportunities to find jobs as young people in other parts of the country.
§ Mr. Wicks
That is an important factor. There might be an issue in Cornwall and other similar areas about retention, perhaps due to holiday jobs. Again, it would be useful to have such information. The schemes are pilots and we genuinely want to learn from them.
We have been even more encouraged by the fact that the allowance seems to be having such a major impact on students' attendance and effort. That is because it is 31WH a something for something measure, under which no money is paid for any week in which the student does not stick to the commitments in his learning agreement. The decision that my hon. Friend the Member for Falmouth and Camborne (Ms Atherton) mentioned seemed harsh, having an adverse effect on a young person who wanted to come to Westminster but I am afraid that the matter is for local discretion.
If the allowance is to be a success, we cannot be satisfied solely with increases in participation: they must be accompanied by improvements in retention and achievement. Many young people who qualify for the allowance may have stayed in education anyway, and we want to be sure that the allowance makes a positive difference to them. Early evidence suggests that it does, because they are attending more frequently and working harder.
I shall set out some more facts about the impact of the education maintenance allowance in Cornwall. More than 3,000 students in the county received the allowance during 1999-2000, and we expect that figure to double this year. More than two thirds received the maximum £30 a week. In 1999-2000, an extra £3 million went into the Cornish economy, and we estimate that it will be nearer £6 million this year.
I realise that the hon. Gentleman is particularly concerned about the question of natural parents, and I want to deal with that point. However, I do not pretend that we are at the end of the story; we are still listening and learning. For me, however, as an American baseball coach once said, it is déjá vu all over again. For 10 years, when I was directing the Family Policy Studies Centre, it was grappling with the complexity of a change in family structure and its implications for public policy. The general conclusion was that it is not easy to ensure equity. In an earlier era, I was a shadow Social Security Minister with some responsibility for child support and I recall that then, too, I had to grapple with those extraordinarily difficult issues.
We believe that it is just and fair that natural parents should continue to provide financial support for their children. It should not be for the Government—that means taxpayers, many of whom are themselves parents—to pick up the tab for absent parents who are perfectly capable of supporting their children financially 32WH but choose not to do so. As a general principle of social policy, most of us would subscribe to that view, but translating the principle into practice is not always easy.
I understand the concern that we should take the full income into account rather than only the maintenance payments. The reason is that maintenance, particularly when assessed by the CSA, merely reflects the contribution that the parents would have provided from income had the family stayed together. It is a matter of equity, because we obviously take account of the income of parents who support their children from within the family. We must consider the impact on the stable family of support being provided through the maintenance payment system.
In summary, education maintenance allowances are a radical approach to a difficult problem. The allowance already makes a real difference for many people, in Cornwall and elsewhere. We must move to a national system that takes account of such complex issues. With regard to student finance—a not unconnected matter, in which my Department needs to be more consistent—we must remember that we do not take account of the absent parent's income. The Department receives letters from concerned Members of Parliament writing on behalf of constituents in stable families who ask why they do not have access to free tuition fees when, further down the road, a family is receiving free tuition fees because the father has left the home, despite the fact that he may have a high income and that he may be supporting his family by the back door. It is such questions of equity, which the hon. Gentleman did not touch on, that we need to grapple with.
§ Mr. Taylor
The key difference, if the CSA enforces the rule, is that the parent with care has no access to the money if the absent parent says no. Will the Minister hold open the possibility of some change this year?
§ Mr. Wicks
The pilot took a fairly simple means-tested approach, under which both incomes were taken into account. However, if no maintenance is being provided, despite intervention from the CSA, we will not penalise the young people. In such circumstances, only the caring parent's income will be assessed.
I repeat that the pilot affects only a third of the country. We are learning a lot. The EMA system is a great success but we are considering some of the crucial, technical issues that affect people, not least the matter of absent parents. I am happy to meet any hon. Members in this regard and would welcome their advice on achieving the right result for this complex issue.