House of Commons

Tuesday 19th July 2016 Commons Chamber

Tuesday 19 July 2016

The House met at half-past Eleven o’clock

Prayers

Tuesday 19th July 2016 Commons Chamber

[Mr Speaker in the Chair]

[Mr Speaker]

I must inform the House that I have received written notification from the Chair of the Culture, Media and Sport Committee, the hon. Member for Hereford and South Herefordshire (Jesse Norman), and from the Chair of the Science and Technology Committee, the hon. Member for Oxford West and Abingdon (Nicola Blackwood), of their wish to resign from the Chair following their ministerial appointments. In accordance with Standing Order No. 122C, I therefore declare that the Chairs of those two Committees are vacant. I shall announce the arrangements for the elections to those two posts as soon as practicable. I hope that it will be possible to hold those elections during the September sitting.

Oral Answers to Questions

Tuesday 19th July 2016 Commons Chamber

The Chancellor of the Exchequer was asked—

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

1. What assessment he has made of the (a) extent of and (b) economic effect of assets and capital being moved out of the UK as a result of the outcome of the EU referendum.

[Owen Thompson (Midlothian) (SNP)]

2. What steps he is taking to update the Government's long-term economic plan in response to the outcome of the EU referendum.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

7. What assessment he has made of the near-term effect of the outcome of the EU referendum on economic confidence and growth in the UK.

[Kevin Brennan (Cardiff West) (Lab)]

8. What recent assessment he has made of the economic effect of the outcome of the EU referendum.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

While it is clear that the referendum decision represents a shock to the UK economy, thanks to the actions taken over the past six years by my predecessor, the economy is well placed to respond. I will work closely with the Bank of England to provide immediate stability and to maintain confidence in the fundamental health of the UK economy as we prepare for the autumn statement. As further post-referendum economic data are published, the economy’s short-term response to the Brexit decision will become clearer. If further measures are required, they will be announced in the autumn statement.

[Philip Boswell]

Given colleagues’ anecdotal evidence of capital flight, the recent vote to leave the EU has plunged the economy into volatility and uncertainty. The Conservative Government have been slow to act and have yet to provide an economic strategy, so will the Chancellor tell the people of the UK when they will get an insight into the scale of capital flight following the Brexit vote?

[Mr Hammond]

The hon. Gentleman is right to say that the shock of the exit vote at the referendum has created short-term turbulence in the UK economy, but we are well placed to manage it. In answer to his question about data, a series of data publications during the late summer and autumn will inform a proper response at the autumn statement.

[Owen Thompson]

The Conservative Government’s so-called long-term economic plan has resulted in their failing on key economic indicators and missing the targets that they set for themselves. Will the Chancellor tell the Chamber whether we will witness an end to this disastrous era of austerity?

[Mr Hammond]

The UK continues to run a very large fiscal deficit by international standards and we will have to address that deficit. We have already announced that we will no longer seek to bring the budget into balance by 2019-20, but that does not mean that we can go forward without a clear framework for achieving fiscal balance over an appropriate timeframe. We will address that issue in the autumn statement.

[Ian Blackford]

I welcome the new Chancellor to his place and wish him all good luck—for all our sakes, he is going to need it. A Deloitte survey of 132 FTSE 350 chief financial officers found that nearly two thirds of them expect revenues to fall. As the Financial Times puts it, business confidence is now lower than at the time of the collapse of Lehman, with 82% of companies expected to reduce capital spending. This crisis has been caused by Brexit. What tangible steps will the Chancellor take to restore confidence? Don’t just give us waffle—give us real plans.

[Mr Hammond]

The hon. Gentleman is right; the figures that he quotes are right. The evidence is anecdotal in the early stages, as he would expect. As he would also expect, the initial response to this kind of shock must be a monetary response delivered by the Bank of England. In announcing that interest rates were not to be lowered last week, the Governor made it clear that the Bank is developing a monetary package that will be announced in due course.

[Kevin Brennan]

The Chancellor’s certainty that the purchase of ARM by SoftBank is good for the UK following the EU referendum is not shared by its founder Hermann Hauser, who said it means that

“determination of what comes next for technology will not be decided in Britain any more, but in Japan”.

Why does the Chancellor think that the company’s founder is wrong?

[Mr Hammond]

I suspect that the founder of the company has not had the benefit of discussions with the acquiring company. I have met the leader of the current management team, who are wholeheartedly supporting the purchase by SoftBank. We have achieved some very hard guarantees—these were volunteered without our having to extract them—about the future autonomy of the company, headquartered in the UK, and about its commitment to double the number of UK employees over the next five years. What became very clear from a discussion with the founder and CEO of SoftBank is that it firmly believes Cambridge will be the global centre for developing the internet of things and ARM will play a key role in developing that industry.

[Mr Andrew Tyrie (Chichester) (Con)]

I warmly welcome the Chancellor to his new role. It is probably the job he always wanted—unless of course he wants eventually to move next door. I note that to most questions so far he has said he is going to wait until the autumn statement, so I am hoping I get an answer to this one a bit earlier. Sticking to the fiscal surplus rule has rightly been scrapped by the previous Chancellor, and the automatic stabilisers have been allowed to kick in. The higher deficit implied by that decision will have to be plugged sooner or later. From 2010, the Chancellor’s predecessor planned an 80% consolidation of that to come from spending, with only 20% coming from tax. [Interruption.] There is a question coming, if hon. Members can be patient. Does the Chancellor intend to stick to his predecessor’s target of 80:20 or is he going to vary it?

[Mr Hammond]

My right hon. Friend will know that the surplus rule always came with the caveat that if the Office for Budget Responsibility forecast four rolling consecutive quarters of less than 1% annualised growth, the target would be suspended. The consensus among pretty much all forecasters is that that is likely to be what they forecast this autumn statement, so my predecessor’s announcement was merely pre-empting something that almost everybody expects to happen. I am afraid to tell my right hon. Friend the Member for Chichester (Mr Tyrie) that how we are going to respond over the longer term to the resulting deficit will be set out at the autumn statement.

[Mr Speaker]

In the hope that the hon. Gentleman will provide a masterclass in the asking of a question, I call Mr Jacob Rees-Mogg.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Thank you, Mr Speaker. I congratulate my right hon. Friend on his appointment. I accept that that is not a question but a statement. May I go on to point out to him that Brexit provides a great opportunity? The £24 billion purchase of ARM by SoftBank is a sign of that. The trade deals that are being offered are a sign of that. Will he grasp this fantastic opportunity and lead us through to the “broad, sunlit uplands”?

[Mr Hammond]

My hon. Friend rightly points to the fundamental strengths of the UK economy. Britain is still one of the most attractive places in the world to do business, to start a business and to invest money, and it is right that we should focus on those positive aspects. But it is also right that we are conscious of the short-term turbulence that we will inevitably experience and of the need to manage that carefully over the next 18 months.

[Lucy Frazer (South East Cambridgeshire) (Con)]

I, too, welcome the Chancellor to his place. As has been mentioned, SoftBank has made a huge investment in a fantastic Cambridgeshire business. It has done that because Cambridgeshire is at the forefront of technology and innovation. The company has said, as the Chancellor has mentioned, that it is going to double the workforce. Cambridgeshire can continue to attract investment such as this only if we have the infrastructure to support it, so will he confirm that he will be committed to infrastructure investment in roads such as the A10?

[Mr Hammond]

My hon. and learned Friend is absolutely right; raising the UK’s productivity is the long-term challenge of our economy, and infrastructure investment is one of the ways we do that. I draw attention to another point: the success of Cambridge today, not only as a centre of academic excellence but as an innovation hub of global importance, has arisen because of the very foresighted decision of Cambridge City Council many years ago to allow development around the city and the creation of the Cambridge business park, which is now a world magnet for investment.

[Kit Malthouse (North West Hampshire) (Con)]

I, too, congratulate the Chancellor on his ascension. One of the key flows of capital that is likely to increase post-Brexit is the £300 million or so that is invested every year in gilts by those seeking a UK investor visa. This is of little productive value to the UK economy. I wrote to the previous Treasury team suggesting that this money would be better invested in drug discovery but, amazingly, I got the brush-off. May I impose myself upon the Chancellor of the Exchequer and ask for a meeting to explain the merits of requiring these people to invest in the productive part of the UK economy?

[Mr Hammond]

I anticipate that there will be a need to fund UK Government gilt issuance for the foreseeable future, but I understand my hon. Friend’s point and I would be happy to discuss it with him.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Mr Speaker, I am sure you will allow me to extend my congratulations to the Chancellor. He will remember that I welcomed him as a very fresh-faced Back Bencher to the 1997 Budget, when he already showed great promise, which he has more than fulfilled now. Does he agree that the major current threat—there are many—from Brexit is in fact the interruption to investment in British industry and in Britain, and therefore that the purchase by SoftBank of ARM is to be welcomed? In view of the undertakings that ARM has given, that is the best antidote to the prevailing doubts.

[Mr Hammond]

The hon. Gentleman is right and I thank him for his kind words. We need to remind ourselves that we are running a 6.9% of GDP external account deficit, and that has to be funded somehow. It has been funded by an extraordinarily successful run of foreign direct investment into the UK—more than into any other country in the European Union. That has slowed as uncertainty around the referendum has been created. We now need to generate the confidence to allow it to resume.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I take this opportunity to welcome the Chancellor to his post, and also the Chief Secretary and other new Treasury Ministers. There is a real concern that the uncertainty surrounding Brexit is forcing many businesses and international banks to consider moving their core operations and the jobs that go with them overseas. Banks in particular make use of their EU banking passport arrangements to operate within the UK, so what measures will the Chancellor be taking to avoid the loss of those arrangements?

[Mr Hammond]

The hon. Lady is right to say that passporting is an important feature of the arrangements we have with the European Union. In the negotiations that we will have in the future with the European Union about Britain’s future relationship with it, protecting those rights for our very important financial services sector, which I should emphasise is not just about London—two thirds of financial services jobs in this country are outside London—will be a very important part of those negotiations.

[Rebecca Long Bailey]

Moving back to the issue of ARM, analysts this week have predicted a raft of foreign takeovers linked to the fall in the value of the pound following Brexit. The Chancellor stated this week that Britain is open to foreign investment, barely a week after the Prime Minister wanted to oppose such takeovers, so has the Government’s approach to securing new investment been reduced in the space of a week from an ambiguous industrial policy to merely slashing corporation tax and hoping for the best?

[Mr Hammond]

No. The UK remains very much open to foreign investment, but we are very clear that we want investors who will invest in British technology, British jobs and businesses headquartered, based and directed from the UK. We are not open to asset-strippers.

[Amanda Milling (Cannock Chase) (Con)]

3. What steps he is taking to support infrastructure development in the west midlands.

[Andrew Stephenson (Pendle) (Con)]

4. What steps he is taking to support infrastructure development in the north- west.

[The Chief Secretary to the Treasury (Mr David Gauke)]

There are 40 schemes in the west midlands in the infrastructure pipeline, with a total value of £7.6 billion. More than 300 infrastructure schemes have been delivered in the west midlands since 2010. There are 88 projects in the north-west in the infrastructure pipeline, with a total value of £34.5 billion. More than 240 infrastructure schemes have been delivered in the north-west since 2010.

[Amanda Milling]

I congratulate my right hon. Friend on his new role. The Rugeley B power station site is truly a hub of connectivity, where the national grid, broadband and rail infrastructure all come together, and it is an ideal location for redevelopment. Will my right hon. Friend outline the assistance that the Government can provide to ensure the speedy redevelopment of the site, and will he meet me to discuss the possibility of creating a Rugeley enterprise zone on this strategically important site in the west midlands?

[Mr Gauke]

I thank my hon. Friend for her kinds words, and for her question. It is not the first representation that I have received in the few days in which I have been doing this job, and I suspect that it might not be the last I receive today. I would be delighted to meet her to discuss the enterprise zone and the site that she talks about. It is important that we have world-class infrastructure. If we can bring that together in various forms on particular sites, it will enable us to make further and faster progress. I look forward to discussing that with her in future.

[Andrew Stephenson]

May I too congratulate my right hon. Friend on his promotion? The recently announced infrastructure bonds will help to improve productivity and promote economic growth across the north-west. Will he outline the projects that could be eligible for this funding?

[Mr Gauke]

I am not sure that this morning is the point at which I can provide specific examples, but I can say that this Government are very ambitious about infrastructure. As my right hon. Friend the Chancellor has pointed out, infrastructure is one of the ways in which we can drive up productivity. That is one of the great challenges that we face, but we as a Government are determined to address it.

[Valerie Vaz (Walsall South) (Lab)]

The Minister has reeled off a list of moneys going to infrastructure projects in the west midlands. Will he publish a list of all those moneys that he is delivering? Who is going to be accountable for this public money—the local enterprise partnerships, the combined authorities, the local authorities, or HS2 Ltd?

[Mr Gauke]

It was not just the money—I also rattled off the numbers. I would be delighted to provide the hon. Lady with details of the projects that have been delivered, with, as I say, 300 infrastructure schemes delivered in the west midlands and 240 infrastructure schemes delivered in the north-west. Accountability depends on the specific nature of the schemes. Clearly, over the past six years we have delivered on infrastructure, but there is more to do and we are determined to do it.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

One of the absurdities of the previous Chancellor’s tenure was the fiscal rule that forbade borrowing money for infrastructure investment even when the return on that investment would have grossly exceeded the cost of the borrowing. Instead, the former Chancellor ended up borrowing billions to compensate for low growth and the cost of failure. That orthodoxy was strongly challenged in the Conservative leadership election, so will we now see a more rational approach from this Chancellor’s team?

[Mr Gauke]

As my right hon. Friend the Chancellor has made clear, and as, indeed, the previous Chancellor made clear, in circumstances where there is a projection of growth less than 1% over a 12-month period, that fiscal rule does not apply. The fact is that we inherited a very high deficit, and we have shown very strong determination over the past six years to bring that deficit down. As we face the challenges that we now face in terms of Brexit, had we not taken the tough decisions on public spending over the past six years, we would be in a much more vulnerable position than we are now.

[Mike Wood (Dudley South) (Con)]

The previous Chancellor announced a new light rail link between the midland metro and the new enterprise zone in Brierley Hill in my constituency. Will my right hon. Friend meet me to discuss how we can extend that to the main line rail link at Stourbridge so that we can support businesses, communities and jobs in my constituency?

[Mr Gauke]

I note that my prediction that I would receive further representations and diary request appears to be holding true. I am happy also to meet my hon. Friend to discuss the project that he mentioned.

[John McDonnell (Hayes and Harlington) (Lab)]

I, too, welcome the Chancellor to his position, and I welcome his whole team. It is a deserved promotion for the Chief Secretary, whom I believe I promoted only a month ago in a speech to the House.

EU funding for the regions comes to £10 billion a year. At the recent Local Government Association conference, councillors from all parties expressed their concern over the potential loss of these structural funds. Will the Chief Secretary clarify whether he plans to make funding provision equivalent to that received through the EU structural funds in the event of the UK leaving the EU?

[Mr Gauke]

First, I thank the shadow Chancellor for his kind words. Yes, his description of me as Chief Secretary last month proved to be ahead of its time. That is not a phrase I often use about the shadow Chancellor, but he was right on this occasion.

On the structural funds, of course we need to make an assessment of value for money and so on. We will make announcements in due course. I recognise the case for wanting to address uncertainty, but it is right that we follow due process before we make any announcements.

[John McDonnell]

I am grateful for that, but may I ask the Chief Secretary that, in the interests of local government stability, that statement is made sooner rather than later?

The vote to leave also affects the UK’s access to European Investment Bank funds, which last year came to £6.5 billion across the country. With business investment falling even before the vote to leave, and with Government investment scheduled to fall until the end of this Parliament, what action is the Chancellor taking to ensure that Britain retains its stake in the European Investment Bank?

[Mr Gauke]

First, on the general point, I recognise what the hon. Gentleman is driving at in terms of uncertainty and the desirability to resolve the issue sooner rather than later.

It is the case that the UK did very well from the European Investment Bank in recent months in terms of attracting investment. There is no evidence as yet that the UK will be discriminated against during the period that we remain members of the EU, but the hon. Gentleman is right to raise the issue. We will continue to monitor the situation and we want to ensure that we continue to do well from the EIB.

[Maria Caulfield (Lewes) (Con)]

5. What fiscal steps he is taking to support businesses.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

The Government are committed to ensuring that Britain has a competitive corporate tax system that encourages innovation and business investment. We have already announced a reduction in corporation tax to 17%—the lowest rate in the G20—and we are reducing the business rates burden by £6.7 billion. The Government have also increased the rate of research and development tax credits and set the annual investment allowance at its highest ever permanent level.

[Maria Caulfield]

I thank the Chancellor for his response and congratulate him on his new role. Many small businesses in my constituency face difficulties. The Costcutter on Claremont Road in Seaford employs four people, but the store is too large to benefit from the Government’s extension of small business rates relief to properties whose rateable value is less than £12,000. Will the Chancellor therefore consider reintroducing the retail rate relief, which last year helped such businesses with a £1,500 discount on their rates bill?

[Mr Hammond]

The retail scheme was a temporary arrangement until the current proposals were fleshed out fully, so I am afraid that we will not be able to reintroduce it. Many businesses that benefited under the old, temporary retail scheme will benefit from the permanent scheme that we have introduced to reduce the burden of business rates, but I am afraid that some may slip through the net.

[Danny Kinahan (South Antrim) (UUP)]

20. May I congratulate the Chancellor and his team on their appointment? On supporting businesses, PricewaterhouseCoopers yesterday said that growth in Northern Ireland is likely to remain at zero, the worst in the United Kingdom. Will the Chancellor put in place some mechanisms—he has already discussed enterprise zones such as Belfast international airport—to help us?

[Mr Hammond]

One of our priorities, in the interests both of social fairness and of improving the productivity of the economy, will be to address the huge—one might say almost grotesque—disparities between economic performance in the different regions and nations of the UK. That will be a central part of our productivity agenda, which will be a key cornerstone of our long-term economic plan.

[Helen Whately (Faversham and Mid Kent) (Con)]

Since the referendum, some businesses in my constituency have put investment and recruitment on hold due to uncertainty. They welcome the policies that my right hon. Friend has mentioned. I also welcome the indication that he will look at further fiscal stimulus in the autumn statement, but that is some time off. May I press him to reveal a bit more about the options that he might consider to support the economy and businesses?

[Mr Hammond]

I am afraid that I shall not be tempted by my hon. Friend to speculate on the content, or even the date, of the autumn statement. What I can say is that the Bank of England is well equipped with the tools necessary to deal with the short-term needs of the economy following the shock of the referendum, and the autumn statement is well placed, after the batch of economic data that will be published this autumn, to provide a longer-term response.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I welcome the right hon. Gentleman to his new position. He may recall that his predecessor cut corporation tax for business to allow the living wage to be introduced. As we speak, Marks and Spencer is consulting on cutting overtime payments and Sunday and bank holiday pay, in order to do just that. What will the Chancellor do to ensure that my constituent, Mrs M, does not lose £2,000 a year because of the introduction of the living wage?

[Mr Hammond]

Very clearly, the intention of the introduction of the living wage was not to make people worse off; it was precisely to support the living standards of those on the lowest wages. I will look carefully at the case that the hon. Lady has drawn to my attention.

[Scott Mann (North Cornwall) (Con)]

I welcome the Chancellor to his post. A report published in March illustrated that someone who lives in a deprived area is 50% less likely to start a business on a self-employed basis, and it highlighted the barriers they face to starting such a business. Will my right hon. Friend consider the recommendations in the report and work with me to reverse that trend?

[Mr Hammond]

I am very happy to do that. One of the great strengths of the UK economy is our innate entrepreneurialism. We need to foster that, and we need to make sure that it works in all areas, regions and nations of the United Kingdom.

[Stewart Hosie (Dundee East) (SNP)]

May I congratulate the Chancellor and the Chief Secretary to the Treasury on their new roles? The problem we have seen over many years is that fiscal policy occasionally works against the interests of business. Innovation funding has been converted from grants to loans, and there has been a cut during this Parliament to the UK Trade & Investment budget. I ask the Chancellor, who is new and fresh to the job, to look again at those policies, in particular, to make sure that innovation and export support funding is aligned with innovating and exporting businesses.

[Mr Hammond]

I assure the hon. Gentleman that I will be looking comprehensively at all areas of the portfolio as I prepare for the autumn statement, in the context of the economic situation that we face post this shock.

[Stewart Hosie]

I welcome that, and I ask the Chancellor to look again at one other thing. One of the problems that business and the economy face is a lack of demand. May I ask the Chancellor to look again not just at headline corporation tax cuts, but at an intelligent use of allowances—for example, the reintroduction of industrial buildings allowance—to build demand for construction now and long-term supply side capacity to boost what we do, particularly in terms of exporting, in the future?

[Mr Hammond]

I assure the hon. Gentleman that when we look at the corporate tax environment, we will not just be looking at headline rates. We will be looking at the marginal effective rates of corporate tax for investors in the UK, because that is what we want to target—more investment, more jobs and the creation of more wealth in the UK.

[Michelle Donelan (Chippenham) (Con)]

6. What steps the Government are taking to reform the business rates system.

[The Financial Secretary to the Treasury (Jane Ellison)]

As my hon. Friend knows, in Budget 2016 we announced the biggest ever cut in business rates in England, worth £6.7 billion over the next five years. The package cuts business rates for all ratepayers, and 600,000 of the smallest businesses will not have to pay business rates again. The Government are also looking to modernise the administration of the tax to make sure that it is fit for the 21st century.

[Michelle Donelan]

I congratulate my hon. Friend on her new role. Have the Government decided whether car park business rates will be devolved to local authorities? That would offer a significant reduction in council overheads, which could enable Wiltshire Council in my constituency to reduce parking fees and improve the economies of our local market towns.

[Jane Ellison]

I congratulate my hon. Friend on taking such a close interest in what will boost her local economy. The Government have announced that they will devolve 100% of business rate revenues to local government. The details are subject to consultation, and the consultation document was published by the Department for Communities and Local Government earlier this month. She and her local council may well want to contribute to that consultation, and she may want to make the point that she made so well just now.

[Chris Bryant (Rhondda) (Lab)]

Some of the richest areas in the country find it easiest to raise money through the business rate system. If we are not to perpetuate poverty and the gap between rich and poor parts of the country, do not the Government, if they are going to proceed with this, have to make sure that there are proper balancing mechanisms? Otherwise, the problems that we have seen in so many parts of the country, which feel completely forgotten and left aside, will be perpetuated for future generations.

[Jane Ellison]

I am very well aware of the point that the hon. Gentleman makes. In my previous role, I had responsibility for the public health grant, and those points were made in that context on several occasions. We have an open consultation on business rates retention. We are aware of that issue, and the existing system of redistribution will be continued in some form. Obviously, that is something at which we will look closely.

[Mr Steve Baker (Wycombe) (Con)]

The business rates system sometimes interacts with the planning system to leave premises empty, but incurring tax. Will the Government work to ensure that councils are appropriately incentivised to ensure that premises are productively occupied so that business owners have a chance of paying the tax they incur?

[Jane Ellison]

I hear the point that my hon. Friend makes. That is clearly something to which further consideration will be given.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Any help that small businesses get from business rates reform will be very welcome in my constituency of Huddersfield, but that does not outbalance the fact that my university and my manufacturing businesses have been hard hit by Brexit. I know that the Minister is not one of the guilty Brexiters, but what will the Government do to help manufacturing industry and universities so hard hit?

[Jane Ellison]

The Chancellor has already made a number of comments about how we will deal with and address this situation, and more will clearly be said in the autumn. It is important that we recognise that, while we undoubtedly face some risks and have to look to manage them, we must also seize the opportunities we can take from the situation we are in.

To return to the point about business rates, taking 600,000 of the very smallest businesses out of business rates altogether is a good thing. It has not taken effect yet. It is important to make it clear that although that has been announced, it has yet to take effect. We all have a job to do in the spring to make sure that our local businesses get the maximum benefit.

[Julian Sturdy (York Outer) (Con)]

10. What progress he has made on the establishment of the northern powerhouse.

[The Chief Secretary to the Treasury (Mr David Gauke)]

A northern powerhouse will be built by connecting up the cities in the north so that the whole is greater than the parts. We have committed billions to new transport investment and devolved powers to the cities, and we are promoting science and culture. According to one recent survey, the result is that the number of foreign direct investment projects in the north is up by 127% since 2014. The employment rate is now close to its record high, and unemployment has fallen faster than in the south.

[Julian Sturdy]

May I add my congratulations to the new Front-Bench team? In medieval times, the north was ruled from the great city of York. Even in Yorkshire, things do move on, but the need for well-connected transport links is still fundamental for every thriving city. Will my right hon. Friend ensure that sufficient funding is in place to deliver the key infrastructure needs, such as the upgrading of the York northern ring road, which will allow the city to fulfil its true potential in the new enterprise zone?

[Mr Gauke]

This Government are determined to ensure that we have strong transport infrastructure in the north of England, but I very much hear the points my hon. Friend has made. We have committed to investing an extra £161 million to accelerate the transformation of the M62, and £75 million to improve other road links, including the A66 and the A69. We very much recognise the case he is making and, as I say, as a Government we are determined to ensure that the north of England can fulfil its potential.

[Helen Goodman (Bishop Auckland) (Lab)]

May I congratulate the right hon. Gentleman on his promotion to the Cabinet? Earlier, he was very vague about the European structural funds. Some £800 million of European structural funds were part of the north-east devolution deal. Without a guarantee from the Government, the loss of that money will drive a coach and horses through the deal. [Interruption.] I will give the Minister time to listen to what the Chancellor is saying in the hope that he can come to the Dispatch Box and say that the Government will guarantee the £800 million.

[Mr Gauke]

As I said earlier, we recognise the need to bring any uncertainty to an end as soon as we possibly can. In the circumstances, it is right that we take a moment before making any guarantees, but let me be absolutely clear that as a Government we remain committed to doing everything we can to strengthen the northern powerhouse and to ensure that the north of England fulfils its full potential, which includes transport infrastructure. On the specific point, we will make an announcement in the not-too-distant future.

[Mr Speaker]

Despite his sudden shyness, the man in the cream suit has an identical question, and I want to give him his opportunity. Mr Alec Shelbrooke.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

No. 17, sir.

[Mr Speaker]

No, spit it out now, man!

[Alec Shelbrooke]

17. Since 2010, my city of Leeds has seen hundreds of millions of pounds invested in its transport infrastructure. I wonder whether my right hon. Friend can confirm that the billions of pounds that were to be put into the northern powerhouse to invest in transport infrastructure across the whole of Yorkshire and the Humber will still be delivered.

[Mr Speaker]

Splendid.

[Mr Gauke]

This is one of those rare occasions when the Chief Secretary can be like the man from Del Monte and say yes.

[John Healey (Wentworth and Dearne) (Lab)]

The northern powerhouse plans in south Yorkshire are at risk. In the 1980s, our economic regeneration was kick-started by funding from Europe and it still supports small businesses, training and apprenticeships, so may I give the Chief Secretary another chance? Will he guarantee that the £174 million that has been pledged to south Yorkshire under the current programme will be paid in full?

[Mr Gauke]

The right hon. Gentleman will understand, as a former Treasury Minister, that there is a need for consistency. My answer remains that we will make an announcement soon. We recognise the point that he is making and the desire to remove uncertainty, but I am not in a position to make an announcement this morning.

[Graham Evans (Weaver Vale) (Con)]

21. There are nine enterprise zones in the north-west of England, including the magnificent Sci-Tech Daresbury in Weaver Vale, which employs more than 500 scientists. Does my right hon. Friend agree that enterprise zones are essential to the Government’s commitment to rebalance the economy, close the north-south divide and build a great northern powerhouse?

[Mr Gauke]

My hon. Friend makes a very good point. Enterprise zones, which were reintroduced by the Government in the last Parliament, are important in creating a clustering effect and a culture of enterprise. They are making a big contribution to the northern powerhouse and playing a role in the increase in investment in the north of England.

[Peter Dowd (Bootle) (Lab)]

May I welcome the new Ministers to the Front Bench? Five northern powerhouse combined authority leaders have requested a meeting with the Prime Minister in Manchester to discuss the serious implications of Brexit for the northern economy, given its massive contribution to the country as a whole. In advance of the Brexit vote, will the Chief Secretary tell the House how many civil servants were working on regional plans, or any other plans for that matter, for such an eventuality?

[Mr Gauke]

First, I thank the hon. Gentleman and welcome him to his post. I am delighted to see that the shadow Front Bench is almost up to full complement.

We obviously face a number of challenges in terms of the new situation, but there are also a number of opportunities. As I have made clear repeatedly today, the Government are determined to ensure that, whatever the consequences of the Brexit vote, we will enable the northern cities to prosper and work together. That remains a Government priority.

[Mr Graham Allen (Nottingham North) (Lab)]

11. If he will commission research on the potential long-term savings to the public purse of greater investment in cross-departmental schemes to promote early intervention; and if he will make a statement.

[The Chief Secretary to the Treasury (Mr David Gauke)]

The Government recognise the benefits of early intervention to ensure that all children and young people receive the best possible start in life. The Government worked with the hon. Gentleman and others to establish the Early Intervention Foundation. We continue to provide funding to the foundation to develop and share the evidence base in this area. The Government have also invested £770 million in the troubled families programme, which aims to achieve sustained positive outcomes for 400,000 families with multiple complex problems by 2020.

[Mr Allen]

I welcome the new Treasury Front Benchers to their duties. I hope that they will take the opportunity over the summer to reorient the Treasury’s thinking away from late intervention, firefighting and paying excessively to put things right, and consider an early intervention philosophy that allows the Treasury to invest early and make a lot of money. They should look at Big Society Capital and its terms of reference, and consider the possibility of improving the market for social investment bonds. Will the Chief Secretary meet me and colleagues from all parties to discuss those issues?

[Mr Gauke]

I am very happy to meet the hon. Gentleman to discuss those issues. To be fair to the Government, we introduced social impact bonds and the troubled families programme, which seems to be working. There are good signs in terms of improved school attendance and reduced youth crime and antisocial behaviour. We do recognise the benefits of early intervention, but I am happy to discuss it with him at greater length over the weeks ahead.

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

I add my congratulations to the Chief Secretary and commend to him last year’s “Building Great Britons” report by the all-party parliamentary group for the first 1,001 critical days, which I chair. The report revealed that the cost of getting it wrong on perinatal mental health and child neglect is some £23 billion. Does he agree that investing in young people at an early stage is every bit as beneficial to the economy as investing in roads and infrastructure? Will he allow the all-party group to give him a presentation on how we can save him and the country a great deal of money and give our children a better future?

[Mr Gauke]

I would be interested in seeing such a presentation, whether with the hon. Member for Nottingham North (Mr Allen) or separately—I am happy either way. The Government have already demonstrated a willingness to look at any such case and will respond to the evidence, which I look forward to hearing.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

13. What steps his Department has taken to tackle global tax evasion.

[The Financial Secretary to the Treasury (Jane Ellison)]

I am really proud of the role that the Government and the UK have played in recent years. The country has taken a leading role in tackling tax evasion and avoidance, driving fundamental reform of the international rules and standards. For example, we led the development and early implementation of the new global standard for automatic exchange of information on offshore accounts. I am sure we will continue to offer global leadership on this vital issue.

[Tulip Siddiq]

The Panama papers revealed what most of us had long suspected—that the super-rich enjoy manipulating the tax system—but I was astonished to learn in a written response from the former Chancellor that the £10 million multi-agency taskforce set up to investigate those revelations still does not have the Panama papers in its possession. Will the Minister clarify what the £10 million has been spent on, or is it another example of creative Tory accounting?

[Jane Ellison]

I understand that there may be some logistical barriers to acquiring the papers—[Interruption] —with the journalists, in fact. I will write to the hon. Lady with more detail, but I do not believe there is any fault on the part of Her Majesty’s Treasury.

[Sir Henry Bellingham (North West Norfolk) (Con)]

15. Does the Minister agree that one strand of activity in the campaign is to continue to reduce corporation tax? Does she agree that we should have an aspiration to have the lowest corporation tax of any country in Europe?

[Jane Ellison]

Obviously, the effective rate is what really matters. We have set out a sensible and good ambition for 2020, but internationally what matters is what people pay. I return to the point that the UK has led the world. More and more countries have signed up to looking at how we ensure that multinational corporations pay what they should.

[Caroline Flint (Don Valley) (Lab)]

When it comes to corporation tax, we can only get the take that we should if we know what is going on in those companies. I welcome the Prime Minister’s words on tackling the Amazons, the Googles and others. May I suggest to the Minister—I welcome her to her new post—that the Treasury team reconsider introducing in the Finance Bill when it returns to the House in the autumn a public country-by-country reporting amendment, so that we can see what is going on, and so that whatever the corporation tax rate is, we get what we deserve?

[Jane Ellison]

I am aware of the right hon. Lady’s interest in the matter and of previous debates. The key thing is that that has to happen on a multinational basis—that is what we feel. It will be an issue at the forthcoming G20 Finance Ministers meeting and we will have more to say about it. I return to the fact that the UK has a world-leading position and will continue to push the global community to go further.

[Jeremy Lefroy (Stafford) (Con)]

14. What assessment he has made of recent trends in the level of employment.

[The Economic Secretary to the Treasury (Simon Kirby)]

The employment level stands at 31.6 million, which represents more people in work than ever before. Over the past year, employment growth has been driven by full-time workers and by high and medium-skill occupations, showing that the recovery has produced high-quality employment, helping to boost productivity and raise living standards across the country.

[Jeremy Lefroy]

I congratulate my hon. Friend on his well deserved appointment. In Stafford, employment is at record levels and the jobseeker’s allowance claimant rate has fallen since 2010 from 3.2% to 1.1%, but employers point out to me that there are increasing skills shortages. Will he have discussions with colleagues in the Department for Education about strengthening engagement between employers and schools on that subject?

[Simon Kirby]

My hon. Friend, as ever, makes an excellent point. Unemployment in his constituency has fallen by 2,700 since 2010. Skills are absolutely important and I will be having the conversation he suggests.

[Ian Murray (Edinburgh South) (Lab)]

I welcome the new Economic Secretary to his role in the Treasury. I am sure he will bring a much-needed dash of colour and flamboyance.

Employment is incredibly important in my constituency and across Scotland. Will the Treasury give an absolute commitment today that not one penny of research and development funding that goes to the wonderful higher education institutions across Scotland, and particularly in my constituency, will be lost as a result of the EU Brexit decision?

[Simon Kirby]

The hon. Gentleman is, as always, very entertaining. The Chief Secretary has said that we will make an announcement in due course.

[Alberto Costa (South Leicestershire) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

My priority is to ensure the stability and prosperity of the UK economy. That means a combination of near-term measures to respond to the shock that the economy has received, and longer-term measures to manage the impact of transition out of the EU and to reposition the UK economy to maximise its potential in the new circumstances we will then face.

[Alberto Costa]

I add my congratulations to the new Front-Bench team. Leicestershire County Council is one of the lowest funded local authorities in the country. The council is reaching the point where it may not be able to meet all its statutory obligations. Given that, will my right hon. Friend help to arrange an urgent meeting between his counterparts in the Department for Communities and Local Government and council officials to discuss this matter?

[Mr Hammond]

As my hon. Friend notes, that is a CLG lead, but I am very happy to facilitate such a meeting for him.

[John McDonnell (Hayes and Harlington) (Lab)]

The Chancellor will, I hope, have seen the research published by the Institute for Fiscal Studies this morning. It shows that young people in work are still earning 7% less than before the crisis, while older workers have seen no improvement in their earnings for seven years. Will the Chancellor take this opportunity to put an end to what is becoming a lost decade of austerity, deliver the public investment that can provide well-paid, secure jobs across the country and scrap the anachronistic fiscal rule?

[Mr Hammond]

Since this is our first outing together, let me take the opportunity to make it clear to the hon. Gentleman that I do not believe in the money tree; I am clear that we have to pay our way in the world. We have a very large fiscal deficit that we have to address, but while doing that we also have to ensure we maximise the productive capability of the UK economy. That means targeting our investment into skills—that does largely mean young people—and infrastructure, and encouraging capital formation in private businesses.

[Huw Merriman (Bexhill and Battle) (Con)]

T2. Last year, the former Chancellor came to Hastings and committed to extending high-speed rail from Ashford to Hastings and Bexhill. This investment is the key to delivering local housing, a labour market and business expansion. I welcome the Chancellor to his position and ask for his commitment to this vital project.

[The Chief Secretary to the Treasury (Mr David Gauke)]

I am grateful to my hon. Friend for his question. On the particular proposal he sets out, he is a strong champion for his constituents. If he will forgive me, in my new position of trying to control the purse strings all such matters have to be looked at. As I have made very clear, however, the Government are committed to improving transport infrastructure throughout the country, including in Sussex.

[Mark Durkan (Foyle) (SDLP)]

T4. I voice my compliments to the new Front-Bench team and my acknowledgement of the old. The prospect of moving to an ultra-low corporation tax rate has already been aired. That, of course, has huge implications for the revenues of developing countries. Will the Chancellor undertake to carry out and publish a spill-over analysis of the effect of UK tax rates and rules on developing countries, as the Governments of Ireland and Netherlands have done?

[Mr Gauke]

The position of the UK Government on corporation tax and the impact on developing countries is very clear. We believe in taxing the profits of economic activity that occur here, and that is as far as it goes. Over the last six years, we have consistently helped to build up tax capacity in developing countries and provided support to their revenue authorities so that they might be better able to collect the taxes that are due. The international system is moving towards helping those countries as well.

[Suella Fernandes (Fareham) (Con)]

T3. I congratulate the Chancellor on his appointment and ask that when he looks through his in-tray, he pick up the recent report from the all-party group on financial education for young people. I chaired the inquiry that produced the report, which concluded that while it was a positive step that financial education was included in the national curriculum, delivery was still too patchy, meaning that millions of children were ill-equipped to deal with money when they left school. Will my right hon. Friend commit to making that issue a priority?

[The Economic Secretary to the Treasury (Simon Kirby)]

I know that my hon. Friend takes a keen interest in this interesting and increasingly complex matter. It is very important that people have the skills they need to help them to navigate financial matters, which is why in 2014 the coalition Government made financial education part of the national curriculum in English schools. That said, I am quite happy to concede that there is more work to be done.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

T6. Even excluding cuts to welfare and capital spending, the Office for Budget Responsibility forecasts that funding for day-to-day public services will fall between 2009-10 and 2019-20 by the equivalent of about £1,800 per head, while between 2014-15 and 2019-20, day-to-day spending per head is forecast to fall by £1,000 per head. What plans does the Chancellor have to reverse this dangerous trend?

[Mr Hammond]

I have no plans at the moment to reverse the spending plans set out by my predecessor. Any such plans will be announced in the autumn statement. I would say to the hon. Lady, however, that Scotland now has devolved taxation and spending powers and can consider addressing the balance within its own competence.

[Robert Jenrick (Newark) (Con)]

T5. The Chancellor got his first job in my constituency, so it is a pleasure to welcome him to his latest job. The borough of Rushcliffe has now produced two excellent Chancellors of the Exchequer. In truth, however, Britain has not had a Chancellor since Nigel Lawson who has taken tax simplification seriously. As we prepare the economy for Brexit, will my right hon. Friend make it one of his priorities and consider, in the eight months before the next Budget, creating a commission on tax simplification?

[Mr Gauke]

We have created the Office of Tax Simplification and are currently legislating in the Finance Bill to put it on a legislative basis. It is setting out more and more ambitious plans for how the tax system could be simplified, and a large number of its recommendations have already been implemented, but there is still more to be done.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

T7. As a proud Londoner, I believe that we must have greater control over taxes and public services, especially in the light of Brexit. I know that my friend Sadiq Khan has ambitious plans for London. Will the Chancellor commit to an initial devolution deal for London in his first autumn statement?

[Mr Hammond]

I am afraid that I will have to disappoint the hon. Lady, as I cannot commit to anything in the autumn statement at this stage, but I am meeting the Mayor of London later this week and look forward to a constructive discussion with him.

[Mrs Theresa Villiers (Chipping Barnet) (Con)]

I congratulate the Chancellor and his new team. Do they agree that we need a broad coalition of countries around the world if we are to ensure that big businesses start to pay their taxes? Will he give his full support to the work in the OECD, the G20 and the G7 that started at the G8 summit at Fermanagh in 2013?

[Mr Hammond]

Yes, as one of my colleagues has already said, if we are to tackle the issue of profit shifting by global corporations, we have to do it on a global basis. This is an important topic on the agenda of the G20 Finance Ministers meeting this weekend in Chengdu, China, in which I intend to take a full part.

[Ms Margaret Ritchie (South Down) (SDLP)]

T8. What positive consideration will the new Treasury team give to the implementation of fiscal flexibilities to assist and underpin our tourism industry?

[Mr Hammond]

We will look in the autumn statement at all sectors of the economy, and where we believe that additional fiscal support is necessary, we will announce appropriate measures.

[Charlie Elphicke (Dover) (Con)]

I welcome the Chancellor to his place. Does he agree that big business needs to change and that large multinational companies, including Amazon, Google and Starbucks, have a duty to put something back and pay off a debt to their fellow citizens, and a responsibility to pay their taxes?

[Mr Hammond]

Yes.

[Kerry McCarthy (Bristol East) (Lab)]

T9. In a new report on living standards, poverty and inequality in the UK, the IFS finds that young people in their twenties are still earning 7% less than before the financial crisis, yet we know that the pressures on their incomes, particularly housing costs and student fees, are higher than ever before. What are the Government going to do to help this generation that is being left behind?

[Mr Hammond]

We have already had this question from the shadow Chancellor. Of course, we have introduced the national living wage, which will make a difference to people on low earnings at the bottom of the income scale. Interestingly, the hon. Lady perhaps hints at something else—questions of inter-generational fairness. The Prime Minister signalled early on in her tenure of office that that is one of the areas that she wishes to address.

[Craig Mackinlay (South Thanet) (Con)]

I congratulate my right hon. Friends and indeed the entire new Treasury team.

With some softening of the market in house sales, will my right hon. Friend commit to looking at the data and consider whether the 3% additional stamp duty on second property purchases is necessary, desirable or indeed raises any additional revenue at all?

[Mr Hammond]

I can certainly commit to looking at the data, and I can tell my hon. Friend that my approach to taxation is that it is there for a simple purpose: to raise revenue for the Exchequer. I expect the taxes we put in place to achieve that.

[Andrew Gwynne (Denton and Reddish) (Lab)]

T10. In the Queen’s Speech, the Government said that they will continue to support the northern powerhouse. Why, then, of the 15 infrastructure projects with the most public funding is only one in the north?

[Mr Gauke]

Some of the numbers quoted on regional impact do not take into account national projects such as HS2, which clearly benefit a number of regions. Let me be clear that, as I set out earlier, we have a very large commitment to infrastructure projects in the north of England, with something like 240 in the north-west and 300 in the midlands.

[Ben Howlett (Bath) (Con)]

As part of the west of England devolution deal, business rates will be devolved to a combined authority. Will my right hon. Friend commit to full implementation of the previous deal on business rates and recognise the importance of this deal to the regional economy?

[Mr Hammond]

We have no plans to announce any changes to the business rate plans that are already in place.

[Rachel Reeves (Leeds West) (Lab)]

The Government have announced that they are going to give £375,000-worth of banking fines to the Jo Cox fund that was set up by her family and friends to support charities that mattered to her. That fund has already raised £1.5 million in just a month. May I welcome the Government’s decision to allocate banking fines to support that fund? Will the Chancellor join me in encouraging people to give to the fund, which supports the White Helmets, Hope Not Hate and the Royal Voluntary Service?

[Mr Hammond]

I am delighted to join the hon. Lady in making such an appeal. I am glad that the Government have been able to support this very valuable fund in memory of Jo Cox, and I am sure that members of the public, seeing the Government contribution, will now want to redouble their efforts to support it.

[Rebecca Pow (Taunton Deane) (Con)]

I add my welcome to the Chancellor and the new Treasury team.

There is a great need in the south-west to provide more high-skilled jobs to boost productivity. In order to do that, we need to attract the right businesses. In this post-EU world, could the Chancellor kindly give his commitment, much praised so far, to the A358 upgrade for those in Somerset?

[Mr Gauke]

I am rapidly learning that, when it comes to road programmes and other transport infrastructure projects, it is for me to respond. We remain enthusiastic about improving our transport network, whether it be in the south-west of England or elsewhere.

[Hannah Bardell (Livingston) (SNP)]

Given the Supreme Court’s ruling earlier this year, does the Chancellor have plans to review the Financial Conduct Authority’s failure to enforce the prospectus rules in the Lloyd’s enhanced capital notes case? One of my constituents has been fighting hard for pensioners, who have lost over £3.3 billion.

[Mr Hammond]

As indeed have constituents of mine, so I am familiar with this case from the point of view of a constituency MP. I have not yet had a chance to look at it from the point of view of a Treasury Minister, but I promise the hon. Lady that I will do so.

[Marcus Fysh (Yeovil) (Con)]

Given the fall in long-term borrowing costs, the ability of infrastructure investment to show that we mean business and the enthusiasm shown by the Front-Bench team, will Ministers meet me to discuss an acceleration of the dualling of the A303?

[Mr Gauke]

That will be me again.

My diary is filling up, and I was planning to take a summer holiday, but I may need to reconsider. I should be delighted to meet my hon. Friend.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Two infrastructure projects are critical to the north-east: increased airport capacity at Heathrow, and an expanded Metro system. What funding commitment can the Government make to those projects today?

[Mr Gauke]

As I think has been made clear, a statement on airport capacity in the south-east will be made in the autumn. As for the Metro, I cannot add much to what I have said before, but the Government obviously want to support transport infrastructure throughout the country, and are looking at all good projects.

[Several hon. Members rose—]

[Mr Speaker]

Order. I am sorry to disappoint remaining colleagues, but we have had 20 topical questions, and we must now move on.

Turkey

Tuesday 19th July 2016 Commons Chamber

12:35

[Emily Thornberry (Islington South and Finsbury) (Lab) (Urgent Question)]

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on recent developments in Turkey.

[The Minister of State, Foreign and Commonwealth Office (Sir Alan Duncan)]

I thank the hon. Lady very much for applying for the urgent question.

As Members on both sides of the House will have seen from events unfolding on their television screens, it became clear on Friday evening that a military uprising was under way in Turkey. In plain terms, it was an attempted coup, which we condemn unreservedly. It was ultimately unsuccessful, and constitutional order has been restored, but 210 people have reportedly been killed, and some 1,400 injured. I am sure that the whole House will join me in expressing our sympathies and condolences to the people of Turkey on the tragic loss of life.

Her Majesty’s Government have, of course, been closely engaged throughout the weekend. Foreign and Commonwealth Office consular staff worked tirelessly throughout Saturday and Sunday to support British nationals who have been affected, and they continue to do so. We have thankfully received no reports of British casualties. Our advice to British nationals remains to monitor local media reports and to follow FCO travel advice, including the advice provided by our Facebook and Twitter accounts.

My right hon. Friend the Prime Minister spoke to President Erdogan last night. She expressed her condolences for the loss of life, and commended the bravery of the Turkish people. She underlined our support for Turkey’s Government and democratic institutions, stressing that there was no place for the military in politics, and also underlined the importance of our co-operation on counter-terrorism, migration, regional security and defence.

My right hon. Friend the Foreign Secretary was regularly updated by officials as events unfolded. He visited the teams in the FCO’s crisis centre who responded to Nice on Friday morning, and visited those responding to Turkey on Saturday morning. He spoke to his Turkish counterpart, Mevlüt Çavusoglu, on Saturday to express our concern and our support for Turkey’s democratic Government and its democratic institutions, to urge calm, and to encourage all parties to work to restore democratic and constitutional order quickly and in an inclusive way. Her Majesty’s ambassador in Turkey has been in constant touch with his Turkish counterparts. I spoke to him myself yesterday, particularly in order to express our concern for the welfare of embassy staff, and I plan to visit Ankara tomorrow.

The Foreign Secretary attended the Foreign Affairs Council yesterday, and participated in a discussion about Turkey. There is a strong sense of common purpose between us and our European partners. The Foreign Affairs Council has issued conclusions strongly condemning the coup attempt, welcoming the common position of the political parties in support of Turkey’s democracy, and stressing the importance of the prevailing of the rule of law and its rejection of the death penalty.

The Turkish Government now have an opportunity to build on the strong domestic support that they gathered in response to the coup attempt. A measured and careful response will sustain the unity of purpose which we have seen so far, and which was so evident on the streets of Istanbul and Ankara. The United Kingdom stands ready to help Turkey to implement the reforms to which it has committed itself, and to help the democratically elected Government to restore order in a way that reflects and supports the rule of law.

[Emily Thornberry]

I thank the right hon. Gentleman for his answer, and may I take this opportunity to welcome him to his new position? It is unfortunate that he and his team have had to be brought to the House and did not think it right to make a statement themselves. I hope that the emergency landing at Luton of the right hon. Gentleman’s boss is not a bad omen, but we do wish the all-male ministerial team well at this crucial time.

Turkey is of pivotal cultural, political and strategic importance to the world, straddling as it does the east-west divide with borders to eight countries. It is a vital NATO ally and has important minorities, particularly Kurds and Armenians, as its citizens. Half a million people of Turkish or Kurdish descent live in the UK and they are desperately worried about their families. With 2 million British visitors a year, Turkey is greatly loved in this country, and the interests of our two countries cannot be separated.

How many British citizens have been arrested, if any, and what support is being provided to them? What is the current advice to British nationals within Turkey and to those who may be booked to travel over the next few days and weeks?

On Friday we saw the Turkish people, whether they supported the current Government or not, coming out to support democracy and making a clear statement that military coups have no place in modern Turkey. The question is whether President Erdogan will use this as an opportunity to deepen and strengthen democracy or to undermine it. The signs so far are deeply worrying, with 9,000 police officers and a third of the generals dismissed, 7,500 people arrested, including the most senior judges in the country, and the death penalty being introduced.

What reassurances has the right hon. Gentleman had that there will be fair trials for those accused of complicity in the attempted coup? Was the Foreign Office taken by surprise by this attempted coup? How big is the Turkish team in the Foreign Office? Does he have plans to expand it? What will happen to this vital ally—what will happen next to this partner, this friend? It is vital that we work together to ensure that Turkey has a secure foundation of democracy, freedom of speech and human rights into the future.

[Sir Alan Duncan]

I thank the hon. Lady for her warm welcome—to me at least—but I respectfully point out to her that the noble Baroness Anelay, who is also a Minister of State at the Foreign Office, was, when I last spoke to her, a woman. From a personal point of view, may I point out that I am also able to add to the spectrum of choice the hon. Lady would like to see in our ministerial team? [Interruption.] I might say to the hon. Member for Rhondda (Chris Bryant) that he, of all people, should be aware of how exactly I add to that spectrum.

I am not aware of any UK citizens having been arrested, but obviously that is a very serious consular objective for us to pursue, find out and make sure that it remains the case. I think the whole House will agree with the hon. Lady’s point about the importance of wanting the due process of law to be upheld, and for any trials, should they happen, to be fair, and to make sure that the highest principles of democratic standards are upheld, for which of course one needs a functioning and independent judiciary.

I will be discussing all these matters when I go to Ankara tomorrow, and I very much hope that in the reaction Turkey displays to this coup attempt it will be able to remain a very important member of NATO and a partner to other countries in Europe. The answer to the hon. Lady’s straightforward question about whether we were taken by surprise is, yes; I am not sure there is anybody who was not.

[Crispin Blunt (Reigate) (Con)]

The Prime Minister appears not to have mentioned the arrest of nearly 3,000 members of the judiciary in her conversation with the Turkish President. It seems a rather strange way to uphold the rule of law, and The Independent is reporting today that NATO’s leadership has made it clear that a commitment to uphold democracy, including tolerating diversity, is one of the four core requirements for members of the alliance. Is that the position of Her Majesty’s Government?

[Sir Alan Duncan]

I am grateful to my hon. Friend, and indeed Secretary Kerry made similar such comments yesterday. As I have just said, retaining an independent judiciary, which will of course require judges working to apply the due process of law, is absolutely essential if we are to see the standards we wish to see upheld in Turkey. I note what my hon. Friend says about NATO. Turkey remains an important ally within NATO and a very valued UK partner, so we encourage Turkey to maintain its democratic institutions and the rule of law as a fundamental part of NATO’s value agenda.

[Alex Salmond (Gordon) (SNP)]

I welcome the right hon. Gentleman to his place, and the spectacular late flowering of his ministerial career. We suspect that he may well be at the Dispatch Box on many occasions, substituting for the absent Foreign Secretary. We also remember the Foreign Secretary’s film, “The Dream of Rome”, in which he advocated Turkey’s immediate succession to the European Union—an argument he later used to justify Brexit and the UK’s removal from the European Union. Can we be assured that there will be no such ambiguity in the messages that now go to Turkey, and that while no responsible Government can support a military coup against a democratic Government, no responsible democratic Government engages in the suppression of civil liberties, the persecution of minority communities such as the Kurds, the imprisonment of thousands of people, the suspension of parliamentary rights, and the reintroduction of the death penalty? Will the Minister make it clear unambiguously to President Erdogan that it is not only membership of the European Union that is at risk from such actions, but also NATO membership?

[Sir Alan Duncan]

I am grateful to the right hon. Gentleman for his description of me—I had never quite seen myself as a hardy perennial in quite the same way. My right hon. Friend the Foreign Secretary, who has been described as absent, is working furiously. Having been to Brussels already he is due to go to Washington, and he is meeting many European Foreign Ministers today in advance of meetings on Syria and Yemen. It is ill-judged of the right hon. Gentleman to criticise him for deputing me to answer this urgent question.

[Alex Salmond]

It’s his job.

[Sir Alan Duncan]

Well I have a job too, which I hope I am doing to the satisfaction of the House as the Foreign Secretary’s deputy. Turkey’s accession to the EU is clearly a long way off, and it is far too soon after events to start making long-term judgments about it. Some might think that it is less of a matter for the UK than it was before 23 June.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

My right hon. Friend may know that 41 students from the Arthur Terry school in my constituency were caught up in the airport, together with seven members of staff. Thanks to the outstanding leadership of the headteacher, Neil Warner, and the senior member of staff on the team, Sue Bailey, who showed excellent and responsible leadership in extraordinarily difficult circumstances, all 48 were able to leave at 1 o’clock the following morning, and head to South Africa where their school is twinned with the Rondevlei school. Through my right hon. Friend, may I pay tribute to the outstanding service that the Foreign Office provided to my 48 constituents, and in particular to Matt Jordan, a Foreign Office official who was in the airport at the time and who rendered full Foreign Office and consular services to all my constituents in an outstanding way?

[Sir Alan Duncan]

My right hon. Friend is always fully on top of anything that affects his constituents in Solihull, and I know that on this matter he was closely in touch with them. I completely share his commendation of the initiative and leadership—

[Mr Speaker]

Or even in Sutton Coldfield.

[Sir Alan Duncan]

I beg your pardon. Yes—it is important that I get my geography right, and not just in the United Kingdom. What those teachers did was absolutely commendable, and the natural thing is for the Foreign Office to send people to an airport, which is a natural hub, in response to a sudden outbreak of concern. I am full of praise for the manner in which staff in our embassy reacted so promptly and with such initiative to the sudden and unexpected military uprising.

[Joan Ryan (Enfield North) (Lab)]

Yesterday, I and my hon. Friend the Member for Hornsey and Wood Green (Catherine West) met the chairman of the British Alevi Federation. It raised deep concerns with us about the tension that has been rising in the largely Alevi and Kurdish populated neighbourhoods, due to attacks and demonstrations by apparently pro-Erdogan supporters. Many of my constituents have heard frightening reports from friends and family in Turkey who fear that they are being targeted. Will the Minister impress on President Erdogan, and on whoever he meets tomorrow when he goes to Turkey, the need to ensure as far as possible the safety and protection of all citizens, especially ethnic and religious minority communities who feel vulnerable at the moment?

[Sir Alan Duncan]

I appreciate the concerns that the right hon. Lady has expressed. It is important that the leadership of Turkey includes all its citizens in the same climate of proper human rights and fair treatment within that country.

[Michael Gove (Surrey Heath) (Con)]

I warmly welcome my right hon. Friend to his position. He has formidable diplomatic and business experience, and he will add strength to a formidable Foreign Office team. President Erdogan used social media in the difficult hours immediately after the coup attempt was launched to rally the support of the Turkish people against the illegal attempt to seize power. In the past, however, the Erdogan Government have been restrictive in their approach to the use of social media by their people and critical of press freedom. Will my right hon. Friend take this opportunity to ensure that President Erdogan and his allies appreciate that press freedom and freedom of speech are among the values that those behind the coup wished to crush and that he should seek to uphold?

[Sir Alan Duncan]

I thank my right hon. Friend for his comments about my appointment. He is absolutely right to say that freedom of speech and freedom of the media are essential to the proper working of any democracy and indeed of any country. He is also right to say that the use of social media on this occasion proved very useful for quelling the uprising. I am sure that the irony of what he has said will not be lost on many people.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Some of us have always been sceptical about the suitability of Turkey as a safe country to which refugees could be returned under the EU deal. Can the Minister confirm that that EU deal is kept under review? Will he also impress upon the Turkish Government that the continuation of the deal, and the many advantages that stand to go to Turkish citizens under it, will be judged according to their response to human rights in particular?

[Sir Alan Duncan]

The UK is committed to the successful implementation of the EU-Turkey migration deal, which I think is what the right hon. Gentleman was referring to. We have seen no indication that the treatment of refugees in Turkey has been affected by the recent events. We will of course continue to monitor developments closely, but we want to see the deal continuing to work properly.

[Edward Argar (Charnwood) (Con)]

I congratulate my right hon. Friend on his return to the Front Bench in a role to which he brings considerable expertise and experience. Hon. and right hon. Members have rightly focused on the geopolitical and political implications, and the implications for UK nationals, of events in Turkey, but will he acknowledge that UK embassy staff in Ankara and the consular staff in Istanbul have played and continue to play a huge role in managing the implications of those events? Can he update the House on the situation and safety of our diplomatic and consular staff in Turkey?

[Sir Alan Duncan]

I am grateful to my hon. Friend for his question. All our staff in Ankara and Istanbul will be grateful to him for raising this topic. One of the main reasons that I wish to visit Ankara tomorrow is to reassure the staff of the Foreign and Commonwealth Office. They had a shocking and unpleasant experience when suddenly, out of the calm, jets were overhead, shooting, and they heard the sound of explosions very near to the embassy. Some of our staff were separated from their children. For this to happen so suddenly and in such circumstances is a traumatic experience, and I consider it important as a Minister to exercise a proper duty of care. It is therefore perhaps my top priority to do that when I go to Ankara tomorrow.

[Mr David Winnick (Walsall North) (Lab)]

There are still some questions about the origins of the attempted coup that took place last Friday evening. It is encouraging, however, that all the opposition parties in Turkey, however critical they might be of the Turkish President—they certainly are critical of him—made it clear that they were totally opposed to any military dictatorship and that military government was not the answer to Turkey’s problems. Would it not also be useful if the Government here made the Turkish authorities, and particularly the President, aware of the fears that the Turkish Government, led by the President, will use what occurred on Friday as a means of exercising further repression and arresting people who were in no way involved in the coup? It is difficult to understand why 2,700 judges have been arrested, for example. How could they have been involved, directly or indirectly, in what happened last Friday?

[Sir Alan Duncan]

It is not entirely clear exactly who was behind the coup attempt, but I appreciate the hon. Gentleman’s concern about the breadth of the reaction and the rounding up of a lot of suspects. However, we do not want to speculate beyond that. I should like to make it clear to the House that the Prime Minister said yesterday:

“We call for the full observance of Turkey’s constitutional order and stress the importance of the rule of law prevailing in the wake of this failed coup. Everything must be done to avoid further violence, to protect lives and to restore calm.”—[Official Report, 18 July 2016; Vol. 613, c. 559.]

I would add that we are watching closely to see that proper due process is applied in Turkey.

[Mr David Burrowes (Enfield, Southgate) (Con)]

I represent a borough with a significant Turkish-speaking community, and on behalf of my constituents I should like to express solidarity with the Turkish people at this difficult time. What is the Government’s assessment of the alleged involvement of the Fethullah Gülen movement in the coup? What is the Minister’s understanding of the involvement of and links to that movement in this country?

[Sir Alan Duncan]

It is far too early to say, although we quite understand that Gülen’s name has been in the spotlight and that Turkey has applied to the United States for his extradition. That is of course a matter for Turkey and the United States. However, it is important, as my hon. Friend has said, to understand that people living in the UK who have friends and family in Turkey will have concerns, and we need to issue reassurance to them that Her Majesty’s Government are taking a proper interest in what has happened in Turkey and are fully engaged in trying to ensure that calm will prevail there.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Minister has rightly stressed the importance of Turkey as a significant NATO ally. Will he tell us what efforts are being made through the institutions and organisms of the NATO alliance to make it clear to the Turkish Government that democratic norms and adherence to the rule of law must be upheld?

[Sir Alan Duncan]

I imagine that pretty well every NATO country will have been in touch with Turkey. Of course we want the conduct of the Turkish Government to be fully compatible with membership of NATO, and NATO has its own standards and democratic requirements, to which we want to see Turkey fully adhere.

[John Howell (Henley) (Con)]

As a member of the Council of Europe, I was in touch with Turkish MPs over the weekend. Turkey plays a vital role in the Council of Europe. What practical support will the UK Government give to Turkish MPs to help them through this crisis?

[Sir Alan Duncan]

Again, it is difficult to say at this early stage. However, I hope that our clear voice has been heard. One of the things that we have rightly said, and which the hon. Member for Walsall North (Mr Winnick) pointed out a moment ago, is that we welcome the fact that all the parties in Turkey have joined together to make it clear that they condemn the coup and that they wish to see democratic institutions prevail in Turkey. That echoes our own thoughts and beliefs, and I hope that our influence as diplomats and on the world stage can continue to encourage Turkey to step in that direction.

[Chris Bryant (Rhondda) (Lab)]

I warmly congratulate the Minister on his resurrection in all his glorious diversity. I am glad that he referred to consular staff in particular, because it was only in 2003 that the British consul general in Istanbul was murdered in a terrorist attack there. It has been our long-standing policy to bring Turkey into the European family of nations, whether within the European Union or more broadly through NATO, and to ensure that it faces west as much as, if not more than, it faces east towards Russia and Iran. With our leaving the European Union, how can we ensure that we enhance and strengthen that process of encouraging Turkey and pro-European Turkish politicians to face west?

[Mr Speaker]

On the matter of diversity, the Minister of State and I share shortness.

[Sir Alan Duncan]

Perhaps that could also be translated as “brevity”, Mr Speaker.

I commend the hon. Member for Rhondda (Chris Bryant) for the reputation that he enjoys as a former Foreign Office Minister and for the concern that he always showed for those who work in the Foreign and Commonwealth Office, often in very difficult circumstances. In the future, we will have bilateral opportunities with Turkey and, notwithstanding our imminent departure from the EU, I think that any way in which Turkey can replicate the standards that we wish to see in other democratic countries across the European mainland is something that will help it to achieve exactly the objectives that the hon. Gentleman has just described.

[Helen Whately (Faversham and Mid Kent) (Con)]

As my right hon. Friend said, we have an important relationship with Turkey, including our commitment to giving over £250 million in aid to support the 2.7 million refugees living there. Will the Government use that relationship to exert pressure on President Erdogan? He must not use the coup to legitimise a crackdown on all opponents of his regime, whether they were involved or not, and he must not further suppress freedom of speech.

[Sir Alan Duncan]

I share my hon. Friend’s concern. Turkey has taken an enormous number of refugees, for which we should commend and thank it, and the plight of Syria has been partly shouldered by Turkey. The Government and everyone in the House would urge that the reaction to this failed coup does not lead to unacceptable consequences.

[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

I congratulate the Minister on his appointment. President Erdogan has repeatedly refused to rule out the return of the death penalty in response to this event. What discussions have the Minister or the Foreign Secretary had—or what discussions do they intend to have—with the Turkish Government to make it clear that such a change of heart would be regressive and wrong?

[Sir Alan Duncan]

I am grateful to the hon. Lady for her comments. I absolutely agree with her on this rare occasion. Her Majesty’s Government strongly opposes the death penalty, which is the view of all like-minded Governments. It would be a deeply retrograde step, causing incalculable damage to Turkey’s standing at a time when it is important to embrace it within the world community and not see it become more isolated.

[Richard Drax (South Dorset) (Con)]

I welcome my right hon. Friend and other colleagues to the Front Bench. We have heard today about democracy, due process and the rule of law, but we are talking about a repressive regime that has arrested thousands. Does he share my concern about the conditions that these men and women and being kept in? When he goes to Turkey, will he ensure that their human rights are respected?

[Sir Alan Duncan]

I assure my hon. Friend that when I am in Ankara tomorrow I will not be mealy-mouthed in saying what we think needs to happen. Human rights, not reintroducing the death penalty and the proper due process of law will of course form a large part of what we will urge upon the Turkish Government.

[Ann Clwyd (Cynon Valley) (Lab)]

I am glad to hear the Minister talk about the importance of the rule of law and human rights. The last time I was in Turkey I went with the Inter-Parliamentary Union to get 10 imprisoned Members of Parliament out of jail, and I am glad to say that that was successful. Many of them were from the south-east of Turkey, and the situation in Kurdistan—south-east Turkey—is dire with appalling conditions. The military should be reined back and human rights need to be emphasised. We have particular concerns about parliamentarians given the attack on the Turkish Parliament, and I am sure that the Minister will convey this House’s concern for them and our hope that Turkey will continue as a democracy.

[Sir Alan Duncan]

The right hon. Lady understands the region extremely well and has a long-standing reputation for defending human rights and understanding Kurdistan, which has an effect on Turkey. I will convey her thoughts. It is important to ensure that everything that we have been talking about on human rights is properly conveyed to the Turkish Government given that the region is complicated and has some acute and difficult pressures to handle.

[David T. C. Davies (Monmouth) (Con)]

I welcome the Minister to his role. I have every confidence in his ability to answer questions in this House on the many occasions when the Foreign Secretary will quite rightly be promoting Britain’s interests abroad, which is his job.

I ask the Government to reiterate again that our commitment to democracy in Turkey is tied in with our commitment to women’s rights, gay rights and the rights of Turkey’s other political and religious minorities, who may well be feeling threatened at the moment.

[Sir Alan Duncan]

My hon. Friend is right to comment on the hard work of the Foreign Secretary. His list of important rights is something that we could apply to pretty much any country in the world, including Turkey.

[Mr David Lammy (Tottenham) (Lab)]

I congratulate the right hon. Gentleman on being one of the House’s great comeback kings. He will definitely be able to keep the Secretary of State on the straight and narrow.

Does the Minister recognise the concern in constituencies such as mine, which has the largest Turkish-speaking population in the country, that the manner in which the west behaves towards Erdogan is frankly similar to how we behaved towards Mubarak? Erdogan is stretching democracy beyond belief—putting Syrians into Kurdish areas to dilute the Kurdish influence in his country cannot be right. Will the Minister be clear about how Erdogan treats the Kurdish minority in his country?

[Sir Alan Duncan]

I understand what the right hon. Gentleman says. Given the Turkish population in his constituency, I am happy to offer him a face-to-face meeting to talk through the issues. We share the same value system and will have some difficult problems to resolve in the region with a collapsed Syria and terrorist pressure on Turkey, which is not free of such pressures and must work out how to handle them. We must appreciate that the issues are complicated, and I would welcome the right hon. Gentleman through the door of my office to discuss them in person.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I welcome the Minister to his post—he will do a brilliant job—and welcome his statement in support of the democratically elected Government in Turkey. However, the international community has in the past supported military Governments in Pakistan under General Musharraf and in Egypt under General Sisi. Is it now the positon of the UK Government always to support democratically elected Governments?

[Sir Alan Duncan]

We obviously support democracy and all the values and rights that go with any properly functioning democratic state. It is a reality of the world that many countries are not perfect, and I hope that we can use our diplomatic pressure to improve countries and make them understand what world pressure really is. You made a comment about shortness, Mr Speaker, and I hope that means that I am able to punch above my weight as Minister of State.

[Hywel Williams (Arfon) (PC)]

The Turkish Government have already instituted oppressive measures towards Kurdish people in eastern Anatolia, including the unwarranted arrests of lawyers, politicians, journalists and members of the public, leading to the death of many civilians—women and children—which goes largely unreported in this country’s press. Will the Minister impress upon the Turkish Government when he meets representatives tomorrow that the failed coup should not be used as a pretext for further repression of democratic people?

[Sir Alan Duncan]

I hope that I pretty much said that in my opening remarks. The failed uprising must not lead to perverse consequences along the lines that the hon. Gentleman describes. However, when it comes to terrorist acts, we need to understand that the Turkish Government have a legitimate right to defend themselves against those who would attack them.

[Robert Neill (Bromley and Chislehurst) (Con)]

I welcome my right hon. Friend’s well-deserved return to the Front Bench. Does he understand that it is difficult to characterise the arrest of thousands of judges as a proportionate response to an act—however outrageous? Turkey’s membership of the Council of Europe must hang in the balance if it does not respect the independence of the judiciary.

[Sir Alan Duncan]

My hon. Friend points out the potential consequences of certain courses of action, on which it is too early to form a judgment. It is absolutely true, however, that judges are necessary for a functioning judiciary, so we look forward to seeing that there is a functioning, independent judiciary that can properly apply the rule of law.

[Natalie McGarry (Glasgow East) (Ind)]

I welcome the Minister to his place. EU Commissioner Johannes Hahn has expressed concern that the swift round-up of judges after the failed coup indicates that Erdogan had a pre-existing list of enemies, suggesting that much of Turkey’s response is predicated on score-settling. That mirrors the trends in recent years of suppression of free speech and civil liberties, of putting down political opponents and of fighting a brutal war against the Kurds. Will the Minister impress upon President Erdogan that the upholding of human rights and the rule of law is more important now than ever?

[Sir Alan Duncan]

Yes, I will. Three days after this attempted coup, it is inevitable that there will be lots of speculative judgments about what was planned, what was pre-planned, whether there was a previous list and so on. It is impossible to know these things at this stage, which is one reason why I look forward to visiting, but the Government will speak out very strongly for human rights and for the equal and proper treatment of all citizens in Turkey.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I welcome my right hon. Friend to his Front-Bench post. He brings formidable experience and intellect, and will serve the country well. The NATO Parliamentary Assembly annual session is due to take place in Istanbul this November. Does he agree that unless the security situation becomes untenable, that should go ahead in Istanbul, because despite the difficulties that may be ahead in where Turkey is heading, it will be far better to steer that if it stays in organisations such as NATO, rather than if it is exiled?

[Sir Alan Duncan]

I commend my hon. Friend for what he has just said, which is both wise and practical. One of the most important ways in which Turkey can be engaged and persuaded is through the forum of NATO. We wish Turkey to remain a full and compliant member of NATO, and I hope that that meeting continuing as he suggests would provide a powerful platform for bringing about the kind of positive developments we would wish to see.

[Mr Mark Hendrick (Preston) (Lab/Co-op)]

Turkey is democratic, but successive elections have shown that it is becoming increasingly authoritarian. How concerned is the Minister that President Erdogan will use this coup as a blank cheque to go against any or all of his opponents? The UK is leaving the European Union but we should still be concerned that Turkey gets its wish and eventually becomes a member. Will the Minister make it clear to President Erdogan on his visit tomorrow that if the death penalty is introduced, that will totally negate any ambitions Turkey has in that direction?

[Sir Alan Duncan]

I believe I am right in saying that if Turkey were to reintroduce the death penalty, it would be disqualifying itself from membership or future membership of the EU, so this would be a self-defeating act and against the objective the hon. Gentleman has just described of Turkey’s potentially joining the EU. I think it is fair to say I have already largely answered the other questions he asked.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I congratulate my right hon. Friend and his colleagues on their appointments. Turkey is a major NATO ally and partner, so how is it that we appear to have been completely blindsided by this military coup? What can be done with our partners to improve our situational awareness?

[Sir Alan Duncan]

In a troubled country with pressures of that sort, when their own Government are completely blindsided, it is probably not surprising that we were unaware that this was going to happen. I put it to my hon. Friend that there may have been nobody across the world, whatever the scope of intelligence, who had firmly predicted that this was going to happen on Friday night.

[Peter Grant (Glenrothes) (SNP)]

I know that the Minister will impress on President Erdogan how important it is that people get a fair trial, regardless of how serious the offence someone is accused of committing—indeed, the more serious the alleged offence, possibly the more important it is that they get a fair trial. It is difficult to see how that can happen when so many judges have been arrested. What practical help will the Minister be offering to the Turkish Government to make sure that anyone who has been arrested and is going to be put on trial gets a fair trial, in accordance with the proper rule of law?

[Sir Alan Duncan]

The most practical influence we can have on this is to join with like-minded countries and make our view clear collectively, be it through the EU or other forums that join together countries such as our allies in the United States. The collective and singular voice calling for upholding of the rule of law and the proper functioning of a democratic state is what we can most effectively provide at this early stage. The point about NATO has already been made. The point about the long-term objective of Turkey wanting to join the EU has already been made. I hope that bilateral discussions, the likes of which I hope to have tomorrow, will also impress on the Turkish Government exactly the point the hon. Gentleman has put to the House.

[Diana Johnson (Kingston upon Hull North) (Lab)]

I, too, congratulate the Minister on his appointment. Will he say a little more about the fact that, as we know, human rights abuses against the Kurdish people have been increasing over time, and that the Kurdish people play such an important role in the fight against Daesh? Will he point that out in his conversations tomorrow? What more will he be saying about it?

[Sir Alan Duncan]

The hon. Lady raises a very important point, because the UK and Turkey work in a close partnership to prevent extremist travellers from reaching Iraq and Syria, involving practical co-operation between our police and security forces. We want that to continue and we hope that it will, and we stand ready to help Turkey in any way we can during this difficult period.

[Mark Durkan (Foyle) (SDLP)]

The Minister referred to constitutional order being restored, but we know that in President Erdogan’s hands that is a dark and elastic concept, as the experience of religious, ethnical and regional communities, of journalists, of parliamentarians and of rights activists shows. If the Government are going to communicate strongly to the Turkish Government that this coup should not be used as an excuse for a carnival of repression, will he reinforce that by direct engagement with the democratic opposition in Turkey and with legitimate rights activists there, too?

[Sir Alan Duncan]

The UK’s policy is to engage across all parties within Turkey. The hon. Gentleman should be aware of the EU Foreign Affairs Council statement yesterday, which condemned the coup and welcomed “the common position” of all

“the political parties in support of Turkey’s democracy.”

[Kevin Brennan (Cardiff West) (Lab)]

One aforementioned irony of this situation is that the Foreign Secretary published a scurrilous poem about President Erdogan. That is one of the glories of our democracy, but is the serious point not that, currently, if someone published a similar poem in Turkey they might be subject to arrest? What are the Government going to do to ensure that free speech is preserved, even in the current situation?

[Sir Alan Duncan]

Exactly as I have been explaining for nearly an hour now, we have to apply the maximum and optimum diplomatic pressure we can, both bilaterally and multilaterally, and we will continue to do that. This is often about relationships and persuasion; I once teased the Foreign Secretary, but I am happy to say that we are getting on extremely well.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

I warmly congratulate the Minister on his new and elevated role. What discussions has he had with colleagues in the Department for International Development to ensure the safety of and provisions agreed for refugees, including humanitarian aid arrangements?

[Sir Alan Duncan]

We speak regularly to people in DFID, and I used to be a DFID Minister. I have not had any direct conversations, as I have been in this job for only 48 hours, but prompted by the wisdom of the hon. Lady, I assure her that I shall do this at the earliest opportunity.

[Jim Shannon (Strangford) (DUP)]

I, too, congratulate the Minister on his appointment and thank him for his statement. There was much concern about human rights abuses in Turkey before the attempted coup. During the recent coup there have been documented attacks on Christian churches in Trabzon and Malatya. Will he draw to the attention of the Turkish Minister tomorrow the persecution of Christians and ethnic minorities, and the attacks on their property and on them in Turkey?

[Sir Alan Duncan]

We strongly encourage Turkey to continue to work towards the full protection of fundamental rights, especially in the areas of minority rights, freedom of religion and freedom of expression. We will continue to do that, and I fully take on board the hon. Gentleman’s point about the need to protect Christians in Turkey.

[Tommy Sheppard (Edinburgh East) (SNP)]

I, too, add my warm congratulations to the Minister on his appointment and express my hope that he will bring an enlightened perspective to some aspects of our foreign policy. At 4.30 today I was due to meet Garo Paylan, a Member of the Turkish Parliament for Istanbul and a leading member of the HDP, the principal social democratic opposition party. Obviously, he has been unable to make that meeting, but he has relayed to me his extreme concern that many members of that party are now being rounded up and detained by the Turkish authorities, despite having nothing whatsoever to do with this attempted coup. May I therefore ask the Minister to make it specifically clear to President Erdogan and the Turkish authorities that this country will not tolerate the repression of democratic opposition parties in that country, whose only misdemeanour is to fulfil their constitutional duty to criticise the Government?

[Sir Alan Duncan]

The hon. Gentleman speaks passionately and forcefully on this matter, and I fully understand what he is saying. This is why our ambassador and all of our embassy team are closely watching exactly what is happening to democratic parties, and we are engaging with them across the spectrum of political involvement to make sure that we know exactly what is going on and can make our voice heard accordingly.

Points of Order

Tuesday 19th July 2016 Commons Chamber

13:20

[Alex Salmond (Gordon) (SNP)]

On a point of order, Mr Speaker. During the urgent question, it was implied, at least from the Tory Benches, that the Foreign Secretary was abroad, representing this country’s interests—[Interruption.] Yes, it was. Is it possible that we could fit a locational device to the Foreign Secretary—a Boris beacon—which would tell us when he is and when he is not available to join us here in the Chamber?

[Mr Speaker]

I am bound to say two things to the right hon. Gentleman. First, I am no great enthusiast for over-zealous surveillance. Secondly, within whosesoever competence the matter might fall, it is not a prerogative of the Chair, but I have a sense, and I am sure the right hon. Gentleman will not take exception to my saying this, that on this occasion his inquiry was substantially rhetorical, and he was more interested in what he had to say to me than in anything that I might have to say to him.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Further to that point of order, Mr Speaker. Could you advise me how I may be able to put it on record that the House has just been brilliantly served by the Minister of State, Foreign and Commonwealth Office, answering all the questions that the House put?

[Mr Speaker]

Well! The hon. Gentleman is in some danger of rising in the House’s league table of colleagues who specialise in complimentary remarks, but there is a fine line between being complimentary and being Uriah Heepish or oleaginous. May I very gently suggest that the hon. Gentleman have a word with his right hon. Friend the Member for Surrey Heath (Michael Gove) about the dangers of over-indulgence in that regard? We will leave it there for today.

I thank all colleagues for taking part. Very sincerely, may I thank the Minister of State, Foreign and Commonwealth Office, the right hon. Member for Rutland and Melton (Sir Alan Duncan), for attending so courteously and with such good humour to the inquiries from colleagues across the House on that very important matter?

Income Tax (Non-Military Expenditure)

Tuesday 19th July 2016 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

13:23

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I beg to move,

That leave be given to bring in a Bill to require HM Commissioners of Revenue and Customs to record income tax revenues where the payee self-certifies as holding a conscientious objection to public spending on defence purposes and report to Parliament thereon; to place a duty on HM Treasury to take account of the amount and proportion of such self-certified income tax income in preparing the supply estimates; and for connected purposes.

The central purpose of the Bill is to give taxpayers who have a conscientious objection to war the right to direct to a non-military security fund the portion of their taxes that would otherwise be spent on military purposes. One hundred years ago, at the height of world war one, Britain became the first country in the world to make the legal right of conscientious objection available to all British subjects.

The Military Service Act 1916 simultaneously claimed the right to force men to die for their country, while also granting the legal right of conscientious objection in Britain for the first time. Thousands of men, including both my grandfathers, registered for exemption from military service on the grounds of conscience. Some COs, like my grandfathers, took up alternative service, such as driving ambulances and running field hospitals. Others felt that they could take no part in any activity connected to the war and they were imprisoned, but what linked them all was their absolute determination to be true to their beliefs, despite marginalisation.

Since 1916, the right to conscientious objection has been recognised in every significant international treaty. The European convention on human rights, the United Nations universal declaration of human rights and the British Human Rights Act all testify that everyone has the right to

“freedom of thought, conscience and religion”.

The past 100 years has seen immense progress in the democratisation of war. Modern wars are no longer fought with conscript armies; armed conflict relies now on professional armies and high-tech weapons. Security is supposedly maintained with the ideology of deterrence. In short, war is waged with money, rather than manpower—funded by UK taxpayers—and yesterday this Parliament voted to support the nuclear deterrent, at a cost of £30 billion.

The law, as it stands, prevents many from acting in accordance with their own conscience, as their tax money is being spent on armed conflict, which they object to on moral, religious or ethical grounds. Some equate paying for killing with doing it themselves. These few thousand people are faced with two options—either keeping their income below the taxable level, as a lady whom I met outside earlier today has done all her working life, or withholding a portion of their tax and facing prosecution and bankruptcy. There is no other alternative, and no right to object.

I thank the campaigning organisation Conscience: Taxes for Peace not War for helping me to prepare this Bill. It has been compiling a list of these modern-day conscientious objectors, who have been writing statements of conscience, as world war one COs did before them. One of these COs, Diana Warner, said:

“We have seen increasingly brutal and far-reaching wars, massive death and displacement of civilians, untold trauma and injury to our soldiers, and environmental destruction. As a GP I work every day for the health and wellbeing of my patients, and as a taxpayer I must do the same for the security of people in the UK and elsewhere. I insist on the right as a Conscientious Objector for my taxes to be used to forge peace and not to be used on the mechanisms of war.”

If conscientious objection can be recognised in wartime, why not in peacetime, too?

Today, the rights of COs to military tax are being campaigned for across Europe, the USA and Canada. In passing this Bill, Britain would lead once again, setting a world precedent and demonstrating that we are a leader in human rights and individual freedoms. Those who object to funding war and preparation for war still want to contribute to the security of our country and the wellbeing of our world, so this Bill calls for a mechanism for COs to fund non-military peace-building and conflict prevention initiatives, which would contribute to national security while allowing individuals to pay their taxes with a clear conscience.

By permitting the right to invest in peace rather than war, we are not only granting an individual freedom, but making a substantial step in the direction of a more effective and humane foreign policy. There are two possible destinations for this hypothecated tax.

The first is the Department for International Development, which is highly regarded internationally for the promotion of social justice. This Government’s commitment to supporting DFID is commendable. The second possible destination is the less well-known conflict, security and stability fund, a cross-departmental fund of just over £1 billion. It was created by this Government to address the causes of international conflict.

If Britain were to pass this Bill, the UK would make the hard-won right of conscientious objection relevant to today’s society by granting people the right not to pay for someone to kill on their behalf. We could also take a lead in helping to redefine the common understanding of security. Genuine, long-term security is achieved not with ever more sophisticated weapons and increased spending on “defence”, but by co-operation, negotiation, and shared understanding of the problems that face humanity—poverty, ill health, and environmental degradation.

I now wish to move on to address some common objections to a Bill of this type. First, the Bill is not seeking exemption from paying taxes but allows COs to pay their fair contribution towards national defence with a clear conscience by investing in non-violent alternatives to war and weaponry. COs would rather invest their fair share in longer-lasting and more sustainable means of conflict resolution and prevention.

Secondly, on the criticism that the Bill introduces hypothecation, is not the Government’s sugar tax, to be spent on sports provision for young people, a form of hypothecation; and what about the additional tax on insurance premiums that is going to be allocated to flood prevention? The UK’s most significant form of personal hypothecation would appear to be Gift Aid, which redirects personal income tax towards a named charity. This sum amounted to £1.19 billion in 2014-15. Gift Aid is already widely used by taxpayers to direct funding to charitable causes.

Some say that the Bill would create a precedent for other pressure groups to petition this House to divert taxes to their favourite causes or away from their personal dislikes—but military tax is specifically an issue of conscience, not a political preference. This principle was recognised 100 years ago by Her Majesty’s Government, and I am laying a case for an extension of that right.

Finally, there is the issue of practicality. The administration of the provision set out in this Bill would merely need a signed declaration to Her Majesty’s Revenue and Customs and a transfer of an already-calculated sum of money to one, named, Government-controlled fund. The calculations are already provided by HMRC to UK income tax payers as a matter of course. The destination of the transferred tax receipt would be a single fund from which moneys would be drawn for the purposes indicated in the Bill.

This Bill seeks to acknowledge the existence of conscience when spending money, in order to stop forcing people to pay for wars that they do not morally agree with and for weapons they cannot, in all conscience or reason, endorse. Let us acknowledge the rights of individuals committed to this by extending the recognition of conscience with regard to war. You get the world you pay for—let us allow the right to pay taxes for peace, not war.

Question put and agreed to.

Ordered,

That Ruth Cadbury, Mr Virendra Sharma, Mr Roger Godsiff, Alan Brown, Caroline Lucas, Michelle Thomson, Hywel Williams, Martyn Day and Kate Green present the Bill.

Ruth Cadbury accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 2 December and to be printed (Bill 54).

Higher Education and Research Bill

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Tuesday 19th July 2016 Commons Chamber

Second Reading

[Madam Deputy Speaker (Natascha Engel)]

I inform the House that the amendment has not been selected.

13:34

[The Secretary of State for Education (Justine Greening)]

I beg to move, That the Bill be now read a Second time.

As the Prime Minister said outside Downing Street last week, this Government want to give everybody, no matter what their background, the opportunity to go as far as their talents will take them, in a country that works for everyone. Our higher education institutions are crucial to giving people the power to determine their own futures. They present opportunities for individuals to better themselves—to broaden their knowledge base, sharpen their skills, and participate in the groundbreaking research that can make the future brighter for everyone.

My time at Southampton University was one of the most shaping periods of my life. I should point to my time at the Department for International Development as another of those periods. For me, the chance to go to university was absolutely pivotal to being able to make something of myself. Today, I can still point to the telephone box in Kingsbridge, Devon where I rang through to get my A-level results while we were on holiday that year. In that moment, my whole future changed for the better. I was the first person in my family to be able to go to university. I remember, after that call, going to the pub across the road to celebrate with a drink. None of us really knew what going to university would be like for me, but we all knew that it was going to be the best thing and that it would improve my life chances. Opportunity is about giving our young people the freedom to fly, and universities are absolutely central to that.

My party’s record on this in government is one we can be proud of. We have taken away the limit on student numbers so that more people than ever before can benefit from higher education, and the participation rate among students from the most disadvantaged backgrounds is at record levels. We have put in place the essential funding changes that have placed our universities on a stable financial footing so that they are resourced for success, and we have protected investment in our world-class science base.

The universities that our young people attend are some of the best in the world. We punch well above our weight, with 34 institutions ranked in the world’s top 200 and more than twice that number in the top 800. But there is more to do to make sure that everyone can access a high-quality university place, and in spite of the progress made, we are far from meeting our economy’s need for graduates, so this Government are absolutely determined to support and nurture our universities, and to ensure that they are open to every student who has the potential to benefit from them.

The creation of new universities is an undoubted force for good, both academically and economically. Recent research by the London School of Economics shows that doubling the number of universities per capita could mean a 4% rise in future GDP per capita too. However, the current system for creating universities can feel highly restrictive, with new providers requiring the backing of an incumbent institution to become eligible to award its own degrees. This Bill levels the playing field by laying the foundations for a new system where it will be simpler and quicker to establish high-quality new providers. I am pleased that in May the hon. Member for Wallasey (Ms Eagle) confirmed that the Opposition do not object to broadening choice for students by expanding the higher education sector.

These reforms, which are the first since the 1990s, enable us to maintain the world-class reputation of our higher education institutions, because quality will be built in at every stage—from the way we regulate new entrants to how we deal with poor-quality providers already in the system. I recognise that there have been concerns about the quality of new providers—that they cannot possibly be as good as what we already have. It is not the first time that such arguments have been made. The same arguments were made when the new red-brick universities were being established just before the first world war, but today Sheffield, Birmingham and Manchester—which I visited very recently in my previous role—are world-class universities. This “quality” argument was made about the 1960s expansion, but in four of the past 10 years the Sunday Times award for university of the year has gone to one founded in that very period—currently the University of Surrey. In 1992, it was a Conservative Government who had the vision to set free the polytechnics to enable them to become universities. Now we are making it possible for a whole new generation of universities to help us to extend access to higher education for young people across our country.

[Carol Monaghan (Glasgow North West) (SNP)]

I welcome the Secretary of State to her new position and look forward to working with her over, I hope, the next few years. Does she agree that one aspect of the post-war universities and the post-1992 polytechnics was that students were not asked to contribute fees in order to receive a university education?

[Justine Greening]

I acknowledge that the Scottish National party takes a very different view of this issue. The reality is that the choice that it has made has resulted in fewer students being able to go to university in Scotland. One in five students in Scotland who apply for, and who have the grades to get, a place cannot go because the funding is not available. The hon. Lady’s Government in Scotland have made that choice, but it is not a choice that this Government want to make. We have to make sure that places are available for students who have the potential and talent to make their way in life. Putting a cap on opportunity and potential is not just bad for students; it is bad for our country more broadly.

[Michael Gove (Surrey Heath) (Con)]

First, may I congratulate my right hon. Friend on assuming her new role? She has been an outstanding advocate for greater social mobility in every role she has had in frontline politics, and I am delighted to see her in this job.

Is it not the case that, following the introduction of fees, we have seen more students from working class and poorer backgrounds go to university in England and Wales, while in Scotland educational inequality has worsened, to the extent that the First Minister of Scotland had to sack her Education Secretary in despair at the way in which inequality was growing north of the border?

[Justine Greening]

Since 2009, students from a disadvantaged background in England are 36% more likely to go to university. It is not good enough to come up with excuses and tell young people of great quality who have the grades that they cannot go to university because the Government who, unfortunately, are running the country in which they live are not prepared to take the decisions to enable funding to get to the sector and create the places that they need. We are prepared to do that.

The Bill is about opening up the sector to enable new providers to enter it and create the extra places that our young people need. There will be rigorous tests for those new providers, as well as for those that already exist, centring on quality and making sure that they have financial stability. We are interested in enhancing the world-class reputation of our universities in creating opportunity for all, rather than in expansion for its own sake.

[Rebecca Pow (Taunton Deane) (Con)]

I thank my right hon. Friend for giving way and offer her huge congratulations on her new role. Does she agree that the new university side of the Bill will lead us into a new era of focusing much more on gearing up our students for the workplace and on linking with business to provide the exact courses required to upskill our people for the future?

[Justine Greening]

My hon. Friend is absolutely right. The good news is that we expect many—indeed, most—of the jobs created over the next few years to be graduate-level jobs. Our economy is creating opportunities, but we need to make sure that our young people are in a position to take them. That is part of the reason why this Bill is absolutely critical. Wherever and whatever a person is studying, part of how they are able to succeed is making sure that they get high-quality teaching. That is why we are delivering on the Government’s manifesto pledge to implement a new teaching excellence framework for universities.

[Gloria De Piero (Ashfield) (Lab)]

May I also congratulate the right hon. Lady on her new job? I was also the first in my family to go to university. Ashfield, which I represent, has among the lowest number of 18-year-olds in the whole country going to university. The Secretary of State says that she wants to see opportunities for people from ordinary backgrounds, but how is scrapping grants for the poorest kids going to help?

[Justine Greening]

The bottom line is that the evidence base shows not only that more young people are going to university than ever before, but that a higher proportion of them are from disadvantaged backgrounds. As I said to the hon. Member for Glasgow North West (Carol Monaghan), we do our young people a disservice if our system cannot be financed to create places for them.

[Several hon. Members rose—]

[Justine Greening]

I am going to make some progress, because it is important that I cover the teaching excellence framework, which is at the heart of the Bill.

The framework will assess and drive up quality by providing reputational and financial incentives for success, which is a proven approach to ensuring high standards at our universities. That approach is based on what we have learned from our experience. It was a Conservative Government who introduced funding for research on the basis of quality, which is now a widely accepted way of working. The research excellence framework is regarded globally as the gold standard for institutional research. By extending that principle to teaching, we can ensure that British higher education remains in the world’s elite, and that students at all universities—old and new—receive the quality teaching that they have every right to expect.

Let me be absolutely clear: the Bill does not raise tuition fees or change current procedures for secondary legislation setting the maximum tuition fee cap. That will, rightly, continue to require the same level of parliamentary scrutiny as before, and the Bill will allow the maximum fee cap to keep pace with inflation, which the last Labour Government allowed for every year from 2007. What we are saying to high-quality providers is, “You can access fees up to an inflation-linked maximum fee cap if—and only if—you can demonstrate that you are providing high-quality teaching and you have an agreed access and participation plan in place.”

The Bill allows fee caps to be set below the maximum, to reflect varying levels of teaching excellence framework awards. The providers that are not meeting those standards will have to charge fees beneath the maximum fee cap, and that cap will not increase in real terms.

Our proposal to maintain the real value of the maximum fee cap, but only for those with excellent teaching, is backed by those who know the sector best. Universities UK has described that approach as “balanced and sustainable” and argues that maintaining the real value of the maximum fee cap is

“essential to allow universities to continue to deliver a high-quality teaching and learning experience for students.”

[Wes Streeting (Ilford North) (Lab)]

I congratulate the Secretary of State on her appointment. I am sure that she is as shocked as I am that vice-chancellors are welcoming the opportunity to put up university tuition fees. Does she agree that many students and graduates who have gone through that £9,000 system do not feel that that level of tuition fee has been justified and that they have not seen the benefits of the decision that this House took some years ago?

[Justine Greening]

The hon. Gentleman raises an important point. The real-terms ability of the maximum fee to keep up with inflation is enabling £12 billion of investment to get into higher education over the coming years. It is critical to make sure that students get value from the investment that they make in themselves and that teaching is of high quality. That is why the teaching excellence framework is such an important part of the Bill.

The proposed office for students is another part of the Bill that clearly shows that we are putting students at the heart of our higher education policy, as they should be. The creation of an office for students, which will be the principal regulator for higher education, will put students’ interests at the heart of regulation. It will have a legal duty requiring it to consider choice and the interests of students, employers and taxpayers, and it will look across higher education as a whole, with responsibility for monitoring financial stability, efficiency and the overall health of the sector.

The current system was designed for an era of direct Government funding of higher education when fewer people attended university. Higher education attendance is no longer a privilege of the elite. We lifted the limit on student numbers, meaning that more people than ever before have been able to benefit from a university education. The legislative framework needs to reflect that.

The office for students will create a new single register of higher education providers, replacing the current fragmented system and ensuring a single route into the sector. The simpler system means that this Bill will reduce regulatory costs on the sector and contribute to this Government’s deregulatory agenda. It also ensures that the requirements are clear and fair. Only those on the single register will be able to obtain degree-awarding powers, become universities or charge fees that attract student loans. Those providers will have to comply with conditions relating to, for example, their financial stability and the quality of their provision. The office for students will have powers to impose additional conditions—for instance, around access and participation for students from disadvantaged backgrounds—on fee-capped providers that wish their students to be able to access student support.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Let me join in the congratulations to the Secretary of State on her appointment. Why is there no duty on the new office for students to promote collaboration? The crisis that we confront in this country is around technical education, not higher education. If we want to grow the number of students on level 5 apprenticeships, we need to transform the level of integration and collaboration that exists between further education and higher education. Why is that dual-track system not being encouraged by placing a duty to collaborate at the heart of the office for students?

[Justine Greening]

I take the right hon. Gentleman’s point, which is an important one. I want universities to continue to work hard on the ground in many of the local communities of which they are part, to encourage a pipeline through which children can come and apply. If the percentage of university students from disadvantaged backgrounds is to rise, that is incredibly important.

The right hon. Gentleman will be interested to know that an element of the Bill tackles collaboration, specifically with UK Research and Innovation, which I will come on to shortly. There will also be time to debate this in the Bill Committee. I absolutely agree with the sentiment that he has expressed, and it is important that universities engage with local communities beyond their own campuses and encourage young people.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I, too, welcome the Secretary of State to her new post. Before she moves off the subject of collaboration, I am disappointed that there is no mention in the Bill of collaboration with the new combined authorities, especially those, such as the one in Greater Manchester, that are to take on some of the skills agenda. What role does she think local government and local enterprise partnerships have in making sure that higher education is part and parcel of that partnership for a better local economy?

[Justine Greening]

I agree with the hon. Gentleman that those different parties have to work together at a local level. The University of Roehampton, in my constituency, does really great work in reaching out to our local community. As a higher education institution, it has a large proportion of students from more disadvantaged backgrounds studying for degrees. He is right about that. I am determined to make sure that the higher education sector plays its role in communities more broadly. I do not believe that collaboration necessarily has to be codified in the Bill, as he suggested, for it to happen, but I agree with the sentiments that he expressed.

[Several hon. Members rose—]

[Justine Greening]

I want to make a little more progress, because it is important that I continue to inform the House of how the office for students will work, and particularly how it will regulate providers.

If a provider breaches its conditions of registration, the OFS will have access to a range of sanctions, including monetary penalties and, in extreme cases, suspending or deregistering providers, to safeguard the interests of students and taxpayers and to maintain the world-class reputation of the sector. Our proposals have the support of those who know best, with the likes of Professor Simon Gaskell, chair of a taskforce that was established to review the regulation of the sector, commenting that

“there have been a number of significant changes to the funding of higher education and to the number of providers offering courses. Regulation of the sector needs to keep pace with these developments if confidence, and our international reputation, are to be maintained.”

Indeed, only today the University Alliance described the Bill as

“a raft that can take us to calmer waters”.

[John Pugh (Southport) (LD)]

The Secretary of State has emphasised the need for collaboration. Clause 2(1)(b) mentions

“the need to encourage competition between English higher education providers…in the interests of students and employers”.

She has identified that collaboration is in the interests of students and employers, so why is she objecting to putting it in the Bill?

[Justine Greening]

I feel as though we are already delving into the Bill Committee debate that will no doubt take place on this clause. I welcome the House’s engagement with the Bill. It is important to get it right, and we will have an important debate to make sure that it is properly structured. I look forward to the Bill Committee debate when Parliament returns after the recess.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

Will the Secretary of State give way?

[Justine Greening]

I will take one more intervention before I make some progress.

[Roger Mullin]

I welcome the Secretary of State to her new post, and I look forward to her future briefings on the Scottish education system being more accurate. May I provide some insight into one aspect of collaboration, which could usefully be strengthened? Twenty-five per cent. of all students who enter higher education in Scotland do so through the college sector, and many colleges are in collaborative arrangements with universities. We have 2+2 arrangements, as we call them—two years in college, and two years in university—and so on. That is something that the English system could well have a look at.

[Justine Greening]

The hon. Gentleman makes a further point about the need for universities to be part of their broader communities. It is probably worth my setting out how much I welcome the fact that the further and higher education briefs are now part of a broader Department for Education brief, which makes us well placed to look across the piece at how the institutions that help to develop our young people’s talent and potential can work effectively together, as well as with broader communities.

Thanks to the reforms we introduced in the last Parliament, the entry rate for young students from disadvantaged backgrounds is at a record level. In the final year of the last Labour Government it was around 14%, and today it stands at almost 19%. But we need to go further. As the Prime Minister said last week, this Government

“will do everything we can to help anybody, whatever your background, to go as far as your talents will take you.”

This legislation supports the key principle that higher education should be open to all who have the potential to benefit from it, but this has to be about more than just accessing opportunity. Although application rates for students from disadvantaged backgrounds are at record levels, we want to ensure that those students are supported across their whole time at university. Too many disadvantaged students do not complete their courses, for various reasons, and universities can and must do more to help them to get across the finishing line. That will allow them not only to gain the degree that they set out to get, but to reap the career rewards of doing so.

[Jo Stevens (Cardiff Central) (Lab)]

I, too, congratulate the Secretary of State on her new position. What does she think is an acceptable level of debt for a graduate?

[Justine Greening]

We need to look at the level of tuition fees that has been introduced, the rate of applications from disadvantaged students, and the number of disadvantaged students who are going to university. Those young people are taking a decision to invest in themselves, and they believe that it will offer value for money. The Bill will enable us to strengthen that decision by underwriting the teaching in universities with a teaching excellence framework.

[Jo Churchill (Bury St Edmunds) (Con)]

I welcome my right hon. Friend to her position, and I look forward to working with her. We have had much discussion of disadvantaged young people, but how will she encourage participation among mature disadvantaged groups, particularly women? There has been a large drop-off in the number of women part-time students. What progress can we make in that area, particularly in the teaching, nursing and caring professions, which women often go into after they have had their families?

[Justine Greening]

There are two areas in which the Bill can particularly help. First, it will provide transparency and give us a clearer sense of who is entering and going through our university system. One of the functions of the office for students will be to improve transparency, which will help us not only to improve access but to widen participation. Secondly, some of the financing changes will free up opportunities for people who find it harder to go to university because they cannot get the finance for a course. The Bill will allow us to take those two steps forward.

We are going further than Labour ever did to strengthen access agreements. Under the Bill, institutions wanting to charge tuition fees above the basic level will have to agree plans that look at participation as well as at access. We want to ensure they are doing everything they can to support students from disadvantaged backgrounds throughout their course to reduce the number of drop-outs and help all students into fulfilling careers.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I join other hon. Members in welcoming the Secretary of State to her new post. On enabling students to access higher education, there is one group that has not been able to access it—Muslim students whose religious beliefs prevent them from taking out a loan. I know she will point to the new provisions in the Bill on sharia-compliant loans, but why does she believe that this specifically requires legislation? Many of these students have been waiting years, if not decades, to be able to go to university. Why is she making them wait even longer?

[Justine Greening]

The Bill puts in place the powers that we need to take a more flexible approach to funding. As the hon. Lady says, some students are less likely to want to take out a conventional student loan. We need to respond to that if we are to widen participation, and that is precisely what the Bill does. It will actually achieve the aims she talks about.

We will have transparency, which will require higher education institutions to publish application, offer and progression rates by gender, ethnic background and socioeconomic class. Across all its functions, the office for students will have to take into account the need to promote equality of opportunity across the whole lifecycle for disadvantaged students, not just access.

Academic autonomy is the bedrock of success for our higher education sector. The Bill introduces measures to safeguard the interests of students and taxpayers, while protecting academic freedom and institutional autonomy. It enables the OfS to be independent of Government and the sector, as a regulator should be. It will be an arm’s length non-departmental public body, just as the Higher Education Funding Council for England is now.

The office for students will operate a risk-based approach to regulation by concentrating regulation where it is needed and ensuring the highest standards are maintained across the sector, while reducing the regulatory burden on the best performing institutions. If a university is doing well, it should not have to worry so much about bureaucrats peering over its shoulder.

However, one important aspect of such risk-based regulation will be a more flexible approach to degree-awarding powers. We will move away from the one-size-fits-all approach, which currently requires smaller, specialist institutions to demonstrate that they can award degrees in any subject, and requires new providers—including some of the very best overseas institutions—to spend four years building up a track record in England, irrespective of a long record of excellence elsewhere in the global academic world.

The provision to vary degree-awarding powers will enable specialist institutions to gain such powers only in the subject areas in which they have an interest or a need. It will enable the office for students to give degree-awarding powers on a probationary basis to institutions that can clearly demonstrate their capability and have a credible plan to ensure they meet the full degree-awarding powers criteria after three years. As part of that, the OfS will require clear and robust protections for students when granting probationary degree-awarding powers.

[Liam Byrne]

The Secretary of State is being characteristically generous in giving way. Is it her expectation that many of our great further education colleges that are already providing higher education will be able to acquire their own degree-awarding abilities, in a much more generous way than is currently possible, as a result of this change?

[Justine Greening]

Broadly, the rule that 55% of students need to be studying on degree courses will remain. In the end, however, what we are trying to do more broadly with these changes is to open up the chance for new high-quality institutions to join existing high-quality institutions in our higher education sector in being able to offer degrees.

[Wes Streeting]

The Secretary of State is being very generous in giving way for a second time. She may not have seen the policy advice, but a briefing was caught on a long-lens camera outside No. 10 back in April. It said that the Government’s plans risk

“creating poor quality provision for marginal students”.

What is she going to do to mitigate that risk?

[Justine Greening]

The Bill is about ensuring that we have a strong, robust, successful, innovative and high-quality higher education sector for Britain’s young people. The hon. Gentleman sets out problems and then suggests we should not bring forward a Bill to tackle them.

[Mark Field (Cities of London and Westminster) (Con)]

It strikes me that the Secretary of State is giving a lot of good detail on the safeguards, which should satisfy most reasonable people. Others may feel there is something of a closed shop on degree-awarding powers, and I am very glad that the Bill will, among other things, do its best to break it down. Such a closed shop is unacceptable, particularly in relation to global education provision, which, as she says, we benefit from and can push out to other parts of the world.

[Justine Greening]

My right hon. Friend is absolutely right. For the many institutions that have spent years working steadily to get their own degree-awarding powers, these changes will be welcome. They should not have to wait so long, and once the Bill is passed, they will not have to do so.

[Mark Field]

I suspect institutions that have spent many years trying to get degree-awarding powers and have not quite got them will feel that they have spent a frustratingly long time doing so. None the less, I am sure this provision will be welcomed in the years to come by many of the institutions she is talking about.

[Justine Greening]

I am sure my right hon. Friend is right.

[Mr Jim Cunningham (Coventry South) (Lab)]

rose—

[Justine Greening]

I will make a bit more progress, because I recognise that many hon. Members want to contribute to this debate. I will give way in a second, but it is important that I briefly set out for the House how the OfS will be able to act when students and taxpayers are not well served. When there are grounds to suspect a serious breach of a provider’s conditions of registration or funding, the office for students will have the power to enter and search a higher education provider, subject to the crucial safeguard that a court warrant must be obtained first.

[Mr Cunningham]

rose—

[Justine Greening]

I will give way to the hon. Gentleman because he has been trying to catch my eye, but I must then try to make some progress on this long Bill.

[Mr Cunningham]

I have two universities in my constituency. What did the Secretary of State mean when she said that other institutions can share in these changes? I was not clear what she meant.

[Justine Greening]

I was talking about the changes to degree-awarding powers. For institutions that may currently feel they cannot go down this route because it is simply too complex and long-winded, we will open up the sector to enable great institutions to step up to become, over time, an institution that awards degrees directly and then for excellent institutions to become, after a further three years, a university. This is important for Britain. If we are to be a country in which our young people have the number of places they want at high-quality institutions, with the range of different degrees that they want and that our economy needs, it is important to have a higher education sector that can respond and that is what the Bill seeks to address.

The Bill enables the OfS to require registered higher education providers to have a student protection plan in place. Students will want to know what to expect from their providers if their course of study cannot be delivered. Although some providers currently have student protection plans, the new requirement means that students of all registered providers will be protected.

This Government believe that no one with the necessary ability should be denied a place at university. That is why, for the first time ever, we are providing direct financial support for those undertaking postgraduate masters study. We also intend to extend direct financial support to postgraduate doctoral study and to introduce part-time maintenance loans comparable to those we give to full-time students.

The Bill will make significant improvements to higher education and research, but let me reassure the House that none of these changes will be delivered by undermining other routes into highly skilled employment. We are committed to creating 3 million apprenticeships by 2020, and the Government recently launched the skills plan, which is our response to Lord Sainsbury’s independent review of technical education, setting out an ambitious overhaul of the post-16 skills system. Taken as a whole, those changes will allow young people to make well-informed decisions about their futures, giving them every opportunity to achieve their potential and, at the same time, improving the quality, relevance and value of learning.

I have talked a lot today about teaching and students, but the UK is also a world leader in research and innovation. Established and emerging economies alike look on in envy not just at the quality and breadth of our research, but at our incredible track record of turning innovative ideas into life-changing, marketable products and services. The Government are protecting science resource funding at its current level of £4.7 billion, which will rise in cash terms every year for the rest of the Parliament. At the same time, we are investing in new scientific infrastructure on a record scale, delivering on the £6.9 billion science capital commitment in our manifesto.

Few people understand the research landscape better than the Nobel prize-winning geneticist Sir Paul Nurse. Aside from being an inspirational example of how social mobility can happen in our country, last year he completed an independent review of our seven research councils, recommending that the seven existing bodies be brought together into a single body. The Bill will make his recommendation of

“a formal organisation…which can support the whole system to collectively become more than the sum of its parts”

a reality.

[Mike Wood (Dudley South) (Con)]

Coventry University, Birmingham City University and the University of Wolverhampton recently launched a partnership to bring together their applied research and training expertise. Will the Secretary of State ensure that the measures in the Bill to implement Paul Nurse’s recommendations support such innovative collaboration, so that, as she says, the public investment in our research can add up to more than the sum of its parts?

[Justine Greening]

The Bill will help in two ways. Not only will it naturally bring the research councils together under one umbrella organisation; it will give that organisation a much more powerful voice when developing links with the business community. I know from the time I spent in industry before entering the House that the link in Britain between academia and research and business is a strong one, but one that can be strengthened further. As we consider how our country will be successful as we navigate through the Brexit process, making the most not only of our young people’s talents, but of our most world-class research institutions and the brains within them will be key.

The Bill will bring into being a new body called UK Research and Innovation that will strengthen the strategic approach to future challenges, while maximising the value of the Government’s investment of more than £6 billion a year in research and innovation. UKRI will provide a strong, unified voice for the UK’s research and innovation funding system on the global stage, cementing Britain’s world-leading position. UKRI and the Office for Students will work closely together to ensure that there is a co-ordinated, strategic approach to the funding of teaching and research in England.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Welsh universities have traditionally had an awful deal out of the seven research councils structure. In 2014-15, we received 2% of the total budget, whereas our population share would demand at least 5%. Does the Secretary of State think that that 2% is fair for Welsh universities, and what will the new structure do to address the situation? Would it not be better to create four research councils for the four component parts of the British state and Barnett-ise the funding?

[Justine Greening]

The Bill is about strengthening our capacity to do world-beating research. The money will follow where the excellence is. I have no doubt that there is significant excellence in Wales. That is why there has been significant funding for some of our world-class research that is taking place in that part of the UK. The Bill is about enabling the seven research councils to add up to more, as Sir Paul Nurse said, by bringing them under one umbrella.

The Bill will ensure that the UK is equipped to carry out more multidisciplinary research and to better respond with agility and flexibility to the latest research challenges. By bringing Innovate UK into UKRI, we will harness the opportunities across business as well, so that business-led innovation and world-class research can better come together and translate our world-class knowledge into world-class innovation. Innovate UK will retain its individual funding stream and continue its support for business-led technology and innovation.

We are protecting in law, for the first time ever, the dual-support research funding system in England—a system that many people consider to have underpinned universities’ confidence to invest in long-term research and that has contributed to our well-deserved global reputation for excellence.

The formation of UKRI will provide crucial support during this period of change in our relationship with the European Union. As we face new challenges, we need a strong and unified voice to represent the interests of the research and innovation community across Government, across Europe and around the world.

[Margaret Greenwood (Wirral West) (Lab)]

Unison, the union, has about 40,000 workers in higher education institutions, which represents a great range of staff. It is very concerned, as am I, that the vote to leave the European Union has produced real uncertainty that will create challenges in terms of funding, research, staffing and students. It asks a question that I would like to put to the Secretary of State: why is there a rush to do this? Should we not look at the new landscape, think very carefully and then decide what we should do?

[Justine Greening]

I do not agree with the hon. Lady, but I recognise the challenges that she talks about in making sure that the universities sector and the higher education sector more broadly come out of the process of Brexit stronger. That is why we are engaging in a structured way across Government and outside Government in sectors such as HE to ensure that we have a smart approach to taking Britain through the Brexit process. I refer her to the point that the University Alliance made earlier today about the Bill being

“a raft that can take us to calmer waters”.

The Bill is how we will provide the security, vision and direction for a strong higher education sector.

[Liz McInnes (Heywood and Middleton) (Lab)]

rose—

[Jo Stevens]

rose—

[Justine Greening]

I have taken an awful lot of interventions, but I must now make some progress and allow the debate to continue.

Our universities are world class and our researchers are world beating. That is because over the years, over the decades and over the centuries, they have evolved and adapted to face the challenges and changes of the world around them—the world that they do much to study, understand and explain. We have to make the bold moves that are needed to secure their success for many more years to come. These changes are about further unlocking and unleashing the talents of our people and our best brains. I want the young people of today and tomorrow to be given every opportunity to succeed. That is why I am proud to put the Bill before the House. I pay tribute to the Minister for Universities and Science, who has done so much work to get the Bill to this stage.

The Higher Education and Research Bill will put more information and more choice in the hands of students. It will promote social mobility so that every person in this country has the opportunity to make the most of themselves. It will boost productivity in the economy as we realise our future outside the European Union. It will enhance and cement our position in the world as leaders in groundbreaking research, and ensure that students and taxpayers receive value for money from their investment in education. It is the right thing to do and the smart thing to do.

The Prime Minister told us last week that

“together we will build a better Britain”.

I am clear that education has to be at the forefront of that. Our universities deserve the best, our students deserve the best and our researchers and innovators deserve the best, so that they can play their role in building that better Britain. The Bill will provide them with nothing less than the best, and I commend it to the House.

14:19

[Mr Gordon Marsden (Blackpool South) (Lab)]

I congratulate the Secretary of State and welcome her to her position. We look forward to the development of her thoughts on the subject.

The Bill has positive elements, which the Opposition welcome. The recognition and identification of social mobility as a key factor in the expansion of higher education is important. It is crucial that we create a system that works for social mobility not just for young people, but for adults. The introduction of a transparency duty for university admissions will be a good start, but more must be done.

We welcome the promise at last of an alternative student finance method, as pledged in the White Paper. We hope that it addresses the concerns of Muslim students about a lack of sharia-compliant funding. The Opposition had to press the Government hard on that issue during the maintenance grants debate in January, as my hon. Friend the Member for Walthamstow (Stella Creasy) has made clear. I am pleased that, finally, it has been taken on board.

I praise the Minister for Universities and Science for his strong and consistent advocacy of the importance that the EU has had for universities in the UK. During the referendum campaign, he spoke trenchantly against Brexit, saying that

“we’re potentially confronted with a funding black hole roughly equivalent to the size of one of our world-class research councils.”

He also said that ditching membership would mean

“losing a seat at the table when the big decisions about funding and priorities are made”.

There’s the rub. The reality is that our world and the education world are utterly changed since 23 June. That makes all the concerns and criticisms that the Opposition and others have voiced on the Bill much more powerful, but we find that the Government are still groping for answers. The Bill too often produces 20th century answers to 21st century challenges. It is laced with an obsession for market-led ideology that does not reflect the realities in higher education or those of the post-Brexit world.

[Mark Field]

As someone who was on the same side of the debate for the 23 June referendum, I recognise the concerns about leaving the EU. However, we must look to the future. There are great opportunities. One of the great things about our higher education system is that it is focused very much on being a global operator, particularly given the strength of the English language. Therefore, there will be tremendous opportunities. It is a difficult, unpredictable and uncertain time, but none the less a time that is open for and ripe with opportunities for our best higher education institutions.

[Mr Marsden]

I welcome what the hon. Gentleman says and the fact that he spoke so staunchly on the part of the remain campaign. The fact remains, as it were, that the Government have not put forward a pathway. I will talk about that later.

Everything one needs to know about that obsession can be found in one small section towards the start of the White Paper, which states that

“we need to confront the possibility of some institutions choosing – or needing – to exit the market. This is a crucial part of a healthy, competitive and well-functioning market, and such exits happen already – although not frequently – in the higher education sector. The Government should not prevent exit as a matter of policy...and it will remain the provider’s decision whether to exit and their responsibility to implement and action any exit plans.”

Such breezy complacency and laissez-faire attitudes would be comical were it not for the dire consequences that they threaten for thousands of students and dozens of research and higher education institutions.

The Government have made great play of their new teaching excellence framework as a way of strengthening HE’s offer to students. The Opposition of course approve of moves to value excellence in teaching—who could not?—and we approve of the concept of measuring teaching quality, but the lack of detail on how it will work is added to by concerns that the Government are using the TEF as a potential Trojan horse for removing the fee cap. If that happens, it could bring in its wake a two-tier system and a very damaging separation between teaching and research institutions.

We are strongly opposed to linking the TEF with fees, as are the majority of higher education institutions’ respondents to the Green Paper, which is why the Secretary of State was so coy in saying that only the best people believe in it. We are strongly opposed because, in the first year, it would allow almost all universities or HE providers to charge an automatic index-linked inflation increase to students. That is particularly problematic post-Brexit, with the fragility of our economy. There are no guarantees on the level of inflation for the next few years. Therefore, students could face significant increases in fees—the Government cannot guarantee otherwise.

In any case, as the White Paper makes clear, all bets are off, because we do not know what further increases will be permitted by the second and third stages of the TEF. The University and College Union and others are deeply concerned by the lack of parliamentary scrutiny built into the TEF. By putting key aspects of the TEF proposals out for consultation separately from the Bill, the Government are denying Parliament the chance to debate the vital aspects of the plan in full. The equality impact assessments the Government have published alongside the Bill raise further questions about the devil in the details of the TEF.

[Amanda Milling (Cannock Chase) (Con)]

Does the hon. Gentleman recognise that the link between the TEF and fees means that universities will be made more accountable for any increase in fees?

[Mr Marsden]

There is no evidence for that. The point is that, if universities have a fees case to make, they should make it. A number of universities have already said—I will say more about this shortly—that they do not wish to pursue that link. It is telling that the House of Commons Library briefing says of the impact assessment:

“The material in the assessment is nearly all qualitative. The impact of few, if any, of the policies are explicitly quantified.”

The TEF in its current format will not provide assessment by course. The equality analysis states that the

“TEF will recognise both part-time and full-time teaching quality”

but there are no details on how that will happen. Institutions such as Birkbeck and the Open University, which teach a wide range of students from more varied educational backgrounds, have concerns that they may not be dealt with in the same way as students from more traditional backgrounds.

[Rebecca Pow]

Will the hon. Gentleman give way?

[Mr Marsden]

I will make progress and come to the hon. Lady presently.

Long-established institutions such as Cambridge University have said quite straightforwardly that they do not support the link between the TEF and fees. Cambridge University states:

“it is bound to affect student decision-making adversely, and in particular it may deter students from low income families from applying to the best universities”.

No wonder the Government’s equality analysis had to resort to newspeak, saying that

“TEF is expected to benefit students regardless of their… characteristics”,

in an attempt to meet their public equality duty.

[Mike Wood]

Will the hon. Gentleman give way?

[Rebecca Pow]

rose—

[Mr Marsden]

I will give way to the hon. Member for Taunton Deane (Rebecca Pow).

[Rebecca Pow]

As someone who has put two daughters through university and who has a son who is thinking about where to go, I believe it is essential that more focus is put on the quality of what is offered at universities. That is what the Bill fundamentally tries to work in, which I applaud.

[Mr Marsden]

There is absolutely nothing wrong with quality, but we have to see where the quality extends. The truth is that that is not clear in the TEF before us.

In addition to the first year, we know that only the simplest of tests will be available to allow HE institutions to obtain tuition fee increases. In essence, it is a cash-in coupon. There are no guarantees about where that will take us in fee changes in years two and three. It is therefore not surprising that the vice-chancellor of the University of Bedfordshire, Bill Rammell, who is a former HE Minister—[Interruption.] When the Lord Commissioner of Her Majesty’s Treasury, the right hon. Member for Bexleyheath and Crayford (Mr Evennett), stops barracking from the Front Bench, he might find that one or two respondents to the Bill have close connections with the Government and the Conservative party. It is not surprising that Bill Rammell says that the TEF proposal

“risks the commoditisation of higher education”,

even if the Government have had to row back from their original plans.

It took about six years in the early 2000s to get a broadly acceptable framework for measuring research quality with the research excellence framework. Simply using existing datasets and metrics in teaching such as the national student survey will not on its own do the business. The Business, Innovation and Skills Committee said that the use of metrics as proxies for quality was problematic. Although the White Paper claims that TEF awards will add up to £1 billion in 10 years, there are no cost predictions. The Government are proceeding on the assumption that there will be only one TEF assessment per university—a one-size-fits-all approach that has been criticised by a wide range of commentators, not least at the all-party parliamentary group meeting that the Minister spoke at last December. Where is the recognition of that, and where is the strategy for finessing that assessment, which could perhaps be done by schools of humanities, science, social science and so on?

[Michael Gove]

The hon. Gentleman is being very generous and I do not doubt his commitment to improving higher and further education, but for the life of me I cannot understand what his argument is with the teaching excellence framework. He begins by attacking the Government for extensive consultation and then attacks the Government for being too narrow and rigid in their application. Which is it: are the Government too open-minded or too narrow-minded? Can he enlighten the House?

[Mr Marsden]

From a right hon. Gentleman who has demonstrated his ability to turn on not one but several sixpences in the past few weeks, I think that that is a little rich. I will, however, deal with his particular point. It is not a question of saying that we do not support the teaching excellence framework. What we are saying is, “This is the Government and these are your Ministers. Bring forward the material to demonstrate it is going to work.” So far, they have not done so.

[Amanda Milling]

Will the hon. Gentleman give way?

[Mr Marsden]

No, I will make some more progress.

The higher education White Paper emphasises repeatedly that the driver for the changes is that half of job vacancies from now until 2022 are expected to be in occupations requiring high-level graduate skills, but there is little clarity on what that means. As my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) asked earlier, does that include levels of technical professional competence? If so, why is there no strong linkage with the skills plan released by the Department for Business, Innovation and Skills just two weeks ago? There is an obvious need for crossover between the skills plan and the higher education Bill, but the disconnect between them makes even less sense now that the Department for Education will be taking on skills and further education policy. If the opportunity for students at 16 and beyond to switch between higher education and vocational routes is to be real, why is the skills plan not linked directly with the HE White Paper?

A recent University and College Union survey showed that less than 10% of respondents recalled learning anything in school about higher education before year 9, or having any contact with a university. The Education Committee I served on and Peter Lampl at Sutton Trust have said for a number of years that it is imperative we give young people the aspirations they need at a much earlier age, so that they can make more informed choices about their future educational plans. I would like to see much more about that in the Bill, as I am sure would the rest of the House.

There are also huge question marks, following the changes to the mechanisms of government, about where the money is coming from. Will it all transfer over from the new Department for Business, Energy and Industrial Strategy? With the existing cuts across that Department, where will the resources to implement these wonderful changes come from, especially since the Department has huge school funding issues to fix?

The Government strategy for expanding HE and skills rests on their “loans will cure all” philosophy. As we have already seen, however, that is no guarantee. Less than 50% of the money allocated to the 24-plus advanced learner loans was taken up because of resistance from older learners. BIS had to return £150 million unused to the Treasury. On top of that, students have already been hit in the past 12 months by the triple whammy of scrapping maintenance grants for loans, freezing the student loan threshold and removing NHS bursaries. That has damaged social mobility for the most disadvantaged students.

The Bill places immense faith in the magic of the market. Central to its proposals are a concentration on creating a brave new world of what the Government are calling HE challenger institutions, which are likely to be private and for-profit. Before any Government Member jumps up, let me say that we are not in any way, shape or form opposed to new institutions. [Interruption.] The Secretary of State has had her say. I speak as someone who taught for nearly 20 years in what was a new institution, the Open University, which is one of the proudest boasts of the Labour Government under Harold Wilson. We will take no lessons from Conservative Members on that. The Government propose that new providers could be given degree-awarding powers straight away. Students would in effect be taking a gamble on probationary degrees from probationary providers. Who is going to pick up the pieces if it all goes wrong? It is still unclear what resources the proposed office for students will have to police this progress. What if the problems are not picked up until students have been working for their degrees for, say, 18 months? As I have said previously, the White Paper chirrups about the

“possibility of exit being a natural part of a healthy market”,

but students are not market traders and they do not easily slip a second time into the womb of higher education when they have been let down by that new shiny market.

Cutting corners in the process of becoming a higher education provider also poses a serious risk to staff and students, and increases the risk of public money being misused. We know that in 2011 concerns around BPP and the Apollo group caused the previous Secretary of State, David Willetts, to pause a major extension. Previous expansion of private providers in other jurisdictions has already affected the reputation of their higher education systems, with reports of phantom students, fraud and low quality of education. As Research Fortnight argued in May:

“The government’s proposed reforms are being billed as bold and innovative but in fact they are no such thing.”

It says the wording

“proportionate for the Bill’s regulatory aspects”

is “code for light touch” and that

“instead…the UK government has instead decided to emulate a model from which many in the rest of the world want to escape.”

Encouraging universities or new providers is important, but

“the title of university needs to be seen as a privilege…not an automatic entitlement”

and,

“in the long term it is quality that is at risk if the proposed legislation becomes law.”

One example of a potential threat to quality, which concerns a number of universities, might be the proliferation of private medical schools. Three new medical schools will be opened in England by 2017 and possibly as many as 20 may seek to enter the market in the next few years. These schools will be able to operate free of some of the restrictions facing publicly funded medical schools, in particular around the recruitment of home, EU and international students. That will create a distorted playing field, where existing institutions are unable to expand home or international intakes without penalty. It is also feared that they will have limited engagement with research, lowering the standard of medical education in the UK.

Baroness Alison Wolf was a part of the excellent Sainsbury report to which the Secretary of State referred earlier. In June, fresh from a stay in Australia, which has had its own provider controversies, she urged caution on the back of the experiences in higher education she had found there. She said:

“The Australian experience confirms the madness of the removal of caps on enrolments. I think it is morally outrageous that we encourage young people to take out these big loans and give up years of their lives when it is increasingly becoming obvious that in some universities the average earnings of graduates is lower than the average salary of non-graduates.”

UCU added its concerns, not least about the removal of minimum student numbers from the criteria for university title. So why are we scrapping the right to confer title by the Privy Council? In the rest of the world that might be seen as a symbol of excellence and scrutiny. The problematic unfolding and development of the office for students, certainly in its early years, means it will not be able to have the same sort of international clout, and it removes the role of Parliament from either approving or disapproving the university title as a backstop.

The alternative White Paper, produced by a broad group of researchers and academics—it is a good read—has also done us a service by reminding us of the history and chequered process over alternative providers under this Government and their predecessor. In December 2014, the Public Accounts Committee robustly criticised officials from BIS for repeatedly ignoring warnings from the Higher Education Funding Council for England about the for-profit sector. In the report published in February 2015, the Chair reported that

“Between 2010-11 and 2013-14, there was a rise in the number of students claiming support for courses at alternative providers, from 7,000 to 53,000. The total amount of public money paid to these students…increased from £50 million to around £675 million. The Department pressed ahead with the expansion of the alternative provider sector without sufficient regulation in place to protect public money.”

My hon. Friend the Member for Ilford North (Wes Streeting) has already referred to the famous photographed private memo casting doubt on BIS’s ability to solve this problem.

The Secretary of State talked about past objections. I think it was a recycling of something the Minister said recently to the Higher Education Policy Institute conference, although she did not go quite so far back as the Minister, who took us back to the 1820s and the “cockney universities”. When the Minister was asked what these new institutions would look like, having already had a lukewarm response from Google and Facebook, he could only say that a lot of them were interested.

The concern is for students whose institutions are forced to close. It is still unclear what resources the proposed office for students would have to police this or how affected students could be financially compensated and given a clear plan for completing their education. The White Paper says that all institutions will have an exit plan for their students, but how will it work? The Government’s own equality assessment admits:

“Ethnic minority students are more likely to come from a disadvantaged background which may mean that they cannot access the same financial or social resources as white British students in the event of a course or campus closure. We therefore expect”—

not “demand” or “will organise”—

“protection plans to have a greater impact on this group.”

[Margaret Greenwood]

On potential closures, does my hon. Friend agree that this is of particular concern to mature students choosing to study in universities in their immediate locality? Because they have to continue to work, support children and family members and so forth, a closure would create extreme difficulties for them.

[Mr Marsden]

My hon. Friend is absolutely right to bring us back to the nub of the issue, which is the family circumstances of the people affected.

In those blithe phrases from the equality assessment lurks the potential for hundreds of broken careers and dashed hopes of social mobility. As serious is the reputational damage that failed challenger institutions or scandals associated with them could do to universities as a UK international brand. The Government’s White Paper was already blasé about the potential knock-on effects for UK plc of their sweeping changes. HE providers across England and the devolved nations of Britain are internationally competitive because they are seen as part of a tried and trusted UK brand. There needs to be a UK-wide strategy in place to safeguard that. As we emerge into a post-Brexit world, it will be even more vital, if we want our UK brand to shine as brightly as possible, that we reassure Scotland and Northern Ireland, especially where there remain unresolved tensions over research between UKRI and the new England-only bodies.

The Government say that the office for students will cover access and participation, but what concrete action there will be to match the rhetoric remains unseen. There remain major concerns about how quality assurance will be affected by the merger of the functions of HEFCE and the QAA. The Government have consistently undermined their own rhetoric on widening participation with cuts to ESOL—English for speakers of other languages—adult skills and social mobility funding for universities, alongside their disastrous decision to scrap maintenance grants for loans, for which we held them to account in this Chamber in January.

Peter Lampl and the Sutton Trust, who have championed that access for more than a decade, repeated their fears in their briefing on the Bill, including, specifically—this has been alluded to but the Secretary of State was unable to give an answer—the fact that English students have the highest level of debt in the English-speaking world. The figures are: £44,000 on graduation and over £50,000 for those requiring maintenance loans.

[Michael Gove]

The hon. Gentleman is being exceptionally generous in giving way. In improving access to higher education, is not improving the quality of secondary education one of the most important things? Is it not a great tribute to our previous Prime Minister and to the previous Education Secretary, my right hon. Friend the Member for Loughborough (Nicky Morgan), that there are now 1.4 million more children in good and outstanding schools who now have the chance to go to university and achieve great things?

[Mr Marsden]

I am always happy to applaud excellence in the secondary sector, but it is a little rich coming from the right hon. Gentleman, given that he and his predecessor presided over a system in which level 4 schoolchildren were denied automatic access to work experience, which would have built up their skills and capacity to take some of these positions.

[Margaret Greenwood]

On quality in schools, does my hon. Friend agree that there is also the issue of access to further education, particularly adult education? I used to teach on an access to higher education course in a college for adults. When it comes to accessing higher education, that sort of provision is invaluable, particularly for people from disadvantaged backgrounds, but sadly the Bill is very short on anything to do with lifelong learning and part-time education.

[Mr Marsden]

My hon. Friend is absolutely right, and I intend to remedy that as best I can in my remaining remarks.

In the briefing for the Bill, the Office for Fair Access emphasises that it needs to retain the ultimate authority to approve or refuse access agreements. It is timely to emphasise that OfS board members should have expertise around social mobility and fair access. The Bill’s introduction of a transparency duty for higher education applications is positive, but as the Sutton Trust said in May, the Government’s record on improving social mobility is poor. We agree with the National Union of Students that the Government need to create a requirement for an annual participation report.

If we want the office for students to be a genuine office for students, there also needs to be a designated place on the board for a student representative. However, it is not only students who are key stakeholders but people working at all levels in our institutions, and that is why I particularly underline what Unison said about the lack of accountable strategic decision making around employers and students remaining a concern. That is something else that the OFS needs to look at.

We cannot get away from the fact that the student position is nowhere near as rosy as the Government are saying. For 20 years, the official position has been that maintenance support is not meant fully to cover the annual costs of living for full-time students. The loans are supposed to be supplemented by earnings or contributions from family. Too little attention has been paid to the other debts that students contract. The debate around increases to tuition fees is important, but the fundamental problem of sustainability also lies in maintenance support and student cost of living. That is why student dissatisfaction levels are so high and so alarming.

I turn now to the issues around the separation of regulation and funding between teaching at OFS and research at the new UKRI body. GuildHE says that it risks undermining some of the positive interaction between teaching and research. I have already set out the risks that allowing challenger institutions degree-awarding powers from day one could have on the quality of our institutions. The regulation needs to be robust, rather than just proportionate, but as I have emphasised when we debated the Government’s scrapping of student maintenance grants earlier this year, FE colleges are a key driver of social mobility. They deliver more than 10% of all HE courses in this country, often to the most disadvantaged students and often in places with a dearth of stand-alone HE provision and a history of low skills in the local economy. They span the country, from the NCG in the north-east to Cornwall college and my own excellent Blackpool and the Fylde college.

Last year, 33,700 English applicants were awarded maintenance grants for HE courses at FE colleges. One would have thought, therefore, that the Government would have seen them as a key element for expansion as part of their array of challenger institutions, yet hidden away in the annex to the impact assessment for the Bill is the Government’s forecast for the number of FE colleges that will be delivering HE as a result of the Bill. The forecast figure for 2027-28 is exactly the same as that projected for 2018-19, whereas other alternative providers are projected to more than double in number. It is true that the Bill will make it easier for FE colleges to get degree-awarding powers, but what comfort will that bring when systematic cuts to colleges’ ESOL provision, adult skills and other areas have reduced the capacity of FE to participate in HE expansion?

In addition, many key HE programmes on which both FE colleges and modern universities rely could be scrapped if up to £725 million of EU money currently going to local enterprise partnerships is lost—money that produces jobs and skills for them and their communities and on which hundreds of courses and staff depend.

[Liam Byrne]

Would my hon. Friend underline how important this point is? For many of the communities we serve, further education is the critical springboard into higher education. In the great city of Birmingham, we have the grand total of just 100 young people on level 5 apprenticeships. We cannot change that number unless we radically increase the way in which further education and higher education work together. That is why this element of the Bill needs highlighting as so important.

[Mr Marsden]

My right hon. Friend is so right; in his previous position at this Dispatch Box, he championed that position and continues to champion it excellently today.

We and many others, including the Royal Society, have major concerns about the merger of the science councils and the consequent tensions between the new UK model, English models and the devolved Administrations. It is an issue that seems to unite many people across the piece, whether it be the former President of the Royal Society, Sir Martin Rees, who has said that the plans were “needlessly drastic”; the Academy of Social Sciences, which fears that it will lose autonomy and weaken communication with academics over future research planning; or Paul Nightingale of the Science Policy Research Unit, who said that it was doubtful whether having an “extra layer of bureaucracy” would help.

We share the concerns of Cambridge University and others that there need to be stronger safeguards for dual funding and protecting the integrity of the QR. To deliver this dual support, there will need to be smooth interaction with the devolved Administrations, the Higher Education Funding Council for Wales, the Scottish Funding Council and the Department for the Economy in Northern Ireland. However, the Royal Society and others, and indeed the director of the University of Scotland, Alasdair Smith, are very concerned about how this will operate. These changes prompted the Lords Science and Technology Committee to write to the Minister to express its concerns. It has stated that it had serious concerns about the integration of Innovation UK into UK Research and Innovation. It is concerned that Innovation UK should retain its business-facing focus, and the recently distinguished Chair of the Science and Technology Committee, now the Under-Secretary of State for Health, the hon. Member for Oxford West and Abingdon (Nicola Blackwood), also asked for clarification on this point.

The proposed changes to the departmental landscape since last week split responsibility for research and teaching across UKRI and the office for students respectively. Two separate frameworks, the research excellence framework and the teaching excellence framework, both lack links to funding.

Now, of course, there are major concerns post-Brexit about how universities are going to fund that research. At present, UK universities receive 10%—just over £1 billion a year—of their research funding from the EU. The Times Higher Education says that 18 UK institutions face losing more than half of their research funding as a result of the decision to leave the European Union. This affects some of our newer universities as well as long-established universities in the Russell Group. That is why Professor Paul Nurse in his research review for the Government warned that leaving the EU jeopardised the world-class science for which the UK is known.

[Jo Stevens]

I have three universities in my constituency—two new ones and one Russell Group university—and they are very concerned about what is going to happen as a result of Brexit. Does my hon. Friend agree that we have had no reassurance from the Government about the replacement of the funds that currently go to our world-class universities?

[Mr Marsden]

I am afraid that I would agree. This problem has been amplified by people such as Chris Husbands, the Vice-Chancellor at Sheffield Hallam University, who said that four out of 12 of his research projects are now in jeopardy. These are issues that affect the bread and butter of the whole workforce. We did not think that this Bill was really fit for purpose before 23 June, but the difficulties have been amplified in the wake of the funding uncertainty and instability after the Brexit vote.

[Anna Soubry (Broxtowe) (Con)]

Will the hon. Gentleman give way?

[Mr Marsden]

Not at the moment, I am sorry.

Now is hardly the time for embarking on three years of creative chaos, meddling with what the Bill calls the “architecture of quality assurance”, where the White Paper cheerfully says on page 61 that HEFCE and OFFA will dissolve, following the creation of the OfS. It is therefore not surprising that many universities have urged a period of stability. The Vice-Chancellor of Coventry University, Stuart Croft, has said that

“to add the demands of that Bill to those of EU exit, at the same time, will be an intolerable burden for universities that, frankly, threatens to rock our very capacity to do everything we do to promote and extend the UK’s reputation globally”.

The Chairman of the BIS Select Committee, my hon. Friend the Member for Hartlepool (Mr Wright), has recently made a similar point.

There are more than 125,000 EU students at UK universities. What is to happen to their continued eligibility to study here or access student loans? If we are seen as insular and inward looking, what does that leave us with regarding the 10% increase in domestic and EU students by 2019-20, which the Government promised in the White Paper? The Chair of the BIS Select Committee also echoed these concerns, saying that

“the government has not provided that clarity needed to reassure individuals”.

The White Paper, of course, and this Bill argue that the new challenger institutions will be central for extending that, but at a time when our existing institution brands already risk losing tens of thousands of EU students, this obsession with untried, unnamed and untested providers could undermine rather than reward the sector. We should not think that will affect only England. There are 20,000 non-UK EU students at Scottish universities and 2,700 at Northern Irish universities.

Finally, what is to happen to the future careers of some of our brightest and best students and our future workforce? During the 2013-14 year, there were 15,000 UK students on the EU-funded Erasmus programme. This is not just about economic losses, but about the potential blighting of a whole generation, brought home to me by an email the weekend after the Brexit vote from a young man in Blackpool who, thanks to the EU Erasmus programme, had just completed a year of his university course in Munich. He said:

“I’m deeply concerned about our path forward as a nation.”

The former Chair of the Science and Technology Committee pressed the Minister on Horizon 2020, but the Minister refused to be drawn on future schemes to enable EU citizens to come to work in science. Why? Because he knows that, given her Home Office stance on migration, the new Prime Minister could veto it. Regardless, then, the Government are merrily pressing on with a Bill introducing major changes that could cause further massive disruption. No wonder people are saying, “If it ain’t broke, don’t fix it.”

The rhetoric of the White Paper is all about the mechanisms for gaining a rapid increase in young graduates, but there is little mention of the importance of adult skilling, and very little in the Bill to power it. There is a complete failure to plot any realistic lifelong learning strategy to tackle our skills gaps. We need to retrain and reskill older workers because there are not enough young ones.

There was much talk about improving social mobility by the previous Government, but little of it has touched on or benefited older and part-time students. The number of part-time students has plummeted by 38% and mature students have dropped by 180,000 since 2010. As the Open University has said:

“Part-time HE is a catalyst for widening participation. It is essential that the new government reaffirms”

their targets. The Secretary of State was quite right to talk about young people from disadvantaged backgrounds improving through part-time education, but that has not been seen for mature students, whose numbers have declined greatly.

The huge challenges are underlined by the latest survey of students by the National Education Opportunity Network, which says that

“over 40% may be choosing different courses and institutions than those they would ideally like to because of cost and restricting the range of institutions they apply to by living at home”.

This Government have talked the talk on widening participation, but they have not walked the walk. It is astonishing that in such a large Bill, they have not put centrally the importance of adult and part-time learning to improving social mobility. Instead, they tucked it away in a couple of paragraphs in the White Paper.

Speaking as someone whose passion for this area was fuelled by nearly 20 years as a course tutor in the Open University, and having cut my teeth as a post-grad with the Workers Education Association, I am proud to endorse, as is this party, an express commitment to part-time HE and adult education in the proposed general duties of the office for students. I have said previously that the worlds of FE, HE and online learning are morphing into each other far quicker than some Whitehall policy makes us realise. If we are not ahead of the curve, the consequences for our economic performance and social cohesion will be severe.

[James Cleverly (Braintree) (Con)]

The hon. Gentleman mentions a number of criticisms of competition in the university sector, but does he not agree with Lord Mandelson, who said in his response to the Government White Paper:

“I welcome this focus on the range of universities…as they are essential for social mobility”?

[Mr Marsden]

Lord Mandelson and I are at one on that; I welcome a range of universities, but I want to make sure—I am sure most Members would agree—that they do what they say on the tin and can be trusted in the first place. That is the whole point of what we are saying. [Interruption.] I know, from a previous incarnation, that the Whips are trained to say things like that, but the proof of the pudding is in the eating.

[The Lord Commissioner of Her Majesty's Treasury (Mr David Evennett)]

Wait and see.

[Mr Marsden]

I will indeed wait and see.

The Government should take into consideration proposals in the new report that has been prepared for the all-party parliamentary group for adult education, “Too important to be left to chance”. They should study the Fabian Society’s new proposals: it recommends gradually doing away with loans via national insurance and education learning accounts. The Open University, City and Guilds, the TUC, the Institute For Public Policy Research, Unionlearn and several other organisations have produced ideas to facilitate both credit transfer and personal careers accounts, and I have added my own thoughts. They build on the magisterial 2009 NIACE report “Learning Through Life”, co-authored by Tom Schuller and the late lamented Professor David Watson.

Knowledge is power, as shop stewards and industrial injury lawyers know only too well. Today we have an opportunity, but also a duty, to extend that power through learning to millions of workers across Britain. Lifelong learning should not be “siloed”. It contributes to social cohesion, so it is an issue for the Department for Communities and Local Government; it helps people to live longer, so it is an issue for the Department of Health; it helps to return offenders to society, so it is an issue for the Home Office and the Ministry of Justice; and it contributes to preparing economically inactive people to enter the world of work, if that is appropriate. I have laboured those points because I realise that, given the smaller budgets that the Education Ministers may have, they may have to go to some of the other Departments with the begging bowl if we are to see any progress in this regard.

Knowledge is not merely power, but the key to empowerment. We should be bold in the world of lifelong learning that we offer our citizens for 2020: we should offer practical skills along with pure knowledge. Instead, however, the Government have been content to make welcome but incremental changes, while the capacity of adult learning is unravelling further. As was pointed out earlier by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), the Bill contains little reference to the part that devo-max can play in expanding new providers, or to the productivity and job needs of the 21st century. That fear is echoed in the alternative White Paper, which states:

“'A private, for-profit university would have neither an interest in meeting a broader public remit nor the interests of the local economy in which it is located—its primary responsibility will be to its owners, investors and shareholders.”

Instead of looking at urgently needed and constructive ways of reducing the financial fees burden on our students, the Government have produced mechanisms which dodge Parliament’s ability to judge and regulate them. Instead of strengthening and shoring up our universities and higher and further education at a most critical time, they risk seriously undermining them by obsessively pursuing a market ideology. Instead of presenting analysis in the wake of Brexit, offering relief, assurances and strategies to safeguard both research excellence in our traditional and modern universities and the involvement of higher education in the local communities and economies that they serve, the Government have presented no answers to the urgent threats, such as brain drains, that are emerging post-23 June. Instead of strengthening our UK HE brand in the uncertain world in which we must negotiate post- Brexit, they have produced what many regard as a hotchpotch of structures in research and science, with unresolved tensions between new structures for England and the devolved nations of Scotland, Wales and Northern Ireland. They have continually ducked the suggestions made to them about pre-legislative scrutiny to try to iron out some of these issues, although, thank goodness, my hon. Friend the Member for Hartlepool has initiated an inquiry.

Given the result of the Brexit referendum and the collapse of the Cameron Government, we see how wise it would have been for the Government to reflect and take time. Instead, they are going hell for leather with a Bill that is obsessed with a toxic combination of market and competition-driven ideology. The small measures of progress and relief that they have offered in respect of social mobility could have provided an opportunity for them to paint a bold new picture of a system that would encourage social cohesion, but instead they have undermined their own social mobility agenda in the ways that I have described.

We could have had a Bill which addressed those issues, and which would have commanded wide support across the House and among the institutions that that supply HE and research, but instead, after a week in which the very structures of the Department for Education and the Department for Business, Innovation and Skills have been turned upside down, we are pressing on as if nothing had happened. Maynard Keynes famously said:

“When the facts change, I change my mind. What do you do, sir?”

This is not the Bill that this Parliament needs. It is not the Bill that universities and HE institutions needed. It is not the Bill that our country needs—that our countries need. It is a Bill that is currently not fit for purpose. Especially post-Brexit, we need a Bill that will provide direction and structure, and tackle and settle the needs of a crucial part of our national life for the next generation. That is why we cannot support this Bill’s Second Reading tonight.

15:05

[Neil Carmichael (Stroud) (Con)]

Let me begin by welcoming the new Secretary of State to her post. It is a great pleasure to see her on the Front Bench, and I think that she has a wonderful job. When she was describing her experience of being the first member of her family to go to university, I was reminded of the fact that the same was true of me. I remember heading down from Northumberland to Nottingham, thinking that I was going fairly far south until I met students who were arriving in Nottingham, but had travelled north. I was quite intrigued by that.

I enjoyed my time at university, as did the Secretary of State. As she said, getting to university really does matter, and for those who do, it is a fabulous experience. The point of our debate today is really to ensure that more people can do it, and more can be successful.

I also welcome the creation of a large “super-Department for Education”. It always struck me as absolutely barmy that the last Government but one, Gordon Brown’s Government, severed the Department and created a wasteland for post-16s. We never quite knew who was doing what, how it was being done, or who was funding it—quite apart from the fact that the link between schools, colleges and universities was effectively broken. The creation of this new Department is, I think, a fabulous step in the right direction. I remember discussing these issues with my right hon. Friend the Member for Surrey Heath (Michael Gove), and I think he would concur with what I have just said. As a former Secretary of State for Education, he is well placed to do that.

So here we are, with the right kind of Department. As Chair of the Education Committee, I am also pleased to note that I have even more to do, because the sector that we are discussing today is so very important. There is nothing more important than ensuring that the higher education sector thrives and prospers. I will give several reasons for that, but the obvious one is connected with social mobility and social justice. The brutal fact is that it is an abhorrent waste that there are people who could go to university in other circumstances but who cannot do so. That is completely unacceptable. We must have a society in which people who can, should and do want to go somewhere can go there. That is our job. It is not acceptable for groups of people, or individuals among groups of people, to be trapped.

[Jo Stevens]

On that basis, how does the hon. Gentleman justify the removal of national health service bursaries?

[Mr Carmichael]

I do think it important to attract people to the NHS. I think that today we should be concentrating on the Bill as it stands, but our Committee will certainly consider that issue in due course.

Let me return to my point about social justice and the need to extend it to all, because that is critical. In particular, we need to extend it throughout the country, to regions, areas and localities that have, in effect, been surrounded by a wall: a wall against hope, a wall against opportunity, a wall against achievement.

That leads me to my second key point. The Bill is also about productivity, because that is a critical issue as well. A society in which people can feel included, feel able to express themselves, and feel able to get the jobs and opportunities that they want must be a society that is also based on an economic, productive model. Productivity equals more opportunity, because it means people having more skills, being able to command a higher salary, and being able to do things that they could not otherwise do—so the productivity argument is at the core of why we have to improve our university sector in the way this Bill seeks.

[Mr Jim Cunningham]

Does the hon. Gentleman acknowledge that productivity is also linked to research and development, in particular R and D projects with Europe? There is a concern. The vice-chancellor of Warwick University thinks that withdrawal from Europe might have an impact on some of the projects it gets finance for. Will the hon. Gentleman’s Committee look at that, or has it already looked at that consequence?

[Neil Carmichael]

I thank the hon. Gentleman for his intervention. It is essential that we have R and D, and if we look at the comparators between ourselves and other countries that we are competing with we find some areas where we could and should be doing better—so the hon. Gentleman is absolutely right.

I want to make a point about productivity. The important point about the German economy, which according to the OECD is 28% more productive than ours, is that businesses, companies and professions understand that human resources—people—are the things that really matter. I shall give an example to show how I know that. I once went to a car factory in Lower Saxony, east Germany. It had been built from the ashes of the collapse of the communist regime, and it was producing Porsche cars. I asked the factory manager what the supply chain looked like, and he said, “I can show you”. He showed me the typical things from Bosch and Pirelli and all the rest, but colleges and universities—people—were also part of the supply chain. That is a very important point, because it shows that if we are really going to be productive and drive through the growth we need, we must consider the human resources. In making sure that we do so, this Bill is a huge step in the right direction.

[James Cleverly]

My alma mater, the University of West London, has relentlessly nurtured a relationship with the industries into which its graduates go. It tailors its courses to the needs of those industries and there is a real symbiotic relationship between the industries and the university. Is that a model we should be looking to expand across our higher education sector?

[Neil Carmichael]

That is a very good point and I was going to loop that in with devolution and so forth. My hon. Friend makes a powerful point: it is very important that our universities are connected to businesses and professions. I would make two further points. First, through devolution and making sure universities become dominant the partners of cities and other regions, they will be able to make those links, develop those stakeholding opportunities and contribute to the world of research and development that is so important beyond the university itself.

Secondly, we must recognise that businesses and professions have an interest in investing in universities and we should encourage them to do so both in the traditional way of supplying capital and in the most sensible way, which is supporting students to go to university, stay at university and develop research opportunities. There are steps in this Bill to make that happen, which is why I welcome it.

I like the idea that the office of students will be able to start helping to shape the new universities and create access to the degree subjects we need. That chimes with the knowledge I and everybody else now has that certain skill sectors are woefully undersupplied. We need to develop the university sector to help put that right. It is important that we develop that relationship.

I also welcome the fact that this Bill is saluting the Nurse review, which is an important contribution to the debate. I can see an opportunity for the Education Committee to have yet another hearing on who might be in charge of UK Research and Innovation, and I look forward to that given our recent experience. That structure needs to be user-friendly in the sense that it must engage with the world of research and all those interested in science, because we must remember that getting IP in the right place is important, as is recognising the value of IP and that there are sometimes questions about who owns IP and who is going to benefit from it. We need to set up a system that looks good and is able to deliver that structure.

I also want to talk about the question of destinations. We think about it all the time when we think of schools because increasingly it is destinations from schools that matter, rather than just qualifications and assessments. Destinations should definitely have a place. That is why I am pleased about the teaching framework, as I think it will help us shape the destination issue in a very interesting way.

[Tom Elliott (Fermanagh and South Tyrone) (UUP)]

Does the hon. Gentleman accept, however, that part of that process could be further education or regional colleges, as opposed to just universities, and that they have an important part to play in their relationship not only with schools, but with universities, so that teaching can be upgraded in some of them?

[Neil Carmichael]

Yes, of course I do. Colleges do produce foundation degrees, for example, and that has a logical link and extension to universities. The relationship between larger colleges and universities should be allowed to develop and be encouraged, because that is exactly the kind of fluid way in which we can address the question of getting the skills we need.

I want to end on a subject that is also critical: making sure we think about the world of education in a linear way, from start to finish. That is why I am so pleased to welcome the creation of this new Department. I wrote about it a few years ago, and hoped it would happen, and now it has. There were several reasons why I hoped it would happen. One of them is that we do need to see universities and colleges thinking more about what their relationship is with schools and academies. That is a key issue, and the direction of travel goes the other way, too. That will help us understand more about what the labour market and the skills requirements are.

[Michael Gove]

My hon. Friend the Chairman of the Select Committee is making, as ever, a compelling argument. I want to associate myself with the point he has just made about universities and higher education institutions playing more of a role in our schools. Does he agree that the leadership shown by Baroness Alison Wolf in ensuring that King’s College, London sponsors a maths school—an outstanding new free school—is exactly the model other universities should seek to emulate, and that if vice-chancellors want to show they are committed to social inclusion and social mobility they should sponsor more free schools and academies?

[Neil Carmichael]

That is an interesting intervention and I was coming on to that area, because the world of education is not just boxed up into different sections; it is linear. We need to see more mixing up of people within the sector. There is value in vice-chancellors knowing more about schools and academies and in lecturers getting more involved in schools. I also want to emphasise the value of businesses and professions going along as well. That will mean we get an education system that knows more about what is needed out in the world, that is more comfortable with itself in delivering those things, and that is reaching out to the people who most desperately need to be reached out to—those whom I described as being locked into places where they should not be and being deprived of opportunity and hope. That is what we have to put right on this journey we are embarking upon with the Second Reading of this Bill.

The Committee I chair will look at a lot of issues raised by the Opposition; I have taken note of one or two of them, because I want my Committee and this House to get this Bill right, as it is an important Bill. If viewed through the prism of Brexit the Bill is even more important. Brexit is a call to arms for our education system. We will have to provide more of the skills that we need because we will not necessarily be able to rely on the European Union to do that for us, and that must be in the back of our mind when we think about higher education, or indeed about all education.

15:19

[Carol Monaghan (Glasgow North West) (SNP)]

The SNP joins other parties in having concerns about the Bill. We do not dispute that some aspects of higher education need reviewing, and we welcome attempts to increase diversity and access to higher education. The Bill aims to transform the HE landscape, but it does not go far enough in terms of diversity, and it poses a serious threat to the international reputation of the UK HE sector. To press ahead with the Bill at a time when HE is already experiencing great uncertainty due to Brexit is reckless and will cause further damage.

There are significant differences between the higher education sector in Scotland and its counterparts in the rest of the UK. The SNP is supportive of the UK Government’s proposals to improve the standard of teaching through the teaching excellence framework, but it stresses the need to consider Scotland’s unique educational provision. Although Scottish HE providers will not be bound by the Bill, there are concerns that by not participating in the TEF, Scottish universities will be disadvantaged when attracting international students, who are a crucial source of funding for all HE institutions.

[Kirsten Oswald (East Renfrewshire) (SNP)]

I came to this place after working in an educational institution, and I echo my hon. Friend’s sentiments about the value of international students. Does she agree that that value is much more than just financial, and that all our students will lose out if attracting international students becomes a problem?

[Carol Monaghan]

I agree 100% with my hon. Friend. Diversity in our institutions and what we learn from overseas students enrich the experience for all students in higher education.

International students who are considering a move to a UK university could view an English university with a strong TEF rating as offering a better experience than a Scottish university with no TEF rating. Since the TEF will be grounded in quality assurance scores, and given that Scotland has a distinct quality assurance system, recognition of Scotland’s enhancement-led institutional reviews, and benchmarking those reviews against TEF ratings, would allow institutions in Scotland to continue to compete on a level playing field when attracting international students.

It is important to exercise caution around the use of metrics to judge quality of teaching. Certain metrics—graduate salary or student satisfaction, for example—can drive university behaviour in a negative way, as higher education institutions are incentivised to sacrifice certain subjects in favour of areas that produce more positive results in the criteria being measured. Courses that are more challenging and perhaps score lower in student satisfaction metrics—for example, vital STEM courses—could end up being dropped because they do not measure well on the TEF metrics. If metrics are to be used, it is important for our economy that they are carefully honed to ensure that the degrees being taken and the skills developed still meet the overall needs of society.

We should view with caution the drive towards marketisation of the student experience. Giving the power to award degrees to new untested providers on day one is a concern if there is no clear mechanism to ensure that those providers have a track record of delivering quality courses to students. Plans that assist the entry of “for profit” providers and award them with the title of “university” will be damaging as the UK competes internationally for students. Perhaps most importantly, those new institutions, which often have no record, will compete for significant numbers of students while allowing them to cherry-pick profitable courses.

[Mr Jim Cunningham]

I am sure the hon. Lady knows that the National Union of Students is concerned about what we call the creeping privatisation of the university service. We could end up with a situation like the mess we have in the national health service through privatisation by the back door.

[Carol Monaghan]

All SNP Members share that concern, and we should be worried about the move towards privatisation of the university system.

Courses that are more expensive to deliver—again, I mention STEM courses—will be left to traditional higher education institutions that will either bear that financial burden alone or, worse still, will abandon some of the courses that have earned the UK its worldwide reputation for excellence in that field. New institutions will be allowed to operate without providing services such as libraries or student unions, which are a key part of the student experience at university. Indeed, the Bill permits competition not on equal terms with existing universities, but on substantially reduced terms. The only assumption one can make is that the new providers will put profit before students.

The Government have outlined two models, and with the “low” fee cap of £6,000 we will have universities that potentially offer lower quality provision. At the other end of the scale, the higher fee of £9,000 can further rise with inflation. Where teaching is high quality, that is recognised as a strength of an individual course, not of an institution, yet fees will be the same for all courses in an institution. Creating a system that assesses the quality of a whole institution and allows it to raise the fees for every course based on that assessment when the quality of teaching will vary across departments, is unrealistic. It will create a framework in which students could study courses of lower quality at an institution that was judged to provide “generally” high quality, yet they would, unfairly, be charged higher fees for poor-quality degrees.

[Michael Gove]

Like the hon. Lady I am a huge admirer of higher education in Scotland, not least because in the middle ages my home town of Aberdeen had as many universities as the whole of England. In its most recent report, the Sutton Trust revealed that Scotland has the worst record of any part of the United Kingdom in admitting students from poorer backgrounds to higher education. What is going on?

[Carol Monaghan]

The right hon. Gentleman makes a useful intervention because the metrics used by UCAS for higher education in Scotland consider only entries directly from school. In Scotland, however, a large number of students—particularly those from disadvantaged backgrounds—take alternative routes in.

Tuition fees were trebled in 2012, but there is no evidence to suggest that there has been an improvement in teaching quality or in student satisfaction. The SNP strongly opposes any further increase in fees. We continue to support a system in which entry to university is based on the ability to learn and never on the ability to pay. We have a strong and principled record of opposing increases in tuition fees throughout the UK, and we will reject any Bill that seeks to increase the financial burden on students.

I am happy that the Secretary of State recognises that allowing the marketisation of higher education will increase the possibility of institutions exiting the market. The National Union of Students has raised concerns about the first responsibility of providers that collapse, and asks whether providers will place their responsibilities to their shareholders above their responsibilities to their students. Students might get monetary recompense when a provider collapses, but there is no recognition of the time wasted by students who start a course with an institution that subsequently fails. That time is indeed money for those students, whose careers and earning potential could be delayed while they seek an alternative provider. They are being asked to gamble with their fees and, more importantly, their time. The SNP has at its heart a commitment to higher education, and the idea of prioritising profit over education remains alien to us.

The new emphasis on participation, as well as access, is a positive measure. Plans to place a transparency duty on universities to publish data for students based on their gender, ethnicity and social background are a step in the right direction. I am also pleased that there will be scope to extend student financing to students who do not accept interest-incurring loans, thus creating a sharia-compliant manner of financing for students. But if the Government are going to meet their worthy targets of doubling the proportion of people from disadvantaged backgrounds going to university and of increasing the number of black and minority ethnic students going to university, the transparency revolution must also ensure meaningful outcomes and accountability.

[Kirsten Oswald]

Does my hon. Friend agree that the Government should look closely at the interaction between the further and higher education sectors in Scotland and take full account of the way in which they work to encourage participation by groups whose participation is currently limited?

[Carol Monaghan]

Absolutely. Those arrangements can benefit single parents and part-time students, who are often unable to access higher education in the same way that they could in the past.

Clear measures and pathways to enable disadvantaged students to progress have been steadily eroded. The removal of education maintenance allowance and maintenance grants for students from disadvantaged backgrounds, coupled with cuts to the disabled students allowance, do not match the Government’s ambitions in this area. Thankfully, the picture in Scotland continues to improve, and positive steps have been taken to ensure that access continues to increase. Young people from a disadvantaged background in Scotland are now more likely to participate in higher education than they have ever been in the past. In 2014, 41% of students from disadvantaged backgrounds were able to access higher education in Scotland.

Moving on to research, the commitment to a dual support system for research funding and to the Haldane principle have been widely welcomed by the research community. However, proposals in the Bill to reform the UK research councils could have implications for higher education institutions in Scotland, and we have concerns about the possible short and long-term consequences for Scotland’s research base. The retention of the seven disciplinary research councils is welcome, as mergers or changes to that structure could prove distracting to the research councils and could ultimately have a negative impact on the UK’s research capability. The Royal Society of Edinburgh has said:

“The RSE welcomes the statement that the individual research councils continue to hold their own budgets and provide the leadership for their own disciplines in an autonomous fashion.”

The creation of UK Research and Innovation in the context of a science and research budget will potentially give greater co-ordination across the research councils and we hope that it will offer a stronger voice to the research community in its interaction with the Government. Scotland currently performs well in attracting funding from research councils for grants, studentships and fellowships, with the latest recorded figures showing that Scotland attracted 13% of the UK total in 2012-13. However, research council spending on infrastructure in Scotland in that period amounted to only 5% of UK spending. Similarly, only 7% of Innovate UK funding is spent in Scotland.

We are concerned that the establishment of the UKRI could lead to a lack of consideration among the research councils and Innovate UK’s decision-making bodies of Government priorities and research needs in Scotland and the other devolved nations. Scotland’s research interests and priorities will be better served if the new UKRI board has experience and understanding of the research and innovation landscape and policy across Scotland—as well as the rest of the UK. We therefore ask that the devolved Administrations have representation on the board.

[Patrick Grady (Glasgow North) (SNP)]

My hon. Friend—despite what the annunciator was saying, she is not the hon. Member for Angus—and I visited the University of Glasgow, which is in my constituency and close to hers, to meet the staff of the space research department. They spoke to us at some length about the importance of research mechanisms and the ability of research councils to join funding all the way up. Does she agree that it is important when given the opportunity in a Bill such as this to try to make some progress on those issues?

[Carol Monaghan]

Absolutely. One of the problems found by institutions such as the University of Glasgow is that there is a black hole between different areas of research, so let us hope that the proposals lead to greater collaboration.

Collaboration between research councils and Innovate UK is positive, but Innovate UK’s core mission is different and distinct from that of the research councils. Its bridging role between business and the research community is about stimulating and supporting business innovation, and that mission could be threatened if Innovate UK does not work collaboratively with the academic research community. SMEs currently account for 90% of Scotland’s business base, and we hope that Innovate UK will continue to work with them in its distinct role.

Finally, the impact of the EU referendum has serious implications for the university sector and, given that Scotland clearly voted to remain in the EU, the UK Government must work with the Scottish Government to ensure that Scottish higher education institutes are not adversely affected. In 2014-15, over 13,000 EU students were studying for undergraduate degrees at Scottish universities. At the Science and Technology Committee last week, I asked the Minister for Universities and Science about the status of those students over the next few years, but he was not able to offer a guarantee beyond 2017-18. I call again for an immediate guarantee from the UK Government that all EU students studying in Scotland, and across the rest of the UK, will be able to continue their studies without disruption.

[Patrick Grady]

I thank my hon. Friend for giving way a second time. After the EU referendum, the University of Glasgow and many other Scottish universities were quick to state how welcome EU students were in their institutions. They went as far as they possibly could to assure students that they would continue welcome them and that they wanted students to complete their courses and remain valuable parts of their institutions. Does my hon. Friend welcome how quickly those institutions responded to the result? Will she press the Government for further reassurance?

[Carol Monaghan]

I agree 100%. The University of Aberdeen also took the bold step of saying that there would be no change in the status of any EU student—not just those currently studying, but future students looking to attend the university, a point which the right hon. Member for Surrey Heath (Michael Gove) might like to note.

The Bill does not reflect the impact of Brexit. Scottish institutions have not been offered any assurances that the €217 million of current EU funding will be made up by the UK Government. With the current instability in higher education, this is the wrong time to press ahead with Bill, so the SNP is not able to support it in its current form.

[Several hon. Members rose—]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. To help all Members, instead of setting a time limit, if we could do up to 12 minutes, we will all get equal time and we should all be happy.

15:40

[Mark Field (Cities of London and Westminster) (Con)]

I will try to keep this even shorter, Mr Deputy Speaker. It is a great pleasure, as a London MP, to be here with the dynamic duo who have now taken over our education system: my right hon. Friend the Member for Putney (Justine Greening), who is, unfortunately, not in her place, and my hon. Friend the Member for Orpington (Joseph Johnson). Having sat here for the past two hours, I can confirm that he has slightly blonder hair than she does, although I will allow excuses to be made about that. We have another London Member here, the birthday boy, no less: the right hon. Member for Tottenham (Mr Lammy). Mysteriously, when I read The Guardian today I saw that it said he was born in 1972 and I was sure that must have been a misprint— he does not look a day over 55 to me. I look forward to hearing his words later on.

At this point, I should make a brief declaration of interest, in that I have spent the past 11 years on the advisory board of the London School of Commerce, which is a private higher education provider.

[Michael Gove]

I am sure the House is delighted to hear that my right hon. Friend is a reader of The Guardian, but may I say that I am glad we do not have mandatory reselection in the Conservative party, because such a confession might not endear him to his constituents, and I very much hope he is here for many years to come?

[Mark Field]

That is very kind. As a vice-chairman of the party, may I say that there might be mandatory reselection in Surrey Heath before too long if we are not careful? I thank my right hon. Friend for the observation. Perhaps this is another Guardian misprint; perhaps that is what the problem has been.

As I was saying, before I was rudely interrupted, my role on the advisory board of the London School of Commerce has been enthralling and interesting. I have watched the development of a private education provider that has dabbled with the idea of having full university status and trying to get degree-awarding powers but has actually expanded overseas. This debate is probably not a great opportunity to talk about the Government’s immigration-related policies, but let me say that I do recognise that they have had an impact on the broader higher education sector; a school that had some 7,500 students coming from abroad only 10 years ago now has about a third of that number. However, one interesting thing has been that this college provides two-year degrees and charges well under the £9,000 limit, and there has been growth in the number of domestic students in recent years; there is a sense that this is a vocational, value-added degree going forward. I have watched the college develop further colleges overseas in places such as Kuala Lumpur and Dhaka in Bangladesh, and in a number of European centres. The fact that the college is often just regarded as an alternative provider fails to acknowledge its genuine contribution to the vital eco-system of higher education, where this Bill, perhaps belatedly, is doing important work. Elements of this Bill would have come into place some five years ago had it not been for some high-profile problems arising.

It is fair to say that there is an apparent sense of rude health in this sector, and we all have to recognise that this is a hugely important business and revenue generator for UK plc. That is partly because of the benefit of our having the English language, but to a large extent it is because we have highly recognised and highly approved standards of quality. We perhaps take that for granted with our own education providers, be they in the HE or the FE sphere, but this is not necessarily the case in many other parts of the world. The Minister will know that we have some 125 publicly funded HE institutions, which have almost 2 million students. The sector employs 170,000 academic staff and has an income in excess of £25 billion per year.

The research side of what is being proposed in the Bill is crucial, as innovation is at the heart of what is done in many of our universities, although not all. It is right to recognise that some providers in this sphere will not go down the research route, recognising that they will be focusing largely on vocational education. It is also important that we bear in mind that it is not just spin-off companies from the Cambridge universities of this world that do well; a huge number of high-tech companies, in pharmaceuticals and in other areas, have tremendous successes.

I have been the MP in this district for the past 15 years. Right in the heart of London, we have a tremendous array of HE providers. We have the super Russell Group of the London School of Economics, King’s College London, Imperial and, just outside my constituency, University College London. They are globally successful universities, and in many ways the dominance in popular culture of Oxbridge is now being threatened, in a positive way, by the raising of standards by those four London universities, which are now global players in what they do.

I also have in my constituency one of the sites of the London Metropolitan University, which has been a troubled institution. I have worked with a number of MPs across the House to try to make the case for its continued existence in these troubled times. When I hear debates such as the one that took place earlier today on the idea of allowing universities to fail, I think that that is an important part of any economic eco-system. I do not deny that the implications of such a failure for employees and for students cannot be ignored, but I believe that that is a healthy state of affairs if universities are not doing the job and not providing the education that they ought to provide. If that education is not of appropriate quality or there is insufficient demand for it, universities should not be preserved just because they have existed as institutions for a long time.

I welcome the Bill. I shall focus my brief comments on part 1, which deals with the creation of the office for students. No one can deny that the regulatory system in this sector has evolved into a bafflingly complex framework of organisations and an alphabet spaghetti of acronyms. The overlap between the Higher Education Funding Council for England, the Office for Fair Access and the Quality Assurance Agency for Higher Education has rightly been identified. The new mechanism will get rid of that overlap.

I wholeheartedly support the recognition of the role of students as consumers. They are far more conscious of that role than they ever were in my time as an undergraduate in the mid-1980s, and that is a positive thing. One of the by-products of students paying for their education is that they want to get good value from it. They will be much more critical of poor or repetitive teaching. They will want to ensure broadly that the facilities, both academic and non-academic, within the institutions to which they are paying that money are of a high standard. When I see undergraduates in my constituency, I am struck by how focused they are on getting the best out of their education. One might say that that is consumerism; one might say it is a source of regret for those of us who were at university in bygone decades. I think it is a healthy state of affairs that students take such matters seriously. The Bill implicitly recognises that by setting up the office for students.

The Bill needs full scrutiny in Committee and in the other place, where there are plenty of experts in this field. There are concerns about the granting of provisional degrees, which were mentioned earlier by the hon. Member for Blackpool South (Mr Marsden). The proposals to relax the criteria for validating degree-awarding powers will need to be examined thoroughly. I have some sympathy with the view that because the title of a university is much respected, it should be clearly protected and defined. I hope that if we have a system that allows market failures, the Government will make provision for the interests that need to be protected. No university should be seen as too big or too old and established to fail. A range of regulatory relationships will need to be clarified, but the Bill establishes an important new architecture for the higher education system.

One aspect that will no doubt be debated here and in Committee is Government and ministerial interference in university courses. We need to ensure above all that those institutions retain as much academic and administrative freedom as possible. That is important going forward.

I take this opportunity to congratulate the Secretary of State on the ambitious proposals set out in the Bill. She has already shown herself willing to put excellence and elitism at the heart of the state school system, with her open-mindedness about the expansion of the grammar school sector. As a committed Conservative and former grammar school boy, it is tremendous for me to hear a Conservative Government putting social mobility at the heart of our educational philosophy.

I regard the promotion of competition, variety and consumer choice as long overdue, so I am delighted that this Secretary of State and her Minister for Universities and Science have indicated the intention to take on the vested interests in this field. There are few things as conservative as the left-leaning cadre of vice-chancellors. I wish the Bill Godspeed and look forward to hearing the rest of the debate on it this afternoon.

15:49

[Mr Andrew Smith (Oxford East) (Lab)]

It is a pleasure to follow the right hon. Member for Cities of London and Westminster (Mark Field). Whatever we disagree about, I very much respect the fact that he has in the past pointed out the damage done to the higher education system by ill-thought-out commitments and policies on immigration. I hear his note of caution about the regulation of new providers. I will say a bit more about that in a minute.

As my hon. Friend the Member for Blackpool South (Mr Marsden) said in his excellent speech—others have mentioned this—the Bill comes at a time when universities and research institutes are reeling from the Brexit vote. The drafting of the Bill and the associated consultation clearly took place in the context of an expected remain result. The uncertainties about replacing EU research funding and the position of EU students now confronting the sector would be good enough reasons, in themselves, for putting this legislation on hold to give this House and the Government the opportunity to ensure that the framework for higher education and research is fit for purpose in a post-Brexit world.

There are other concerns about the Bill. While I do not have a problem, in principle, with facilitating new providers and more choice in the sector, there are strong grounds, as the right hon. Member for Cities of London and Westminster hinted, for proceeding more carefully than the Government propose, because it is likely that limited Government finance will be further stretched when funding per student is already under enormous pressure, and there is a risk that failure by new providers will be bad for students and damage the reputation of UK higher education more widely. Let us remember that UK universities and research are currently a huge national asset—an area of competitive strategic advantage that will be even more important, economically and culturally, as we strive to make a success of life outside the EU.

Further, specific, concerns have been drawn to my attention by Oxford University. Clause 23, which provides for the assessment of standards as well as quality, is an extension of regulatory power that infringes institutional autonomy. The Government need to tell us what its purpose is and how it will be used. Clause 43 empowers the office for students to revoke by Order the Acts of Parliament or royal charters that have established our universities. The ability to dismantle so much with so little by way of parliamentary scrutiny cannot be right, and much stronger scrutiny and protection is needed.

[Liam Byrne]

Is it not incumbent on the Minister to give a categorical assurance to the House that where rights and entitlements proscribed in royal charter are deleted, they will be reinstated by the Government?

[Mr Smith]

Yes, indeed. As I have said, there must be full scrutiny by this House. These are Acts of Parliament that are being overturned by an Order—it is absolutely extraordinary.

There are further worries on the structure of research funding. It took the Secretary of State an awfully long time to get on to research. While the Government’s stated intention is to keep the dual funding principle, all research funding is to be the responsibility of the proposed UK research and innovation body, and there is no explicit provision for ring-fenced funding for anything other than specific pieces of work. It is therefore not clear in practice how dual funding is to be delivered. The call in the Bill for a “balanced funding principle” to which the Secretary of State must have regard is vague. I put it to the Government that it is crucial to future UK research capacity that the Bill strengthen the commitment to dual support.

I am also concerned that the Bill does not mention the higher education innovation fund. The Bill artificially divides teaching and research, when in practice the two often go together, especially at the highest levels, including in the work of museums and the well-founded laboratory principle. There really needs to be proper recognition of that in the Bill.

Similarly, there is a huge omission in there not being any requirement for UK Research and Innovation to provide for postgraduate research education and training, which is crucial for graduates moving into the high-tech sector. That was previously regarded, and rightly so, as being so important that the research councils had it written into their royal charters, so why is it not in this Bill? It certainly should be.

I am also alarmed that under clause 84, research councils could be abolished or merged by order. That could affect whole areas of research, so surely it is sufficiently serious that Parliament should have proper oversight.

There is much that is wrong with this Bill, and it is spectacularly ill timed. The Government should take it away, consult and think again.

15:54

[Iain Stewart (Milton Keynes South) (Con)]

I am grateful for the opportunity to contribute to this important debate. I welcome the Bill, particularly its focus on enabling students to make an informed choice about their university options. I have been concerned for some time that too many students regard an immediate, traditional campus-based undergraduate degree as their only option. In saying that, in no way do I wish to diminish the importance of such degrees. For many, that is absolutely the right option and there should be no restriction on numbers—if it is right for somebody, they should do it—but it should be a positive choice and not regarded as a default option.

I want students at school to be able to look at all the options open to them and choose what works best for them, whether that is a traditional degree, a degree apprenticeship, a part-time degree or even deferring their degree to a later point in their career. I welcome the proposals to establish new, high-quality providers to offer different products and increase the range of options for students.

We must also not forget to place the Bill’s provisions in the context of upskilling the workforce and lifelong learning. I am very proud to have in my constituency the Open University. The shadow Minister, the hon. Member for Blackpool South (Mr Marsden), was a lecturer there for some time. In its nearly 50 years of existence—I am not saying that the hon. Gentleman was there from the outset—it has given opportunities to some 2 million people to upskill and reskill.

The excellent briefing note distributed by the Open University encapsulates the point that I want to make:

“It is essential that these far-reaching proposals are not developed solely through the policy lens of an 18 year old student entering higher education for the first time. Re-skilling and upskilling the adult workforce are essential for future prosperity. Economic success in the coming years depends on embedding a lifelong learning culture which rest on 3 co-equal pillars: flexible lifetime learning opportunities, apprenticeships and full time study.”

I very much agree with that.

I welcome the measures that the Government have already taken to assist part-time students, including the decision to introduce maintenance loans in 2018-19, which will work alongside the tuition fee loans introduced in 2012-13. They have also changed the equal and lower qualification restriction that was imposed in 2008. That will allow new students to apply for tuition fee loans for a second, part-time honours degree in engineering, technology and computer sciences this year, and for a wider range of part-time honours degrees in science, technology, engineering and maths in 2017-18. That will be very much welcomed by the Open University.

To reinforce the support for the part-time higher education sector, I want two suggestions to be considered in Committee. The first is an express commitment to part-time higher education and adult education in the proposed general duties of the office for students; and the second is confirmation that a broad range of different types of English higher education providers will be recognised in the make-up of the office for students board. I hope that those constructive amendments, which the Open University has suggested, will be considered favourably in Committee.

While I am on the topic of the OU, I have two other small asks from it that I would like to put on record. The first is a simple request for clarification. The Open University is the only UK-wide university that has a footprint in Scotland, Wales and Northern Ireland, as well as in England. Clause 75 defines the meaning of English higher education provider, and I would be grateful if the Minister could confirm that that definition will apply to the Open University as well as to other English-based universities. The second ask relates to the Open University’s status as a centre of research excellence. The Open University wishes to ensure that the new UKRI body, which is set out in the Bill, will not concentrate research into fewer institutions and geographical locations; and that early career researchers, women and minority groups will be offered opportunities and routes to support their research ambitions.

I turn to the opportunities for creating new high-quality higher education institutions. There is huge potential for new entrants into the market, and I agree with the comments of the principal of Pearson College, Roxanne Stockwell, who said:

“It is clear that the dominance of the one-size-fits-all model of university education is over…Students are calling out for pioneering institutions offering alternative education models and an increased focus on skills that will prepare them for the careers of the future”.

I will use Milton Keynes, which I represent, to illustrate that potential. Members may not be aware of this, but in January next year Milton Keynes turns 50. It has reached its planned size, in terms of both population and physical footprint. I apologise to the right hon. Member for Oxford East (Mr Smith), who heard me make these comments in Westminster Hall last week, but they merit a wider audience.

[Mr Andrew Smith]

The hon. Gentleman need not worry; his comments bear repetition.

[Iain Stewart]

I am grateful for that endorsement. Having reached its planned size, Milton Keynes is actively debating what comes next. There is a live debate about our future size and shape—what the Milton Keynes of 2050 should look like—and our place in the important Oxford-Milton Keynes-Cambridge corridor, which the former Chancellor announced in the Budget that the National Infrastructure Commission would explore for growth potential.

Milton Keynes has the Open University, as I have mentioned. Nearby, we have excellent universities such as Cranfield and Buckingham, and we have a healthy further education and higher education partnership in University Centre Milton Keynes. Despite those things, it has long been an aspiration for Milton Keynes to have a campus-based university of its own to help to generate economic growth and provide all the other social and cultural benefits that university towns and cities enjoy, but I question whether the answer is a traditional campus-based university. Given the increasing consumer sophistication of students, should we not try to create something new that benefits the innovative tradition of Milton Keynes?

In that context, I was absolutely delighted that the recently established Milton Keynes Futures 2050 commission—chaired by Sir Peter Gregson, the vice chancellor of Cranfield—proposed as one of its central recommendations a Milton Keynes institute of technology, or MKIT. Its mission would be to promote research, teaching and practice that provide solutions to the challenges faced by fast-growing cities. It would offer portfolio learning, living lab research and partnerships with a wide range of global educational institutions and employers. MKIT could be the institution that fills the growing skills gap that we face in the new intelligent mobility market. We urgently need to train more people in skills in this sector.

I am also proud to have the Transport Systems Catapult in Milton Keynes. Working with Departments, it has published research showing that there will be a gap of hundreds of thousands of people with those skills in a market that will be worth £900 billion by 2025. If we want to have a share of that global market, we really need to focus skills in this area. That is just one example of the many opportunities that exist, and the Bill provides huge opportunities for innovation.

There is a critical link between the expansion of higher education and the prospects for local economies and people’s life challenges. I strongly believe that the Bill strengthens that link, and I very much look forward to supporting it tonight.

16:05

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I want to pick up where my right hon. Friend the Member for Oxford East (Mr Smith) left off. The truth is that much in the Bill is long overdue. Much of the proposed legislation is necessary, but the truth is that the Bill was written for a very different time and in a very different era. The risk is that the Minister is presenting to the House a halfway house that will leave us with the task of having to come back to some big strategic questions to finish the job.

The Secretary of State was absolutely right to underline the necessity of the Bill. We need the strength of our higher education institutions today like never before. In this post-referendum era, we will have to get a lot better at making things a lot more efficiently. The level of productivity growth that blights our economy today is actually worse than it was at the end of the 1970s, when we used to call it the British disease. The problem with the Bill, however, is that it does nothing to address the big strategic challenges that confront students, our science base and our skills system. I will touch quickly on each.

First, let me talk about students. We all know that there is still a big debate to be had about the financial viability of the student loan system. This afternoon is not the occasion to rehearse the fragility of the Ponzi scheme that now underpins that system, but I often used to debate with the Minister’s predecessors whether Britain could look forward to a debt write-off of £70 billion or £80 billion. The basic message was pretty simple: the student loan system as currently set up is not fit for purpose, and it is certainly not fit for the future.

The Minister has proposed a number of measures to ensure a degree of transparency, not least freezing the thresholds for student loan repayments, but the truth is that we need a wholesale overhaul of the transparency of the system. We need the system to work well, but, quite frankly, too often we are looking through a glass darkly when we try to figure out what is going on.

Like many right hon. and hon. Members, I am disappointed that there is not enough in the Bill about lifelong learning, and I am very disappointed that there is nothing in it about workplace learning. I would like a bold revolution in the way we bring together Unionlearn, the Workers Education Association and the Open University, so that it is possible for workers to go from ABC to PhD in their workplace. In a world where someone can get a massive open online learning course beamed to their smartphone, that is surely possible, but we do not have the qualifications system we need to make that a reality, nor is policy in the right place.

The second big challenge we confront is on the science base. Quite frankly, although we are all grateful to Sir Paul Nurse for the heroic job he has done in overhauling the governance of the science base, there is nothing in the Bill to confront the big strategic challenge for science in this country, which is the fact that we are plummeting down the league tables when it comes to science spending. A few years ago, the Royal Society put it rather well, when it said that

“unless we grow smarter, we will grow poorer”.

If the global race is anything, it is a science race, and today we are falling behind. By 2019, China will become the world’s biggest science player. Right now, we are already losing the race for the good high-tech jobs of the future. We will not fix such a strategic challenge if we are languishing at 23rd out of 33 OECD countries. Our big competitors around the world—Japan, Korea and countries in Scandinavia—are now spending 3% of GDP on science each and every year, while we spend something like 1.3% of GDP on science. In fact, we would need to crowd in funding and add public spending totalling £23 billion if we were to bring science spending in this country up to the level of our strongest competitors. It is not even clear to me whether we have a 10-year framework for science funding any more. I certainly see nothing in the Bill about how we will strengthen a position that is becoming extremely serious. At a time when so many of our universities are having huge holes punched in their science base and science funding because of the decision to come out of Europe, we needed an awful lot more from the Secretary of State this afternoon about how we will tackle the looming crisis.

The third challenge that I want to touch on briefly is the one that troubles me most: why is there nothing in the Bill to address the revolution that is needed in the technical education system in this country? We know how to design good dual-track technical education systems. How do we know that? Because we did it for Germany after the second world war. We just forgot to do it for ourselves. The noble Lord Percy reported to this House in 1944 that

“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…this failure is partly due to deficiencies in education.”

The problem is that what was true in 1944 is true today. We do not have a strong dual-track system that takes a student in a constituency like mine and leads them on to the very highest level of technical education. We have a rise in unqualified science teachers in our classrooms; a careers service that the CBI says is on “life support”; a further education system that was cut by 40% over the course of the last Parliament; and an apprenticeship system that is growing the number of level 2s, but delivering the grand total of just 100 apprentices on level 5 in my home city of Birmingham. Today, just 2% of apprentices go on to level 5 study, and there has been a 40% fall in the numbers on HNCs, HNDs and foundation degrees. Those who are seeking a professional and technical path to higher education from the age of 14 up to the age of 21 go through a system that is overseen by Ofqual, Ofsted, the AQA, the Education Funding Agency, the Skills Funding Agency and now the office for students. It is, quite frankly, a dog’s breakfast.

We need a holistic review to put in place a single, comprehensive dual-track system for technical education. That means everyone from the age of 14 learning some kind of technical education; it means rebuilding the careers service; it means high-quality, gold-standard apprenticeships with everyone studying English and maths up to the age of 18; it means a new degree of specialisation in our colleges, with the creation of institutes of technical excellence; and it means an apprenticeship system that gives at least half of our young people the chance to take a technical apprenticeship up to level 5. We know how to run those apprenticeship schemes because great British companies such as Jaguar Land Rover and BAE Systems are doing so. The only problem is that they are harder to get into today than Oxford University.

Crucially, we need a new partnership between further education and higher education. We should be emulating the best practice in the United States, where it is possible to do the first couple of years of a degree at a further education college before moving on to finish it in a couple of years at a world-class higher education institution. That is why the duty to collaborate is so vital, and why it is such a problem that it is missing from the Bill.

We have been burying our scientists with our sovereigns since the death of Sir Isaac Newton. There is no other country on earth that would get BAFTAs for films about its great scientists. We are one of the world’s great science powers, but our position is in jeopardy. That is why we needed more than a halfway house from the Secretary of State this afternoon; we needed a Bill that repositioned higher education as the powerhouse it needs to be for our country’s future.

16:14

[Amanda Milling (Cannock Chase) (Con)]

I am very grateful for the opportunity to speak in this debate. I welcome the Secretary of State to her role. I am also very pleased that the Minister is taking the Bill through the House, as he spent many months working on the Green Paper and, more recently, the White Paper.

I welcome the news that further and higher education will be pulled in to the Department for Education. I note the comments of my hon. Friend the Member for Stroud (Neil Carmichael) about the Education Committee’s workload increasing significantly, but perhaps my workload will reduce somewhat because the Sub-Committee on Education, Skills and the Economy might be somewhat short-lived.

We have an outstanding higher education system. We have world-leading universities—we are home to four of the world’s top 10 universities—and are second only to the US. However, we must not be complacent, which is why I welcome the Bill. The research excellence framework is a well established and recognised way of assessing and incentivising high quality research. However, the higher education sector has been too heavily geared to prioritising academic research. The Bill looks to achieve a much better balance, emphasising those things that matter to students, their parents and employers.

We need to ensure that students get value for money. We need to ensure that, at the end of their degree, they feel that they have gained from their university experience and, critically, that they can progress on to graduate jobs or further study. We need to ensure that we do not hear students saying, “Was university really worth it?”

To take a few facts, worryingly, the HEIFESS—higher education in further education students survey—showed that more than a third of students said that they would have made a different decision if they had known then what they know now. Similarly a Higher Education Statistics Agency survey showed that around 20% of employed graduates are in non-professional roles three and a half years after graduating.

Students need better information about universities and the courses they are looking at, and support to get into graduate roles. I therefore welcome the creation of the office for students, as set out in part 1 of the Bill, which will be the main regulatory body for higher education in England. The duties of the office for students will be to promote quality, greater choice and opportunities for students. Specifically, it will operate the teaching excellence framework, which we have heard a lot about this afternoon. There should be no surprise about the TEF because it was a key Conservative manifesto commitment.

The TEF will put in place incentives designed to drive up the standard of teaching in all universities and provide students with greater clarity about where teaching is best and about the benefits they can expect to gain from their course. In turn, that will create more competition within the sector and continue to drive up the standard of teaching. It will focus on helping students progress into employment or further study.

The Business, Innovation and Skills Committee, of which I am a member, along with the hon. Member for Sheffield Central (Paul Blomfield), who is in his place, conducted an inquiry into the new TEF. As a Committee, we welcomed and endorsed the Government’s focus on teaching quality, agreeing that a stronger incentive to focus on teaching quality via the TEF will help to ensure that higher education institutions meet student expectations and improve on their leading international position.

Although the rationale for the TEF was generally accepted by the sector, questions and concerns were raised about the potential metrics, how it will affect institutions and how it will apply. Specifically, concerns were raised about the link between the proposed metrics—employability, retention and satisfaction—and teaching quality, and the potential unintended consequences of institutions seeking to optimise their scores on each metric.

Learning gain was suggested as an alternative—other countries are exploring it— but work needs to be done to establish an effective way to measure it. I understand that the Higher Education Funding Council for England is undertaking pilot studies on learning gain or added value metrics that might work, but they could take two or three years to develop. The Committee therefore called on all parties to prioritise the speedy establishment of viable metrics relating to learn and gain.

The technical consultation was therefore welcome and an opportunity for the sector to engage further with the development of the TEF, including ways in which it believed graduate employment could be measured. The development of additional metrics is key to ensuring that it can be incorporated in the TEF by year three, 2018-19, as set out in the White Paper published in May. As I understand it, the technical consultation closed in July. Will the Minister, when he comes to wind up, update the House on progress in developing additional metrics: those being considered and pilots currently being undertaken? The need to pilot the TEF, the metrics and the development of additional measures means it was welcome news in the White Paper that the speed at which the TEF would be implemented, specifically the link with fees, would be slowed down.

Turning to the link between the TEF and fees, we need to ensure that the higher education sector is on a financially sustainable footing. With record numbers of students securing a place at university, we have seen that tuition fees did not stop young people accessing university. With the student loan system, we have a mechanism by which students do not need to meet the costs of university up front. Labour created a provision in law to maintain tuition fees in line with inflation in the Higher Education Act 2004. Between 2007 and 2010, Labour raised tuition fees in line with inflation every year. The tuition cap of £9,000, set in 2012, is now worth only £8,500 in real terms and is expected to erode further, potentially to £8,000 by the end of the Parliament.

To date, there has been no accountability when it comes to institutions increasing their fees in line with inflation. With the real value of tuition fees declining and concerns in the sector about maintaining levels of investment, we need to find ways to provide universities with the scope to increase their fees in a way that is fair and accountable. The TEF has a role to play, although all parties need to work together on design and the metrics to make it work in practice. As I have said, I am pleased that the White Paper confirmed that 2017-18 will be used as a trial year. I am sure the higher education sector will have welcomed the opportunity to input further into the technical consultation.

I was pleased to read an article by Steve Smith, vice-chancellor of the University of Exeter, in the Times Higher Education. Despite concerns about some of the detail, he stated:

“But in my view, it is essential that we proceed with the teaching excellence framework (TEF) linked to tuition fee increases, a policy that offers significant benefits for the quality of higher education that are important to both students and universities. This is why Universities UK board unanimously supported the link between an effective TEF and fee rises.”

He went on to say:

“The government rightly wants ‘something for something’, for the economy and for students. For the economy, the TEF offers a way to support the continued improvement in the contribution of higher education to the knowledge economy through the creation of graduates with the skills needed by industry and business. For students, the ‘something’ is a funding mechanism that allows institutions to invest in teaching and the student experience and thereby to preserve and enhance the quality of education in our universities.”

Finally, I want to turn to the idea of new universities entering the market. Our economy needs more graduates. Over half of the job vacancies between now and 2022 are expected to be in occupations that employ graduates. As my right hon. Friend the Secretary of State mentioned in her speech, lifting the cap on student numbers means more university places being made available.

[Mr Hugo Swire (East Devon) (Con)]

Has my hon. Friend made any study of the outrageous discrimination suffered by English students studying at Scottish universities after we come out of the European Union?

[Amanda Milling]

My right hon. Friend makes an interesting point, on which I am sure there will be further discussions.

It is excellent news that record numbers of students are securing a university place. What is more, the proportion of young people from disadvantaged backgrounds going into higher education is up too. UCAS data show that young people from the most disadvantaged backgrounds are applying at a record rate in the 2016-17 academic year. This is excellent progress. But with more demand for graduates and more skills required in the workplace, the sector cannot stand still, which is why I welcome the provisions in part 1 of the Bill making it easier for new high-quality universities to enter the market. This will mean that more places can be created and that students will have more choice, as well as encouraging greater diversity and innovation in the sector.

[Jeremy Lefroy (Stafford) (Con)]

Does my hon. Friend therefore welcome the news that Chinese investors propose to take over the Staffordshire University campus in Stafford, vacated by Staffordshire University, to provide precisely that additional choice and—I am sure—excellence?

[Amanda Milling]

I thank my hon. Friend and constituency neighbour for his point. He is absolutely right. In fact, he must have been reading over my shoulder, because I was just about to talk about Staffordshire University. I currently do not have a university in Cannock Chase, but we have businesses and organisations with close links to Staffordshire University, and I have a lot of constituents who go there. As a consequence of the Bill and opening up the market to new entrants, perhaps one day I will have a new university in my constituency.

In conclusion, we have a world-class higher education sector, but we cannot be complacent. Our economy needs high-quality graduates and our graduates need the skills to contribute to our economy. I welcome the Bill. It demonstrates that the Government have a clear plan for higher education and builds on the progress already made.

16:24

[Mr David Lammy (Tottenham) (Lab)]

The Bill comes before us at a time of great change, the most important of those changes being my birthday today. It was not that long ago that I was sitting in the Minister’s place. In those days, I looked more like Denzel Washington; today, I look like Forest Whitaker.

Last week’s reshuffle saw the universities brief move to the Department for Education and a new Education Secretary appointed together with a new Business Secretary. I served as universities and skills Minister in the Department for Innovation, Universities and Skills, and then in the Department for Business, Innovation and Skills, when universities switched from Education to Business. It became clear to me that this move gave higher education and the sector as a whole a much more prominent voice in Government. Placing universities under the umbrella of Business, Innovation and Skills drew a clear and explicit link between higher education and productivity, social mobility and ensuring that we have the skilled workforce needed to power our economy. Universities, the research they undertake and the education they provide were seen by No. 10, the Treasury and Cabinet Ministers from across Government as absolutely central to what the Government were trying to achieve.

It is inevitable that the move will mean reduced influence in Whitehall. When DIUS and then BIS were created, there was much debate and some concern among vice-chancellors, but the near universal view was that it would be beneficial. I am concerned, therefore, about this change. It has not been commented on so far but it is the backdrop to the Bill. I ask the Minister: what will happen if our universities are no longer seen as integral to driving innovation and boosting productivity? What will happen when the spending review comes around and universities fight with schools for resources, as they historically did, and lose out, as they historically did?

What will happen when there is pressure to further tighten visa rules for students in order to meet migration targets? BIS worked hard to beat off the Home Office. I was one of those Ministers. The Minister will not admit it, but it is a regular part of the job. My God, how much harder it will be with universities placed in the Department for Education! In each case, the voice of universities will, frankly, carry less weight as a consequence.

[Mr Swire]

The right hon. Gentleman will have heard what my hon. Friend the Member for Cannock Chase (Amanda Milling) said, citing Sir Steve Smith, the vice-chancellor of Exeter University. He will also be aware of the huge number of overseas students at Exeter University, which make it one of the leading universities in the country, if not in the world. I know that the Minister shares my view about visas, but does he not recognise that in this period of uncertainty—not just because of Brexit, but because of visa restrictions—many universities are living in a state of fear? They are worried about European funding for various projects, as well as uncertainty about the visa regime.

[Mr Lammy]

That was, in a sense, the point I was making. Some of the tensions in Whitehall, particularly those emanating from the Home Office vis-à-vis whoever is at university and where they are placed, lie behind this problem.

There is, however, another problem that has been mentioned by Members, not least by my right hon. Friends the Members for Birmingham, Hodge Hill (Liam Byrne) and for Oxford East (Mr Smith)—namely that the vote to leave the European Union has made the future very uncertain indeed for higher education institutions. In looking at this Bill, surely the Government must acknowledge the need to provide greater certainty and not further instability at this time. The higher education sector will be particularly adversely affected by the UK’s decision to leave the European Union. Brexit will significantly diminish research funding across our universities unless the Government propose a large-scale programme for research funding across all disciplines to fill the gap. It would be interesting to hear from the Minister about that.

We know, of course, that the leave campaign’s claim to be saving £350 million a week was entirely fictitious, but I note that the right hon. Member for South Northamptonshire (Andrea Leadsom) promised that any lost EU subsidies paid to farmers would be replaced by central Government funding, so I am sure the House would welcome a similar promise today that any lost research funding will be replaced. I look forward to hearing from the Minister about that.

Universities face the prospect of losing out across the board, so how will they fare in this post-Brexit world when the calls to curb immigration inevitably come? Universities have been warning for years that making student visas harder to come by was having a hugely damaging effect, as indeed the right hon. Member for East Devon (Mr Swire) just said. Sir Keith Burnett, vice-chancellor of the University of Sheffield, estimates that 40% of his university’s income from teaching comes from international students, and non-UK students also generate £11 billion for the wider UK economy. Almost 100,000 students had their visas cut short between 2013 and 2015, and between 2010 and 2015 the number of overseas students arriving in the UK fell by 25%.

The issue is not just about money, however. What message does Brexit send out? The world-leading reputation of our higher education sector is contingent on a perception of the UK as a globally engaged country; it is this reputation that attracts so much investment, drives so many partnerships across the globe and helps to cement our universities’ place at the top of the tree internationally—and it is this reputation that is at risk. Surely in this context, the Government must take a step back, take stock of how Brexit will impact on our universities and then come back to the House with a revised Bill when that impact becomes clearer. I say that as strongly as I can. I know the Minister has worked hard on this Bill—he is a hard-working Minister generally, as we are all aware—but the biggest coach and horses running through the Bill is, frankly, Brexit. It would be good to hear something from him about that.

I am proud of the work that the last Labour Government did in higher education. In 2010, over 50% of additional university places went to students from poorer neighbourhoods for the first time. Our higher education system expanded and together with increased funding for state schools and the introduction of the education maintenance allowance, more students from disadvantaged backgrounds were able to go to university than ever before in our history. In 2010, too, 2 million people were studying at university—a record number and 400,000 more than in 1997. I know that that was a record achievement, because officials who are sitting in the Box now wrote some of those statistics for me at that time.

At this time of flux, it is crucial that we do not take a step backwards when it comes to improving access to our universities. Earlier this year, the last Prime Minister announced plans to force universities to disclose applicant data so that we could see how they were doing in that regard. The Government aim to double the proportion of pupils from disadvantaged backgrounds who enter our universities, and also to increase the number of students from black, Asian and minority ethnic backgrounds by 20%.

At this time of flux, the House will need assurances that that agenda will be taken very seriously and will be driven from the centre, especially given that, in March, the Social Market Foundation’s report “Widening Participation” warned that both those targets would be missed on current trends. Les Ebdon, the director of Fair Access to Higher Education, has given the same warning, pointing out that only 21% of universities have met, or are on course to meet, all their access targets.

The figures are striking. Between 2005 and 2015, the proportion of the intake of Russell Group universities who were from poor backgrounds rose from 19.5% to just 20.8%. That is 1% in a decade, and it is not even close to being acceptable. According to the Higher Education Statistics Agency, the percentage of deprived pupils admitted by seven of the 24 Russell Group universities—including Oxford, Cambridge and Durham—has fallen in the last decade. According to the Sutton Trust, only 4% of students at our top 10 universities are from the most disadvantaged areas, an increase of 0.6% compared to 2009. Just 3.6% of Cambridge students and 2.4% of Oxford students are from the 20% of areas with the lowest higher education participation levels,

I know that the new Prime Minister is making her mark by ensuring there is not over-representation of people from independent schools on the Front Bench, but I think I should put on record why that is so important. Independent school pupils are nearly three times more likely to be accepted by the 30 most highly selective universities than comprehensive school students: the acceptance rates are 48.2% and 18% respectively. State pupils in Hammersmith and Fulham are 10 times more likely to be accepted by highly selective universities and 50 times more likely to be accepted by Oxbridge than pupils in Hackney. Four schools and one college send more students to Oxbridge each year than the bottom 2,000 schools and colleges put together.

[Michelle Donelan (Chippenham) (Con)]

Does the right hon. Gentleman accept that the removal of caps on university places brought about a dramatic transformation, enabling people from disadvantaged and, indeed, all backgrounds to apply to universities and to gain places? If the number of places is limited, that limits life chances from the start.

[Mr Lammy]

I do not accept that, I am afraid. The removal of the cap does not help when it comes to fair access. All that it does is help more chinless wonders from more public schools to get in.

Given that 100 elite schools account for 3% of the total of 31.9% of admissions to Oxbridge, the same proportion as in 2008, we have seen absolutely no progress in the opening up of Oxbridge entrance. St Pauls Girls’ School and Westminster lead the way—nearly half their students go to Oxbridge—while more than 1,300 schools do not have a single Oxbridge entrant, and only 50 students receiving free school meals were admitted to Oxbridge in 2013.

I acknowledge that progress has been made in widening access to universities for our most disadvantaged students and that more poor children are going to university, but the crucial question is: which university? I know that the Secretary of State is new, but she did not really get to the heart of that. It is not just about the widening of participation, but about fair access so that people can get their straight As and A*s and they too can make their way from Sunderland, from Darlington and from Tottenham to these universities.

[Rebecca Pow]

The right hon. Gentleman is making an extremely valuable case but does this not highlight why we need this Bill and some of the things in it, in particular the focus on transparency, so that we can look at social mobility in the individual institutions and work out where they are going wrong and where they need to do more? That is precisely what this Bill is for.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I might be able to help a little, as the hon. Lady is hoping to catch my eye next. Mr Lammy, your speech has taken about 14 minutes so far, and I did advise Members to take about 12 minutes. I am sure your contribution will be coming to an end very shortly.

[Mr Lammy]

Transparency will of course help, but we know what works and under the Labour Government most of that was covered by the Aimhigher programme which, sadly, was abolished by this Government.

Do we want our universities to be engines of social mobility or do we accept that the universities will merely reinforce and embed the inequality of opportunity that pervades our society? That is the central question and that is the test against which this Bill should be held. Of course, we welcome some of the changes that will establish a new improved body for what was the Office for Fair Access, but the points made so far in this debate about teaching are particularly well made. To link teaching to the labour market when universities’ purview is not entirely about the labour market is worrying, and to preference funding alongside that teaching is, I think, suspect. I certainly want to hear the Minister say more about that and I hope that issue receives more scrutiny in Committee.

The question is: is this Bill the right one now given the Brexit challenge? Is it really going to make a change beyond that on transparency about fair access? I hope the Minister will come back to that point. And is it right, on the teaching question alone, to put all the burdens on universities in relation to the labour market, and certainly to allow them to charge more for teaching when that ought to be at the heart of what a university does anyway?

16:42

[Rebecca Pow]

I am very pleased to see the Minister for Universities and Science, my hon. Friend Member for Orpington (Joseph Johnson) back on the Front Bench, and I want to put on record that I welcome the Secretary of State to her position. I share her experience of being the first person in my family to go to university. Both my parents left school at 16 and came from a lowly farming background and I can honestly say it is, and was, a ticket to the world. In those days, very few women went to university, so I can assure the right hon. Member for Tottenham (Mr Lammy) that things have definitely improved.

I rise to support this Higher Education and Research Bill with that as my background, and also with having two children who have already gone through university and one son who, in fairness, is deciding whether to go at all and is thinking about what it will provide. I realise how important it is to go to university, to consider which subject to study and what job might be available at the end of it. Those things are very important.

I have discussed this with many students in my constituency, both at the local sixth-form college, Richard Huish, which is exceedingly good and is in the top 10 in the country, and at Somerset college. I talk to young people about what is preventing them from going further, why they do not want to go—whether they would rather stay at home and so forth. I am very hopeful that lots of these things will be addressed in the Bill because higher education is undoubtedly good for the individual.

Graduates on average earn in excess of £100,000 more over their lifetime, having got that graduate premium. It is not just good for the individual, it is also good for the economy, and in this very rapidly changing world it is essential that here in the UK, especially in our post-Brexit era, we can move our workforce forward. That is why this Bill is going to be so important.

Around 20% of UK economic growth between 1982 and 2005 was a result of increased numbers of graduates, and the skills they brought to the table. I therefore welcome the Bill, and one of its key aims is to encourage and enable even more people to have such opportunities. The Government have been attacked by the Opposition, but the record is already much improved from the days of Labour, with the proportion of young people from disadvantaged backgrounds who go into higher education up from around 13% in 2009 to almost 19% now. The situation is improving, and young people from the most disadvantaged areas of England are now 36% more likely to enter higher education than they were in 2009. That is a record of gradual improvement, but more needs to be done, and the Bill will address that.

The Bill will support the establishment of new universities and promote choice and competition, making it easier for high quality, new providers and challenger institutions to enter the sector and award degrees, giving students more choice and boosting competition to improve teaching quality. Why is that necessary? We have heard lots of points this afternoon, but basically we need to address and improve the skills gap, and ensure a flow of young people and mature students who go on to further education and into business. We must ensure the right courses for those people.

I have spoken to many businesses in my constituency and held roundtable meetings, and it is clear that the right young people are not coming through to work in those businesses. Taunton Fabrications makes bridges, stairwells and stairways for railways all over the country, but it cannot find the right people to work in its business and it is keen for us to get some better courses going. Fox Brothers, which has recently been taken over by Deborah Meaden, is a high-quality, high-end weaving company that provides Yves Saint Laurent and other top-end French companies with fabrics. It cannot find the right calibre of people with engineering experience, or the right textile experience to work in that company, and the Bill will help with that.

If we can address those gaps, we will help productivity in Taunton Deane and the wider south-west. For new universities, however, we are in a cold spot—not weatherwise today—because we do not have a university in the area. Much research has been done to prove that we could do with one, and planning is in progress. Nearby Bridgwater College has just joined with Somerset College, and that is where we hope to have a university. My hon. Friend the Member for Milton Keynes South (Iain Stewart) spoke about thinking outside the box and focusing new universities on the specialisms, strengths, and skills needed—particularly those already in the area—and that is exactly what we are doing in Taunton Deane.

The idea is to link up with health and nursing education—I know my hon. Friend the Member for Bath (Ben Howlett) is present, but Somerset’s main hospital is in Taunton Deane. It already runs courses with the local college, but we must build and focus on them more, and a university would help with that. We also have local specialisms in energy skills, and low-carbon energy and related engineering. That links into Hinkley Point, which we are all very confident we will pull off. That is spawning a plethora of other industries, but we need students and graduates to train in those areas, and to go out in the wider country to use their knowledge. We also have links with the Ministry of Defence which provides training, and with Rolls-Royce in Filton. There are lots of opportunities should we get that university off the ground. I am confident that we will, and that the Bill will help, just as it will in many other places. That would then benefit the wider economy. Productivity in the south-west is below the national level, which is a serious issue. One reason for that is that we do not have the right high-calibre skills and we do not retain our young people. They all go off to university somewhere else, so we need a university right where we are in order to fill the jobs there.

[Jo Churchill]

Does my hon. Friend agree that there is a tendency for young people to go away to university and then to stay close to where they have been studying? At the moment, that is preventing Taunton Deane from benefiting from its students’ skills.

[Rebecca Pow]

I thank my hon. Friend for making such a good point. Indeed, I feared that, when my own children went up north to get the northern experience from their universities, they might stay there and not come home, lovely as they are. It was a great experience and opportunity for them—one went to Leeds and one went to York—but I wanted them to come home. Not that they have yet—they have gone to various other places.

All these things are tied together. This is not just about upping the education offer; we also need to have the right infrastructure. For example, we have to have my A358 road upgrade and we must have good railway stations. All those things need to build together, and I am really confident that the Government get that. That is what they are doing, and our new Prime Minister really does understand that if we are going to increase our productivity, all those things have to link together.

I now want to move on to the part of the Bill that deals with establishing the office for students. It will be the new regulator for higher education, and it will have a duty to promote competition. I welcome this cultural shift in making it a statutory duty to take account of students’ interests. It is amazing that we have not done that before, given that they are the ones who are affected by all this, and I am delighted to welcome this big shift. I have had discussions with the National Union of Students and I understand that, on the whole, this is a very popular move.

We have heard much about the teaching excellence framework, which I welcome. It will ensure that universities focus on graduate employability. That links exactly to what I have been saying about jobs and skills in Taunton Deane; it all links together. Also, a number of hon. Members and hon. Friends have mentioned the need for an emphasis on the quality of teaching rather than just the quantity. We have only to talk to our own children, and other students, about their experiences at university to discover that, given the amount of money involved, some of the courses are sadly lacking in input hours. It is also sometimes unclear what that input actually means—various people are laughing and trying not to laugh—and what it will deliver in terms of employability. I absolutely welcome that part of the Bill.

The Bill also mentions the student protection plan. The hon. Member for Glasgow North West (Carol Monaghan) talked about what would happen to students if their provider was unable to deliver their course, and the Bill will deal with that. I really am optimistic that, as a result of this new framework, students will be at the heart of the matter. I have already mentioned transparency, which will be key to enabling the social mobility that we all want to see. We all want everyone to have opportunities. We do not want an “us and them” situation; we want everybody to benefit. That is what this is all about. The ability to look at which colleges and universities are offering which courses, and at who is successful and getting a job, will put the onus on the establishments to be the best that they can. Otherwise, people will not want to go to them. I fully support that part of the Bill.

I really welcome the combining of research and innovation funding into a single strategic body—UK Research and Innovation. Research is an important part of this country’s economy and it is absolutely crucial to have a strategic approach to the way we handle it and the £6 billion currently invested in it. We should never underestimate the value of research in this country. We are world leaders in many areas, especially in environmental research, and we must build on that and offer greater opportunities.

The Bill strikes a truly healthy balance between protecting our universities’ global reputation for quality and encouraging more establishments, offering new and innovative opportunities for so many more people from every single background. The Bill is essential and will benefit not only individuals, but the entire economy.

16:54

[Stella Creasy (Walthamstow) (Lab/Co-op)]

It is obviously a pleasure to follow the hon. Member for Taunton Deane (Rebecca Pow), although I would caution her against letting “Game of Thrones” influence her understanding of the wonders of the north.

Aristotle once argued:

“The roots of education are bitter, but the fruit is sweet.”

Unfortunately, the Bill leaves a sour taste in the mouth, and I want to try to explain why using three particular issues. The first is access and my particular concerns about the provisions regarding sharia-compliant loans. The second is cost and the vexed question of social mobility. The third is about voice and how the Bill will ensure that students are equal partners in shaping the future of the courses that cost them so much to take.

Many colleagues have already set out our grave concerns about the context in which this legislation comes forward, in particular the challenges facing our higher education sector following this country’s decision to vote for Brexit. The sector has already been battered by this Government and now it will be buffeted by Brexit. Whether we voted to remain or to leave, we all recognise the responsibility to ensure planning for what comes next, but it is unclear what Brexit means for our HE sector and just how it will hit funding. My right hon. Friend the Member for Tottenham (Mr Lammy), sadly no longer in his place, put it well: how will EU students respond? Will we see a rush of English students to Scottish universities? Will EU students get loans?

Furthermore, what will happen to science funding? While sitting here today, I have sadly missed a session of the Science and Technology Committee. We recently went on a wonderful visit to Manchester to look at the National Graphene Institute. Investment in our higher education institutions through European partnerships is absolutely paramount, so to bring forward legislation at such an uncertain time for our HE sector is a source of real concern for Opposition Members.

Returning to the three issues I want to discuss in the short time available today, I will start with sharia-compliant loans. Do we need specific legislation or can we right this wrong straight away? The 2012 legislation raised real concerns within Britain’s Muslim community because of the introduction of £9,000 fees and the ability to bear interest on student loans. Before then, many families in my community were able to subsidise their children to go to university without a loan, but £9,000 a year fees put that goal beyond the reach of so many. The Bill is supposed to aid social mobility, so it is worth looking at what sharia means. Sharia-compliant loans are about the interest rate, and many Members will know I have a particular concern about what interest rates do to people’s behaviour. Under sharia, money has no intrinsic value—it is a medium of exchange. People who abide by sharia principles on finance believe that it is forbidden to make a profit by exchanging cash. Sharia products respect that principle, enabling Muslims to access finance by sharing the risks and rewards equally based on the principles of Islam.

Like many parts of any religious code, sharia is open to interpretation and challenge, but there is something basically good about being able to respect such issues. I have already talked about it on Twitter today and the response reflected the difficulty that we face in society. I have been called a jihadi for wanting the introduction of sharia-compliant loans, but I suspect that that was by somebody who does not quite understand religion or, indeed, decency.

I have been pushing the Government on this matter for many years because I have seen in my community the impact on many students of our not being able to make such a small change to how a product is delivered. These students have bright young futures and could contribute great talents to our communities and our country but, because we do not respect their religious wishes, they have not been able to go on to higher education. Let me be clear: introducing sharia-compliant loans is not an endorsement of sharia itself. Just as we can challenge the bible’s teachings on homophobia while recognising and learning respect from the Christian community, we do not have to dismiss sharia principles entirely. For me, as a Co-op MP, the questions of mutualism at the heart of sharia finance are particularly apposite. I also recognise the practicalities, as being able to be accommodating in this way could make a big difference to many.

The crucial question for me is: why is this taking so long? I have been petitioning the Government since 2011 about the introduction of sharia-compliant loans. Although it is welcome that the Government have now accepted that it is right to do this, my concern is about whether we need to wait for this legislation, with all the problems that it will bring to the HE sector, to introduce these regulations. The Government already have the power to introduce loans and to change their terms, but tying the fate of these students to waiting for this Bill and refusing to publish a timetable for when this kind of product would be available is holding too many students back. Why this is taking so long raises a question in terms of the Government’s responsibilities under the public sector equality duty. We are asking not for preferential treatment for these students, but for equal treatment. We are asking for equal access and the reasonable amendments it would take to how this product is provided to secure that. I would like the Government and the Minister to clarify why they feel they cannot do this today, so that students who are studying now and wish to go to university—at the very least in 2017—could have confidence that they could do that. The Government sometimes rely on the small print in the student loan terms and conditions, which state:

“The regulations may change from time to time and this means the terms of your loan may also change.”

That is allowing them to change other parts of our student loan system, yet they seem resistant to doing this to help Muslim students access our HE system at all. I ask the Government to set the timetable and give our students that chance.

The second issue I wish to raise is the wider one about cost and the concerns that many of us have about this Bill opening us up to higher costs in higher education. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), who, sadly, is also not in his place, is right to say that productivity and getting our young people into FE and HE is crucial to addressing the biggest challenge our country faces. I am sorry that my right hon. Friend the Member for Tottenham is no longer here, because he was absolutely right in his coruscating remarks about transparency. Transparency means little without action; it is a bit like telling somebody that they are tied to the train tracks and what time the train is coming. If we really want to open up access to university across our society—to be truly committed to social mobility—we have to go much further. The question for me is whether this Bill takes us further or could take us back.

We know that loans and more debt at a time of economic uncertainty are a luxury few in our society can afford. The biggest division in our society today is between those who are able to turn to the bank of mum and dad, and those who are not; university education and the possibility of higher fees is simply a bigger part of that picture of whether we may end up crushing talent, rather than developing it, if we do not act. Nothing in this Bill will change that. Nothing that this Government are doing will change that problem of all 18-year-olds being held back by not having the bank of mum and dad—I refer not just to those who want to go to university, but to those who have fantastic business ideas and those who want to go into FE. A truly socially mobile country would seek to work for 100% of 18-year-olds, not just 50% of them. It would recognise that the debt they might incur might affect not only their choice of whether to go to university, but their ability to get on the housing ladder and the ability for their families to look to the future. I say that as someone who represents too many families who have £10,000 to £15,000-worth of unsecured debt hanging over their heads as it is. If the Bill does not address that issue—indeed, if some of its changes are making it even more likely that these people will incur higher debts—we will lose that talent, to the detriment of us all.

The Bill has to be seen in that context of what this Government are doing truly to open up opportunity. We must hold them to account for their failure to recognise the mistake they made when they got rid of child trust funds; the child ISAs will simply not replace the opportunity that those were providing. Tying university fees to the university rather than to the ability to pay is a retrograde step, in a way that a graduate tax would not be. This is taking place in a country where a rising number of middle-income families are now in rented accommodation because they simply do not have the savings even to begin to get on the housing ladder. We are asking them to take on more debt, and potentially to subsidise more debt for their children, and this will hold too many back.

I say to the hon. Member for Taunton Deane that we need to be clear about these figures on social mobility, because this issue is clearly at the heart of this debate. Yes, there has been a 40% increase, but let us look at what that increase is; we are going from 3,105 students in 2011 to 4,040 students in 2014 from the most disadvantaged backgrounds. In the context of our higher education system overall, that is just 3% of disadvantaged children in our country going to those Russell Group universities, compared with 21% of children from the most advantaged backgrounds. Let us have transparency in this debate if we are truly serious about social mobility.

The final point that the Bill has to address, which has not been discussed so far, is student voice. The Bill does not tie up with the provisions of the Consumer Rights Act 2015 that were extended to students, so that students now have consumer rights because they pay tuition fees—a right to a reasonable service at a reasonable time in a reasonable place. Many law students will probably have a field day with those provisions, once they work out that those do apply to the quality of the course provided to them. The Bill does not take account of those provisions or of the value of student voice—the value of students as active consumers, acting to drive up standards.

The National Union of Students has called for student representation on the office for students board. I believe that the Bill must go much further and integrate the rights of students. Indeed, we need a Bill of Rights for students, who are being asked to pay thousands of pounds on the basis that their courses are good enough to get them into a high-paid job afterwards. Those are claims that any trading standards board could look at, but which we have no way of resolving within our current education system.

In conclusion, we know that all legislation coming before the House must pass the stress test of Brexit and what it means—the uncertainties and risks that we must now all tackle, whether we supported the leave or the remain campaign. We know that the Bill falls at that hurdle. We know, too, that it falls on those three powerful metrics—access to further and higher education, the cost of further and higher education, and the voice within further and higher education. I urge the Government to think again, press the pause button and work with the sector and with businesses and the finance sector to make sure that the Bill is not the retrograde step that it may inadvertently become.

Opposition Members are right—there are many potentially good things about the Bill, but there is at present too much that could take us backwards. The talent that lies in all our communities needs and deserves nothing less. Many students are now graduating, but they would look at this Bill and say, “It’s time for a re-sit,” and that is what the Government must offer us today.

17:07

[Jo Churchill (Bury St Edmunds) (Con)]

It is an honour to follow the hon. Member for Walthamstow (Stella Creasy).

I welcome the Minister to his continued role in seeing the Bill through. I agree with many of the points that Opposition Members have made about the huge challenge posed by our exit from Europe. Not one of the university vice-chancellors did not support staying in, and many of them have articulated their worries about funding and so on and about students, their safety and stability in choosing a course in this country, and their life beyond 2017. I agree with those points, but the present situation offers us opportunity as well as challenge. If we say that life must go on hold because of the decision taken two weeks ago, we will not get anywhere. Let us look at the opportunity and drive forward from there.

I welcome the Bill. We lead the world in higher education. Our papers are cited more widely than any other country’s in most leading areas of education. We may be a small country, yet in the quality and quantity of what our minds produce, we are one of the greatest countries. I had the pleasure last week of seeing another of my daughters graduate. The vice-chancellor said that he had dealings with 183 other countries and the institutions there. Bearing in mind that there are 195 countries across the world, it is clear that our collaboration extends beyond Europe. It is global, and we must seize that opportunity as we move forward.

We have heard the good things about the office for students and the teaching excellence framework, and I will not go over the statistics. We need to ensure quality of delivery and of reputation, because it is only by ensuring the continuing reputation of our universities that we will be able to export and bank what we have to offer in the higher education sector. We also need to ensure that their environment is kept stable, for which we need consistency. That is another reason I do not want to see things put on hold. Planning is vital in what are billion-pound industries, looking at the total combined unit of our universities, further education establishments, upper-tier schools, and businesses. I would like to hear how the Minister will help institutions that look to take the opportunity to export, much like Nottingham University having campuses in Malaysia. How can we work on this and challenge ourselves to think of new and innovative ideas? My hon. Friend the Member for Milton Keynes South (Iain Stewart) spoke about the UK equivalent of the Massachusetts Institute of Technology—he called it MKIT—with Cranfield University leading on delivering on different platforms. Such ideas need to be nurtured and propelled under this Bill.

Great teaching must ensure value for money—it should not be the negative that the hon. Member for Glasgow North West (Carol Monaghan) said it is. The teaching excellence framework can ensure value for money for students. We talk too much of a homogenous education system. It is the fact that we have variety that gives us choice. That means that institutions can deliver expensive, science-driven degrees alongside some of the less expensive humanities degrees: the mix is important. Some degrees are more expensive than others to administer, and some need a lot of skills. If we give small institutions the right to deliver degrees, now that we have taken away the critical mass of 1,000, we must be careful about the quality of their delivery to ensure that what they are articulating they are delivering is truly what is on the piece of paper. I would like to see certainty in the metrics, as many others have said. It would be a good idea to pilot this in ’17, ’18 and so on, as my hon. Friend the Member for Cannock Chase (Amanda Milling) suggested.

Research is exceedingly important. Last week, the vice-chancellor of Lancaster University stated that it would be not only still a European university but an international university. He spoke about how it led on research across the world and was in the top 10 in this country. There is a science race. I have spoken about this in Westminster Hall and the Minister has responded. We do not spend quite enough in that area, and we need to look to punching better than we are. Near to my constituency, we have a huge catalyst of life sciences in Cambridge and at Cambridge University, which draws in £1.6 billion of income—the largest in the country. We need to work on such centres of excellence.

[Carol Monaghan]

Does the hon. Lady agree that some of the funding for the excellent research that is taking place is coming from the European Union, and we need to be pressing the Government to replace that funding so that that research can continue?

[Jo Churchill]

I agree that some of it is coming from the European Union. I am not sure whether the Government need to, or will be able to, dip into their pocket to assure that. They must look at possibly more exciting ways of loaning between business and universities, and stimulating particular areas and sectors in order that they contribute to driving the skills base forward. As my hon. Friend the Member for Taunton Deane (Rebecca Pow) said, we have many high-powered industries in this country—nuclear, pharmaceuticals, and so on—that are more than adept at this. Indeed, I have spoken to the Minister about our telecoms industry, which is more than adept at putting some of its own money into ensuring that skills come through. While I would agree that there needs to be some certainty, I would not necessarily say that it should come purely from Government.

Innovations in life sciences, pharmaceuticals and the 100,000 Genomes Project show that a strong university sector is key to both the health and the wealth of our nation. Organisations have a large part to play. Businesses want skills, but in order to build them up they must communicate more with the higher and further education sectors. They are playing an increasingly important part in our university institutions.

Last year, one of my daughters graduated across the river, and this week another graduated in Lancaster, which I consider to be truly northern. Another of my daughters is in Newcastle, and another is waiting to go—[Interruption.] I could go on for ages. I have a vast amount of experience visiting university campuses across the UK, although not so much those in Scotland. I am constantly amazed by, for example, Heston Blumenthal’s interaction with the University of Reading and Tata’s interaction with the University of Warwick, which underpin the importance of the relationship between business and universities. Such relationships are already in place and the Bill builds on them, makes them more transparent and develops the connection between further and higher education and business. Our focus on teaching and research allows us to provide opportunities for businesses with specific needs. In his review, Sir Paul Nurse asked for coherence, and I want the Minister to drive that into the Bill.

We have a chance to export education and improve research collaborations. We need to ensure that marketisation is monitored and that there is no oversupply. Although competition is good, oversupply can lead to the problems that have been mentioned. If there is too much freedom in a market, deliverers will always pick the easy route, so there must be an assurance that the low-hanging fruit will not be taken. I have spoken to vice-chancellors this week and our home universities are already looking for students with lower grades to fill the spaces left by EU students who have fallen away. We need to be aware of that and ensure that oversupply does not lead to a downgrade in quality.

Turning to social mobility, any graduate—my daughters, for example—will be in the marketplace for 50 years. That is an awfully long time and not one person who comes to this place will have had the same job for 50 years. We need to take a more flexible approach. We have spoken too much about the young—important though they are and mother of loads as I am—but mature students and part-time students also have needs. The right hon. Member for Tottenham (Mr Lammy) mentioned the statistics for Oxford and Cambridge, but he failed to take account of the fact—this is the crux of the argument—that some of the young people to whom I speak in my constituency are looked-after children, family carers and mothers. They do not have the flexibility just to choose a university. That is why reputation, quality and availability are so important. This is not about being able to go to top-flight universities; it is about being enabled to rise.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The hon. Lady stimulates me to intervene. It is very dangerous to talk about top-flight universities. I represent Huddersfield, which has a wonderful university with some of the best departments in the country, including for design, innovation and engineering. It is very easy to say what is top flight and what is not. Many of our departments are better than those at Cambridge, and I am sitting next to my hon. Friend the Member for Cambridge (Daniel Zeichner).

[Jo Churchill]

Indeed you are. The words “top flight” came from the top of my head and I fully agree with the hon. Gentleman. My daughters have enjoyed red brick universities, but my friends’ children have been to all manner of providers, including good further education colleges and good apprenticeship schemes. There are fewer degree apprentices at the moment, because that system has not filtered through. More than anything, people need the appropriate qualifications.

I do not want to go on about the statistics around white young men and those from black and minority ethnic backgrounds, because they speak for themselves. I would instead like to articulate the situation of career changers: mature members of our society who, in their 30s and 40s, when they have mortgages and children, want to change careers. That includes the nurses who want to become doctors, and the parliamentarians who want to become teachers.

[John Pugh]

Where are they?

[Jo Churchill]

Exactly. All manner of people who might want to take a different career path are precluded from doing so because they cannot get the appropriate qualifications, and we need to look at that. I was lucky when I did my MSc as a mature student, because I lived in Nottingham. The hon. Lady whom I followed; I am sorry, I cannot remember her constituency—[Hon. Members: “Walthamstow!”]. She spoke articulately about need, and made a good point about the 3% in the system being such a small number, and it is. However, when I was a mature student under the previous Labour Government, I could not access support to help me with nursery fees for my four small children or to help me with my MSc. Things have not got better, and the Bill will allow us to start to push things forward. So although I am open to criticism, I think that what the hon. Lady said was a little unfair.

Earlier in the debate, Members spoke about collaboration and the need to make collaboration mandatory for institutions, and I would like to use East Anglia as an exemplar of joined-up thinking. Next to us sits Cambridge University, which has the most money for research; the University of East Anglia is a leading university in Norfolk; and the new University Campus Suffolk, which has just been granted the ability to award degrees, is a community university. That blend offers people choice. That university in Suffolk, which has a campus in my constituency, has a member of the LEP and the local authority on the board. We need to encourage that sort of thing rather than making collaboration mandatory. They talked to further education providers, schools and businesses about how to fill the gaps in IT and engineering and to boost productivity, looking at nuclear power, farming, health and care. That is what I want the Bill to support.

17:22

[Paul Blomfield (Sheffield Central) (Lab)]

I echo the hon. Member for Bury St Edmunds (Jo Churchill) in welcoming the fact that the Minister survived the ministerial cull and is still in his place, because I think he has brought a—[Interruption.] He is defying my words at the moment; I was going to say how good he is at listening. I am over here!

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Will the Front Benchers take note of this? The hon. Member for Sheffield Central (Paul Blomfield) is making reference to the Front Benchers, and they appear to be having a conversation. I am sure that everybody wants to hear what the hon. Gentleman wants to say.

[Mr Sheerman]

My hon. Friend was trying to be nice.

[Paul Blomfield]

I will continue to be nice, because I recognise the thought and effort that the Minister has put into developing the Bill. I commend him for the way in which he has listened to those across the sector and other stakeholders in shifting thinking, as discourse has moved forward. There is a lot more listening to do, because there are still a number of reservations.

The Bill raises some very important issues: on teaching quality, clearly; on widening participation; on reopening the debate on credit accumulation and transfer; and on several other areas. Sadly, however, as other hon. Members have highlighted, those are not necessarily the key challenges for the sector right now. The Secretary of State was right to say in her opening remarks that our university system punches above its weight. Our universities are hugely important in the transformational impact they have on those who study in them, in building the skills base of our country and in contributing over £11 billion to our export earnings, and this hugely successful sector of course contributes through research and innovation to the wider development of our economy. We have one of the world’s best university systems, but universities face real challenges, many of which, frankly, are not covered by the Bill.

Let me turn back to Brexit. The hon. Member for Bury St Edmunds said that we should look at the opportunities of Brexit. Whether we describe them as opportunities or as challenges, there are real issues to face. She highlighted the fact that we are in the top 10 for research. One reason for that is the enormous funding we have had through FP7—Horizon 2020, as it is now—from the European Union. The EU is spending about £70 billion through Horizon 2020, and until 23 June more was allocated to British-led partnerships than to any other member state. Without that, our research capacity will be deeply affected, with huge economic consequences.

The Minister will recall that I asked him, just days after the Brexit vote, what action he was taking to protect that funding. Reassuringly, he said that we should not worry about anything for the next couple of years because we would still be in the European Union and fully accessing Horizon 2020. That was not an unreasonable answer at that moment—I would have probably given the same one—but when I talked to the vice-chancellors of my two universities in Sheffield two days later, they both reported that locally led research teams had been asked to pull out of trans-European projects bidding for Horizon 2020, because a UK research teams would be a drag on securing funding, given all the associated uncertainty. Mike Galsworthy, who is the director of Scientists for EU, has been trying to monitor the impact on research. He reports that already—just a couple of weeks on—of the 378 responses he has received from research teams, over a quarter are reporting difficulties because everyone fears the risk of having a team from non-EU Britain as a partner.

The Government therefore need, and I hope that the Minister will address this when he winds up, to consider urgently—more urgently than many of the other issues covered by the Bill—what he intends to do to offset the impact we are already seeing. He should commit to underwriting all Horizon 2020 funding to give research teams the reassurance that they can go forward confidently without letting down their partners. He should also talk to those quite close to him—[Interruption] I was thinking of a different form of relationship, but that one will do—about making an early commitment to putting Horizon 2020 at the top of the agenda in our negotiations on what post-Brexit Britain will look like.

The second issue is about recruiting and retaining talent. Between our two universities in Sheffield, there are 406 EU nationals on a salary of less than £35,000. That figure is important because it means that they would not meet the criteria for successful tier 2 visa applications. These are early-career academics—the talent of the future—who will be driving the research and the teaching quality of the future in our universities. Unless we can give them the confidence that they and their successors from European countries can come to this country to work, teach and research in our universities, we will be severely weakening our talent base.

Such issues are not addressed in the Bill, but it threatens to do more damage in the third area of concern in universities, which is international students—an issue on which the Minister and I agree, and about which many Government Members have made the same point. As the right hon. Member for East Devon (Mr Swire) pointed out, the Home Office has done enormous damage to our ability to compete in the growing international marketplace to recruit international students. Brexit threatens greater damage in relation not just to the 185,000 EU students who are here, but to the 320,000 or so non-EU students. Hobsons, the major international student recruitment consultants, reported just a couple of weeks before the Brexit vote that about a third of non-EU nationals considering coming to the UK would find Britain a less attractive place to study if it exited the European Union, and one can understand why.

The Bill could make the situation worse by undermining the strength of the UK’s university brand through the teaching excellence framework. A one-level TEF might not have that consequence, because it would be a straightforward exercise that, subject to ticking certain boxes, most universities would glide through. However, the subsequent grading system creates a risk of brand damage, because we are developing it unilaterally. If we were measuring our universities equitably in parallel and in partnership with every country in the world, perhaps it would be different, but we are not. We are stepping outside what our competitors are doing and saying that we will spotlight our universities in a very different way. We will say that some are okay, some are outstanding and some are excellent. That will send out the message about those that do not reach the very top grade that international students ought to think twice about going there. I appreciate that that is not the Government’s intention, but it is a potential consequence that they need to consider closely. We already have a quality assurance system through the Quality Assurance Agency for Higher Education that is widely respected around the world.

If the Government are going down the TEF route, let us get it right. The thinking on this is significantly underdeveloped. I welcome the way in which, during the discussion about teaching quality, the Minister has moved away from an overdependence on quantitative metrics towards a more qualitative approach that involves institutions in the assessment process. However, there is still a focus on quantitative metrics that, as other Members have highlighted, are deeply flawed.

Employment destination is a key metric, but we all know that that is an unsatisfactory way of measuring teaching quality. Someone who comes from the right family, goes to the right school, goes to the right university and comes out with a passable degree will get a good job, because they have the contacts. [Interruption.] I did not catch the Minister’s observation, but I have no doubt he will make his point later. Employment destination might be a measure of the privilege someone was born into, but it is not a measure of teaching quality. We know that privately educated students are more likely to get a good degree than state educated students. We also know that graduate destination can be affected by the regional economy, so it is a very unsatisfactory metric.

In trying to widen participation, I admire the Government’s focus not simply on entry to university, but on success at university and beyond. However, using retention as a metric is potentially flawed, because the easiest way—I am not for a moment suggesting that any of our universities would do this—to get a good retention score is not to accept students who are likely to fail.

[Jo Churchill]

I agree with that point. A problem with the lack of flexibility in the system is that it does not allow those who have more disconnected lives to be iterative with a degree by going out and back in. That is a problem if Members across the House want to improve social mobility. Does the hon. Gentleman agree that we need to be more flexible to allow those whose lives do not conform to the three-year pattern to have access?

[Paul Blomfield]

I agree with the hon. Lady—I thank her for her intervention, which, like much of the rest of the debate, reflects cross-party concern about the detail of the Bill.

Other hon. Members referred to the research excellence framework as a model for the TEF, but the research excellence framework took time to develop—there was trial and error, remodelling and rethinking. The research excellence framework was not put together with the pace that the TEF has been put together, and nor was it put together without trialling or in a way that creates such risks. That is why, as the hon. Member for Cannock Chase (Amanda Milling) said, the Business, Innovation and Skills Committee said that the Government needed to do more to demonstrate that the metrics relate to teaching quality. Until they do, we cannot be confident that we will get this right.

The Secretary of State said that there was limited thinking among the Opposition, in that we thought that new providers could not possibly be as good as traditional universities. I do not accept that. Equally, I hope the Government accept that there are risks. In the last Parliament, they got their fingers burnt with new providers. We have seen in the higher education landscape in the United States, which some fear is the model the Government are looking to, the damage caused by an insufficiently well regulated system, in which commercial operators come in, milk the public funds provided through the federal loans system without regard to the quality of education offered or the consequences for those who go through it, and leave them to pick up the debt. Everybody was misled at each stage of the process, which is why so many private providers face federal and state prosecution in the United States. Unless we get the regulatory framework right in the Bill, there will be risks.

I know the Minister is committed to getting the regulatory framework right, but the problem is that we do not know what it will look like. I have asked written questions about it, but we still do not know. He can correct me if I am wrong, but in response to a recent written question, he indicated that we will not know what the regulatory portal and subsequent framework look like in detail until the Bill passes. That is not good enough.

I am conscious of the time and of other Members’ desire to contribute. There is so much more in the Bill, but I will leave my remarks there.

17:34

[Ben Howlett (Bath) (Con)]

It is a pleasure to follow the hon. Member for Sheffield Central (Paul Blomfield)—I should call him my hon. Friend—who is the chair of the all-party parliamentary group on students. I am the vice-chair, and it is a pleasure working with him to champion students across our country. I agree with some of the points he made.

I congratulate my hon. Friend the Minister on continuing in his position, on his work over the past year in championing the Bill, and on engaging with the sector more than any other Minister for Universities and Science. That is to his credit and to the credit of the Secretary of State, who spoke earlier. It was great to see her on the Front Bench.

When black people and people from lower socio-economic backgrounds struggle to get on in life, the Conservative party has a responsibility to put our country together again and focus on unity. All the key components of that one nation narrative can be applied coherently to the Bill. We have a responsibility, as I have seen in conversations with my hon. Friend the Minister and when reading the Bill, to ensure that those who have not necessarily had the best start in life can get on. That is a deep Conservative message of aspiration.

My parents never went to university; I was the first one in my family to go. My father was the breadwinner and my mother was disabled. In the 1980s, my parents aspired to become a middle-class family by saving up enough money to get me and my brother through university. Now my brother is a doctor and, well, I am here. That is a great testament to my parents and their determination over the years. As a new MP, I want to enable others in my constituency to follow their own dreams. That is why I rise today in wholehearted support of the Bill.

The changes to the higher education system in 2011 aimed to improve the student experience and the teaching they receive. On the whole, the changes have improved the higher education system, encouraging more students to go to university and improving social mobility. It became clear, however, that the regulatory system did not match what students wanted. There is a need to create a body to check that universities are using the increased funds to improve teaching and resources.

The opportunity to gain a degree in a subject you enjoy or that will help to get the career of your dreams is important for so many in the United Kingdom. The experiences gained in one of our higher education institutions, whether at the age of 18 or as a mature student, are invaluable and often changes people’s lives. I am pleased that a record number of students are going to university as a result of the cap being lifted, with them taking the opportunity to advance their minds as well as themselves. However, these students must be the focus of the university. This long-awaited Higher Education and Research Bill will put students at the heart of the regulatory system. The office for students will be able to monitor and improve institutions. It is set to be full of experts in the field, who can judge the quality of teaching being given by universities.

I am proud to represent a city that has two world-leading universities: Bath Spa University and the University of Bath, which is ranked one of the best universities for student satisfaction year-on-year. I do not want other MPs to try to take that accolade away from us, but good luck. I am concerned, however, about my young constituents who travel elsewhere and do not necessarily get a teaching experience comparable to the fees they end up paying.

Going to university is a big financial investment and students need to be safe in the knowledge that there is a body to ensure that they receive excellent quality teaching that will set them up for a superb graduate life. The new framework and the office for students will monitor teaching quality and provide broad ideas about how best quality teaching can be achieved. This will be done without telling an institution how it should teach or assess or what content should be in their courses. That independence for universities is crucial, as it means they can maintain the individual flair that attracts students, while providing excellent teaching. The new scrutiny will provide an assurance to students about the excellence of the teaching they will receive, and that they will have the skills that employers are looking for. In the west of England, the G4W group of universities is working closely to ensure that businesses and universities work together to deliver skills in the interests of our regional economy. That example will be improved and enhanced across the rest of the United Kingdom as a result of the framework in the Bill. I hope other areas of the country, with their devolved settlements, will be able to deliver just that.

I want to turn to the teaching excellence framework, the measure by which the teaching quality of universities will be assessed. The new framework will finally bring together teaching in line with funding for research, as teaching funding will be linked to quality, not just quantity. That is important, as it prevents universities from focusing too much on mass, often sub-par education, and ensures that those they invite to study are their priority. I have to admit that when I speak to students up and down the country—this has been the case since 2011—many student bodies and student union organisations say time and again that fees have increased but the quality of education and teaching has not necessarily increased with them. That has been a great frustration for students.

It is important that the Government make it clear well in advance what makes a good course value for money, so that universities can tweak their current practices using the guidance provided. It will be difficult to measure such different styles, even across the leading universities, but I urge the Government to come up with a coherent, easy-to-understand set of qualities and priorities that universities can install, so that they can be confident of receiving the highest quality rating. I hope that in Committee we can focus on the quantitative, not just the qualitative side, which obviously has come up several times, and which no doubt the Minister will talk about when he sums up.

The university quality rating will be an invaluable tool for prospective students choosing between the hundreds of higher education institutions across the country. Alex Neill from Which?, an organisation that exists to promote consumer choice and information, said:

“Our research has shown that students struggle to obtain the information they need to make informed decisions about university choices. We welcome measures to give students more insight into student experience, teaching standards and value for money… These proposals could not only drive up standards, but could also empower students ahead of one of the biggest financial decisions of their lives.”

Deciding to go to university is easy for some people, but not for everybody. It is a big decision—the choice of course or institution can make or break a person’s future—and there are many tools available that talk about student experience, teaching style and support, but it is difficult to compare teaching quality, and with all universities raving about how good they are, it is unlikely they would wish to champion such a tool. The Bill will provide students with invaluable and directly comparable data on the quality of teaching they can expect at each institution. I would have found such information incredibly helpful when I was making that choice.

[Michelle Donelan]

Does my hon. Friend agree that the Bill gives students the opportunity not just to gamble and take a chance on their future but to make an informed decision so that they might have the best opportunities in life and get real value for money?

[Ben Howlett]

I completely agree with my hon. Friend and near neighbour. Since 2011, students have said many times that they want more information, and in this digital age, it should not be too difficult to go online and find out in one place what information is available to help them make these choices. I hope that the Careers and Enterprise Company will end up streamlining careers advice and guidance, but the Bill will put at the heart of the system the student making that choice with the information freely available to them.

When fees rose in 2011, teaching quality was supposed to improve with it, and this new regime focusing on teaching quality will be supported by the cap on the fees that a university can charge if it is not hitting the highest teaching quality. This power provides a good stick to prevent universities from disregarding teaching quality, which I know the universities sector has long championed. I have been contacted by key stakeholders in the universities sector concerned that, although they are keen to offer students the best value for money and excellent teaching, these changes will come at the expense of the postgraduate sector, particularly the science, technology, engineering and maths research that is so crucial to our economic development—it is a main component of what the University of Bath specialises in. The Minister has provided me with reassurances, but I hope that he can reassure the entire House that the postgraduate sector will still be able to bloom, while teaching in undergraduate degrees improves.

I have focused on the measures that will improve the student experience. I turn now to the provisions in the Bill providing for more data on diversity and inclusion in our universities. As part of the registration process with the new office for students, it will be a condition that institutions publish admissions stats on gender, ethnicity and socioeconomic background. Given the disconnect in our society at the moment, there is no better time to deliver on this crucial part of the Bill. The data will include the numbers of applications from these groups and—crucially—how many are accepted. I am sure that this publicity will encourage institutions to become increasingly inclusive and provide good tools to identify trends and what policies might be needed to address any shortcomings.

For too long students have been asking for better quality teaching. They want to get a degree, but they also want to receive the best quality education to equip them for their future careers. I am pleased that the Government have taken action, finishing what they started with their changes to higher education in 2011. Students can now be confident that their education is being scrutinised. I hope that the Bill will put students’ minds at rest and reassure them that their institution has good teaching quality and cares about the experience as much as the research side. Sadly, as we all know, this has not always been the case, and I am concerned that a lack of focus is sometimes left, with some students leaving university feeling quite deflated.

I urge all Members to do what the former shadow Business Secretary, the hon. Member for Wallasey (Ms Eagle), unfortunately failed to do in the Queen’s Speech debate, when she failed to mention exactly what students want. At the heart of that, this Government have listened to what students actually want. Students want to see better quality teaching and better quality of future outcomes. We should listen to the students and what they are asking for. Ultimately, the Bill delivers on that, and I look forward to voting for it with the Government in the Lobby later today.

17:50

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to follow the hon. Member for Bath (Ben Howlett). Bath is another beautiful university city. I live in Cambridge, a city of universities. Of course, almost everyone knows of the University of Cambridge, and most people now know of Anglia Ruskin University, which has expanded and improved dramatically over the last decade, particularly under the excellent leadership of the recently retired Vice-Chancellor, Mike Thorne. In Cambridge, we have also enjoyed the Open University and the University of the Third Age, so there is something for everyone, and a precious eco-system that we do not want to risk being disrupted.

Cambridge also has a number of other educational establishments that feed off the Cambridge brand, and one of my concerns is that if we rush to encourage new providers, we must make sure that the quality of the Cambridge brand and others is not tarnished. I am told that when a similar exercise was undertaken in New Zealand a few years ago and a couple of new entrants did not stay the course, the reputational knock-on effect led to a drastic fall in foreign students for the established institutions over the following years—along, of course, with the consequent financial costs—so I say we should be careful here.

Let me start by following on from the excellent points made by my hon. Friend the Member for Sheffield Central (Paul Blomfield). In facing the Brexit challenge, it is absolutely clear that the sector is suffering from instability and uncertainty. I echo the suggestion of many of my hon. Friends that now might not be the time for undertaking more major reforms. Our research institutions and universities currently face a real challenge to maintain our global reputation, and we should not make it any more difficult for them.

I am not saying that the existing regulatory frameworks in place for our universities and research are perfect. Of course they are not, and of course they could be simplified and improved. What I do say, however, is that now is the time for safeguards and support for our higher education providers and research councils—not for further disruption. Let us not rock the boat when we are already faced with such unsteady waters.

Plenty of people are making this point. Perhaps not surprisingly, the University and College Union has asked the Government to stop and wait. It sensibly called for an “immediate nonpartisan inquiry into how we can ensure that our colleges and universities remain open to staff and students from around the world.”

I rather agree. Even putting aside the minor matter of our uncertain place in Europe at the moment—one has to say, what price the great aspirations for the Bologna process and a pan-European higher education system?— there are real problems here.

The impact assessment for the Bill outlines that a single market regulator, the office for students, will be established and says that it will provide

“competition, choice and the student’s interest at its heart”.

That sequence of phrasing raises a further problem—that competition is being put first, and the student’s interest put last. Let us take, for example, the provision that would see new entrants into the higher education market given the ability to compete on equal terms with existing institutions and to immediately possess powers to award their own degrees, albeit on a probationary basis. As I have suggested, there are real risks here. It could dilute the trusted UK brand, risking our country’s reputation for educational excellence on the international stage. The Public Accounts Committee has already found standards at some private providers to be lacking, saying:

“The Department has failed to protect the interests of legitimate students, and the taxpayer.”

The Russell Group has urged the Government to consider a longer period of enhanced scrutiny and peer review to help maintain the UK’s reputation and high standards, and I agree that ensuring the high quality of any institution afforded degree-awarding powers is paramount.

The increased marketisation that this proposal signifies could also threaten providers, and could, in some cases, lead to what we call “market exit”. That might be quite dramatic. The closure of such institutions, whether they are vocationally orientated or traditional international-facing universities, would have a significant, and possibly more than significant, impact on local communities and students. A survey undertaken by the now defunct Department for Business, Innovation and Skills showed that less than half of alternative providers had a student protection plan to implement in the event of “market exit”. Moreover, if providers fail, who will pick up the tab? What will be the effect on the other institutions? I think we need to know the answers to some of these questions.

The National Union of Students has called the marketisation of higher education a “failed experiment”, and has chastised the Government for trying to “turn students into consumers.” I hope that the Government will think again, and will recognise that creating a conveyor belt of higher education providers risks doing real damage to the dynamic, trusted institutions that have been built over so many centuries in our country.

The proposed teaching excellence framework will allow some universities to charge tuition fees rising in line with inflation. While it is fair, and welcome, to highlight the importance of teaching quality, the removal of the fee cap in what can only be described as a slightly underhand way is not very welcome. Another issue of concern relating to the TEF is the splitting of research and teaching oversight between the office for students and UK Research and Innovation. The Royal Society rightly points out that

”today’s PhD content is tomorrow’s course content”,

and, as the University of Cambridge tells me, the close and mutually beneficial relationship between teaching and research—their interdependency—is a central tenet of UK university excellence. Consequently, it is important for the TEF to recognise the value of research-led teaching in its assessment criteria.

I appreciate that the review of the research excellence framework is currently under way and expected soon, and I am sure we all await its conclusions on how the assessment of teaching and research quality will be streamlined and interlinked, but I think that there must be a strong requirement for co-operation between the office for students and UKRI.

The implications for wider research are profound. Let me say in passing that an omission in the Bill is the lack of provision for post-graduate student supervision: there is more to be said on that, I think. The Bill restructures our country’s research base by revoking the royal charters of the current research councils and bringing them under the umbrella of the new body that will be created when UK Research and Innovation is merged with Innovate UK. Lord Rees, who has already been quoted today—a very wise voice from Cambridge, and a former president of the Royal Society—has observed that while reshuffling the administrative structure of our research councils is “seductive”, it

“may not prove either necessary or sufficient, and may indeed be counterproductive.”

It is positive that the Bill at least hints at codifying a long-standing convention, the principle of dual funding, but many have observed that the wording is vague, possibly less clear than that in the White Paper, and that the “reasonable balance” referred to in the Bill is insufficient. I hope that the Minister can give us a stronger commitment today, because dual funding is key, and quality-related funding for research is essential.

The integration of Innovate UK into UK Research and Innovation also raises questions. While we are assured that Innovate UK will retain a separate budget and its own business-facing outlook, I think I am right in saying that Members of the House of Lords have already queried the merger and its impact on the independence of the research councils. I am sure that that will be examined closely in Committee.

Let me end by returning to my opening observations. Our research community is already under great pressure, despite the Government’s reassurance that the European referendum result has “no immediate effect” on those applying to or participating in Horizon 2020. As a net recipient of EU funding, science research in particular will be hit hard by Brexit, and although the Universities Minister said recently that “nothing has changed overnight”, we are hearing just the opposite from those on the front line of research in our country, as other Members have observed. We are hearing that—literally overnight—they have been forced to the back of the queue when it comes to forming the collaborative links with European partners that are necessary for applications for EU research grants.

Research and higher education are intimately intertwined with free movement, European alliances and investment, but we may still be years away from knowing what kind of settlement will finally emerge. Before we can begin to think about reforming our vital higher education and research sectors, we must be absolutely sure of our place in Europe and in the wider world. The Government say that it is business as usual, but I say that these sectors are just too important to our country’s economy, and to our society, for us to take further risks in such uncertain times.

18:00

[Michael Gove (Surrey Heath) (Con)]

As a new Back Bencher, I feel fortunate to have the chance to contribute to this debate; it has been well-subscribed, and conducted in the generous spirit one would expect of any education debate. And we have learned a lot, as we would expect in any education debate. We have learned that the University of Aberdeen is staying true to its internationalist foundations at a time of change. We have learned that my right hon. Friend the Member for Cities of London and Westminster (Mark Field) is that rare thing on the Conservative Benches, a Guardian reader. We have also learned from his skilled powers of observation that the new Secretary of State for Education is slightly less blonde than the Minister for Universities and Science, but one of the things his observation has reinforced in my mind is that blondeness is clearly a quality that brings preferment under this new Government—and I know where I went wrong.

I also thank the hon. Member for Blackpool South (Mr Marsden) for his contribution from the Front Bench for the Labour party. He was a distinguished editor of History Today and an outstanding Open University lecturer, but I fear that in his speech today he did not do himself justice. His speech was 45 minutes long, which is some 12 minutes longer than Mozart’s longest symphony, and during those 45 minutes, while there was a great deal of criticism of the Government’s proposals, there was precious little that was fresh, original or new in terms of policy vision. As an education reformer, he is not yet ready to join the ranks of Rab Butler, Lord Robbins or H.A.L. Fisher. It was a pity that instead of what we used to have from Labour—a comprehensive vision of education, education, education —we had instead prevarication, obfuscation and mystification. It is, I fear, sadly reflective of the condition in which the Labour party now finds itself—of the fact that a party that was once committed to the improvement of education, the extension of opportunity to all and radical reform to bring that about now has so little to say. That is not a criticism of the hon. Gentleman or indeed of those who spoke from the Labour Back Benches today; it is just an observation of the fact that where there was once intellectual fertility, there is now, sadly, aridity. But I wish my colleagues on the Labour Back Benches well as they try to ensure their party rediscovers its radicalism and policy vitality.

May I contrast the lack of ideas, fizz and energy on the Labour Front Bench with the qualities displayed by our new Secretary of State in her remarks opening this debate? I had the opportunity to remark earlier on the fact that our new Secretary of State has made extending social mobility the hallmark of all the roles she has taken in Government. She spoke eloquently and from the heart about her own personal journey and her commitment as a graduate of Southampton University and as a comprehensive school girl who was the first in her family to go to university to extend to others the opportunity she herself has enjoyed. It is a promising sign that she now leads a fused and reinvigorated Department for Education that covers the support of children from the moment of birth right up to the point at which they go on to an apprenticeship or into university. It was a mistake of Gordon Brown to separate universities—to make them orphans first of all in the Department for Innovation, Universities and Skills, and then to have them spatchcocked into the business Department—because I feel an unnecessarily narrow and utilitarian approach was taken towards higher and technical education.

The restoration of a Department that sees education in the round and takes a holistic approach to human development and intellectual inquiry is all to the good, and the Secretary of State is absolutely the right person to lead it, and the Minister for Universities and Science, who has already proved himself a distinguished higher education Minister, is the right person to take this Bill forward in Committee.

It is appropriate that we legislate at this stage because this Bill is a sequel, in a way, to the changes we introduced under the coalition. It was the Browne report into higher education finance and the decisions taken by my right hon. Friend the Member for Witney (Mr Cameron), and indeed Vince Cable when he was Secretary of State for Business, Innovation and Skills, that ensured that we were able to place the financing of higher education on a sustainable footing for the future. Almost uniquely among European nations, our higher education system is solvent as a result of the courageous decisions that they took. He will not thank me for mentioning it, but the former leader of the Liberal Democrats, the right hon. Member for Sheffield, Hallam (Mr Clegg), displayed both courage and principle in rejecting his election promise and embracing the right policy outcome. Although he paid a political price for that decision, we should record that it was right, not just for the solvency of our higher education institutions, but also for access. As a result of those changes, more children from poorer backgrounds, and from working-class and disadvantaged homes, now go to university than ever before, and that is a direct result of the courage and coherence of the reforms that were made to funding. Having made those funding reforms, we must now complete the story and ensure reforms to the structure and quality of higher education, so that we maintain our position of global leadership.

Let us be in no doubt that universities across the United Kingdom are global leaders, and some of our finest institutions are among the top 20 universities in the world. Those include not just established institutions of great antiquity such as Oxford and Cambridge, but London’s universities, which are outstanding in research, teaching and their capacity to improve our productivity. We are fortunate that changes in the Bill will ensure that the position of global leadership that we currently enjoy will only be enhanced.

I welcome the fact that the Bill will lead to the development of new challenger higher education institutions. As the Secretary of State made admirably clear, at every point in our history, whenever it has been suggested that we expand the number of higher education institutions, “small-c” conservative voices have always said that more would mean worse. The Anglican clergy used to insist on a monopoly on higher education learning through their stranglehold on Oxford and Cambridge, until a brave, utilitarian radical helped to set up University College London, and helped to break that monopoly and extend higher education.

Throughout the 20th century we had the establishment of the red brick, the plate glass, and the polytechnics into universities, and each of those steps was an exercise in the democratisation of knowledge. It is a pity that in recent years, even though the University of Buckingham has taken its place among universities as a first-class institution, we have not had the same innovation and new institutions being created, but this Bill makes that possible.

There is, of course, an absolute requirement for new institutions to meet a quality threshold that ensures that public money and intellectual endeavour are well directed, and that is why I welcome the principle of the teaching excellence framework. Those on the Opposition Front Bench criticised the Minister of State for being a listening Minister and wishing to consult, while simultaneously suggesting that he was somehow closed-minded and rigid in his desire to ensure that we compare like with like. Let me come to the Minister’s defence—he does not need me to defend him because logic will suffice. The teaching excellence framework has been subject to extensive consultation. That consultation closed just over a week ago on year 2 of the TEF, and in that document of more than 60 pages a series of detailed questions were asked, all of which followed intense engagement with those working in higher education. It was a model for how a Department should consult, and the Minister has shown himself to be a listening, pragmatic and empirical steward of his responsibilities. The TEF has and will evolve as it should in the best traditions of the Department.

The idea that we should somehow object that the TEF allows us to compare different types of institutions is a fundamental misunderstanding. The hon. Member for Blackpool South said that it was a one-size-fits-all approach, but it is explicitly not that, as the consultation makes clear. It is an opportunity to allow individual institutions to be compared in a way that allows meaningful lessons to be drawn for undergraduates and for the Government.

[Mr Marsden]

Let me make it clear that we were not saying that the TEF was a one-size-fits-all measure. We were saying that the basis on which it was going to operate during the first year was one size fits all. Perhaps the right hon. Gentleman will remember that I went on to talk about the need for the TEF to be more disaggregated so that we could look at it within universities. That process might yet come forward.

[Michael Gove]

I am grateful to the hon. Gentleman for that clarification. Indeed, in the constructive spirit in which most of this debate has been held, I welcome what he says and entirely accept that this is a move towards greater consensus.

One concern that people sometimes have about an emphasis on quality is that it somehow runs counter to the important principle of access, and that there somehow has to be a tension between maintaining rigorous teaching and research quality in an educational institution and broadening access. I do not think that there is necessarily a tension between the two, and neither do those who lead our universities. It has been conspicuous, over the past six years and beyond, how energetic vice-chancellors and others have been in ensuring that they can broaden access to higher education.

I would make the point, however, that while universities have worked hard and collaborated with the Department for Education in its previous incarnations to try to influence the curriculum and examinations in such a way as to maximise access to the benefits that higher education can bring, still more could be done. I do not accuse any institution or individual of bad faith, but I believe that there is additional potential for higher education institutions to, as it were, get their hands dirty in the business of improving secondary education. As I have mentioned, King’s College London has helped to set up a new maths free school which will ensure that gifted students from across the state sector have an opportunity to graduate to the mathematic and scientific degree courses that our country needs. It would be a wholly good thing if more universities were to follow the example of those that have been in the lead in sponsoring academies. In saying that, I am simply reiterating the case that has already been made so brilliantly by my Friend in the other place, Lord Adonis.

As well as ensuring that we improve access, the Bill makes it clear that academic freedom must be defended. The National Union of Students—a distinguished former president of which sits on the Opposition Benches—has often been an effective steward and safeguard of undergraduates’ interests. At the moment, however, there are voices and individuals within the NUS who have not upheld the best traditions of academic freedom and who have in some respects created a chilling environment and a cold home for students, particularly those who are Jewish. I applaud the work that has already been done by the Minister of State in ensuring that academic freedom is not simply an abstract question of academics being allowed to publish, debate and discuss, and that it must also be about ensuring that our universities are places where individuals can feel confident that they are respected and that their intellectual journey will be allowed to proceed in safety, whatever their background.

That brings me to my final point. A number of speakers in the debate have talked about Britain’s departure from the European Union as though it were a cataclysm the like of which this country had never endured before—a sort of Noah’s flood that will bring devastation to our institutions. I respect the fact that passions were engaged during the referendum debate and that those who argued that we should remain were sincere in their belief that leaving the European Union would bring problems and challenges for our higher education institutions. All I would say is that if we look at continental Europe—I mean no criticism of those countries—we can see that there are no world-class universities in the eurozone that could take their place alongside the universities of this country or indeed of the United States of America or south and east Asia.

The spirit of intellectual inquiry—and, indeed, international collaboration—that marks out all our best universities globally does not depend on membership of any political union or subscription to any bureaucratic system. It depends on a belief in honest inquiry, a desire to go where the truth takes you and a commitment always to have an open mind to new facts, new experiences and new people. I am confident that those who lead our universities will take the opportunity that the Bill gives them to ensure that the superb work they do remains open to students from across this world, so that our higher education sector, which has done so much to strengthen our economy and to make this country such a very special place, can proceed into the future with confidence.

18:14

[Wes Streeting (Ilford North) (Lab)]

It is a pleasure to follow the right hon. Member for Surrey Heath (Michael Gove) after his relatively recent return to the Back Benches. Whatever disagreements the Opposition may have had with his various policies over the years, it is encouraging to see that while the Government may have lost his voice the House has not, as we have seen in recent days. I am sorry to have to associate myself with his remarks about the National Union of Students, in particular its lack of care towards Jewish students and Jewish representation. It is sad day when I find myself agreeing with the right hon. Gentleman on that.

UK higher education is a global success story, but that success has been put in jeopardy by the decision to leave the European Union. Our institutions currently have 125,000 students and 43,000 staff from other EU member states. Since the creation of the Erasmus scheme, some 200,000 British students have benefited from opportunities to study abroad. Our membership of the EU has added 15% to our universities’ income, not least through the £687 million in research income, from which the UK benefits disproportionately as a result of our strength and excellence in research. Against that backdrop, leaving the European Union provides significant challenges for the sector, and the Bill introduces unnecessary risk and uncertainty that the sector can no longer afford.

With some notable exceptions, this House needs a degree of modesty about the lack of scientific expertise across its Benches and should draw wisdom instead from expertise in the House of Lords. The dual support system for funding research in our universities has been vital to our higher education sector’s success, so we should pay particular heed to the warnings of the Astronomer Royal Lord Rees, already referred to in this debate, from prior to the referendum when he described changes to the research councils outlined in the Bill as “drastic.” He was right then, but he is even more right today. It is a risk, a distraction, and an unnecessary reorganisation that we cannot afford. When winding up, the Minister ought to tell us what benefits this huge disruption will bring because it seems that any potential benefits are far outweighed by the costs.

The Bill continues apace the marketisation of our higher education system, which has been allowed to go unchecked without sufficient protections and rights for students for far too long. Nowhere is that more evident than in the provisions to allow new private providers to set up shop with degree-awarding powers from day one. What would stop the Donald J. Trump university opening in the UK? It could have degree-awarding powers from day one and then, a few years down the line, following inspection—I am sure that the Donald J. Trump university would not stand up to much—let us assume that it just chooses to up sticks and reinvest somewhere else. What protections and safeguards would there be for students?

The White Paper and the Bill refer to protection and the possibility of the OfS awarding degrees. I am proud of the degree that I got from my university—it is unlikely that my university would go bust, but we would certainly be in trouble if it did—but the idea that people who work hard at their chosen university for a degree could suddenly find that their certificate reads “Office for Students” instead of the name of their university is not reassuring. Students have for too long been an afterthought in the debate around reform of the higher education sector.

Turning to the office for students, its name is on the door, but there is no seat at the table for students. It is entirely unjustifiable to call something the office for students when there is no guaranteed representation for students. There was an entire White Paper called “Students at the Heart of the System” and the new Secretary of State used that exact phrase in her opening remarks, but students barely get a mention in the sector’s accountability regime. We should ensure, as a bare minimum, that student representation on the board of the office for students is guaranteed. It may well be that in the current climate that place is not reserved for the NUS specifically, but there are plenty of able student representatives in higher education institutions across the country and they deserve a seat at the top table.

Let me give a broader critique of the sector and what it has done for students. I bow to no one in my love and passion for the UK higher education sector, which is a national and international success story. I have been involved in debates on higher education for some time, so forgive me if I am impatient at the fact that we are still talking about problems that have existed for many years. Too many of our academically elite universities remain socially elite. I get frustrated when I hear of so-called “widening participation success stories” from institutions that have appalling retention data and graduate destination data.

The right hon. Member for Surrey Heath alluded to the fact that the benefits, purpose and value of higher education have always extended beyond simple utilitarianism, and whether that is about graduates getting jobs or companies getting patents, there is a bigger vision and mission. It is about the exploration of humanity, expanding our horizons, having a deeper understanding of ourselves, our culture and our society, and pushing the boundaries of scientific exploration. But we should never forget that for many students, particularly those from backgrounds like mine, although it is of course lovely to go to university and make new friends and to engage in a deeper knowledge of one’s subject, it is also essential that that higher education experience delivers the transformational impact that is so often promised when students apply but that can so often be found lacking afterwards.

Too many institutions are too prepared to pat themselves on the back just for taking students from some of the most deprived communities, be they working-class communities, black and minority ethnic communities, disabled groups or other groups that are under-represented in HE and face particular disadvantage in society. The institutions then take their money, process them through the university conveyor belt and cast them off into the world with no real benefit to their earnings, and with these students having no real sense of direction or purpose in their lives. For too many students, on too many courses, that is the direction taken, and it is simply not acceptable or justifiable. The Government, we in this House and the accountability regime for higher education need to be more robust in challenging that institutional failure.

I am also frustrated about what is happening to so many of the concessions that students and student leaders fought for and won in successive battles, be they on the introduction of tuition fees in 1998, on the introduction of top-up fees in 2004 or on the coalition reforms. So many of the concessions we won—the reintroduction of grants for the poorest students, the increase in the repayment threshold so that it was more generous and even the introduction of the independent Office for Fair Access itself—are being too readily and rapidly undone. That is a betrayal of the promises made by successive Governments, and I would like to suggest a number of changes.

If I were in the Minister’s shoes today, I would be dropping this Bill and starting again. There are three areas in particular where the Government need to do some serious rethinking: funding and finance; transparency and accountability; and the global role of HE. On funding and finance, we have already seen the difficulties presented to departmental budgets and the demands on the Treasury when even simple miscalculations in the assumptions on the resource accounting and budgeting charge and on the level of repayments are made.

I do not wish to rehearse the debate, but we must be honest about the fact—there is an absence of any compelling evidence to the contrary—that the view before the referendum among the overwhelming majority of economists in this country and around the world was that if the UK put it itself on a different course, that would undoubtedly leave the country less well-off than it might otherwise have been. In that context, and given the pressures that will inevitably follow on jobs, inward investment and the labour market, a particular risk is placed on higher education budgets. If graduates are not earning as much as they might otherwise have been, that means less money in the repayment system going back to the Treasury and more pressure upon departmental budgets.

As an opponent of the up-front tuition fee system, which I suffered from in part, the top-up fee system and the coalition’s further reforms, I think it is a terrible mistake that we have ended up with the present system, rather than with some form of proper graduate taxation. I am totally comfortable with the idea of paying more as a graduate and as a beneficiary of higher education. There are particular problems with the principle of having a sticker price up front and with some of the mechanisms of the repayment system that create significant risk for the Government. I am encouraged that others are still engaged in this debate. It is interesting that the Fabian Society has proposals for national insurance education accounts.

As well as looking at the repayment mechanisms, it is more important that we look at the issue of student maintenance. It is undoubtedly the case, as is well demonstrated by NUS evidence, that too many students within the higher education system, particularly those from poorer backgrounds—not necessarily the poorest, but those from low and middle income backgrounds—struggle to make ends meet. If they find themselves stacking shelves or, as I did, working at Comet, now defunct, to fund my higher education course, there is a cost not just in the time taken at work. There is an opportunity cost, because if students are stacking shelves or pulling pints, they are not in the library, the lecture theatre, sports clubs or student societies and activities—all those opportunities that lead to personal enrichment and success later on in the workplace. It should be a serious cause for concern that too many students still struggle to make ends meet.

We could be far more creative with the current system. I particularly commend to the Minister and the new Secretary of State the proposals put forward by Lord Adonis and Josh MacAlister, the chief executive of Frontline, that where there are shortages in key public sector professions, we should look at what we could do by way of remission of repayment of tuition fees. If there was a shortage of social workers in Greater Manchester, for example, and there were graduates who were willing to go there and stick at it, the Government should cover the cost of their tuition fee repayments. There is plenty of scope to think about how to get the best and the brightest graduates into some of our most challenging professions.

On funding and finance, which we debated in Westminster Hall yesterday, it would be unforgivable for the Government to accept the principle that it is okay for Ministers to change the terms and conditions of student finance retrospectively. Not only is it fundamentally unfair to change the terms and conditions for existing students and graduates, but there is a huge risk. Students, especially those from the poorest backgrounds, and their parents and advisers need absolute certainty about what they are signing up for. If they feel that the Government are going to change the terms of the debate further on, that will bring with it serious risk.

On transparency and accountability, as I have mentioned, I think the transparency revolution should be extended to outcomes and graduate success. It is important that the director of the Office for Fair Access should report not just to the board of the office for students, but to this House, given the level of interest across the House. We should challenge some of the bodies associated with higher education about their commitment to transparency.

How can it be justified that UCAS, an organisation on whose board I was proud to serve for two years, when asked for reasonable datasets on applications, particularly from students from disadvantaged backgrounds, continues to supply data in the most inaccessible way possible? It is entirely possible for the very talented data wonks at UCAS to use Excel spreadsheets. They should provide Excel spreadsheets, rather than PDF documents, to people with legitimate demands for data. I hope it will not take an amendment to the Bill to get UCAS to behave more reasonably.

On student representation, as well as the office for students, there should be guaranteed student representation on a statutory footing on the designated quality body and on the governing bodies of higher education institutions, and we should extend the provisions of the 1994 Act to private providers. I rather like the suggestion from my hon. Friend the Member for Walthamstow (Stella Creasy) for a student bill of rights in higher education.

We need accountability for the way that money is spent within institutions. One of the advantages of putting universities back into the Department for Education is that there is now an opportunity for Ministers covering schools, colleges and universities to look together at the issues of social mobility, widening participation and fair access to universities. I am tired of the hand-wringing of university vice-chancellors and their lobbyists, who claim that it is all the schools’ fault that they cannot get poor Jimmy and Jane from the local state school into some of our academically elite universities. If it is all the school’s fault, then I have a really good idea—take all the widening participation funding from higher education and put it into schools and early years, because vice-chancellors have made a compelling case for transferring it in that way. That is not to denigrate the excellent work done by staff working on widening participation and student recruitment in institutions; they are some of the most passionate and dedicated staff in terms of changing the profile of the student body. However, there is scope to make different and better spending decisions. Universities ought to be justifying how they are spending the money and what its impact really is.

We should have more accountability around the scandal of unjustified pay hikes for university vice-chancellors. Our institutions are very ably led, but against the current backdrop of public finances, I cannot believe that these pay increases are justifiable. The Bill should go so far as to require universities not just to publish vice-chancellors’ pay—a great public service provided by Times Higher Education magazine—but to publish pay ratios between the pay of the university vice-chancellor and the lowest-paid staff.

Finally on accountability, we need more clarity about market exit. What happens if these brave new providers go bust or simply shut up shop? There must be better requirements on these institutions to protect their existing students and their graduates.

On global higher education, we can be enormously proud of the role that our institutions play on the international stage. It has been beyond saddening to read of academics who are being told that their funding is at risk and of conferences that will no longer take place in this country because people feel that, by leaving the European Union, we are closing the door to the outside world. The Minister could do a number of things to address this, but none would be more powerful than removing international students from the net migration cap. There is an overwhelming consensus on that, with support on both sides of the House. The previous Home Secretary was an obstacle to this. I am sure that now she has walked through the door of No. 10, she is far more amenable to the idea as Prime Minister. In all seriousness, there could be no better signal to send to the rest of the world than to say that bright students from across the world are welcome to study here and will be embraced.

Those are just a few thoughts. I am anxious to hear from the Front Benchers, and particularly to hear the Minister’s assurance that he will move on the issue of retrospective payments and changes to the student finance system.

18:32

[Liz McInnes (Heywood and Middleton) (Lab)]

I am grateful for the opportunity to say a few words in this debate and to follow my hon. Friend the Member for Ilford North (Wes Streeting), who made an excellent speech that covered most of the points that I was going to raise. I have been asked to finish by 6.35 pm, and I will make sure that I do so. It is interesting that my hon. Friend said that we do not have many scientists on these Benches. I am one of the few scientists in Parliament; it would be nice to have some more of us.

First, I want to talk about students. As my hon. Friend said, yesterday we had a debate in Westminster Hall about detrimental changes to student loan repayments. Since 2010, students in our society have been treated in an unscrupulous and unfair way. They have rarely been consulted. Their voices seem to have been ignored throughout policy discussions, and this Bill seems to be no different. The Government claimed that they set out to make student choice and student interests a central part of their agenda in reforming higher education, but unfortunately they seem to have fallen short on that promise. As my hon. Friend said, there is very little reference to students, or their voices, throughout this Bill. It introduces an office for students but does not mention student representation as part of it. It is absolutely vital that student voices be heard.

The other issue I wish to focus on is the result of the referendum. The parliamentary cycle will now be dominated by Brexit discussions. Until we know what Brexit actually means, and the relationship that we wish to have with and within the EU, this Bill cannot really make any progress. There are more than 125,000 EU students at UK universities, and non-UK EU nationals make up 11.6% of all students at master’s level. International students alone contribute £3.7 billion to the economy. What should happen not only to current students but to prospective students with regard to visa, loan and placement requirements after the 2016-17 academic year? There is no clear and concise policy. Many of the brightest minds come to study at our world-class institutions, and we should look not only to bring them here, but to keep their talents in the UK after they have graduated.

In his research review for the Government, Professor Paul Nurse warned that leaving the EU would jeopardise the world-class science for which the UK is known and that it therefore risked damaging the economy. We now need to discuss the question of retaining or replacing these assets.

18:35

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I, too, welcome the Secretary of State to her place, and I look forward to having constructive dialogue with her in the future.

We have heard many passionate and expert contributions. The hon. Member for Stroud (Neil Carmichael), who chairs the Education Committee, said that he has found himself with an unexpectedly large portfolio. It is safe to say that I know that feeling. On that note, as my party’s spokesperson on equality, as well as on education, I echo my hon. Friend the Member for Walthamstow (Stella Creasy) in urging the Government to make the necessary changes to ensure that loans are Sharia-compliant immediately. I would be interested to hear the Minister’s response to her idea of amending existing legislation instead of making the change in this Bill.

We have spoken a lot about aspiration and supporting the next generation. I cannot help thinking about this evening’s news about my hon. Friend the Member for Wallasey (Ms Eagle). She has been a real friend to me and has been very supportive for many years, both inside and outside this House. She has told many women from backgrounds similar to mine, “Always stand up and reach for your dreams—you can achieve them.” I pay tribute to her.

On the subject of legislative changes, my right hon. Friend the Member for Oxford East (Mr Smith) raised concerns that the office for students will be able to revoke Acts of Parliament and royal charters that establish universities. I hope that the Minister will think again on that.

It was great to hear from my hon. Friend the Member for Heywood and Middleton (Liz McInnes), who highlighted her career as a scientist, on which I congratulate her, and the need—we have heard this many times today—for the right funding and investment for science. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) also made an excellent contribution and spoke of the need for a technical revolution. I hope that the Minister will respond to his proposal for a duty to collaborate.

We also heard from a new Back Bencher, the right hon. Member for Surrey Heath (Michael Gove). We heard from him quite a lot. He did not like the length of the speech made by my hon. Friend the Member for Blackpool South (Mr Marsden), but perhaps that was because it lasted longer than his leadership bid. More seriously, he said that universities must be a safe place for Jewish students. As the shadow equalities spokesperson, I am in total agreement with him.

The right hon. Gentleman also said that he feared that Labour Front Benchers were no longer committed to extending opportunities to enable all young people to access further and higher education. I reassure him and others that we share that ambition. We all agree that no one should be denied the opportunity to study on the basis of their income, background, class, race or gender.

The question is whether the Bill meets that ambition. My hon. Friend the Member for Ilford North (Wes Streeting) was clear that the Bill introduces unnecessary risks at a time of uncertainty. He also frightened me to death, and I am sure many others, with the prospect of a Donald J. Trump university.

Sadly, we regard the Bill as a missed opportunity that will set back the cause of equal access rather than advance it, expanding a higher education free market where profit takes precedence.

First, let us follow the money and look at maintenance grants and tuition fees. University education in England and Wales is already out of reach for many people from low and even middle-income families. The hon. Member for Stroud praised the German economy, but he will also be aware that in 2014 the last of the German states abolished tuition fees in public universities. The Sutton Trust, which campaigns for greater social mobility, has shown that many British students finish university with debts in excess of £50,000. The IFS has said that students will be repaying these debts until they are well into their 50s.

The Bill will directly lead to the uncapping of fees at high-performing universities, and it will effectively introduce a two-tier system of higher education. The best universities will become more expensive and therefore less accessible, at a time when the proportion of low-income students at many top universities is already falling. Quite simply, it is a tax on aspiration. The Government’s equality impact assessment demonstrated the impact on already under-represented groups in higher education. It found that female, disabled, black, Asian and minority ethnic students, as well as mature students, would be disproportionately worse off.

The Secretary of State has made a great deal of the fact that more students from disadvantaged backgrounds are accessing higher education, but she conveniently ignored the figures highlighted by my right hon. Friend the Member for Tottenham (Mr Lammy)—happy birthday, by the way—which showed that the percentage of disadvantaged pupils admitted by seven of the 24 Russell Group universities, including Oxford and Cambridge, fell over the last decade. At the same time, pupils from private schools are still two and a half times more likely than their state school equivalents to enter a leading university. The Government will perpetuate and extend that by enshrining this two-tier system in the Bill. They are slamming the door of opportunity in the face of young people who have high aspirations and the talent to fulfil them.

I listened carefully to the words of the new Prime Minister on the steps of Downing Street just a few days ago:

“If you’re a white, working-class boy, you’re less likely than anybody else in Britain to go to university. If you’re at a state school, you’re less likely to reach the top professions than if you’re educated privately.”

Yet this Bill does nothing to increase social mobility or to create the one nation Britain that she promised. We will judge her Government by actions, not words.

Then we come to the proposals in the Bill to expand the market for private providers, who are in the education sector primarily to make a profit. The Government appear ideologically committed to marketising higher education by promoting competition and introducing for-profit providers. They have taken a similar approach with schools, and I have yet to see any positive impact. This new profit-driven approach is a real threat to academic quality and standards at a time, post-Brexit, when it is even more critical to maintain and enhance the quality and reputation of Britain’s universities, as has been said by many Members from across the House, including my hon. Friend the Member for Cambridge (Daniel Zeichner). Experience from countries such as the USA and Sweden demonstrates that private providers too often seek to compromise quality for the sake of profit.

I am deeply concerned about the impact of the proposals on the terms and conditions of staff. There is already an unacceptable gender pay gap in the higher education sector, alongside the growing use of zero-hours, temporary and insecure contracts. I fear that the Bill will make matters even worse as employers seek to cut costs in order to produce profits.

Similarly, removing the limit on student numbers for university title is likely to lead to an increase in the number of smaller institutions. Perhaps that is the Government’s intention, but there is a concern that the new smaller institutions may be more likely to cut corners when it comes to resources, student-staff ratios, student support and attracting the best academic staff. What safeguards will the Government provide to prevent that from happening? There are many examples of poor-quality private colleges, particularly those that cater for overseas students, failing to provide high-quality courses. The Government must learn the lessons of those market failures and build in proper oversight and regulation to guarantee quality.

The Bill will also reform the research council and funding system, but we believe that that is poorly timed and likely to be ineffective. Brexit has already put the funding of academic research in the UK into a prolonged period of uncertainty.

Because of the time, I will cut my comments short. I share the concerns of my hon. Friend the Member for Sheffield Central (Paul Blomfield) about Horizon 2020 funding, and it is vital that we ensure confidence in our research sector.

It pains me to say it, but this Bill fails to give our young people a chance to soar. It blocks their path not because they lack ability or aptitude, but because they lack the necessary income or background. The Bill promotes a market-driven, two-tier higher education system in which too many of the brightest and the best will be consigned to second best.

On the steps of Downing Street, the Prime Minister promised:

“When it comes to opportunity, we won’t entrench the advantages of the fortunate few. We will do everything we can to help anybody, whatever your background, to go as far as your talents will take you.”

This Bill does not live up to that promise. Let us hold the Prime Minister to her words, and reject her Bill.

18:45

[The Minister for Universities and Science (Joseph Johnson)]

This has been a terrific debate, in which there has been very strong consensus across the House that our universities rank among the very best in the world, our research base is a global envy and our higher education sector is generating the knowledge and skills that are fuelling our economy and providing the basis for our nation’s intellectual and cultural success.

However, there has also been an acknowledgment in all parts of the House that we can do better still. The world of higher education has changed fundamentally since the last major legislative reforms of 1992. With student number controls now lifted, we are in an era of mass higher education that is no longer limited to the academic elite within a small and primarily Government-funded set of institutions. The majority of funding for undergraduate courses now comes from the students themselves, via Government-backed loans.

The sector has long acknowledged that the current regulatory framework is simply not fit for purpose. We must do more to ensure that young people from all backgrounds are given the opportunity to fulfil their potential and the information they need to make good choices about where and what to study. The Bill provides stability and puts in place the robust regulatory framework that the sector itself agrees is needed. It joins up the very fragmented system of regulation across the current sector, giving us what will be a best-in-class regulatory framework.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Will the Minister give way?

[Joseph Johnson]

I will not give away for the moment, because I have a significant amount of material to get through in a very limited time.

The Bill creates a level playing field, making it easier for new high-quality providers to compete with established degree-awarding universities. This will drive up innovation, diversity, quality and capacity, ensuring we remain attractive internationally. It will give students better access to information, empowering them to make the best choices about where to study. It ensures incentives are in place for providers to focus on the quality of the teaching they offer to students.

This Government are committed to equality of opportunity for all. The Bill delivers on that commitment, with a renewed focus on access and participation for disadvantaged students. The new office for students will be required to consider equality of opportunity across the entire student lifecycle, and our reforms to the research landscape will deliver a system that is more agile, flexible and able to respond strategically to future challenges.

This afternoon, we have often heard concerns that now is not the time to proceed with the Bill and that we should press the pause button. That is wrong: the time is right to press ahead, and important sector representatives agree. As Maddalaine Ansell, the chief executive of University Alliance, put it in an article just the other day, the Higher Education and Research Bill

“is a raft that can take us to calmer waters”.

I urge Opposition Members to get on board.

The Bill delivers on pledges in the Conservative manifesto on which we were elected. It will provide stability for the sector, putting in place a robust regulatory framework. The sector has been calling for this legislation since the tuition fee changes were put in place during the last Parliament, and it welcomes the stability and certainty that the Bill will provide. As GuildHE, another representative body, has put it:

“Pausing on the Bill and risking further damage to our international reputation for quality through regulatory failure would be a mistake”.

[Tristram Hunt]

I am very grateful to the Minister for giving way, because I appreciate that it is so annoying when someone interrupts your lecture. As we know, this is a Brexit Government, and many of the leading Cabinet Ministers promised not only £350 million a week for the NHS, but security for all our science funding. Will the Minister at the Dispatch Box give assurances to Staffordshire University and Keele University in my constituency that all their science funding will be secure by Brexit?

[Joseph Johnson]

I encourage Opposition Members to be optimistic about our future as a global leader in higher education and science. The UK has been at the centre of scholarship and science for hundreds of years. Many universities were powerhouses of scholarship long before the European Union came into existence, and I am confident that they will continue to be so for years and years to come.

Our universities are world leading and, although it is too early to say what the new EU settlement will be for science, I am confident that we will continue to thrive following the referendum result. That is why I have been engaging closely with Commissioner Moedas in Brussels and many other people in Governments across Europe, including my Italian counterpart. I welcome their commitment to ensuring that we will not be discriminated against in the period we find ourselves in. I welcome this morning’s statement by the League of European Research Universities that British universities should not be viewed as a risk to research projects and that they will continue to be “indispensable collaborative partners” in the months and years ahead.

Turning to our rationale for opening the market in the Bill, it is generally accepted that competition between providers in any market incentivises them to raise their game and offers consumers a greater choice of more innovative and better quality products and services at lower cost. Higher education is no exception. As my hon. Friend the Member for Cannock Chase (Amanda Milling) said in her excellent remarks, there is certainly room for improvement. Students’ perception of value for money is continuing to fall. In the Higher Education Policy Institute student experience survey published last month, just 37% of student respondents felt that they received good value for money. That was down from 53% in 2012.

We need to address the fact that many students are starting to ask whether university is worth it. Many employers have similar questions when they look at the labour market mismatch in our economy. While employers are suffering skills shortages, especially in high-skilled STEM areas, at least 20% of graduates are in non-professional roles three and a half years after graduating. If the students who are paying for the system and the taxpayers who are underwriting it are not completely satisfied, the market needs help to adapt. This we will provide as a Government. Like my right hon. Friend the Member for Surrey Heath (Michael Gove), who made an outstanding speech, I make no apology for seeking to expand higher education provision and give students more choice and more opportunities at every stage of their lives.

Like my right hon. Friend the Member for Cities of London and Westminster (Mark Field), I welcome the contribution that alternative providers are making and that they will be able to make all the more easily in future. There is no longer a one-size-fits-all model of university education. Students have a sharper eye for value than ever before and they are calling out, as my hon. Friend the Member for Milton Keynes South (Iain Stewart) said, for pioneering institutions offering alternative educational models and an increased focus on skills that will prepare them for the future with the mindset and agility needed to fulfil roles that may not even yet exist. I welcome his engagement with the Milton Keynes institute of technology, which is a flagship for the challenger institutions that we want to come into the sector.

Critically, as other Members have stressed, it is vital that no institution is able to enter our system and access student finance without meeting the very high academic standards that we expect of the sector, as set out in the White Paper. On longevity, we expect institutions to meet the same financial sustainability rules that exist for incumbents. The Bill makes no changes to those demanding requirements. The reforms will, however, make it easier and quicker for new providers to enter the HE market. They will drive innovation, promote choice for students and increase opportunity, but they will also ensure that new providers can enter the market only when they demonstrate that they are able to deliver academic services of the quality that we expect.

The Bill reflects our determination to accelerate social mobility in this country through higher education. When we reformed the student finance system in 2011, some, including Labour Members, said participation would fall. In fact, the opposite has happened. We have a progressive student finance loan system that ensures that finance is no barrier to entry. It is working as a system. Young people from disadvantaged backgrounds are going to university at a record rate—it is up from 13.6% of the bottom quintile in 2009 to 18.5% in 2015. I am afraid Labour Members were wrong then and they are wrong now. Young people from disadvantaged backgrounds are 36% more likely to go to university than they were in 2009, but we can and must go further. Our new Prime Minister has rightly prioritised a country that works for everyone and not just the few.

Our reforms in the White Paper and the Bill support that ambition. The Bill introduces a statutory duty on the office for students to promote equality of opportunity across the whole higher education lifecycle for disadvantaged students, and not just at the point of access. That includes Oxbridge and other elite institutions, exactly as the right hon. Member for Tottenham (Mr Lammy) would want us to ensure. We will bring together the responsibilities of OFFA and HEFCE for widening access into the new office for students. As part of that body, the new director for fair access and participation will look beyond the point of access into higher education and across disadvantaged students’ entire time in higher education. We will also require higher education providers to publish application, offer and progression rates by gender, ethnicity and socio-economic background.

I welcome the cross-party support for our focus on teaching excellence. We are committed to introducing a teaching excellence framework in our manifesto because we want to drive up teaching standards throughout the sector. The Bill delivers on our pledge to drive up teaching quality and to provide students with robust, comparable information on where teaching is best in the system. It will rebalance the priority given to teaching and learning compared with research, and will mean that the funding of teaching is based on quality, not just quantity—a principle long and successfully established for the funding of research.

On the link between tuition fees and the teaching excellence framework, it is worth noting that the previous Labour Government raised tuition fees in line with inflation in every year from 2007 to 2010, regardless of teaching quality. We will allow fees to rise with inflation only for those institutions offering the highest-quality teaching. Maximum fee caps will be kept flat in real terms. We will allow them to increase only in line with inflation each year, as provided for by the Labour Government. Both Universities UK and GuildHE—expert sector groups—have made clear that allowing the value of fees to be maintained in real terms is essential if universities are to continue to deliver high-quality teaching.

Our reforms go well beyond education and also cover our research base. We have heard comments about our outstanding research base. Its strengths in adding to human knowledge and improving our lives are not in doubt. They will continue to be protected, but we have the opportunity to maximise the benefits of our investment through a strengthened strategic approach, removing the barriers to more inter- and multidisciplinary research, and ensuring that we capitalise on links between our research base and business. We have long recognised the contribution of science and research to our wellbeing and wider economy. Our reforms build on those strengths, placing research and development at the heart of a national industrial strategy.

We have heard many passionate voices from both sides of the House today. The House can unite in support of the excellence of our universities and our research, but the Government are not willing simply to celebrate the excellence already achieved—we want it to continue and to build on it further. Our reforms will create a level playing field for new providers and increase competition in the system. We will encourage innovation in the higher education sector, transform the sector’s ability to respond to economic demands and the rapidly changing graduate employment landscape, and ensure that we remain attractive internationally for decades to come. I commend the Bill to the House.

Question put, That the Bill be now read a Second time.

18:59

Division 47

Ayes: 294

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Conservative: 293

Noes: 258

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Labour: 182
Scottish National Party: 54
Liberal Democrat: 7
Democratic Unionist Party: 7
Independent: 3
Social Democratic & Labour Party: 3
Plaid Cymru: 3
Ulster Unionist Party: 1
Green Party: 1

Bill read a Second time.

Higher Education and Research Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Higher Education and Research Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 13 October 2016.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Christopher Pincher.)

Question agreed to.

Higher Education and Research Bill (Money)

Queen’s Recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Higher Education and Research Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(1) any expenditure incurred under or by virtue of the Act by the Secretary of State; and

(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Christopher Pincher.)

Question agreed to.

Higher Education and Research Bill (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Higher Education and Research Bill, it is expedient to authorise:

(1) the charging of fees payable by registered higher education providers and other institutions under the Act; and

(2) the payment of sums into the Consolidated Fund.—(Christopher Pincher.)

Question agreed to.

Business without Debate

Tuesday 19th July 2016 Commons Chamber

Delegated Legislation

Tuesday 19th July 2016 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Enterprise

That the draft Pubs Code (Fees, Costs and Financial Penalties) Regulations 2016, which were laid before this House on 13 June, be approved.

Criminal Law

That the draft Criminal Justice Act 1988 (Offensive Weapons) (Amendment) Order 2016, which was laid before this House on 14 June, be approved.

Climate Change

That the draft Carbon Budget Order 2016, which was laid before this House on 30 June, be approved.—(Christopher Pincher.)

Question agreed to.

Climate Change

That the draft Climate Change Act 2008 (Credit Limit) Order 2016, which was laid before this House on 30 June, be approved.—(Christopher Pincher.)

Question put.

The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until 20 July.

Electricity

That the draft Warm Home Discount (Miscellaneous Amendments) Regulations 2016, which were laid before this House on 4 July, be approved.—(Christopher Pincher.)

Question agreed to.

[Mr Speaker]

Order. I appeal to Members who are leaving the Chamber to do so quickly and quietly, in the manner of the hon. Member for Kensington (Victoria Borwick), who is giving a fine example of seemly conduct to colleagues.

Cockling: Dee Estuary

Tuesday 19th July 2016 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Christopher Pincher.)

19:15

[Margaret Greenwood (Wirral West) (Lab)]

Cockling in the Dee estuary is an industry that makes an important contribution to the local economy. Natural Resources Wales issues 53 full licences each year for the cockle fishery on the Dee. Last year 250 tonnes of cockles were landed there, producing a value of half a million pounds. The value of United Kingdom exports as a whole to other European Union countries was £4.2 million in 2015, with most of the exports going to the Netherlands and France. It is therefore important for us to protect the industry and the livelihoods that depend on it.

For the past year, my office has been in contact with local cocklers who have been hugely concerned about what has been taking place between Natural Resources Wales and the Environment Agency in England. I held a meeting with both organisations in my constituency office, at which it was agreed that the Environment Agency would be the first port of call for the cocklers on the English side of the river, and that it would raise the cocklers’ concerns with Natural Resources Wales. This a question of democratic accountability, and the process governing responsibility for managing the cockle beds of the River Dee raises important issues.

[Mark Tami (Alyn and Deeside) (Lab)]

My hon. Friend mentioned the 53 licences. Many people worked those beds for years, as did their fathers and grandfathers before them, and were not given licences, unlike many others who had not worked the beds before.

[Margaret Greenwood]

That is an interesting point. I certainly know that a number of families in my constituency have been involved in cockling for a great many years.

My constituents feel that the Environment Agency is not representing them adequately, and that, as Natural Resources Wales is an agency of the Welsh Administration, its responsibility is obviously to people in Wales rather than those in England. They have spent months making requests for access to the accounts showing the fishery costs, which have been released in a piecemeal fashion. They have made repeated requests to see the full accounts, but have been provided with only a summary, which has led them to conclude that the fishery is not being managed properly.

My constituents believe that they are being overcharged for their licences because Natural Resources Wales is not acting in a cost-conscious or effective way. They are concerned about the lack of scrutiny of NRW by the Environment Agency and the lack of attendance by EA representatives at meetings, and that is clearly an issue. After submitting numerous freedom of information requests, they were given sight of a document: references from the minutes and papers of the partnership board meetings to Dee Services and transfer of functions. The Partnership Board executive summary of 6 October 2015 states:

“NRW are under pressure from fishermen (who fish the Dee River Cockle Beds), for a meeting. NRW would like EA representation at this meeting but local EA staff are unwilling.”

The Environment Agency apparently pays £18,000 a year to Natural Resources Wales to manage the cockle fishery, but, according to my constituents, that figure never appeared in the accounts before 2015. I should like the Minister to tell me exactly how much the Environment Agency has paid Natural Resources Wales in each year since 2012, and how much scrutiny the Environment Agency is giving to how the money is being spent. The lack of oversight of the way in which money is spent is of real concern.

Last year I asked the Minister what enforcement measures the Department had undertaken in relation to illegal cockling on the River Dee, how many prosecutions for illegal cockling had been brought in each year since 2010, and how many prosecutions had been successful. The Minister replied:

“All cockle fisheries within the Dee Estuary are controlled via the Dee Estuary Cockle Fishery Order 2008. Enforcement of the Order is a matter for Natural Resources Wales (NRW) as grantee of the Order.

Defra does not have information pertaining to the specific enforcement measures taken by NRW on illegal fishing occurring within this fishery.”

My follow-up question is this: why does Defra not have that information? It is paying NRW to manage the fishery, so it should have some interest in how the money is being spent.

More importantly, not only are my constituents paying for bailiff activities via their licence fee, they have also been told that it will pay towards unsuccessful prosecutions. I have asked the Minister how much the Department has spent on the management and enforcement of cockling rights in each year since 2010 and what information the Department holds on equivalent spending by the Welsh Government. The Minister’s response was to state:

“DEFRA does not hold this information.”

Why does it not hold this information? Last year the cockle beds were closed for quite some time, so I ask the Minister what discussions have taken place with the Welsh Government on, first, the management of fish, mussels, cockles and other seafood stocks in the river estuary; secondly the reasons for the closure of the cockle beds in the estuary; and, thirdly, the projected date for the reopening of the cockle beds?

[Jim Shannon (Strangford) (DUP)]

The cockle industry is also important in my constituency. With advances in technology and environmental science there is great potential, but does the hon. Lady agree that ensuring that the jobs of local fishermen continue must be the priority for future legislation?

[Margaret Greenwood]

I thank the hon. Gentleman for his intervention and he makes a good point: it absolutely is important that we protect the jobs of those currently engaged in the industry, as they have been for generations.

To return to the Minister’s response, he stated:

“Fisheries is a devolved matter, and the Dee Estuary is a cross border fishery which is managed by the Welsh Government and Natural Resources for Wales for the Welsh part of the estuary. For the English part of the estuary, fisheries management is covered by my Department, the Environment Agency, the Marine Management Organisation, and the North West Inshore Fisheries and Conservation Authority.

However, Natural Resources for Wales (NRW) has responsibility for managing the cockle fishery in the Dee Estuary (on both the Welsh and English sides) as grantee of the Dee Estuary Cockle Fishery Order 2008. NRW has taken the decision to not open the fishery this year due to insufficient stocks. It has suggested that it may be opened in July 2016 should sufficient stock be available. I have not had any direct dealings with counterparts in Wales within the Dee Estuary fisheries management context or specifically in relation to the closure of the cockle beds.”

Does the Minister believe it is fair for NRW to charge cocklers the full licence fee for a season when that season amounts to only a few days? Cocklers are not doing this as a hobby; this is their livelihood, and if they are unable to access the beds they have no income. The cocklers are concerned that under the bird food modelling system used by NRW, a closed season will become the norm but they will still be expected to pay for a full licence and eventually be driven out of business by this cost.

[Mr David Hanson (Delyn) (Lab)]

My hon. Friend will know that on my side of the River Dee Welsh cockle fishermen who live in my constituency face the same pressures. I have written to Natural Resources Wales about the issue but have not had satisfaction either, so she has my full support in asking for rebates on the full price of the fee for seasonal work.

[Margaret Greenwood]

My right hon. Friend makes a good point: this issue affects fishermen on both sides of the estuary.

I remind the Minister of his own words in relation to farming. He said that

“farming has always been a risky business because of the weather and price volatility. Farmers want to earn their profit from the market but they need a helping hand when things go wrong.”

Are the River Dee cocklers any different? Figures provided to my constituents show that costs for managing the fishery have escalated since 2012 and staff time attributed to the cockle fishery has gone up. I ask the Minister to get the breakdown of what staff time is being allocated, for example, for administration and the cost of bailiffs. I also ask the Minister to look into why, when the fishery was closed for the majority of last season, figures obtained by my constituents show that £87,000 was allocated for staff time? Who is doing what, and why is the Environment Agency not providing any scrutiny of this figure?

Last year I asked the Minister how much revenue had been raised from licence fees for cockling in the River Dee estuary in each year since 2010 and the figures showed a big leap from 2012-13. In 2010 £51,584 was raised, in 2011 it was £52,576, in 2012 it was £52,576, and then in 2013 it increased to £68,900, and remained this figure in 2014. Will the Minister clarify whether this increase was due to a rise in the number of people using the fishery or to an increase in license fee? I would also like to know whether it is the intention of the fishery to become “self-sustaining” at any point as this could be achieved only either by massively increasing the licence fee, which would merely drive people out of business, or by increasing the number of licences, which, again, would drive people out of business and cause considerable environment problems. The lack of financial transparency must be addressed. My constituents have repeatedly asked Natural Resources Wales questions about its spending and charges, but they feel that it has failed to answer them adequately. Apparently, NRW has indicated that a financial manager would address those points, but that has not been forthcoming so I therefore put these questions to the Minister.

According to my constituents, the fishery’s financial records are not adequate and contain numerous omissions and expenses that do not seem credible to my constituents, such as £20,000 running costs for an amphibious vehicle that was supposedly used only for cockle survey work, which would have amounted to just a few days each year. What work was that vehicle carrying out?

[Nia Griffith (Llanelli) (Lab)]

Does my hon. Friend agree that all accounts from NRW and the Environment Agency on the Dee estuary and other cockle beds should be fully published and readily available? People should not have to make freedom of information requests so that we can all see exactly what is going on.

[Margaret Greenwood]

My hon. Friend makes an important point on behalf of Welsh and English cocklers. My constituents have raised pertinent questions, and they have every right to ask them and to be provided with answers if they feel that questions have not yet been responded to, or avoided altogether. They also ask for the necessary support from the Environment Agency, which again they feel has not been forthcoming.

[Byron Davies (Gower) (Con)]

My south-Wales constituency has—or had—a great cockle industry in the Burry estuary. The constant complaint from cocklers at the moment is that although the estuary is badly managed by Natural Resources Wales, which is part of the Welsh Government, they still have to pay full licence fees. Does the hon. Lady agree that it is about time that the Welsh Government started taking a real interest in this issue?

[Margaret Greenwood]

As an English MP I am acting on behalf of my constituents and asking the Environment Agency, and the relevant Minister, to respond to my points, but I understand why the hon. Gentleman raises that issue.

The Minister recently campaigned for the UK to leave the EU, and he asked:

“Is it better to have control and the ability to decide? Or, is it better to exchange that control for a seat at a table where you may, sometimes have some influence? I believe there is a special value in having the ability to act, to decide and to get things done. Where we have control we can bring clarity and consistency.”

Having made that point, his Department is nevertheless happy to pass responsibility to another administration. That is fine, but there should be some scrutiny of that administration since we have a vested interest in its effectiveness. How can the Minister be confident that English cocklers are getting a good deal, or that the Environment Agency is looking after their interests? Who will be the arbiter if Natural Resources Wales goes ahead and pursues a policy that we as English MPs have no influence over, and how can our constituents feel adequately represented?

19:27

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I congratulate my hon. Friend the Member for Wirral West (Margaret Greenwood) on securing this important debate. This issue has impacted on my constituents and those of many hon. Members here today for a number of years, and sadly it has highlighted the injustices that can be created when devolution fails to address the important question of cross-border accountability. My hon. Friend has already set out some of the history behind this matter, and the Dee Estuary Cockle Fishery Order 2008 set the regulatory framework and was the product of many years’ work. I believe that the intentions in that order have been allowed to erode over time and—critically for my constituents—there seems to be enormous difficulty in establishing direct accountability for decisions made under the auspices of that framework.

My hon. Friend has eloquently set out many of the problems faced by her constituents and mine as a result of the transfer of responsibility for the Dee estuary to Natural Resources Wales—problems that the Environment Agency has been aware of for some time, but is seemingly unwilling or unable to act on. It was therefore remarkable that in the latter part of 2015 the Environment Agency proposed a new regulatory order to reflect current management arrangements, and that Natural Resources Wales take over sole responsibility for the Dee. It seems from that proposal that there has been no acknowledgement of our constituents’ genuine concerns about the way the arrangement is currently working. Furthermore, if a regulatory order is required, are current arrangements operating without lawful authority because they have not yet been the subject of such an order?

The issue of accountability has come to a head because of the implementation by Natural Resources Wales of what is known as the bird food model for determining quotas, which was imposed on the estuary without consultation. That represents a dramatic departure from previous systems, and has put the livelihoods of many fishermen in jeopardy. There appears to be no proper mechanism for my constituents to challenge this decision, which they regard as a substantial departure from the management plan agreed under the regulating order of 2008. It will not be possible in the time available tonight to dissect the issues that my constituents have with the model, save to say that they very much doubt that they will be able to earn a living under it, and that it is a model that is not being adopted anywhere else in England.

Given that this represents such a substantial departure from the previous practice, I have to ask whether the decision to proceed with this model has been authorised in accordance with the law. Paragraph 3 of the original regulating order gives the Environment Agency the right

“to impose restrictions on, and make regulations respecting, the dredging, fishing for or taking of cockles within the limits of the fishery.”

Hon. Members will note that the regulation refers to the Environment Agency, not Natural Resources Wales, hence my question about NRW’s capacity to make these changes. I hope that the Minister will be able to answer these questions satisfactorily tonight.

I should make it clear that before we called for this debate our constituents had been trying to resolve these issues through various channels, as my hon. Friend has described. My constituents have also tried to address the issues through the parliamentary ombudsman in England, who said the following:

“Unfortunately, we cannot look at your complaint about the Department for Environment, Food and Rural Affairs because your complaint relates to the management of the cockle beds on the River Dee Estuary which is the responsibility of Natural Resources Wales. As your complaint is about restrictions placed on cockle fishing on the River Dee by Natural Resources Wales we believe that the organisation responsible for responding to your complaint is Natural Resources Wales.”

So off we went to the ombudsman for Wales. What did he say? Well, he noted with characteristic understatement that the new bird food model had

“had an effect on your capability to maintain a sustainable income”.

He went on to say that he was not suggesting that the use of the bird food model had not had a major impact, and that while he felt that there could have been consultation on the new model used by Natural Resources Wales, he could not look into the actual methodology used. He made a recommendation that there should be consultation if the model were due to change again, but a consultation in the future will be no good if the fisherman have already gone out of business by that point. This is the nub of the issue. My constituents have had a system imposed on them without consultation. It is entirely unfit for purpose and it is destroying their livelihoods, yet there seems to be no legitimate route through which they can raise their concerns about it. Where is the accountability in this situation?

Various other issues raised with the Welsh ombudsman were not dealt with on the basis they were not part of his jurisdiction and would have to go back to the parliamentary ombudsman in England. We also raised questions about the running costs, and we were referred to the Wales Audit Office. I agree with the point that was made earlier: we should not have to chase around various organisations to get answers to these questions. The details and facts should be readily available for anyone to see. Does this not sum up the lack of clarity and accountability in the arrangements? Why should my constituents have to be passed from pillar to post trying to get answers when their livelihoods are on the line? My hon. Friend has asked a series of highly pertinent questions tonight on behalf of her constituents about the way in which the estuary is currently being managed. I, too, have asked questions to which I hope one person—the Minister—can provide satisfactory answers.

I have spoken in the past about the fact that the rigid lines of devolution do not reflect the reality on the ground in the north-west of England and north Wales. Our economy works as one, huge numbers of people live on one side of the border and work on the other and our transport links are hugely interconnected. My right hon. Friend the Member for Delyn (Mr Hanson)—whose constituency can be seen across the River Dee—has many constituents who work in my area, and I have many who work in his. The Borderlands rail franchise, which runs through my constituency and into Wales, is up for renewal, and I hope that a way can be found to ensure that passengers from both sides of the border have a voice in that process. But the problem we are discussing tonight is something else. It is happening now, and it is driving my constituents out of business. It is mired in myriad different bureaucracies, none of which seems to be accountable for its actions.

The Environment Agency might have outsourced the day-to-day running of the estuary, but it should not be able to outsource its responsibility to my constituents who have been let down by this abrogation. So I ask the Minister to look into the details, to find a management model that respects the environment but also crucially allows people to earn a living and, most of all, to devise a governance arrangement that does not hide behind national boundaries but instead allows my constituents to have a single transparent and accountable body that acknowledges the existence of legitimate interests on both sides of the border.

19:34

[The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)]

I congratulate the hon. Member for Wirral West (Margaret Greenwood) on securing this debate and the hon. Member for Ellesmere Port and Neston (Justin Madders). Both have been heavily involved in trying to raise their constituents’ concerns.

The cockle fishery within the Dee estuary is managed through the Dee Estuary Cockle Fishery Order 2008, a regulating order giving exclusive rights to manage the fishery resource. In 2004, the Environment Agency made an application under the Sea Fisheries (Shellfish) Act 1967 to the Secretary of State and Welsh Ministers for a regulating order in respect of cockles in the Dee estuary to grant them a right of regulating a fishery for 20 years. As the fishery straddles the border between England and Wales, the application was progressed jointly by the Secretary of State and Welsh Ministers, and a single order was made for the designated area.

The 2008 order was created to enable the Environment Agency to carry into effect and enforce regulations and restrictions relating to the dredging of, fishing for and taking of cockles within a designated area of the Dee estuary. The order allowed the Environment Agency to manage and conserve the wild fishery by the use of licences to control the number of people who fish there and make regulations and levy tolls for the benefit of the fishery. Unlicensed persons are excluded from the regulated area except for individuals taking no more than 5 kg of cockles daily by hand for personal consumption. That is similar to how inshore fisheries and conservation authorities would manage cockle fisheries in their waters. For example, the North Western Inshore Fisheries and Conservation Authority would manage its cockle beds via a byelaw, with permit holders fishing only during an open season based on the IFCA’s stock assessments.

Natural Resources Wales took on the functions of the Environment Agency Wales in 2013, including the regulatory responsibility for the 2008 order. NRW currently acts on behalf of the Environment Agency to deliver their statutory functions for the English side of the 2008 order. While NRW and the Environment Agency are joint grantees of the 2008 order, NRW manages all operational and management aspects of the order. That arrangement is enshrined in a service level agreement between NRW and the Environment Agency.

Before the 2008 order, the cockle fishery operated on a boom-and-bust cycle, with the beds often shut for a few years owing to very low cockle stocks. Once stocks had built up, the beds would open, but that would often result in hundreds of cocklers operating on the beds, resulting in stocks sometimes being cleared out quickly—within days or weeks—and consequently the beds being closed for several more years in some cases. From 1996, the beds were closed except for brief periods in 1997, the years 2001 through to 2003, and 2005. Since the introduction of the 2008 order, the beds have opened every year and have provided up to six months’ lucrative employment for 53 licenced cocklers. Additionally, during a bumper year, the fishery could be opened to a number of short-term non-renewable licence holders issued on a points system, using the NRW stock assessment to estimate the total allowable catch.

NRW estimates that licensees can earn somewhere in the region of £20,000 to £40,000 during a six-month season, depending on variables such as the cost per kilo of cockles. In 2013, 545 tonnes of cockles were landed and the fishery was worth an estimated £650,000, and 2014 was a bumper year with approximately 1,500 tonnes landed, giving an estimated value of £1.5 million. The cockling season was shorter in 2015 with just 250 tonnes of cockles landed, giving a value of £500,000. The amount of cockles landed and their value therefore varies from year to year.

The cockle season usually opens in July for six months and is subject to harvest limits derived from stock assessments that take place between April and July. Carrying out those stock assessments is one of the key costs covered by the licence. In 2015, early concerns over stock levels meant that the fishery was not opened until 21 September, but NRW reduced its annual licence fee in recognition. This year, the Dee estuary cockle beds opened on 1 July.

Fifteen licence holders are located in England and the remaining 38 in Wales. Many of the English licence holders have expressed concerns about the management of the fishery, which resulted in a letter of complaint to the Public Services Ombudsman for Wales about NRW earlier this year. It does, however, make sense for a single body to be responsible for the management of the Dee cockle fishery. It is not practical for the estuary to be divided in half between English and Welsh authorities, as the England-Wales boundary runs through the middle of some of the beds and cockle stocks move around the estuary. That means that in some years the English beds are heavily stocked and Welsh beds have no stocks, and vice-versa. Performing surveys, liaising with cocklers and carrying out enforcement would all be more complicated and less efficient if two management bodies were involved.

Following the complaint about the NRW to the ombudsman regarding the management of the fishery, its resulting decision, given in May, was that the complaint should not be investigated. I do believe, however, that there must be a good level of quality consultation and dialogue between the NRW and those affected by its management decisions. I understand that there is a Dee Estuary Sea Fisheries Liaison Group, which meets regularly and includes both cocklers and the NRW. I am aware that the most recent meetings of this group were held on 12 May and 17 June, and that an annual general meeting of licence holders was held on 23 June, with five attendees from interested parties. I am unaware of any contentious issues being raised at this AGM.

The hon. Member for Wirral West raised the issue of EA attendance. During the past year or so, the EA has increased its frequency of attendance at these meetings. Following today’s debate, and the points she and the hon. Member for Ellesmere Port and Neston both made, my officials will reconfirm to the agency my belief that it should attend all these meetings in future, in order to represent the views of their constituents. I also understand that they met the EA in January 2016, together with local licence holders. The licence holders were given contact details of EA staff who could assist should they have concerns, and the EA has said, when I made inquiries, that it has not received any concerns to date but it stands ready to assist should concerns be raised directly with it.

The hon. Lady raised the issue of licences and the transparency of licence fees, and I should point out that that was looked at by the ombudsman. To clarify the position, the 53 licensees pay an annual fee to the NRW, which is currently set a £1,500. In the previous three years, it had been set at £1,300, but it was reduced in 2015-16, in part owing to the season being shorter than usual. I am told that in 2015-16 the fishery cost the NRW more than £100,000 to regulate, with the cost primarily being made up of salary costs for liaison, surveys and enforcement. There are also some capital costs associated with equipment, hire of boats and so on. In 2015-16, the licence fee brought in £63,000, because of the reduction, and the EA therefore contributed the shortfall of £18,000—an additional £20,000 was made up in grants from NRW. So there is a shortfall, but there is transparency on the costs of the fishery.

The hon. Lady also asked how the licence fee is calculated, and I have been given a wonderful formula:

A is the annual number of working days on survey, enforcement or administration, B is the staff cost per working day and N is the number of licences. So a transparent formula is used, and I have been given the figures that she requested. Secondly, she made a point about prosecutions for illegal cockling. Although that is a responsibility of the NRW and the Welsh Government, I can confirm that at the end of last year I had a conversation with Carl Sargeant, the then fisheries Minister in the Welsh Government. He discussed his concerns about enforcement on this fishery and checked whether I was happy for certain actions to be taken. So we do discuss these issues.

Finally, the hon. Gentleman raised the issue of the changes that were made to the bird food model. I am told that two different approaches have been taken. Previously, the West model was used, under which some 4,500 tonnes of cockles had been set aside, particularly for oystercatchers, whereas under the new Stillman model, which was introduced, that figure went up to 6,900 tonnes. But there are also some advantages to that model, as the West model would not allow any exploitation of the fishery unless there were at least 100 cockles per square metre.

In conclusion, hon. Members have made some important points, and I hope I have been able to reassure them that we take this issue seriously. I have asked the EA to attend all future meetings, and I hope that this clarifies some of the points that they have requested.

Question put and agreed to.

19:45

House adjourned.