Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Higher Education (Industry and Regulators Committee Report)
(6 months, 3 weeks ago)
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Baroness Taylor of Bolton
That this House takes note of the Report from the Industry and Regulators Committee Must do better: the Office for Students and the looming crisis facing higher education (2nd Report, Session 2022-23, HL Paper 246).
Baroness Taylor of Bolton (Lab)
My Lords, I thank the members of the committee, who put so much work into compiling this report, and our staff, who were extremely helpful. The noble Lord, Lord Hollick, was the chair of the committee when we started this report in March last year, but we also had a lot of help from our special adviser, Mike Ratcliffe, and from the committee staff of Dom Walsh, Dominic Cooper and Itumeleng Osupeng. I should also mention Alec Brand.
As I say, we started our inquiry into the OfS and higher education in March 2023, a time when we felt that the higher education sector was facing a whole raft of challenges. They have intensified since then, and I think we were right to decide that this should be our priority at that time. The challenges that higher education is facing pre-date but were exacerbated by issues such as Covid. It is important to remember that some of these are very long-standing challenges that higher education has been trying to deal with for quite some time. We had the raft of difficulties, and we have had issues such as the loss of EU research funding that have challenged universities even further. There have, of course, been industrial disputes, which have not helped, but I think that all the issues such as inflation, the cost of living and the lack of funding have made industrial action more likely.
The committee’s overarching finding was that the Office for Students was performing poorly; it is important to make that basic point. We did not choose our title casually—in fact, we had many alternatives that could have been a bit more colourful, shall we say. We said it “Must do better” because this is an important institution that regulates a very important sector of the British economy, and for it to be performing poorly is extremely important and a very real problem for us all. I think that this report is one of the strongest of recent House of Lords committee reports, and therefore should be taken seriously.
The name of this organisation, the Office for Students, was chosen deliberately by the Government to imply that it would put the interests of students before the interests of providers, yet our investigations found that neither students nor providers of higher education have confidence in the OfS. There were poor relations with both providers and students, and a very clear perception of a lack of independence of the OfS from government.
I will talk about several of our conclusions; I know that colleagues will venture more widely. My overriding concern as we went through this inquiry was the complacency on the part of the OfS about what we described as “the looming crisis” in higher education. There is more discussion of it now—just recently we saw some alarming figures—but even when we were taking evidence more than a year ago, we could identify severe difficulties in the whole sector, not just the odd institution.
The freezing of tuition fees for so long meant that many universities were in real difficulty. The Russell group has suggested that its universities are losing £4,000 for every domestic student. Perhaps not surprisingly, that has pushed universities to become increasingly dependent on cross-subsidisation from international and postgraduate students, whose fees are not capped. That has been a feature for many universities, not just one or two. On the other hand, recent statements and comments from Government Ministers that there should be a reduction in the number of international students are causing real concern and may already be impacting international applications.
We raised alarms about the information we had on the financial challenges but, at the time, the OfS gave very general assurances about the health of the sector and did not share our concern about the direction in which things were going. However, in its most recent financial sustainability report, published just last week, the Office for Students says that 40% of HE institutions are expected to be in deficit this year. That is after many institutions have made severe efficiency savings— or cuts, as they are probably better called. In many institutions there is little leeway for further cuts without significant consequences, and this could affect the quality of the education they offer.
I have a couple of specific questions for the Minister. What action are the Government taking in relation to the looming—indeed, current—crisis facing the HE sector? What is the Government’s attitude to international student recruitment? Clarity on that point would be very helpful all round. I wonder whether the Government really understand the danger of institutions collapsing and/or a decline in the quality of the education provided.
One of my main memories of the evidence we received was that of a vice-chancellor who said that, were his institution to see financial problems looming, he would not talk to the OfS about possible solutions and long-term viability because he thought that its attitude would not be supportive but combative, and that it would look for problems and criticisms of the institution. It is really worrying that the reputation of the OfS is so bad within the sector.
I have heard anecdotally from some in higher education that our report has prompted some change in tone and that the OfS is sometimes using different language in its visits and contacts. If that is the case, it proves that the House of Lords can have a positive impact.
I said earlier that the name OfS was deliberately chosen to imply that it was on the side of students. The committee found that, despite its name, it was unclear how the OfS defines student interests. Indeed, it was said that there was a suspicion that the term was used as a smokescreen for the political priorities of the Minister. We were given the example of free speech, which we heard was not a priority concern of students. We took direct evidence from students on the concerns about OfS engagement. We particularly heard allegations that the OfS issued veiled threats over the future of its student panel when individual students on it were making their concerns known. The OfS responded to our criticism and said that it would expand its plans for a review of its approach to student engagement. That is to be welcomed, as is the fact that it will take up our recommendation to report annually on student engagement. Does the Minister have any information about when we might see a report on that?
There is another area of real concern and puzzlement. Why has there been such a breakdown in the relationship between the Office for Students and the Quality Assurance Agency for Higher Education? The QAA, which assessed quality and standards until 2023, was widely accepted as a significant and independent body doing a very good job. Things are now being changed, and this is possibly going to result in a move away from European standards. This in turn could damage the international reputation of some of our universities, which have such a high reputation historically. The Minister needs to clarify this because I am not sure that the OfS has the capacity to assess the quality of all HE institutions. The OfS has completed only eight such studies and reports so far. Can it do it for the entire sector and in a timely way? Will it be as professional, comprehensive and reassuring as the system we had with the QAA? What happens there really matters.
Other concerns that we had were about the burden of regulatory compliance. We needed some clarity on the OfS’s priorities. UUK says that in each university 17.6 staff, on average, are involved in compliance. Those people are having to deal with the bureaucracy that the Government often say they wish to reduce. It would be good if the Minister could comment.
I must also say a word about political interference. There is clearly a concept throughout higher education that the OfS is there to do the wishes of the Government, rather than act as a totally independent body. I am sure that the Minister is well aware of the criticisms that have been made—the idea that if there is a headline in the Daily Mail, the Minister will tell the OfS to go hard on that particular issue. That is the perception, and it rings true in many respects. I must also mention other issues because the perception of interference is not helped by the fact that the chairman of the OfS takes the Conservative Whip in this House. The all-party committee as a whole thought that anybody in such a significant role should not be taking any party Whip when it came to activities within Parliament.
Our report has shed light on the very widespread concerns that exist. The challenges in HE are intensifying and are very real indeed. The OfS is now beginning to recognise that some of the issues we raise are pertinent and need attention, but the challenges facing the sector are very significant. I have long believed, and have said for many years, that pre-legislative scrutiny is helpful to Parliament and to government in getting things right. What we have never done is sufficient post-legislative scrutiny; I have now suggested to our committee that we should do post-report scrutiny to see whether our committee’s report has had a real impact and made a difference. I think it is beginning to, but the committee will return to this issue to try to make sure that the OfS improves its performance.
Lord Wharton of Yarm (Con)
My Lords, I draw attention to my registered interests. Clearly, as chair of the board of the OfS I am also bound by the Addison rules, so I cannot reply directly to observations that noble Lords may make or to committee reports in this House. I am rather restricted to making what will be a short contribution to this debate and I am here to speak as a Member of this House, rather than as the chair of that body. That said, there are some things that I can say. While I should not stray into comments on the day-to-day operations of the OfS, I wanted to be here to make a few general points.
Any public body must have regard to its stakeholders. There must also be a robust and honest two-way conversation and communication. A regulator cannot always be appreciated by the regulated, and one of the challenges in higher education in England is that, until recently, it did not have a regulator at all. This has been a significant transition, and a large number of people have worked extremely hard to bring it about. I pay tribute to all those who worked diligently to register providers after the Higher Education and Research Act 2017 came into operation. It is particularly good to see the noble Lord, Lord Johnson of Marylebone, here; I particularly recognise the role that he played in creating the accountability and protection that exist today.
Since the initial creation of the OfS, the pace of registrations has of course slowed. There are, though, still new entrants to the higher education system in England, and it is more important than ever, given some of the challenges that the noble Baroness mentioned, that we have a robust and thorough approvals process in place. The Office for Students regulates more than 400 higher education providers. Put another way, there is more than one higher education provider for every two noble Lords in this House. Given the range of activities they undertake and the importance of what they do, the task of regulating them is not a small one, but I think it is generally accepted that regulation of some form is much needed, even if there is debate about the shape that the regulation should take.
Any regulator must undertake a significant sector engagement programme, in this case including ongoing dialogue with students and providers. This does not mean that everyone at all times necessarily likes what needs to be said, but openness and engagement matter to any public body or regulator—and, of course, this is no exception.
We live in challenging times for higher education. Events have highlighted a range of issues for the sector and the outlook for the financial sustainability of higher education has worsened, though the sector itself predicts some, albeit limited, improvement in the short term. This is a topic on which I have had a number of conversations with the noble Lord, Lord Willetts. I do not know what comments he plans to make today, but his advice to me and ongoing support are much appreciated and I recognise his quite exceptional knowledge of the workings of the higher educational sector.
The Higher Education (Freedom of Speech) Act means that matters of free speech at higher education providers will fall under a new regime and, for the first time, student unions will also be regulated. This comes at a time of increased debate over issues such as current events in the Middle East, in particular, which can lead to quite passionate views being held and expressed. They can also lead to tensions, and it is no small task getting the balance of that regulation right. It is important that the will of Parliament is reflected, given that the Act was passed by Parliament and the requirements created in legislation, and that the correct approach is taken.
I look forward to the comments of the noble Lord, Lord Mann. I do not know what he plans to say today but, if he touches on some of his excellent work in the area of anti-Semitism, I am sure that will be of interest to noble Lords and certainly to me. Similarly, protection from harassment and sexual misconduct is a live topic and must be seen in tandem with the free-speech debate changes that are to come. The student interest is central to all this and must of course remain so in the future.
I have to be careful not to stray into what may breach convention. As much as I would like to say a lot more, these brief points are very general as a result. It is for the Minister to respond and I look forward to her contribution. It is, though, reassuring to see the continued interest in the future of higher education from across this House. I know that many in the broader higher education community will be listening to what is said today with interest, and that the words of noble Lords in here will certainly have an impact outside this place.
Lord Parekh (Lab)
My Lords, I congratulate the Industry and Regulators Committee on its excellent report, which raises some important issues. Precisely because it ranges over a large number of issues, different people will pick up on different bits of it. I thought I would pick up on an aspect that may not be picked up in a gathering such as this, a conversation on what is happening to the higher education system in general; on the problems that the higher education system faces; and on what we can do about it. This issue requires a national conversation about what we should be doing.
I want to contribute three ideas to that conversation today. First, it is clear that our universities are passing through a difficult phase. Some 40% of England’s universities have budget deficits. Courses are being closed. Staff are being retrenched and so on. We know all this, but I think there is a danger of panicking and creating a situation where we end up following courses of action that we might regret. It is important to bear in mind that this is happening mostly with universities in England. For universities in Scotland, the score is slightly different; it is therefore difficult to arrive at a single homogeneous national perspective.
Secondly, this kind of crisis is not new. We have been hearing about it for the 40 years that I have been in this country. It is important to note that, happily, the crisis we are facing is financial, not intellectual—as I discovered when I went out to India as a vice-chancellor of one of the finest universities, where the crisis is intellectual. Teachers have few commitments. Academic pursuits are not valued. Happily, our crisis is largely financial; I say “happily” because it is in contrast to the academic and intellectual crisis that countries such as India and even China face. On the financial level, it is worth bearing in mind that we are not bankrupt: nearly £40 billion is contributed to universities from public funds. I say all this not to calm things down but simply to suggest that there is no need for immediate action. There is a need for immediate reflection. We need to look at ourselves and ask where our universities need to go.
With that in mind, I start with the three ideas that I want to propose. First, it is important to bear in mind that we need to find new sources of revenue. I will talk about overseas students in a minute. I do not like the category of overseas students, and I find the division between domestic and overseas dangerously colonial. I have objected to this in the past in writing and shall do so today, but that is a different story.
The first thing is that we need to find new sources of revenue. This can come from not only going out and getting new sources of revenue but cutting down on our expenditure. I must say that some universities—some of those that have gone bankrupt or have been talking about passing through a budget deficit—have not been administratively competent. We need to look at ourselves and ask whether universities have been administratively competent and whether university salaries have been manageable. I hate to say all this but, when vice-chancellors collect about £350,000, I ask myself, “Is this the real world in which I live?”. When I went out to India as a vice-chancellor, I did not get a penny because the vice-chancellor was supposed to be sinecure. They are retired professors and eminent people so they serve for free. Here, vice-chancellors fatten themselves off the backs of their university colleagues. The first question to ask ourselves is this: is there no room for reducing our expenditure before we talk about ways to raise revenue? That is point number one.
On point number two, higher education is a basic medium for structuring the relations of power and status between different social groups. It is through higher education that one acquires a certain status, money and power. There are people in any society—certainly in our society—who have never been to university, who are poor and marginalised. The question then is: what is being done about them? In any fair system of higher education there must be a provision for the poor, the marginalised and those who have never been to university.
Therefore, the fees we charge students should be progressive, in the sense of being proportionate to the parental capacity to pay. This is how things happen in many parts of the world, including provision for the blacks in the United States. It should be possible for us to say that people earning less than a certain amount of money or who have never been to university do not pay any fee or maintenance fee. As for the rest, they can be taken care of by the loan system that we operate, provided it is opened up in such a way that the period for repayment is extended over a period of time and the conditions of return are not so harsh.
This second point is important. I really want to emphasise this: there are people in any society for whom it should be possible for us to give a complete freeship—no tuition fee, no maintenance fee. That kind of provision has to be made in a society, otherwise you have a society that is totally unfair.
The third point I want to make is on the distinction between domestic and overseas students. I do not know how it came to be made. In many countries there is no such distinction. The noble Lord, Lord Willetts, will correct me if I am wrong, but I think there is no differential fee between domestic and overseas students in Germany; it is the same fee. There are other countries where the same fee is charged to domestic and overseas students.
In the mid-1970s, we introduced this distinction between domestic and overseas students. I may be mistaken, but that seems to be when it came into our vocabulary. What does it mean? It means “ours” and “theirs”. These are our students; we look after them. Over there are “they”, whom we do not have to look after; they come to us. The stereotype is that they are rich and loaded with money, so we can raise their fees. There is no limit to how much we can raise their fees, whereas with ours we have to be careful. The Government have to make sure that our students’ fees are not increased beyond a certain point.
This distinction between ours and theirs—between domestic students, which we even call home students, and overseas students—is dangerously similar to the colonial distinction between our country and one over there. If I may say so, it smacks of the spirit of some degree of mean nationalism: that our people will benefit at the expense of them, so when we have overseas students we make sure they pay the salary of the redundant staff. I have been told that five overseas students means one lecturer. When I first heard this I was alarmed. I was asked by my vice-chancellor at the University of Hull, “Look, can you not recruit five students? You’ll save the job of one university lecturer”. I almost felt that I was being blackmailed into saving the job of a young lecturer by recruiting five students. We need to be careful.
The other thing is that we have become so harsh. Our attitude to overseas students is totally ambivalent and confused. At one level we want them, because one student means a fifth of a lecturer’s salary or whatever. At another level, we put overseas students in the category of immigrants. We put all kinds of restrictions on visas for graduate students coming to us. We say, “They can work” or, “They cannot work”, and create all kinds of wretched complexities. On the one hand we seem to resent them, while on the other hand we are anxious to have them. Where do we stand?
I go to India fairly often every year, and I am confronted by Ministers and others who ask me, “What is Britain’s attitude to overseas students?”. Do we want them, as the Americans do—or did until recently—when the doors are open and all kinds of facilities are thrown open? The Australians do that; Australia is now taking many of our students. What is Britain’s attitude? Do we want them or not? If we do, are we being hospitable to them or are we going to be mean in terms of not wanting them, putting all kinds of restrictions on the number of visas and increasing the minimum amount of money that they should earn before they can qualify? All these categories with which we play around have been dangerously obnoxious, and I very much hope that we can take a consistent attitude to overseas students, in the sense of welcoming them subject to certain conditions. Certainly, whatever attitude we take, it has to be one on which the nation is agreed, not resentful.
Lord Clement-Jones (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Parekh. I declare an interest as chair of the council of Queen Mary University of London. I thank the noble Baroness, Lady Taylor, for her comprehensive and very fair introduction to our report. I thank her too for her excellent marshalling of our committee, with the noble Lord, Lord Hollick, and I add my thanks to our clerks and our special adviser during the inquiry.
I will speak in general terms rather than specifically about my own university. In higher education, there have been challenges aplenty to keep vice-chancellors and governing bodies awake at night: coming through the pandemic, industrial relations, cost of living rises for our students, pensions and research funding, to name but a few. But above all there are the ever-eroding unit of resource for domestic students, which was highlighted extremely effectively by the noble Lord, Lord Johnson of Marylebone, on the “Today” programme last week, and the Government’s continual policy interventions, including, above all, their seeming determination to reduce overseas student numbers.
In the face of this, I have to keep reminding myself that in 2021-22 Queen Mary University delivered a total economic benefit to the UK economy of £4.4 billion. For every pound we spent in 2021-22, we generated £7 of economic benefit. Universities are some of our great national assets. They not only are intellectual powerhouses for learning, education and social mobility, making a huge contribution to their local communities, but are inextricably linked to our national prospects for innovation and economic growth.
The committee’s report was very well received outside this House. Commentating in Wonkhe, the higher education blog—I do not know whether there are many readers of it around; I suspect there are—on the government and OfS responses to our report, its deputy editor noted:
“If you were expecting a seasonal mea culpa from either the regulator or the government … on any of these, it is safe to say that you will be disappointed”.
For him, the four standout aspects of our report were:
“the revelations about the place of students in the Office for Students … the criticism of the perceived closeness of the independent regulator to the government of the day … the school playground level approach to the Designated Quality Body question … and the less splashy but deeply concerning suggestion that OfS didn’t really understand the financial problems the sector was facing”.
As regards the DQB question, which the committee explored in some depth, the current approach being taken by the OfS is extremely opaque. We clearly need a regulatory approach to quality to align with international standards. It is clear that the quickest way to get the English system realigned with international good practice would be to reinstate the QAA—an internationally recognised agency. Most of us cannot understand what seems to be the implacable hostility of the OfS to the QAA.
It is notable that the OfS, perhaps stung by the committee’s report, has now belatedly woken up to the fragility of the sector’s financial model and the fact that the future of the overseas student intake is central to financial underpinning. In its 2023 report on the financial sustainability of HE providers, the OfS confirmed that the
“overreliance on international student recruitment is a material risk for many types of providers where a sudden decline or interruption to international fees could trigger sustainability concerns”
and
“result in some providers having to make significant changes to their operating model or face a material risk of closure”.
Advice that they need to change their funding model and diversify their revenue streams is not particularly helpful, given the options available.
The Migration Advisory Committee’s Rapid Review of the Graduate Route, published last week—which recommends retaining the graduate visa on its current terms and reports that the graduate route is achieving the objectives set for it by the Government, finding
“no evidence of any significant abuse”—
is therefore of crucial importance. There is absolutely no doubt about the importance of the work study visa to the sector and the broader UK economy. In answer to the question from the noble Lord, Lord Parekh, we want it, and I hope that the OfS will play its part in trying to persuade the Government to retain it.
The Wonkhe blog also asks the fundamental question about the Government’s response regarding the regulatory burden on higher education. I hope the Minister can tell us: do the Government think it necessary and acceptable to keep ratcheting up regulation on universities? We are going in the wrong direction. Additional resource is required to monitor and provide returns in a whole variety of areas, such as the new freedom of speech requirements.
With the extraordinary contribution that universities make to society, communities and the economy as a whole, will university regulation benefit from the proposals set out in Smarter Regulation: Delivering a Regulatory Environment for Innovation, Investment and Growth, the Government’s recent White Paper? We will discuss this in a future debate on the response to our subsequent report, Who Watches the Watchdogs? For instance, the White Paper proposes the adoption of
“a culture of world-class service”
in how regulators undertake their day-to-day activities, and the adoption by all government departments of the
“10 principles of smarter regulation”.
It says:
“All government departmental annual reports must also set out the total costs and benefits of each significant regulation introduced that year”,
and says that the Government will
“strengthen the role of the Regulatory Policy Committee and the Better Regulation Framework, improve the assessment and scrutiny of the costs of regulation, and encourage non-regulatory alternatives”.
It says:
“The government will launch a Regulators Council to improve strategic dialogue between regulators and government, alongside monitoring the effectiveness of policy and strategic guidance issued”.
Finally, it says that
“it is up to the government to better assess its regulatory agenda, to try to understand the cost of its regulation on business and society”.
What is not to like, in the context of higher education regulation? Will all this be applied to the work of the OfS?
That all said, I welcome some of the way in which the OfS, if not the Government, has responded to our report. There is an air approaching contrition, in particular regarding engagement with both students and higher education providers. I welcome the OfS reviewing its approach to student engagement, empowering the student panel to raise issues that are important to students and increasing engagement with universities and colleges to improve sector relations.
As regards the Government, a dialling down of their rhetoric continually undermining higher education, a pledge to ration ministerial directions given to the OfS, and putting university finances on a more sustainable, long-term footing would be welcome.
It is clear that continued scrutiny and evaluation— I very much liked what the noble Baroness, Lady Taylor, had to say about post-scrutiny reporting—will be essential to ensure that both government and OfS actions after their responses effectively address the underlying issues raised in our report. Sad to say, I do not think that the sector is holding its breath in the meantime.
Lord Norton of Louth (Con)
My Lords, I declare my interests as a serving academic at the University of Hull and as chair of the independent Higher Education Commission. The commission produced a report in 2013 on regulating higher education that included a recommendation for a protection or insurance scheme to insulate institutions against possible future financial difficulties or failure.
However, my starting point today is that regulators need a mindset of existing to get the best out of the bodies that fall within their responsibility. It is not just a mindset but an issue of how regulators are trained. The same applies to administrators within universities. They are trained in a particular set of skills related to their area of responsibility. They are not necessarily trained in what the body they regulate or work within exists to achieve. In terms of this debate, they are not grounded in what universities are for, which is to teach and research. Administrators need to focus on what they can do to ensure that universities deliver the best. That means going beyond a narrow focus on tick-box exercises, and concentrating instead on how regulations and rules can be utilised to facilitate, not constrain.
Doing so is important at all times but it is especially so now for the reasons advanced by the Industry and Regulators Committee in its excellent report. As it says:
“The higher education sector faces a looming crisis”.
That crisis is already upon us, having worsened since the report was published. As the report states, given the problems facing universities,
“it is … vital that the sector’s regulator is fit for purpose.”
I should stress that that is necessary but not sufficient. The conditions giving rise to the crisis also need to be addressed. The committee’s recommendations need to be seen as part of a wider strategy for enabling universities to thrive and remain world class, and to produce graduates who are essential to a healthy and vibrant society. If we are not proactive in addressing the problems, we will be left behind by other nations. It is not sufficient to say how many of our universities are in the top 20 globally; it is the trend that matters. The higher education sector is under threat.
On the OfS, the committee has produced a powerful and hard-hitting report. As it in essence argues, and as we have heard, the Office for Students has not lived up to its name. However, as the committee also recognises, there has been “a proliferation of regulators”—a virtual alphabet soup of bodies—in the sector, which has just added to the regulatory burden. The more regulators there are, the greater the chilling effect on universities, not to mention the demand on resources. As the noble Baroness, Lady Taylor, mentioned, research commissioned last year by Universities UK found that, on average, a university has almost 18 full-time equivalent staff dedicated solely to regulatory compliance. That is bigger than many university departments. Universities are meant to be autonomous institutions and are encouraged to be innovative, but they are notably risk averse and tend to treat guidance from regulators as fixed law, which some will then gold plate. Like the committee, I welcome the fact that the Government recognised the problem and intend to tackle it. I look forward to the findings of the review due this summer.
However, the principal value of the report is in demonstrating what is missing. The OfS lacks the power and, arguably, the mindset for enabling universities to thrive. That mindset may change but the OfS cannot expand its own powers. As we have heard, it has just published its report, in which it recognises the crisis facing universities. It is pressing them to have realistic funding models but it lacks the capacity to do much beyond that, not least in terms of protecting students in the event of some institutions failing. The Government have the power to help universities but appear to have gone AWOL. The Government constitute a significant part of the solution but they first have to recognise that they are a major part of the problem.
The report before us is hard-hitting and I endorse its recommendations. I very much agree with the argument on accountability. There need to be clearer lines of accountability. It may benefit government that the lines are not too clear, enabling it to eschew responsibility. I also very much agree with the recommendations on quality assurance. As we have heard, that is a task for the QAA or a similar body, not the OfS. We cannot continue with a situation where England, unlike the rest of the UK, is not aligned with internationally recognised standards.
I welcome the recognition that the OfS and government adopt narrow means of assessing the value of degrees. There remains a tendency to see graduates as economic units, with metrics that fail to reflect the value to the individual and to society, as well as the fact that it is difficult to measure economic value when we do not know what form future jobs will take.
The principal problem, though, is to be found in the Government’s response to the report. There is a tendency to ascribe responsibility to the OfS for problems that require action on the part of government. The OfS does not have the capacity to deal with the problems that it recognises now face the sector. Its recent report highlights the risks and the fact that some HE institutions have been overly optimistic in their planning assumptions. It also acknowledges the decline in the real-term value of income from UK undergraduates. Universities are having to subsidise the teaching of home students with income from overseas students.
In their response, the Government recognise the value of overseas students. As the response says, they
“bring significant economic and social benefits to the UK”.
The response welcomes the fact that universities are seeking to diversify their recruitment of international students. It then goes on to say:
“The UK continues to be an extremely attractive destination for international students, with an array of world-class universities, a competitive post-study work offer in the Graduate Route and a welcoming environment”.
That no longer bears a relationship to the reality. The Government have contributed to a chilling environment for overseas students based on presumption rather than fact regarding the graduate visa route. This has been exacerbated by the comments of some Members of the other place. The Migration Advisory Committee found little evidence of abuse of the system and that it was not undermining the quality of the UK higher education system.
It is not just universities that benefit from attracting overseas students, in terms of funding and contributions to research, but local economies; many local businesses are dependent on student patronage. There is also the long-term effect on trade. The export of higher education contributes significantly to the UK economy as well as to the UK’s global reach in terms of soft power. Overseas students are not taking the place of home students. The benefits are substantial—a fact recognised by the public. A recent Survation survey found that the public recognise the value of recruiting overseas students and support the retention of the graduate visa route.
People appear to recognise what separates overseas students from people who migrate to the UK. First, they pay to be here; secondly, they go home. Most return to their home country and contribute to its development. The UK benefits all round: the Treasury, the Foreign Office and the Department for Education all appear to recognise the value, but that benefit is disappearing. Applications from overseas students are declining. The Government are sending out completely the wrong signals.
The Government say there is overreliance on overseas students but make no acknowledgement of the fact that they are in large measure responsible for that situation. Despite inflation, the student fee has remained unchanged, so overseas student fees are needed to subsidise home students. The decline in recruitment of overseas students puts HE institutions in a difficult situation. Yet the Government act as if entirely detached from what is happening, putting responsibility on the OfS to monitor what is happening. That is unfair on the OfS.
The OfS can be more resilient and supportive in its approach, but it is the Government who need to act, and swiftly. Their response to the committee’s report is dripping in complacency. Basically, they are monitoring the situation, saying:
“The government keeps the HE system under review … and … plans to consider”
the funding position
“ahead of the next Spending Review”.
There is no self-reflection and no active recognition of their responsibilities to maintain a healthy HE sector.
I trust that my noble friend Lady Barran will not take up time telling us how good the HE sector is—we already know that—but instead devote her time to saying precisely what action the Government are taking, in relation to not just the Office for Students but the second part of the title of the committee’s report: “the looming crisis facing higher education”. Recognising that there is a crisis is necessary but it is not sufficient. What will the Government do, that otherwise they would not have done, because of this excellent report? That will be the measure of what my noble friend says.
Lord Freyberg (CB)
My Lords, it is a huge pleasure to follow the noble Lord, Lord Norton, with his wide and extensive experience in this area. I too thank the noble Baroness, Lady Taylor of Bolton, for giving us the opportunity to discuss this critical report. My contribution today will focus on the urgent need for a review of higher education funding and student outcome indicators for creative arts students.
I start by echoing the calls of several noble Lords for an urgent review of higher education funding. The near 10-year tuition fee freeze for domestic students is jeopardising the sector’s long-term viability, particularly at post-1992 universities. Substantial job cuts and forced course closures are, unfortunately, becoming commonplace. The report warns that if the domestic undergraduate funding freeze continues, some universities will have to merge or, in the words of the noble Baroness, Lady Taylor, exit the sector. This is completely unacceptable and entirely preventable. At the very least, fees should rise in line with inflation. Here I entirely agree with the noble Lord, Lord Johnson, in his comments on the “Today” programme last Friday.
In addition, substantial evidence shows that the financial hardship that students have faced in recent years has been a real concern. Joint research in October 2023 by student housing charity Unipol and the Higher Education Policy Institute indicates that rent consumes nearly the entire average loan, leaving students with just 50p per week for all other expenses, including necessary resources such as textbooks. The National Student Money Survey 2023 states that the average monthly shortfall between maintenance loans and student living costs is £582. The Sutton Trust’s 2023 student maintenance analysis report found that median loans of £8,500 in London and £7,000 in the rest of England do not cover the median essential spending costs of £17,287 and £11,400 respectively.
This financial strain impacts on students’ education and university experience. Many students, facing significant gaps between their loan income and expenses, must work to subsidise their costs, often taking on more hours than recommended or feasible for full-time study. Opinium’s 2023 poll of 1,000 university students across the UK found that seven in 10 students have considered dropping out of higher education since starting their degree, with nearly two-fifths citing rising living costs as the main reason. Research by COSMO—the COVID Social Mobility and Opportunities study—also shows that young people from working-class families are more likely to forgo university because they cannot afford it. Here I echo the second point from the noble Lord, Lord Parekh.
Maintenance grants, which provided non-repayable financial support to students from lower-income households and helped mitigate financial barriers to higher education, were abolished in 2016. Under the current system in England, the poorest students incur the highest level of debt. England is the only UK nation without some form of maintenance grant provision for students. As Victoria Tolmie-Loverseed, assistant chief executive at Unipol, said:
“We risk excluding those from poorer backgrounds, forcing middle-income students to take on unsustainable debts, and damaging the student experience for all”.
Another issue identified in the committee’s report was the OfS’s method of evaluating value for money through its student survey results, which was described as “simplistic and narrow”, particularly due to its focus on employment outcomes. This focus on employment outcomes—specifically the jobs that graduates hold just 15 months after finishing their studies—disadvantages creative degrees. The regulator uses these outcomes to measure a degree’s value for money but, as noted in the House of Lords Library briefing, the current measure fails to reflect the value of creative degrees.
Outcomes are important, and it is crucial that universities equip students with the skills they need to succeed. However, this narrow focus overlooks a wide range of valuable outcomes and fails to recognise the unique nature of the creative industries, where many creative graduates find employment. The creative sector is characterised by a high proportion of start-ups and micro-businesses, with graduates often experiencing non-linear career paths, frequently working freelance or on short-term contracts. Graduates may also work part-time while pursuing creative endeavours or building portfolios. Self-employment accounts for 32% of creative industry employment in the UK, compared with 16% for the economy more broadly. Therefore, measuring employment outcomes at a fixed point shortly after graduation is ineffective for determining the success of creative degrees.
This narrow measure has also contributed to the perception of creative higher education as offering low-value and poor-quality courses, despite these degrees being crucial to the UK’s creative industries and the economy. The University of the Arts London, which nurtures the largest talent pipeline to the creative industries, with 22,000 students from 130 countries, advocates for a change in how the Office for Students measures high-quality provision, suggesting a broader approach beyond just graduate outcomes. This should involve a sector-wide dialogue with the Government and the regulator to develop a more holistic way of measuring the value of higher education. At the very least, the context of the non-linear careers of creative graduates should be considered.
The Government urgently need to review higher education funding. Additionally, they should embark on a major reform of the student maintenance system, and rapidly improve how student outcomes are measured by undertaking and publishing a review of this area.
Lord Johnson of Marylebone (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Freyberg. I echo the points he just made about the creative industries and the need to measure properly value for money in that respect. I declare my interests as a visiting professor at King’s College London, chairman of FutureLearn, and someone who, in my previous ministerial role in the other place, was very much involved in the creation of the OfS and the high-level regulatory framework it is now implementing. I come at this with a certain baggage, and I lay that on the table; your Lordships do not need me to be clearer about it.
I very much want to defend the OfS rather than join the chorus of people seeking to bury it and condemn it for problems which, by and large, are not its responsibility but the responsibility of government policy. It is important that we are very clear in assigning responsibility correctly in this debate as we consider this report.
As the noble Lord, Lord Norton, said in his excellent speech, we have in the UK a world-class higher education system. It is one of our greatest national assets. However, it has some faults: some resistance to accountability, a quickness to take affront at suggestions that there are areas for improvement, and occasionally some short-sightedness in the way it opposes legitimate demands for reform. I fear that the report resulting from this inquiry is to some extent evidence of that phenomenon, because the inquiry and the report that came out of it were in part—probably quite a considerable part—the result of some very self-interested lobbying by university mission groups whose universities have over the years been very well represented in this place.
I am not saying that there is not room for improvement in the way the OfS operates—of course there is. However, it is also important that we do not lose sight of what this report is in part—not in totality—all about. We have to be honest that the report and the inquiry that led up to it are in part a continuation of battles that many in the sector and in this place waged against the very creation of the OfS in the first place.
Just to take us back a little, the fight about the OfS was actually about the change from a funding council acting on behalf of providers to an independent market regulator looking out for the student interest. This shift, as the OfS’s brilliant first chair Michael Barber noted in his evidence to the committee, was very much overdue given the massification of the sector and the change in the tuition and maintenance funding regime from one of government grants to income-contingent loans. My view is that for as long as we have a mass higher education system, as we will have, and this system of funding—to my mind, these two things are very closely and inseparably linked—we will need an independent market regulator rather than a funding council model.
Many in the sector and perhaps in this place might romanticise the Higher Education Funding Council for England. Indeed, there was a lot that was great about it, including its formidable last chief executive, Madeleine Atkins. But of course, by the middle of the last decade it had long passed its sell-by date as a mode of regulation for the sector. Indeed, in some senses it did not even recognise itself as a regulator. It came out of the University Grants Committee model, which was suited to a very different world of very small, limited tertiary participation and a much smaller, narrower system of university providers.
HEFCE was good for a world that had passed, but it was no longer fit for purpose for an era of mass higher education. Its function was very limited: to spread available grant funding around the providers in the system to ensure that everybody got a fair crack at the funding that the Treasury was making available. What HEFCE was not effective at was acting as a regulator to promote quality, choice and competition in the student and taxpayer interest. It is not going too far to say that there is a general consensus that, by the end, HEFCE had become essentially captured by the sector and urgently needed reform.
That is the backdrop to why the OfS was set up. Of course, this was not a popular change in the sector. The battles leading up to the passage of the Higher Education and Research Act 2017 were ferocious. It was one of the most heavily amended bits of legislation in recent memory. We should not ignore all that history, including the way the sector and its outriders lobbied hard against the new accountability regime that the Office for Students represented. To some extent, there are undertones of all that lingering around today at the five-year to six-year mark.
The creation of the OfS represented a move away from co-regulation to something that is much sharper and has greater consequences for institutions that deliver poor quality and poor student outcomes. All the stuff about co-regulation and how it is a better approach is, to my mind, a thinly disguised plea for self-regulation—a stance that I do not think any party in government will return to. As I said at the start, as long as we have a mass higher education system funded by a system of income-contingent loans—we will have this for the foreseeable future because it is the least bad system and is the only game in town from a fiscal perspective—we will need an organisation such the OfS acting in the student and taxpayer interest.
As Michael Barber told the committee, many universities thought that, notwithstanding the clarity of its legal duties, the OfS would be HEFCE under another name. They were very wrong and were surprised to discover that it was different. Some in the sector might think that, if they undermine the OfS enough and throw enough mud at it, they will suddenly get nice old HEFCE back, with its big pot of grant money administering the teaching grant and a system of student number controls that constrains competition and choice and allocates students to providers on the basis of government quotas. That is highly undesirable as an objective and highly unlikely to arise as government policy.
Even in the unlikely event that a future Government did want to replace our current funding system of income-contingent loans and return to a world of grants, they would still want an independent regulator to ensure value for money for taxpayers and hold universities to account for quality and outcomes in a mass higher education system in pretty much the same way the Office for Students does. Although the student focus of the regulator might change in such a scenario, I do not believe that any Government will return to the funding council model of the past.
Respectfully, I disagree with the report’s main contention that the Office for Students is performing poorly. To be honest, I think that Michael Barber and Nicola Dandridge did a brilliant job in leading the establishment of the new regulator in very difficult conditions, which their capable successors are continuing. I remind Members that its initial priority was to set up the new organisation. It managed the considerable task of registering a large numbers of providers at pace and putting in place the new regulatory framework in its first strategy. It then coped admirably with the challenges of the pandemic, suspending some of its regulatory requirements while providers adapted to the changed environment.
In its second strategy, the OfS has moved on to focus on quality. This has seen it reset the TEF, toughen up the B3 outcomes metrics, and reset the indicators for non-continuation, completion and progression. Again, that has generated a fair amount of angst in the sector, but this is absolutely necessary in terms of both the student interest and upholding quality and standards in the sector.
I do not want people to think that I am just a lackey praising the OfS without any self-awareness or criticism. I recognise that it has problems and is not in all respects operating as well as it might. I will be brief: there are three areas that I would focus on. The first is the question of distance from government. The problem here is not the OfS but the DfE—I say that with all respect to the Minister. The problem is clearly Ministers. It is also about where universities sit in government. The mistake is to have universities in the Department for Education, which does not understand institutional autonomy and treats universities like failing schools. My noble friend Lord Willetts made the point before.
In his great report on higher education sometime in the early 1960s, Lionel Robbins warned against moving universities to the education department because he feared that such an interventionist department would not understand or value the autonomy of universities. His warning has proved sadly accurate. The DfE treats universities like poorly performing secondary schools and now intervenes in them so much that the Office for National Statistics may well propose bringing universities back into the public sector.
When I was working on the HERA legislation, I was lucky enough to be Minister for both universities and science, like my noble friend Lord Willetts was when he was in the other place, with responsibility for both aspects of government policy towards the sector. That coherence has to some extent been lost by the move to the DfE and the splitting of ministerial responsibility in that way. It would be preferable to have universities back in a growth department of government, such as the business department or the new DSIT, where universities would be reunited with the rest of the research base.
The layering on of ever more conditions of registration has become slightly crazy. Ministers should adopt a self-denying ordinance of one in, one out—or better still, one in, two out.
My second area for improvement is that the Office for Students has to do much more to support innovation and promote new forms of provision. Now that it has established its bona fides as a tough and independent market regulator it has space to address parts of the role that Parliament has given it that have been neglected in the first five years. New providers—I have been intimately involved with a number—have been stunned by the bureaucracy they encounter in trying to get on to the register and establish new modes of provision. The consultants they have to recruit to advise them tell them that to succeed with the OfS they must, above all, look as much like an established university as possible. This is hardly the recipe for innovation that we want in our system.
My final point is that the Office for Students must make a real go of the lifelong learning entitlement. This policy is flailing at the moment. I think the name of the Office for Students should change to the office for lifelong learning, and it should grip this policy urgently so that it has a fighting chance of delivering the skills revolution that Ministers say they want for it. The detail of how that might work is for another day but that is an urgent priority.
I urge anyone in this Room who believes that the solution to the sector’s troubles is to attack and dismantle the Office for Students to think again. A strong regulator that enjoys the confidence and trust of the sector and of government is vital to the future of our HE system. Everyone should focus on working hard to that end.
Lord Mann (Non-Afl)
My Lords, I begin by referencing my entry on the Register of Lords’ Interests: I am the unpaid and independent adviser to government on anti-Semitism. I was warned on coming in by my advisory team—a small one—that I should attempt to persuade, not to berate. My independence may come through a little bit, but I want to reference one page only in this report of 104 pages, page 17. There is a current Office for Students consultation on draft regulatory advice arising from the Higher Education (Freedom of Speech) Act 2023, which is due to be enacted on 1 August. My suggestion to the Minister and the Committee is that the currently proposed guidelines appear to remove crucial and hard-won safeguards for Jewish students, potentially allowing anti-Semitism to grow on university campuses.
The OfS was directed to produce regulatory guidance on the free speech Bill. It released it at the end of March but, as of today, several questions remain unanswered about how the guidance will work in practice. It is my understanding that there are only two weeks left in the consultation process. If the proposed advice proceeds as it currently stands it will be acceptable to do and say the following things in our universities, leaving them with no power to intervene. I shall give three examples. The first is to have “intifada until victory” posters on approved university noticeboards. The second is to have a Holocaust denial society registering at a university freshers’ fair, having followed the correct registration processes. The third is to have “free Palestine” graffiti on a Jewish society poster on an official noticeboard.
All three are quite separate and distinct and are serious issues that are not conducive to the establishment of good relations on university campuses, which universities are, of course, legally bound to foster. I suspect that the Government and Parliament would both be horrified to discover that, in just over two months’ time, it might be possible to defend Hamas’s “inalienable right” to commit the 7 October attacks, or to argue that the Holocaust never happened, in one of our universities—not just to say such things but to do so by citing the Government’s own legislation on free speech, as passed by Parliament.
Over the past 30 years, we have driven Holocaust deniers out of any legitimate space for debate. The current flaw in the guidance that is circulating risks throwing away that agreed rejection of the falsification of the murder of 6 million Jewish men, women and children, and many more Nazi victims. When this legislation was going through, the Minister at the time stated that there would be an explicit—I repeat the word “explicit”—rejection of Holocaust denial, but that has not been forthcoming from the OfS. That is contrary to the promises made by the Government, in all good faith, to the House during the progress of the freedom of speech Bill.
It is not legitimate to intimidate and harass Jewish students in the name of free speech. The OfS’s director for freedom of speech and academic freedom, Professor Arif Ahmed, has been one of the leading critics of the IHRA definition of anti-Semitism, which this Government were the first in the world to adopt in 2017, and which has been adopted by all political parties represented at Westminster to great impact and positive effect. The current proposals are likely to lead to some universities revoking their use of the IHRA definition as a reference point in looking at anti-Semitism. Jewish communal organisations in this country united in supporting the Government when they adopted the IHRA definition in 2017. It is a globally agreed definition, and there are no credible examples at all—not a single one—of its use in our universities prohibiting or restricting in any way any freedom of expression or of academic study, but it will fall foul of the guidance as it currently stands.
The advice as it stands will also stop the mandating of most forms of training on anti-Semitism, despite the fact that the Department for Education has tendered such work for contract in recent months. It will impede universities’ ability to take action against those who intimidate, ostracise and harass Jewish students and staff. The crux of the problem for universities will then be that this approach of purist free speech, to which the guidance currently works, will lead to aggressive legal actions against universities. This will distract universities from their core role and divert their attention away from safeguarding and strengthening intercommunity relations in the university population, which become more important and more prescient by the month. I put it to the Minister that the proposed regulatory advice is not fit for purpose and that the negatives that will impact will be detrimental to Jewish students.
I listened to the noble Lord, Lord Johnson. One of the purposes of the Office for Students was to be for students. Jewish students are entitled to that right alongside—no more than but no less than—any other group of students. The safeguards that universities are using at the moment are needed now more, not less, than ever before, and have generally been working. This current draft, on which consultation is about to end and which is to be enacted by 1 August, needs a fundamental rethink. Jewish students across the country have indicated in great detail their serious concerns about how the guidance will operate. I endorse their concerns. I suggest that the Government pause the enactment of the free speech Act until these issues have been resolved.
I offer my services, as well as those of others who have worked in this field in great detail over recent years, to try to ensure that government policy on the equitable treatment of Jewish students and the objectives of the OfS can be brought together in a way that has practical application and does not undermine the good work that has gone on in universities in challenging the scourge of anti-Semitism and protecting both Jewish students and Jewish staff.
Lord Agnew of Oulton (Con)
My Lords, I refer to my interests in the register, which include being a member of the Industry and Regulators Committee that produced this report. I thank the noble Baroness, Lady Taylor, for her highly effective stewardship of the report to publication.
I have spent the last 14 years involved in primary and secondary education, but there are many who would tell you that there is no connection between this and tertiary education. I respectfully disagree and will try to show noble Lords why in the next few minutes. I should probably issue a trigger warning to those noble Lords who will disagree profoundly with many of my points today.
First, there are still people out there who think that the British university system is wonderful. I am sorry to be blunt but, other than a few exceptions, these people are living an illusion. The OfS was set up in 2018 to provide better governance. Perhaps it was just bad luck that it received the hospital pass, but the main outcome has been to see the future prospects of so many of our young people simply benighted.
The sixth sector hides behind the financial constraints that it suffers from. Of course, it is tough to live off the same £9,250 a year that has been the settlement for several years, but have a look at the secondary sector. I set up an academy trust in 2012. Today, we have 17 schools with 11,000 pupils and dozens of ageing buildings, many that pre-date university campuses. In our sixth forms, per student funding is £6,073 in Norwich for the so-called elite subjects of maths and science and £5,421 in Thetford.
Time and again during our inquiry, I was told by university luminaries that it was much more expensive to educate young people a year or two older than those for whom I have responsibility. This is despite a sixth-form phase providing 24 hours a week of face-to-face education in small settings of 20 or so students. How many undergraduate courses provide even two-thirds of that? Of course, the academic year of a university is substantially shorter, so why are there such differences in the operating model?
First, universities have indulged in a binge of building. Their buildings are funded on cheap debt, but they have to be maintained and interest rates have now normalised. Secondly, there is a vast bureaucracy. Vice-chancellors are broadly overpaid, in my view; they have recently awarded themselves another 5% pay rise, on average, while of course the people doing all the work at the front line—the lecturers—are underpaid. Universities have created a Ponzi scheme based on growing student numbers. Not one of the university managers we interviewed was able to provide a clear financial model of how their institution worked, other than relying on foreign students.
This year, my academy trust will receive an increase in its general annual grant of about 1.5%. The local LEA has taken a larger chunk to fund SEND. Despite this, we provide an extended school day to every secondary school pupil, costing about £1 million a year but adding a whole year of education over their five years in that school. We spend £400,000 subsidising musical instruments for pupil premium children and a further £500,000 hiring reading mentors to deal with a post-Covid literacy crisis. We have found that we have 1,500 pupils with reading ages between three and seven years behind their chronological age. Yes, we receive some odd capital sums to build a new school block, which is additional to those funds, but from September this year we will be educating around 270 children for free. So-called lagged funding means that we will not get the £1.7 million per pupil settlement that would have operated if we were paid for all those children on our campuses.
How do we achieve this? We achieve it through relentless and ruthless cost control at every level. Every photocopier is tracked for excess output of colour printing; every light bulb has been replaced with LED; every invoice has to be pre-validated via a central electronic purchase ordering system; every head teacher has to learn the principles of curriculum-led financial planning to control timetabling and resource allocation. I heard none of this during our inquiry.
No one could tell me why an undergraduate needed three years to complete a degree with six hours of contact time a week, why it was acceptable to take six weeks to mark and provide feedback on an essay or why, during the lecturers’ strikes, they did not use the money that they were not paying in wages to provide alternative mechanisms for those abused young people who could not get their degrees to apply for their jobs. This is before I get going on foundation years—a cynical way of luring young people for an additional paid year of study, having failed their A-levels—or unconditional offers, removing aspiration from young people as they knew they could glide in whatever happened, or offering lower grades for pupils in so-called areas of deprivation, even though they were in private schools. This happened to my own son and the next year to the daughter of the noble Earl, Lord Leicester, at the same institution. All this is for £50,000 of debt that hangs over them for up to 40 years. There were no solutions, just an agonising moanathon about how difficult everything is.
I turn to the vexed issue of overseas students. The idea that our universities have been hoovering up the world’s best and brightest is one of the most blatant sophistries of modern times. I am grateful to my honourable friend Neil O’Brien for his detailed research on this. Using data from the Migration Advisory Committee review of the graduate route to visas, he has shown that the median person on the graduate route earns about half of what the median full-time worker does. A staggering 41% earn less than £15,000 a year. Put that against the minimum wage of £24,000 and the threshold of a work visa at £30,000, and the whole grisly story unfolds.
On the point of the noble Lord, Lord Parekh, about colonialism, there is an unpleasant truth emanating from the MAC’s report. Since 2005, the number of overseas post-study visas issued to the US, Canada, Australia, New Zealand and Japan has been almost utterly consistent at around 20,000 a year. However, since study visas were reintroduced in 2019, visas for India have increased by 900% and for sub-Saharan Africa by 700%. Should students from these countries really be paying a huge premium compared to domestic fees, and then earn less than the minimum wage?
I challenge the statement of the noble Lord, Lord Norton—I paraphrase—that overseas students then return to their home countries. The MAC’s statistics show that, although only 6% of US students stay, that figure rises to between 25% and 35% for Pakistan, Nigeria and Bangladesh. The OfS claims, of course, that it has no remit on any of this. It seems that its energies are directed into meddling in a performative way on second-order and third-order issues, such as insisting that artwork from degree courses be stored for five years. So the full-size papier mâché Brontosaurus has to lurk in a basement serving no purpose to anyone. If the OfS had focused on demanding proper accountability in the financial management of the sector, it is possible that we would not be faced with upwards of 60 higher education institutions facing serious financial challenges.
I read today that my noble friend Lord Cameron, straying from his international brief, warns of widespread closures. Well, that is what happens if organisations are mismanaged. The problem should not be solved by dragging in hundreds of thousands of migrants and dependents to prop up a failing system. The current crisis represents a once-in-a-generation opportunity to repurpose many HE institutions into training institutions that reflect the needs of today’s British society and economy —think my noble friend Lord Baker on steroids. The public debate agonises about our decline in productivity and lack of economic growth but we hear virtually nothing emanating from these organisations to lead the charge.
I have only one question for my noble friend the Minister—I know that this is not her day job—and would prefer a written answer. How aware is the DfE of the impending financial collapse of dozens of our universities, and what is it doing about it?
Viscount Chandos (Lab)
My Lords, it is a great pleasure to follow the noble Lord, Lord Agnew, who is a stimulating and enjoyable colleague on the committee—even if he probably classifies me as one of the madmen who believe that the British higher education system is something that we should be proud of and do everything to protect.
Being privileged to be another member of the committee, I am very grateful to my noble friend Lady Taylor for her incisive introduction and for her leadership of the committee, now and during the inquiry, along with the noble Lord, Lord Hollick. Noble Lords have already heard from other members of the committee and can judge the strength of both the individual views and the consensus that was reflected in the report. I will try not to repeat the many excellent points made by all speakers this afternoon. I will leave it to my noble friend Lady Taylor to respond, if she wishes, to the suggestion of the noble Lord, Lord Johnson, that the committee has been captured by providers, just as HEFCE allegedly was in the past.
I draw the attention of your Lordships to my entries in the register of interests, in particular as a vice-chair of LAMDA and as a co-opted member of the investment committee of Worcester College, Oxford.
If the crisis in higher education was looming at the time of the report’s publication, it has well and truly arrived nine months later, although the Government are doing their best to exacerbate the crisis with new measures, most of all through the threatened change to the visa regime. We cannot, as a committee, claim paranormal levels of foresight in predicting the crisis; the evidence that we heard and received, as well as the data that we analysed, told us only too clearly that all was not well in the state of higher education. It was deeply frustrating that, in our interactions with the OfS at the time of the inquiry, it seemed to be in denial. It is hard to judge whether this was complacency —a smoothing snooze at the wheel—or a regrettable lack of transparency.
Of course, the OfS is not responsible for setting government policy. We should be careful not to attribute failures on the part of the Government to the regulator, even though, as the committee found, there was a worrying lack of distinction between the Government and the OfS—a subject to which I will return.
In its report published last week, Financial Sustainability of Higher Education Providers in England, the OfS writes that it
“has an important role in monitoring and reporting on financial sustainability, and intervening to protect the interests of students, as far as is possible, if a provider is at risk of closure”.
It goes on to note that it does not
“have the powers or remit to intervene … in support of sustaining the system as a whole”.
However, has it given, on a timely basis, firm, clear and objective advice to the Government as to the threats to the system? I do not know what may have been said behind closed doors but what the OfS said to our committee—a committee of Parliament to which it owes a duty of transparency—did not instil confidence in either its grasp of the situation or its willingness to speak truth to power.
Here we come back to the strong discomfort felt by the committee about the independence of the OfS from government, or the lack thereof. If the OfS’s financial sustainability report shows belated recognition of the developing crisis, the accompanying document, Navigating Financial Challenges in Higher Education, is not encouraging. It says:
“A focus on cash management may help with short-term resilience but, in the longer term, more significant mitigating action is likely to be required”.
That is fair enough. So, what might the mitigating action comprise? This could involve, says the OfS,
“rethinking an institution’s business model, for example rebalancing the resources spent on teaching and research, phasing out some courses, or seeking to recruit different students to different types of course”.
That prescription manages to combine the banal with the ominous.
My noble friend Lady Taylor referred to cuts already implemented. At Oxford Brookes University, the music and mathematics departments are being closed outright, while staff cuts are also taking place in English and creative writing, history, film, anthropology, publishing and architecture. These are not departments failing to deliver high levels of education, nor are they training for industries in which the UK is not a leader. In a dynamic society and economy, change is inevitable and to some degree desirable, but the cuts at Oxford Brookes are damaging to the institution and the sector and are a deeply worrying trailer of what the OfS is advocating in rebalancing resources.
If the OfS will not fight the higher education sector’s corner, Parliament can. The committee’s report challenges the Government as well as the OfS. Financial sustainability in the HE sector cannot be achieved through cuts alone; funding must be increased in real terms, whether through an increase in the cap on fees or, as I would prefer—whatever pressures on the Exchequer the next Government face—a return to the hybrid combination of fees and direct grants that existed before the Conservative-led Government, in place from 2010 onwards. Or do the Government actually agree with that profound political thinker, Rod Liddle, who argued this Sunday that the number of universities should be reduced by two-thirds and that the proportion of young people going to university should be reduced to 15%? Can the Minister reassure the Committee that that is not the Government’s objective? If not, does she agree that, to avoid this happening accidentally, significant real increases in funding must be put in place?
Lord Lucas (Con)
My Lords, I congratulate the committee on an excellent report. However, as someone whose life revolves around schools—as in the Good Schools Guide—and parents, noble Lords will not be surprised if I find myself in many aspects standing, as well as sitting, beside my noble friend Lord Agnew.
I am a fan of the Office for Students. For a couple of decades, I have been trying and failing to get universities to take suicides seriously and to involve families in dealing with the problem. The OfS succeeded where I had failed. I am immensely grateful to it, as are many parents. I am pleased to see that the OfS is taking up cudgels on freedom of speech. As Jo Phoenix, the professor who was so disgracefully driven out of the Open University, said today:
“Imagine a world where those who go to university are taught to value diversity of viewpoints and what knowledge and evidence are”.
I do not have to imagine—I went to a university like that—but that is not the university my daughter is at, and nor is it the university that many of her friends are at. It is disgraceful how their ability to think, talk and discuss is depressed—and, in some subjects, absolutely excluded. We need to do something about this. I am proud of the Government for having taken steps in this direction but that has not been supported by the university sector as a whole, with some honourable exceptions, in the way that I should have hoped.
Look at the latest decision by UCAS to show for university courses the grades that people who got on to the course in the previous year achieved. I have been asking for this for 20 years. Not to provide that information is outright lying. It is misrepresenting what the course is, and this has been supported all the way through by UCAS. It has been absolutely defended, because UCAS is owned by the universities and is not independent of them. The great virtue of the Office for Students is that it is not the university’s creature. That is immensely important in looking after the interests of students.
I therefore hope that the Office for Students will carry on down that course. The first thing that I would like it to focus on is getting universities to provide real information on the value of their courses. What do students who follow a particular course go on to do? When they look back, two or five years later, what do they think of the education they received? That is absolutely basic, vital information that the university should be wanting in order to improve its courses and to do better, and to understand what it is doing and achieving.
The noble Lord, Lord Freyberg, hymns UAL. It is absolutely hopeless when it comes to that. When one looks at the education it is providing, in what way does it fit its students for the life that the noble Lord describes? There is so much that universities can do to improve what they are offering students, and it will take a vibrant Office for Students to persuade it to go in that direction. However, it will be a much better place for universities. They will be selling what they really do and will be appreciated for what they achieve. Their place in all our hearts will be much stronger, and that is something really to aim for.
Another area where I hope the OfS will make improvements in universities is in their relationship with schools. Why do universities not pay attention to the references that schools give their students? Schools have looked after these children for seven years; they know and understand them. There is a whole load of information about how to help, respond to and educate each of these students as individuals, which universities just discard.
In the early days of this discussion, I asked whether universities could employ modern technology to really get under references, understand what they are saying, and, to help schools make better references, feed back to schools what they thought of the students. The response was, “We never get to know our students well enough; we couldn’t do that”, to which my answer is, “Yes, but you ought to have a duty of care. You ought to be doing that. You ought to be looking after students and you ought to know them well enough”. If they did that, they could also help schools make better A-level predictions. At the moment, it is well known that schools are rubbish at making A-level predictions, but the universities do nothing to improve the matter.
What do universities learn when students are with them about what they could have been taught better at school so that they would succeed more at university? How is that information fed back to schools? If it is not collected, it does not get back to schools. What should universities do to influence the examination system? At the moment, they are absolutely rigid in what they expect. They expect a particular pattern of examinations; they are really narrow in what they are prepared to accept. However, when it comes to what they will take from overseas students, they will look at anything. In essence, the flexibility that universities have to respond to the way that students learn and to their differences and individuality is just not extended to our children, and it is important that it should be.
Lastly, I hope that the Office for Students will pick up on the real need to look after the interests of individual students when a university ends a course. It is not satisfactory just to offer them another course. Does that suit them? Is it right for that student? No; they are just offered the package: “We aren’t doing archaeology any more. Go on to history”. That should not be enough. Universities—and, in particular, we, the Government—should take responsibility for looking after the interests of these people. We need to do better than we are.
There are things that the Government should do, too. The state that we have got ourselves into on immigration is ridiculous. Collect proper data; take proper decisions. I have never won an argument with the Home Office—although I once managed to get it to collaborate with Imperial College, which took a lot of effort—but, for a university, this is a really important part in knowing where it can go, what it can do and how it can run. As the Government know, it makes a big difference to our country; they just have to run it properly. The continued impression of running around blindfolded and bumping into trees is not what we should be doing. We need to do a lot better, and I hope that that will happen soon.
On a more minor point, I hope that the Government will look at enabling co-funding of degree apprenticeships so that there is some blend between the debt that a university student takes on and the complete lack of debt that happens in degree apprenticeships. We need to expand degree apprenticeships much more than we are. I really hope that the Government will look seriously at lifelong learning and really involve universities in it. Obviously, the Open University is there, but the world is moving so fast that we all need to keep learning and adding to our knowledge. My university seems to think that, having spent three years studying physics, that was the end of my interest in the subject—just because I went to become a chartered accountant. It has made no effort in the past 50 years to keep me up to date. I would have paid for that. I think that most people who go to university would like to keep learning and extending their knowledge, but the sector does not seem to respond to that at all.
It is not an easy time for universities. There are many politicians, like me, who are out of love with them and extremely reluctant to burden our children with even more debt. As my noble friend Lord Agnew says, one of the first things we need universities to do is to be open about their costs. How can it cost 50% more than a sixth form? They are providing so much less. What is the reality? Be open about it. Let us see what is going on and really understand how these costs are made up: “You are asking us for more money; how do you justify it?”. It is not just words; we want some figures and an understanding. Really collaborate with Alumni UK. This was something I asked for when my noble friend Lord Johnson was taking his Bill through—that universities work together to support their international alumni, make a group out of them and make them a joined voice for this country and for working with this country.
The British Council has at last launched something like this. It has some support from universities, but much less than it should have. This ought to be the universities’ contribution to our national effort. They will talk to us a lot about soft power, but when it comes to providing it and sharing it, they do not seem so keen. I really hope that they will change their minds on that, get behind Alumni UK and embrace the idea of being self-critical, self-improving organisations, collecting the data they need to do that, so that they do not find it necessary to close courses in panic but close courses in the ordinary course of business when they are not doing what they should do. They should evolve new courses and be constantly trying to improve, change, evolve and—to come back to something I said to the noble Lord, Lord Freyberg—really focus on the needs of their students and make sure their courses are really fitted to that.
I enjoyed and benefited from university. I want as many of our young people as possible to do that, but we really need the universities to improve.
Lord Willetts (Con)
My Lords, it has been a very interesting debate, stimulated by this excellent report. I declare my interests as a visiting professor at King’s College London and a member of the council of the University of Southampton. There is a lively debate about universities going on, particularly on this side. Let us have a proper debate about what is going on.
I want to comment on some of the interventions, particularly from some fellow Conservatives in this Committee. I very much agree with the key point by the noble Lord, Lord Johnson, that we need a regulator. I do not actually think that the old regime was as bad as is sometimes made out. HEFCE was the regulator, in reality, but its regulatory power was the power of the purse, because it was handing out grants. As the grants disappeared, so its capacity to exercise authority by attaching conditions to the grants was going, which is why, right from early on, I said that we needed a new legislative framework. I congratulate the noble Lord on bringing that in. In today’s world, the HEFCE model of regulation was very discretionary. The regulatory regime needs to be more explicit, rules based and clear, so that people know where they stand. A rules-based, transparent regulator was another of the prizes we all wanted to see from the new regime.
Also, one of my frustrations was that, having to deal with an agenda of trying to promote new players coming in, it was incredibly frustrating that they were not properly regulated. A regulator extends the capacity to regulate new arrivals. The noble Lord eloquently made the case for the OfS, but where I think I part company from him is that one reason why this report is interesting and important is that it is not the old lags who always turn up and we all enjoy our debates on higher education. This is a committee of experts on regulation who are looking at the OfS from the perspective of people who look at how regulatory regimes operate in other sectors, in other contexts. I attach some weight to their assessment, as fellow Members of this House who devote their committee time to studying regulation in different places, of how it is working in the world of HE. I understand the frustrations of my noble friend who chairs the OfS that because of this previously unknown Addison rule, he was not able to engage directly with the points that the committee makes. I am sure that there are good answers on many of them, but having this perspective from a committee that specialises in looking at regulation is a good thing.
The funding model has come up: it came up at the beginning with the noble Lord, Lord Parekh, then with the noble Lord, Lord Johnson, and from others in referring to debt. The new funding model is here to last. It was begun under the previous Labour Government. I will turn later to some of the things that we heard from the noble Lord, Lord Agnew, but from the tone of the remarks it is absolutely clear: the Department for Education is never going to find a large public budget to fund higher education. In my experience, almost every Education Secretary who turns up cares about early years and primary school. They have no desire, in any battle with the Treasury, to say, “I’m not going to ask you for more money or primary or secondary education. Please can we have more money for universities?”. They just do not, so we need another way of funding it. We have that, and it is not debt in the sense of commercial debt.
For me, it was a low point, when the argument was being made that we needed to have some increase in fees, to hear the then Minister say that we could not put up fees because it would contribute to the cost of living crisis, pandering to a deep and dangerous misconception that somehow this is money that students pay up front. It is not; what matters is the repayment formula, which of course ensures—I look again at the noble Lord, Lord Parekh—that people on low incomes do not pay back. In reality, they do not pay for their higher education; the generality of taxpayers pay for the higher education of people who are subsequently not able to afford to pay back. That is the right and progressive way of doing it.
As to how this funding compares with the money going into primary and secondary schools, I will make some quick comments on what the noble Lord, Lord Agnew, said. I can remember the negotiations with the Treasury. There used to be capital grants for higher education, in the same way as there are for schools. When people compare the figures of £6,000 for schools and £9,000 to universities, that schools figure does not include capital spend, which is a separate and substantial line item in the DfE. I remember the negotiations, and one reason why we put the fees up to such a high level was that the Treasury said, “We’re getting rid of all capital grants for higher education. In future, institutions will finance capital by borrowing on the commercial markets, and one reason for the fees is to cover the interest payments on the capital now that we are stopping having a public capital budget for HE”. That is part of the logic of the system. Their borrowing money to fund development is the new model; it was another form of expenditure saving.
Secondly, that £9,000 includes £1,000 of access spending, which is an absolute social mobility challenge but is not there to pay for the cost of educating a student. It is money to meet a social mobility objective. There are other extra costs. One of my regrets is that we call them tuition fees; they are university fees, for all the other activities that are provided for at a university.
When you look at the historical trends, as measured by organisations such as the Institute for Fiscal Studies, it is clear that in the English system the long-term trend, over 20 or 30 years, has been for public expenditure on primary and secondary education to rise relative to expenditure on students in higher education. That is the underlying long-term trend, so it is not a soft option for higher education.
It is, however, certainly the case that universities need to account for how they spend the money. This was done most recently in the Augar report, which was quite tough-minded. It commissioned an accountancy firm—I think it was PwC—that estimated the costs of higher education and provided an estimate which showed, even in those days, five years ago, that something like the £9,250 fee was barely sufficient to meet what an independent accountancy firm assessed as the cost of higher education. So the fee is looked at, and needs to be looked at, from time to time.
On data, one of my frustrations with the OfS is partly because of the flow of letters and requests that it gets from Ministers on every subject under the sun. Again, my noble friend Lord Johnson made a good point: a great self-denying ordnance would be a restriction in the number of ministerial letters so that there is some sense of strategy and capacity to get on with things. It is the basic information that students rightly care about that matters, as my noble friend Lord Lucas said. In every engagement that I had with students they made practical points. They want more contact hours but they did not want all them to be in incredibly crowded lectures; they had some views about the amount of direct contact that they had. They wanted their academic work back promptly with some kind of useful academic feedback. That is the kind of information that they wanted.
In the old days—looking back, it was perhaps a naive hope—we actually got the NUS to talk to the Consumers’ Association about the kind of data that it and the NUS could obtain to provide to prospective students by working together. There was then an outbreak of anxiety that thinking of students as consumers and working with the Consumers’ Association was ideologically incorrect. That is the kind of information that students should have good access to, and we can still do better on it. Incidentally, if one needs more information about what happens after one leaves university, the Student Loans Company is a hidden and unused resource from which the data should be liberated to make that kind of information possible.
Briefly, I have some final observations on how this argument has gone. There is an issue about promoting innovation. Again, my noble friend Lord Johnson made that point. For example, I hear that an exciting new model for engineering education in Hereford will say that showing that it has a plan for each individual student if it goes bust—it has to be a plan based on the innovative education model it is operating—is quite a barrier to it getting through the regulatory process, becoming fully entitled to give any degrees and, one hopes, getting a university title. This should be a regulatory regime that promotes innovation. That is an issue.
I turn to my noble friend Lord Agnew and his obvious unhappiness about higher education. If only some aspects of the school agenda were transported to higher education. Academies, such as the Mossbourne academy, have thrived and newcomers have come in, but the DfE assesses higher education in a different way. A Mossbourne academy higher education institution would get nowhere in the Department for Education’s model because it takes prior attainment as a measure of the quality of a university. It does not use that with schools: it looks at value added. It is prior attainment that counts for status in the world of higher education, which rewards incumbents.
That model even has a specific measure of school performance in terms of getting students through to the Russell group. I love the Russell group—it is a set of research-intensive universities—but it is massive producer capture to allow a self-organised club to become a measure of performance of a school. One goes to universities that say that the prospective students turned up and rather like what they saw but the school was keen for them to go to a Russell group university. This is a system that rewards incumbency. That is completely different from the agenda at the school level.
Of course the Russell group is excellent and research intensive, but we need to be a bit more relaxed about the different missions of different types of university. Of course many of them will deliver training, and a university can do so. We should not have our view of universities totally shaped by the Oxbridge model. The technical Hochschule in Germany that we all love are actually universities and increasingly take the title “universities of applied science”. In the Republic of Ireland, the university title is being spread. I sometimes think that if people—even, dare I say it, some on my Conservative Benches—could ritually humiliate some of these institutions and say, “You’re not really a university”, they would feel so much better about it. The truth is that those institutions are legitimate universities in almost every other western country. We should accept them and welcome them to the diversity of missions that we have in higher education today.
The OfS is doing a necessary and important job. It needs to be liberated from some of those ministerial letters and to be able to focus on the data that really matters to prospective students. I hope that the OfS will understand the importance of the context of the students that it recruits and I very much welcome this important report from the committee.
Lord Storey (LD)
My Lords, it is a great privilege to follow so many colleagues who have, or had, positions in universities. I have enjoyed listening to their detailed knowledge. I thank the noble Baroness, Lady Taylor. In a sense, her opening remarks absolutely hit on my understanding of the situation. I was slightly concerned when she used a one-word judgment about the Office for Students—I have written it down somewhere and forgotten it. I thought we were against one-word judgments and that, like Ofsted, we did not want to go down that route. I am just teasing. All the issues were very carefully and considerately focused.
We have world-class universities and we ought to be proud of them. They have amazing leadership and staff, but that should not blind us to the fact that there are major problems in some of our universities. There is a great danger that we wallow in praise but do not tackle some of the issues happening around us. One has only to look at the private higher education sector to know that there are big problems, or to listen to students talk about their experiences of simple things such as chasing up and trying to get back a thesis or assignment, or their complaints of there being hundreds of other students in lectures. Those issues may be small and insignificant to noble Lords in this Committee, but to students themselves they are really important.
I have a background as an ordinary primary teacher and headteacher. I did a certificate of education and then went on to university because I realised that I needed a university degree if I were to get a promotion. Like probably everybody in this Room, I thoroughly enjoyed my time at university. University is not just about learning; it is about playing as well. How sad it is that, these days, many students cannot afford, for example, to go to university away from their home. Students increasingly stay in their own locality. I do not know the exact figures but at Liverpool University the students increasingly come from Liverpool, Merseyside or the north-west. When I went to teacher training college, my friends came from the north-east, Northern Ireland and all over the country. I gained so much from that experience of talking to people from different regions and cultures. We have lost that. Universities also provide the opportunity to learn different things and offer extracurricular activities. We talk about the importance of extracurricular activities in schools but they are equally important in universities.
I will come to the issue of funding in a moment. I want to single out a few comments that I feel must be addressed at some stage. The noble Lord, Lord Agnew, was either bonkers or brave—or both—to raise those hugely important issues. Somebody has to address them. We cannot just say, “He would say that, wouldn’t he?” I want to know the answers to his questions. Similarly, the noble Lord, Lord Lucas, went on and on, quite rightly, about linking higher education, schools and student satisfaction, but we never get any answers on that. At some stage, I would like to hear the answers. Finally in my general comments, I say to the noble Lord, Lord Johnson, that yes, I like the title, “office for lifelong learning”, so let us try to make that happen. It seems to be the right phrase.
When student loans were introduced—we remember all the furore about them; I had forgotten that they were introduced by a Labour Government, of course, although the coalition Government increased them enormously—my party leader and others signed pledges that they would abolish them. However, I thought to myself, “Do you know what? If students are getting a loan and paying for their university education, they will be in the driving seat. They will actually have a say in what is going to happen”. Similarly, when the Office for Students was established, I thought to myself, “Ooh, this is good: it has ‘students’ in its title. It will mean, again, that students are in the driving seat”.
The report is quite worrying but, actually, I can look at it in a positive way. You have to know where you are to find out where you are going. Remember, the Office for Students has as its mission
“to ensure that every student, whatever their background, has a fulfilling experience of higher education that enriches their lives and careers”.
I can tell noble Lords that, as a city councillor, I have referred three cases to the Office for Students. The first was that of a PhD student who was awarded only a master’s degree, not a PhD. She complained and said, “Hang on a second. I didn’t see my supervisor for three years. Covid came along and nobody from the university contacted me”. The university was not at all interested. I contacted the Office for Students and it was very proactive for that young woman. It ensured that she got a year’s extension and was paid some compensation. That would not have happened without the Office for Students, I guess.
The second case involved a mature student who had special educational needs and wanted another year. She had already delayed her degree by two years, and she wanted a third year. The university said no. The Office for Students sorted it out.
The final case was a failure. It involved a student at a Russell Group university. On the day of her final exam, her father died. Imagine that. The university said, “Well, we’re very sorry about that”, but nobody contacted her; I mean, nobody actually said that. Her personal tutor did not contact her. What is that all about? That is another complaint from students when you talk to them. She was told that she could sit the exam in the summer. How crazy is that? She was not given a date; she just had to wait until summer came along. Then, sometime in August, she was allowed to re-sit the exam. That is not the way to treat a young woman whose father has just died. I contacted the Office for Students but, sadly, nothing happened on that occasion.
As we have heard from so many colleagues, the higher education sector faces a looming crisis. It is mainly to do with long-term financial sustainability, compounded by Covid; the freezing of student fees; inflation leading to higher costs for institutions, staff and students; a lack of EU research funding; and ongoing industrial action, as we have heard from a number of colleagues. The financial sustainability of the funding system for the higher education sector clearly needs to be sorted. Has the Office for Students paid sufficient attention to this challenge? It should be questioned on a number of issues. Has it lived up to its promise? Is it trusted by the providers it regulates? Has it acted in the real interests of students? On the last point, my experience is that it has. Have the Office for Students’ duties been applied consistently and equally? Should it focus more on communicating with institutions, rather than relying on data from those institutions?
The freezing of the cap on tuition fees for domestic students and the loss of EU research funding have led to higher education providers becoming reliant on cross-body subsidy from international and postgraduate students. This dependency comes with huge risks. It will be interesting to read Robin Walker MP’s inquiry into university funding’s reliance on international students. As Simon Marginson, a professor in higher education at Oxford University, says:
“If today’s decline in the real-terms value of fees continues … then within a decade even the UK’s most elite institutions will find themselves diminished. This could be further exacerbated as countries such as China … pour money into their own higher education systems”.
Vivienne Stern, the chief executive of Universities UK, says that there is a
“need to have a … conversation about how universities are funded”.
Over 100,000 more young people will be seeking university education by 2030, when there is little space or incentive to accommodate them. Let us get to the real issue. Political parties, particularly in an election year, are unwilling even to acknowledge or to face up to the problems in this field. At the moment, they would rather keep quiet. Can you blame them? “Well, Mr. Starmer, Mr. Sunak and Ed Davey, how are you going to deal with the matter? Are you going to put the funds or the loans up?” Of course they are not going to say anything now. Once the election is over, whoever is in Government, whether it is a coalition Government or whatever else, I hope that those political parties will have the honesty and the integrity to realise that the funding issue is crucial to the continued success of our universities. If they do not do something about it, we will see our world-class universities become second-class universities.
We can already see how this lack of action is affecting universities. Just one recent example, if your Lordships remember, was the University of Essex, which forecast a £13.8 million shortfall, blaming the 38% drop in applications from overseas students for its plans to freeze pay and promotions. In response, the plea for more government assistance puts universities at odds with government. It is argued that the sector has become bloated, providing too many courses that do not offer a return on student investment. But we cannot just leave silence to rule. Perhaps we need to find a new funding model. Is it increasing the level of fees or allowing universities to charge what they want, or do we just let the weak wither and close, and the strong and successful prosper? Do we look—dare I say it—at Vince Cable’s idea of a graduate tax? I do not know, but we have to do something about it. I hear only one or two voices, and they are not from political parties, saying, “Universities need more money”.
Returning to the Industry and Regulators Committee report, I hope the Minister in her reply will want to comment—I am sure she will—on some of the quite concerning conclusions of that report. The Office for Students
“does not engage with its stakeholders”,
whether students or providers; its approach to regulation seems
“arbitrary, overly controlling and unnecessarily combative”;
and,
“there have been too many examples of the OfS acting like an instrument of the Government’s policy agenda rather than an independent regulator”.
Baroness Twycross (Lab)
My Lords, I commend my noble friend Lady Taylor for securing this debate on the report of the Industry and Regulators Committee, and all members of the committee. Like the noble Lord, Lord Storey, I felt privileged to hear from such well-informed contributors.
Having reread the report in preparation for this debate, its title, Must Do Better, felt like an understatement. The committee was damning in its criticism of the Office for Students, and, as my noble friend highlighted in her opening speech, the committee’s overall finding was that it is performing poorly. I am not sure that many positive points were raised in the report, besides those attributed to the noble Lord, Lord Wharton, the chair of the Office for Students, although the noble Lord, Lord Johnson, provided a defence of the regulator in his contribution, as did the noble Lord, Lord Lucas. The examples which the noble Lord, Lord Storey, just provided in his speech gave context, with the engagement he has had with real-life examples, which was helpful.
I look forward to the Minister’s response to the many points that have been raised and, in particular, to hearing what has changed in the interim since the committee’s report was published. It was clear from many contributors to the debate, including my noble friend Lady Taylor, the noble Lord, Lord Clement-Jones, and others, that over recent years universities have faced many issues, from having to deal with the pandemic to research funding being limited and pressure on the funding model.
The “looming crisis” the report cites is, as a number of noble Lords have stated, clearly already here. The Office for Students appears, unfortunately, be part of the problem whereas it should be a major part of the solution. A regulator should do what it says on the tin. This is a regulator that, as the noble Lord, Lord Norton, said, has not lived up to its name. It should not be rocket science: indeed, the mission statement for the Office for Students says:
“We aim to ensure that every student, whatever their background, has a fulfilling experience of higher education that enriches their lives and careers”.
However, despite the good intentions described by the noble Lord, Lord Johnson, the Office for Students has not delivered for students yet, or for the sector, and lacks clarity over even what it defines as a student interest.
The noble Lord, Lord Wharton, highlighted the freedom of speech Act, and its implications are significant for universities. As the noble Lord, Lord Mann, made starkly clear, the regulatory guidance proposed by the Office for Students on freedom of speech has led to a situation that, as Labour warned it could and would, will allow Holocaust deniers and their ilk to potentially spread hate on our campuses. Will the noble Baroness commit to intervene to ensure that the rollout of the regulatory guidance described by the noble Lord, Lord Mann, is paused until such time as it is fit for purpose and has appropriate safeguards for all students, not least for the protection of Jewish students? Moreover, will she explain how the Government will ensure that the Office for Students will reset its work to be less simplistic and narrow in its approach? Will the Government require the Office for Students to refresh its approach to student engagement? Will they insist that the regulator defines what it sees as student interests?
The noble Lord, Lord Willetts, spoke about the social mobility aspect of universities, which I would hope would be among the key issues that should be promoted and measured by the OfS. The committee recommended that the OfS should take on the role of providing students with clear and digestible information on costs, outcomes and contact time, which, as the noble Lord, Lord Willetts, said, is a real concern to prospective students. As the noble Lord, Lord Storey, said, there needs to be a key focus on what students want, including getting their essays and assignments back quickly. Students deserve to get the information they need to make what is a significant life decision. What conversations has the department had with the regulator to ensure that this now happens?
The noble Lord, Lord Freyberg, spoke powerfully about the impact of the cost of living on students, which leaves them with a shocking shortfall. Many have to work, and prioritise work, in order to get by, and the pressures can cause students to drop out. Surely an office that is genuinely for students must address these concerns. Labour believes that regulation matters, and questions of what regulation should look like have come up throughout the debate. As my honourable friend the Member for Warwick and Leamington, Matt Western, said in a Westminster Hall debate last year, we need
“good, fair-minded, proportional regulation, which is needed in any sector, especially the higher education sector. For a sector that benefits from £30 billion in income from public money, educates over 2 million students and contributes £52 billion to our GDP, supporting more than 800,000 jobs, the need for regulation is clearly self-evident”.—[Official Report, Commons, 26/4/23; cols. 427-28WH.]
The need for proportionate, appropriate regulation was a point made succinctly by a number of speakers today, including the noble Lord, Lord Norton, who stated that the starting point is that regulators need a mindset that gets the best out of bodies. I welcomed the point made by the noble Lord, Lord Willetts, that this committee’s view on regulation should be taken seriously because it knows what it is talking about and this is its area of expertise. The committee report found that the regulatory framework has become overly prescriptive over time, and the OfS is too willing to direct higher education providers’ operations and activities, showing little regard for the need to protect institutional autonomy.
Of particular concern is the lack of co-ordination by the OfS with other regulators in the HE space, in particular in relation to degree apprenticeships. The committee recommended that the DfE should reconvene the Higher Education Data Reduction Taskforce—although a better acronym could probably be found—to address duplication and unnecessary burdens on providers. Can the Minister confirm whether the DfE will be doing this? Is she satisfied with the quality assurance agency now also being the regulator? Does she agree with the committee, and a number of speakers today, that this is a concern?
A thread through this debate has been the growing concern over recent weeks and months about the financial instability of the sector. This was also the subject of a Question that raised cross-party concern in your Lordships’ House this afternoon, following the recent report published by the Office for Students. My noble friend Lord Parekh spoke of an ambivalence towards overseas students, and a number of noble Lords —including, among others, my noble friend Lord Parekh and the noble Lords, Lord Clement-Jones and Lord Norton—spoke about the sector’s overreliance on international students, where their fees currently act as a subsidy for domestic students; the noble Lord, Lord Agnew, likened this model to a Ponzi scheme. What conversations has the DfE had with the Home Office on the implications for our HE institutions of further limits on international students? Even the rhetoric around limits on international students appears to be having an impact already.
The noble Lord, Lord Norton, said that the Government are sending out all the wrong signals on overseas students. Does the Minister agree with that point? Is she concerned by the fact that the Office for Students did not share the committee’s concerns on the financial health of universities just over a year ago but now judges that, as my noble friend Lady Taylor said, 40% of universities are expected to be in deficit? Can the Minister outline what more the Government are doing to ensure that the unsustainable financial situation facing many higher education institutions is resolved? Does she agree with the Office for Students’ report that we might see some changes to the shape and size of the sector, for example through mergers, acquisitions or increased specialisation? Does she agree with the noble Lord, Lord Johnson, that the Office for Students should be doing more to promote innovation and new forms of provision?
During today’s debate, there were varied views on how universities’ financial management is in practice but it is clear that cuts alone are not the solution. Many higher education institutions have already made fairly drastic efficiencies. Labour will reform the higher education funding system. It is looking at ways to make the system fairer and more progressive; it will change the system to give students, graduates and universities the support they need.
My final point is that an independent regulator must have the trust and respect of the sector in order to succeed. It was clear from most of those who gave evidence to the committee that the Office for Students does not have the respect of the sector and is not giving students the voice they need. There is considerable suspicion of the OfS’s relationship with government; this appears to be in large part down to the belief among the sector and other stakeholders that the OfS is too close to government and is, in effect, acting at its direction. The noble Viscount, Lord Chandos, described this as a lack of distinction between government and the regulator; he also referred to a lack of transparency. I appreciate the fact that the Government’s response to the committee indicated their view that there are already established and sufficient protections to ensure that the OfS operates independently of government; none the less, I ask the Minister to take this view seriously and ask the department not simply to dismiss this view as erroneous or unfair.
The regulator cannot succeed unless vital relationships are reset as a matter of urgency, trust is restored, and it is seen and believed to be delivering for both students and the sector as a whole. I welcome my noble friend Lady Taylor’s commitment that the committee will return to this subject in future. This was an enlightening and hard-hitting report demonstrating the value of the work of the committees in your Lordships’ House. I look forward to the Minister’s response.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, I thank the noble Baroness, Lady Taylor of Bolton, for securing this important debate, and all members of the Industry and Regulators Committee for their work and scrutiny of the vital issues linked to the higher education sector and the Office for Students as its regulator. If I may, I also thank my noble friends Lord Johnson of Marylebone and Lord Willetts for their ministerial insights into the sector.
My noble friend Lord Johnson gave an incredibly helpful analysis and synopsis of the issues which led to the creation of an independent regulator with a focus on quality, competition, choice and value for money. I recognise some of his criticisms in relation to the way that government is structured, with part of the responsibility for the university sector sitting in the Department for Science, Innovation and Technology and part sitting in the Department for Education. I absolutely share his enthusiasm, and that of my noble friend Lord Willetts, for a real focus on innovation in the HE sector and on the lifelong learning entitlement.
I also thank my noble friend Lord Lucas for highlighting some really practical suggestions, which he brings from his experience of listening to students and parents, and the noble Lord, Lord Storey, for the examples of his interactions with the OfS in practice. It was extremely helpful for all of us to hear that.
Before I go into the report itself, I want to touch briefly on the independence of the OfS. I can honestly say that, in my experience within the department, I do not recognise the picture that noble Lords painted of political priorities driving the work of the OfS. If I may say so, I felt a tension between the calls for real independence on the part of the OfS and calls for the Government to influence its direction even more, which is, perhaps, something for all of us to take away and reflect on. I asked colleagues to check how many guidance letters we sent to the OfS in the past 12 months. We have issued four guidance letters to it: two related to the expansion of medical places and two related to funding. I am not sure quite what the threshold is for the number of ministerial letters, but that does not feel too oppressive to me.
I turn not so much to the Government’s response to the committee’s report, which your Lordships have obviously seen, but rather to providing updates to show the progress made against its recommendations. The noble Baroness, Lady Taylor of Bolton, the noble Lord, Lord Storey, and others, dwelled on the importance of the relationship between the Office for Students, the students themselves and providers. I am pleased to see that the OfS has reflected on the committee’s recommendations regarding student interest in engagement. It has made sound progress in reaching out to students and inviting them to engage in its work, including work to reframe the OfS student panel, which I understand is now playing a key role in the development of the OfS’s new strategy for 2025 and beyond.
I know that the OfS has hosted numerous round tables and webinars, inviting students to contribute on its new freedom of speech and academic freedom functions to help inform proposals and consultations. Last month, the first meeting of the OfS’s new disability in higher education advisory panel—fondly known as DHEAP—took place, which will review how universities and colleges currently support disabled students and will make recommendations to improve their experience.
The noble Baroness, Lady Taylor, asked me about annual reports on student engagement. We are not aware that a commitment was made in that regard, and I am not aware that those reports are planned, but if there is a misunderstanding I am happy to pick that up with her afterwards.
Regarding the relationship with the sector, I hope that your Lordships will be pleased to hear how the OfS reflected on the committee’s recommendations to enhance—
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, I am sorry to interrupt the Minister so near the end of the debate, but I am afraid that a Division has been called, so the Committee will have to adjourn. I advise members of the Committee that there are likely to be two or three votes back to back, so it will be not a 10-minute adjournment. It will be substantially more, probably more like half an hour. I advise members of the Committee to keep their eyes on the annunciators, particularly after the second vote has been completed.
Baroness Barran (Con)
My Lords, I was just starting to talk about the relationship of the OfS with the sector, which was a matter of concern to a number of your Lordships. The OfS has both reflected and acted on the committee’s recommendation to enhance its relationship and engagement with the sector. Senior OfS staff have visited over 80 universities and colleges across England as part of its new sector engagement programme, as well as hosting numerous online and in-person events for vice-chancellors, finance directors, institution staff and students alike to raise awareness and understanding of its regulatory work. The OfS recently commissioned a new piece of voluntary research to gather provider views to help improve how it works with the sector.
One of the key recommendations in the committee’s report was around clarity about the OfS’s duties and decision-making. The Government believe that the OfS’s statutory duties are clearly set out in legislation, through the Higher Education and Research Act 2017. In particular, we believe that it is right that institutional autonomy as an important principle should not always be prioritised above other important matters: for example, driving quality improvement.
The noble Baroness, Lady Taylor, talked about the new powers and duties that Parliament has given to the OfS and suggested that those were perhaps not always the priorities of students, if I followed her remarks correctly. We believe that the Higher Education (Freedom of Speech) Act is critical to protecting academic freedom. Issues around the tragic events in the Middle East give us a very recent example of that, as the noble Lords, Lord Wharton of Yarm and Lord Mann, pointed out.
Additionally, we have asked the OfS to focus on tackling harassment and sexual misconduct, in response to evidence of a serious problem in our universities. The noble Lord, Lord Mann, asked for specific reassurances. We are still in the process of the consultation. We need to let that conclude, but I would be more than happy to meet with the noble Lord if that would be helpful. To enhance the OfS as an effective regulator that safeguards students’ interests, the Government announced an independent review of the regulator in December 2023, which is being conducted by Sir David Behan. It is due to conclude shortly and the Government will carefully consider its findings and recommendations.
A number of your Lordships, albeit from slightly different perspectives, talked about issues of financial sustainability in the sector, including the noble Baronesses, Lady Taylor and Lady Twycross, my noble friends Lord Norton of Louth and Lord Agnew, the noble Lord, Lord Storey, the noble Viscount, Lord Chandos, and others. It is crucial that we have a sustainable higher education funding system that meets the needs of the economy and is fair to students and to taxpayers. We keep the funding system under continuous review to make sure that this remains the case and that it offers diverse opportunities for learners to acquire vital skills.
The noble Lord, Lord Parekh, who is not in his place, was the first to focus on the cost side of universities, which is more within their power to control. I will comment on that also in response to my noble friend Lord Agnew’s remarks, even though he asked me not to respond—it is an irresistible opportunity. A number of your Lordships used the term “financial crisis”, and I understand why, but we should remember that in 2022-23, the total income for the higher education sector in England was £43.9 billion, up from £29.1 billion in 2015-16. Of that, approximately £16.3 billion, or about 37%, was provided by the Government. Over the current spending review period, the Government have also invested £1.3 billion in capital funding to support teaching and research through the Department for Education teaching grants and the DSIT research grants.
A number of your Lordships cited the figure of 40% of the sector being in deficit. That was cited in the recent OfS report as an expectation for this current financial year, 2023-24. The noble Viscount, Lord Chandos, asked if it was government policy to see the Rod Liddle projection of two-thirds of the sector disappearing: clearly that is not the case. That is important, I say in response to my noble friends Lord Agnew’s and Lord Lucas’s remarks. I think my noble friend used the term “impending financial collapse”. This is a sector that has grown 50% over the past few years. The OfS report projected a surplus of £2.1 billion for 2026-27, and a margin of 3.9%. Average borrowing in the sector is 30%. While the Government absolutely recognise some of the pressures and in particular some of the risks that the sector faces, that is not the typical picture of a sector facing impending collapse.
We also need to be careful in talking about 40% of providers, or roughly a third of providers this year. I talk here about the UK rather than England only: the aggregate deficit of those providers that were in deficit was just over £330 million; the aggregate surplus of those in surplus was £3.3 billion; and 50% of the aggregate deficit was accounted for by 10 providers. There really are outliers, in both surpluses and deficits. Making sweeping statements about the whole sector is not helpful but I will, of course, write to my noble friend as he requested.
A number of your Lordships, including the noble Lord, Lord Clement-Jones, and the noble Baronesses, Lady Twycross and Lady Taylor, asked about the sector’s dependency on international students and the Government’s position on that. Our international education strategy is absolutely clear that diversification and the sustainable recruitment of international students remain a key strategic priority. This is a core focus of the work of Sir Steve Smith, the UK’s international education champion. We are pleased that the latest figures show that providers are diversifying their recruitment of international students, with many increasing their intake from priority countries that were outlined in the International Education Strategy.
My noble friend Lord Norton of Louth asked me not to talk about how good the sector was, but if he will permit me just one sentence: as your Lordships noted, we have a world-class higher education sector, with four universities in the top 10 and 17 in the top 100. We have also educated 58 current and recent world leaders, and we continue to have an education system that is the envy of the world. We expect the UK to remain attractive to international students from across the globe.
In response to the question from the noble Baroness, Lady Twycross, about our work with the Home Office, we have regular conversations with the Home Office about this issue. I think it is fair to say that my noble friend Lord Norton of Louth was critical of the Government’s position in many areas, including this one. We are very clear that it is important that we have a competitive offer for international students that aligns with our strategic priorities for our economy, but we also need to keep the prestige and the brand of UK higher education.
I turn to the issue of value for money, which the committee’s report acknowledged could be measured in a number of different ways. I note the concerns expressed by my noble friends Lord Lucas and Lord Agnew in this regard. My noble friend Lord Lucas stressed the importance of making sure that students understand the value of and the outcomes from their courses. The noble Lord, Lord Freyberg, was concerned about a graduate’s future earnings being too crude a metric and that creative degrees might get marginalised as a result. I hope he would accept that the Government have had a huge focus on our creative industries. We recognise how important they are for the economy and our well-being as a society, and the great demands for skills that there are in those industries. I hope it will reassure him that we have commissioned the Institute for Fiscal Studies to research a new way of measuring the impact that courses have on a graduate’s future earnings, which we hope will be more sophisticated and incentivise the kinds of behaviours that we heard discussed today.
The noble Lord, Lord Clement-Jones, questioned the OfS approach to quality. We believe that the OfS has introduced a more rigorous and effective quality regime. It regulates quality by monitoring adherence to its conditions of registration, and of course condition B3 sets out minimum thresholds for student outcomes.
The noble Baroness, Lady Taylor of Bolton, talked about the quality assessments that the Office for Students is carrying out. I think she quoted a figure of eight, which might have been the figure published; actually, 32 have been completed in the first cycle and the office is in the process of publishing all those reports. We hope very much that they will have a real impact and provide valuable information for students and providers alike.
How can I have only two minutes? Turning to the regulatory burden, again raised by the noble Baroness, Lady Taylor, and the noble Lord, Lord Clement-Jones, the Government acknowledge the need to reduce regulatory duplication in the HE sector. We have established a new provider data forum, with the OfS and the Education and Skills Funding Agency, to identify and tackle data burden and duplication issues. We are also commissioning independent research to gain an understanding of the nature, scale and cumulative impact of data collection requirements across the sector.
The noble Lords, Lord Freyberg and Lord Parekh, talked about social mobility. I think the Grand Committee will have heard me say before that 18 year-olds in England from the most disadvantaged areas were 74% more likely to go to university in 2023 than they were in 2010.
In closing, I am grateful for the thoughtful contributions that all of your Lordships have made during this debate. There is an extraordinary amount of expertise in your Lordships’ House on both regulation and higher education. The Government are absolutely committed to making sure that we continue to have a higher education sector to be proud of, and to supporting the OfS to deliver regulation that enables that sector to remain world class.
Baroness Taylor of Bolton (Lab)
My Lords, I think Members here will be pleased that I intend to be brief and not detain them too much longer. It has been a very wide-ranging debate and, as the Minister has acknowledged, we have a high level of expertise in the Room, which has been very useful and constructive. I hope the noble Lord, Lord Johnson, will acknowledge that the comments of the noble Lord, Lord Agnew, prove that the committee was not captured by providers. I reassure him that we took evidence from Michael Barber and Nicola Dandridge, and have followed through on all the written evidence. The weight of evidence that we had backs up what our report actually said. It was not a subject that we entered into lightly, nor did we with the criticisms.
I wish that we had more time, because I would very much like to have discussed further with the noble Lord, Lord Johnson, some of the phrases that he used, such as “mass HE sector” and “poor-quality student experience”. Terms like that are bandied around far too freely, when in fact the vast majority of students get a very good experience and a worthwhile qualification at the end of it.
In fact, if we are talking about how we judge those qualifications, I chaired the council of the University of Bradford for several years and I was always frustrated because very often the quality is measured by how much graduates earn once they leave the courses. In Bradford, we wanted our graduates to stay in Bradford and the region and help to raise that region, yet, if you look at the earning potential in Yorkshire compared with London, we were always going to be at a disadvantage, which did not actually reflect the value added. I am sure that the noble Lord, Lord Norton, would say the same for Hull.
No one who gave us evidence, no one we spoke to and no one on the committee is against regulation. Everybody knows that if public money is involved, there have to be elements of accountability. The question is: what is the balance between accountability and interference? That is the main area where we did not see a situation that we would want. We produced another report recently about who regulates the regulators. That is also something we are going to come back to because it is a very significant point: there is a need for more parliamentary accountability of regulators. Actually, I think that if we had had an ongoing drumbeat of accountability of the OfS to Parliament, we might have avoided some of the problems that have emerged more recently.
As for the “looming crisis”, the Minister wants us to be cautious. I think we are seeing a trend here, and it is worrying. There are many universities that are concerned about their financial position this year and many that are looking to the future and seeing a very precarious situation in years to come, so I do not think that we can be complacent about this at all. The funding of higher education is a very difficult political issue for everyone: this is not just difficult for one party but for everyone, because it is very hard to resolve.
I still have some concerns about the marginalisation of the QAA and it being pushed out of this situation. The international reputation of our universities is desperately important and one of the reasons they are such big earners for this country. We have had some reassurance today about better relationships in the future and about a better role for students in terms of consultation, and those are to be welcomed, but there is a very long way to go before we have a satisfactory situation here. As I said in my earlier remarks, I am very keen that the committee should return to this subject and monitor what is happening in the future. That would help in having better regulation and a better balance and partnership between universities and those who are regulating. In the meantime, I beg to move.
House of Lords
Water Companies: Failure
(6 months, 3 weeks ago)
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Baroness Jones of Moulsecoomb
To ask His Majesty’s Government whether they have a plan for Thames Water and other water companies if they fail.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)
My Lords, I declare my interests as in the register. As set out in statute, if a water company became insolvent or were in serious breach of its principal statutory duties or an enforcement order, it would enter special administration. The statutory purpose of special administration is to ensure that the company continues to operate and that customers continue to receive their water and wastewater services.
Baroness Jones of Moulsecoomb (GP)
I thank the Minister for his Answer, but it does not sound like much of a plan—there is not much detail there. I declare an interest as a member of the advisory board of River Action. I will put a plan forward; I am happy to share it with the Government because it is better than that one. The plan is that, as soon as any water company fails—and several are looking as if they are on that path now—we take it back into public ownership. We do not make taxpayers and bill payers pay extortionate amounts—we would keep it very cheap; I can explain how—and we stop the pollution as soon as possible, because we have all had enough.
Lord Douglas-Miller (Con)
I thank the noble Baroness for her very comprehensive plan and look forward to talking to her in detail. In the meantime, I assure her that the Government and Ofwat, the financial regulator of the water sector, carefully monitor the situation. Ofwat continues to engage with Thames Water to support it in improving its resilience within the context of its licence and broader statutory obligations. Fundamentally, it is the companies’ responsibility to continue to raise capital, and they should continue to explore this while fulfilling their statutory obligations of providing water and wastewater services to their customers.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, the noble Lord referred to the statutory instrument that sets out the action to be taken when water companies are teetering on the verge of bankruptcy, which was debated on 19 February and subsequently passed in the Chamber. The mechanisms are there, so why are the Government havering over implementation and allowing inadequate management of this vital asset to degenerate on a daily basis?
Lord Douglas-Miller (Con)
My Lords, there is a high bar for the imposition of a special administration regime. A variety of options remain available to Thames Water in securing additional finance and it is vital that all of them are fully explored. The Government are prepared for a range of scenarios across our regulated sectors. If it becomes clear that any company will become insolvent or can no longer fulfil its statutory duties, we will not hesitate to use our powers to request the court to place it into special administration.
Lord Dubs (Lab)
My Lords, the wording of the Question is “if they fail”. Does the Minister agree that on seeing on our television sets the excrement coming into our streams and rivers so frequently, most people in the country would say that the water companies had already failed?
Lord Douglas-Miller (Con)
I do not actually agree with the noble Lord fully. I accept that a number of the water companies are not performing to the right standard. The Government have been very clear that what is going on is unacceptable, but there is a huge legacy issue here. Simply renationalising water companies or stopping their chief executives from getting their pay, bonuses and all the other things—as is now in place—is not going to solve that problem straightaway. It is a long-term legacy issue which the Government have a fully funded plan to address.
Lord Sikka (Lab)
My Lords, in 1990, Thames Water had net assets of £1,329 million. By 2023, they had increased to £1,435 million, which is a paltry increase of 8%, or a total of £106 million, mostly due to accounting abuses. This means that, over 33 years, Thames Water shareholders have provided little or no new equity at all, which is a major reason for its financial instability. Everyone knows that Ofwat is negligent and incompetent; what is the Government’s excuse?
Lord Douglas-Miller (Con)
The noble Lord cited a number of very detailed figures, which I know he is prone to doing, so forgive me if I do not know the detail on that. Since privatisation, the private water sector model has unlocked about £215 billion of investment. This is the equivalent of around £6 billion annually in investment—almost double the pre-privatisation level. This has delivered a range of benefits. Our bathing waters continue to improve—in 2023, almost 90% were classified as good or excellent. Water companies have invested £25 billion to reduce pollution from sewage and water company investment in environmental improvements has been scaled up to over £7 billion since 2020.
The Lord Bishop of St Albans
My Lords, could the Minister reassure the House that should any of the water companies fail, the ongoing monitoring of, for example, run-off from agricultural land—which is devastating many of our rivers, including the important chalk streams in Hertfordshire in my diocese—will continue, that we will continue to seek to find improvements, and that no momentum will be lost?
Lord Douglas-Miller (Con)
I absolutely assure the right reverend Prelate that this would be the case. If a water company were to go into administration, the special administrator would take control of the company and it would be regulated in exactly the same way as any other water company and subject to all the same environmental rules and regulations.
Lord Grade of Yarmouth (Non-Afl)
My Lords, we have reached the end of a long period of very low interest rates, during which the regulated utilities have taken on a great deal of debt. That was not a problem when interest rates were so low but, now that interest rates have risen, does the Minister think it time that the regulators of those industries took a keener interest in the balance sheets of the regulated utilities?
Lord Douglas-Miller (Con)
The noble Lord raises a very good point. Undoubtedly, mistakes were made in how water companies reacted over the past 10 or so years, when interest rates were very low. Now that interest rates have risen, so have the costs of the borrowings, which have created a number of difficult financial implications for them. However, we all hope that interest rates are falling.
Baroness Hayman of Ullock (Lab)
My Lords, my noble friend Lord Dubs mentioned contaminated water, and there is now evidence that faeces-contaminated water has been detected in 10 areas of England and Wales. Is the Minister absolutely certain that nobody here today has drunk contaminated water?
Lord Douglas-Miller (Con)
I will just drink this glass of water—bottled water. I assure the noble Baroness that it is very good.
Lord Douglas-Miller (Con)
The noble Baroness raises a very serious point, despite all the laughter. One recent example of contaminated water has been extremely challenging, but the water company has responded pretty well. The Defra team went down there, and we have been in constant contact with South West Water. As noble Lords might expect, we have launched an investigation into the cause, and I hope that we will have the answers soon.
Lord Fox (LD)
My Lords, the Minister cited a number of figures, but one he did not cite is that, since privatisation, the shareholders of 10 water companies have withdrawn £85 billion that could and should have been invested in the water industry. Whatever happens, can he undertake that those shareholders will not benefit further from the catastrophe happening to our waterways across the country?
Lord Douglas-Miller (Con)
The noble Lord makes a very good point, which was touched on by the noble Lord, Lord Grade, on the behaviour of some of the previous shareholders and owners of water companies. I apologise for their behaviour—as do the Government—because I wholly agree with the noble Lord, Lord Fox, that it was not well done. I very much hope that the controls put in place since then, and the lessons learned, will satisfy him going forward.
Carer’s Allowance
(6 months, 3 weeks ago)
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Baroness Pitkeathley
To ask His Majesty’s Government whether they plan to review their policy of fining carers who inadvertently break the earnings limit rule when claiming Carer’s Allowance.
Baroness Pitkeathley (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and draw attention to my interests as set out in the register.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, while fully recognising and valuing the vital contributions made by carers every day in providing significant care and support, claimants have a responsibility to ensure that they are entitled to benefits and to inform DWP of any changes in their circumstances that could impact their award. Where benefits are overpaid, it is our policy to recover that money, where reasonable, and to set affordable and sustainable repayment plans that do not cause undue hardship.
Baroness Pitkeathley (Lab)
My Lords, talking of undue hardship, I hope the Minister will now confirm the figures, which were finally released last week, that more than £250 million is being clawed back from more than 134,000 carers. In 2019, the DWP promised that its new automated system would stop overpayments and warn carers in time. Does he agree that it is unacceptable that carers are being prosecuted in this way? Does he also agree that what is needed is, first, an amnesty for carers who have been overpaid through no fault of their own and, secondly, a thorough review of carer’s allowance, so that carers are neither prosecuted nor persecuted for trying their best to combine paid work with their caring responsibilities, thus propping up the whole social care system on behalf of us all?
Viscount Younger of Leckie (Con)
I think I should just reiterate that the Government thoroughly recognise and value the vital contribution made by carers, but it is also the case that, if a claimant incurs an overpayment due to payment error or fraud, this overpayment will need to be repaid and, in some cases, as the noble Baroness will know, a penalty will be charged. However, we carefully balance our duty to the taxpayer to recover overpayments and safeguards are in place to manage repayments fairly. Some overpayments will attract no penalty at all, and I can certainly expand on the safe- guards that we have in place.
Baroness Tyler of Enfield (LD)
My Lords, is the Minister aware that the chair of the Work and Pensions Select Committee has written to the comptroller of the National Audit Office asking the NAO to conduct a second inquiry into carer’s allowance overpayment, five years after the initial investigation in 2019? Would the Government welcome such an investigation and how quickly could it be set up?
Viscount Younger of Leckie (Con)
I have to say that the gist of the argument that came from the noble Baroness’s question is, “What is going on?” I can tell her that around 1 million people are in receipt of carer’s allowance and that the vast majority of them—around 95%—were paid correctly. I do not entirely accept the statistics that the noble Baroness mentioned: the total overpayment rate for carer’s allowance was 5.2%, which represents about 60,000 people. About half of them ended up being given a penalty of £50—the basic civil penalty.
Baroness Andrews (Lab)
My Lords, on the statistics, can the noble Viscount tell us how many people owe more than £20,000? When he talks about responsibility, will he agree that the problem is that we have another instance where the information technology system has got away from human judgment? The IT system does not trigger action, so carers may wait months and months to be told that they owe significant amounts. The evidence now suggests that one of the effects of this is that some carers are not going to claim carer’s allowance because it is too risky. They are facing so much stress and this is one element of stress that they simply cannot handle.
Viscount Younger of Leckie (Con)
Although I do not have the figure to pass on to the noble Baroness, I can say that the other main category for overpayments comes under the title of “conditions of entitlement”. That represents 2.8% of the total. This is when claimants have stopped caring and neglected to tell us, or when the claim has been fraudulent from the outset. I am aware of some extreme cases highlighted in the press—which, by the way, have been building up over many years—where the amount of repayment is particularly high. That amount is not particularly high, but I will certainly get the figure to the noble Baroness.
Baroness Sherlock (Lab)
My Lords, let me give an example. Carer’s allowance is a cliff-edge benefit. If you are caring for 35 hours a week and you earn £151 a week or less, you get the lot. If you earn £1 more, you get nothing. So the people the Minister is talking about include someone like Helen, who cared for her parents for 10 years. She breached the earnings rule because she worked in a hospital. They used to dock her wages automatically to pay for her parking. When they stopped doing that, her net pay went up. She was over the earnings limit by an average of £2 a month for two years, and she was told to pay back £1,700. DWP has known about this for years. Why is it not telling carers before they get into this kind of debt?
Viscount Younger of Leckie (Con)
I think the noble Baroness will know that, each year, there is an uprating letter, so the communication is there for individuals. However, it is fair to say that we are looking at what more we can do to help our customers. I say again that it is their responsibility to tell us whether they exceed the earnings limit. Equally, we are looking to see whether, for example, under the RTI, the information that we receive instantaneously from the HMRC can be utilised so that we can send a text to customers. This is something that we are looking at very seriously— so her point is well made.
Baroness Buscombe (Con)
My Lords, I have great sympathy with what the noble Baroness, Lady Sherlock, has said in terms of communication. Every department can always do better in that and use every form of technology and so on to make sure that people know where they stand. However, would my noble friend not agree, and in support of what my noble friend is saying, that the Government have to be vigilant? We will get an income tax take in this country this year of only around £279 billion, and the bill just for the Department for Work and Pensions will be £300 billion. That is one department. It is vital, is it not, that the Government are vigilant and really crack down on those people who genuinely should not receive—
Baroness Buscombe (Con)
No, I am sorry, I am talking about those who should not receive. I did not say “carers”; I am saying those who should not be in receipt of benefits.
Viscount Younger of Leckie (Con)
Indeed. I think I have made it clear already that we need to be fair. We need to balance carefully our duty to the taxpayer to recover the overpayments with safeguards in place to manage the repayments fairly. I am the first to say that some carers are among the most vulnerable people in society. Where they have got themselves into difficulty and gone over the limits, it is their duty to tell us and we have an important job to do in these situations to help them with their repayments. We have made some very good progress on that, but I have made the point that in terms of communications there is more to be done.
Baroness Smith of Llanfaes (PC)
My Lords, I myself was a young carer for my late father and I understand how such additional responsibilities can limit your options for a stable income. Does the Minister acknowledge that unpaid carers are disproportionately affected by poverty? Will he explore longer-term solutions to bring more unpaid carers out of poverty, such as reforming the much-needed carer’s allowance?
Viscount Younger of Leckie (Con)
The noble Baroness makes a very good point. Each carer has his or her own responsibilities, some of which are very great, involving permanent lack of sleep. However, it is very important that, if they can, they should lead for themselves fulfilling and rewarding lives. That is why we have a number of initiatives to encourage carers to do some work. We think that it is good for them, and they acknowledge that. Clearly, this is a very important part of what we do in our department.
Baroness Watkins of Tavistock (CB)
My Lords, we all acknowledge that caring is an extremely stressful occupation and that it is really good if carers can spend some time at external work. We know that it is good for their mental health. The responsibility of paying something like £1,500 back in a short period is more than stressful; it tips some people into becoming so mentally ill that they can no longer go to work. Can the Minister go back to the department and agree the number of people who should have their debt written off and that those not in that category should pay no more than £5 a week?
Viscount Younger of Leckie (Con)
We certainly do not agree with the idea that any of the debt should be written off; we think that the debt is there to be repaid. However, as I have said, we have a number of plans in place on a one-to-one basis to help each individual who has got into difficulty, to help them to repay that debt. That is a very important point.
Baroness Lister of Burtersett (Lab)
My Lords, my noble friend Lady Pitkeathley called for a fundamental review of carer’s allowance, as has the Work and Pensions Committee. We need a review that looks not just at the cruel rules but at the purpose of carer’s allowance, all the eligibility rules and the level of carer’s allowance, which is one of the lowest benefits of its kind.
Viscount Younger of Leckie (Con)
The noble Baroness will know that we keep these matters under constant review and that the carer’s allowance is a non-means-tested benefit, with no capital rules, in England and Wales, which means it does not depend on the payment of national insurance contributions but is funded from general taxation.
I would also say that, for the claimant to be able to earn up to £151 per week, we need to take account of the allowable expenses. So that £151 can be stretched, in effect, by taking account of national insurance, tax and other allowable expenses.
Internal Drainage Boards: Levies
(6 months, 3 weeks ago)
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Baroness Taylor of Stevenage
To ask His Majesty’s Government what assessment they have made of the impact of increases in internal drainage board levies on local authorities.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
The Government are aware of the pressures that certain councils have experienced due to the increasing internal drainage board levies. In 2023-24, we assessed the impact of the levies on local authorities and provided £3 million in additional grant funding to the 15 that are most severely affected. Having listened to local authorities, the Government have announced a further £3 million of support in 2024-25. We are currently assessing the impact of this year’s increase in levies on local authorities and will announce the distribution of funding in due course.
Baroness Taylor of Stevenage (Lab)
My Lords, the £3 million does not touch the sides. Councils are charged this levy to manage water levels in their area. Since 2016 they have been expected to fund it through council tax. The financial impact shows that it has increased by almost £11 million in two years, beyond the council tax capping limit of 30 authorities involved, such as Boston, where the levy consumes 58% of the council tax, and Great Yarmouth, which saw 91% of its council tax increase consumed. Councils have been told repeatedly that the Government are looking for a long-term solution, so where is that solution, when is it coming, and will the Government meet the representatives to determine a solution before the end of the financial year?
Baroness Scott of Bybrook (Con)
Yes, I am very happy to meet those people with the noble Baroness. If she gets in touch with my office, we will arrange that.
Baroness McIntosh of Pickering (Con)
My Lords, I declare my interest as vice-president of the Association of Drainage Authorities. Does my noble friend agree that the drainage boards play a crucial role in low-lying areas to alleviate the flood risk? Given the unprecedented weather events of the past 18 months—the wettest on record since 1836—will she commit the Government to undertaking a comprehensive review of water management and flood risk resilience to ensure that low-lying areas are not placed at greater risk in the future?
Baroness Scott of Bybrook (Con)
DLUHC has already committed to work with the sector and with Defra to implement, as my noble friend quite rightly says, what needs to be a long-term solution. Both departments recognise the importance of the issue and will continue to explore options. I welcome the sector’s views on this and will undertake data gathering as part of the work.
Baroness Bakewell of Hardington Mandeville (LD)
Internal drainage boards perform an essential function in geographically managing flood water—and this comes at a cost. If this is borne locally, other essential services will be depleted. Can the Minister comment on whether the Government would be prepared to spread this cost across all councils, not just those that habitually suffer flooding?
Baroness Scott of Bybrook (Con)
I understand where the noble Baroness is coming from, but that is not what the Government had envisaged. We are looking at the data and those councils that are under the greatest pressure because of the issues of water in their areas. That is how we will continue to do it this year—led by data.
Lord Porter of Spalding (Con)
My Lords, I declare my interests on the register. Up until May last year—as some noble Lords and certainly the Minister will be aware—when the electorate unceremoniously but quite wisely decided I should have more time in my diary, I used to lead a council that suffered the unfairness of the way the drainage board levies are currently raised. Over 50% of our council tax increases used to go to pay the drainage board and over 50% of council tax in total used to go to pay the drainage board. In the last two years, over 100% of what we collected in council tax increases went to pay the drainage board. Obviously, I do not blame my noble friend’s department for that, but does she agree that this is cost shunting from Defra to DLUHC and that, perhaps, a joint meeting between Defra and DLUHC to get a resolution would probably be best for the sector?
Baroness Scott of Bybrook (Con)
That is exactly where we are going. As my noble friend said, it is up to DLUHC and Defra—and local authorities—to get together and work out the future of this funding.
Universities: Financial Sustainability
(6 months, 3 weeks ago)
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Lord Young of Cookham
To ask His Majesty’s Government what assessment they have made of the financial sustainability of universities in England.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, the Government recognise that the sector’s financial position has become increasingly challenging. The financial health report from the Office for Students makes clear that the business models for a significant number of providers must change to ensure that they are financially sustainable. Indeed, all providers must continue to adapt to uncertainties and financial risks. Ultimately, providers are independent from government and, as such, it is for them to decide how they manage their finances.
Lord Young of Cookham (Con)
I am grateful to my noble friend. As she says, the universities are independent, but the Government set the framework within which they operate—freezing student fees for seven years and controlling student visas. Government has an overall responsibility to make sure that students get a good-quality education at universities and that they remain competitive internationally. What is my noble friend’s response to the rather worrying report from the Office for Students last week, which basically said that we need to review the business and funding model of universities if they are to continue to maintain their quality?
Baroness Barran (Con)
The Government recognise the importance of having a thriving higher education sector which is responsive to the needs of the economy and funded in a way that is fair to taxpayers. We have demonstrated that commitment via our £1.3 billion of capital funding that was announced in this spending review, which is to support universities with teaching and research in key STEM areas and supporting roles in the NHS. As my noble friend said, the Office for Students was clear that providers need to review their business model and that there are very different business models across the sector.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, has the Minister seen that even the Foreign Secretary contacted the Prime Minister to say that a curb on graduate visas could be devastating for universities? Next time she bumps into the Foreign Secretary, could she whisper in his ear that it is easier to cross the Floor of this House than it is down there?
Baroness Barran (Con)
I think the noble Lord is aware that the Government do not comment on leaks.
Lord Cromwell (CB)
If the Minister is not too busy whispering on the Front Bench, could she confirm whether, if a major university—say, one of the Russell group—were to fall over financially, it would be too big to fail, or would the Government bail it out?
Baroness Barran (Con)
If the noble Lord looks at the recent data that has been produced on the financial health of our universities, he will see that larger universities, such as those in the Russell group, are in very good financial health and continue to show significant surpluses. Of course the Government have a role to play in making sure that student interests are protected in the case of a university failing.
Baroness Royall of Blaisdon (Lab)
My Lords, does the Minister agree that international students have a positive impact on our skills base, future workforce and international influence? Businesses recently said that they agree. If this is the case, why do the Government want to axe the graduate visa programme? Could it be that they are pandering to the right wing of the Conservative Party rather than thinking of the greater good of our country?
Baroness Barran (Con)
The Government recognise the value of international students and are very proud of our international education strategy and what it has achieved. However, the Home Secretary commissioned the Migration Advisory Committee to write a report, which it published very recently, and the Government are considering its recommendations with care.
Baroness Bloomfield of Hinton Waldrist (Con)
In light of the recent report from the Migration Advisory Committee—itself no pushover—can my noble friend reassure us that the Government will allow recent changes to postgraduate visas to work through the system before they make further changes, such as severely restricting graduate visas to particular subjects or universities, either of which could severely impact the already precarious financial status of some of our universities?
Baroness Barran (Con)
I recognise my noble friend’s concerns. We are committed to retaining the prestige and brand of UK higher education, which has been so successful in attracting international students. I repeat that the Government are reflecting on the findings of the MAC report. However, I point out that it found no widespread abuses of the system but pointed to specific concerns, including the use of recruitment agents.
Baroness Wilcox of Newport (Lab)
My Lords, the system is not working for students or universities. The issue with the Office for Students is clear, and the Government have worn down relationships with universities by ignoring this impending crisis. Does the Minister believe that there is a clear duty on the Government to step back and look at the approach that they have been pursuing?
Baroness Barran (Con)
I just cannot agree with the noble Baroness. Our universities are tremendously successful. Student numbers, both domestic and international, have risen year on year and funding has increased—for English universities by 50% since 2015-16. Clearly, the report was very helpful, constructive and nuanced in the way that it set out some of the risks for the sector, which need to be worked through.
Baroness Smith of Newnham (LD)
My Lords, I declare my interests at Cambridge and the Oxford International Education Group. Could the Minister explain to the House how the Government can say that they feel that higher education and its reputation is very important, and yet the Home Office keeps changing policies? Does that not send mixed messages to potential international students? Could UK plc not be doing a rather better job in terms of international higher education?
Baroness Barran (Con)
I remind the noble Baroness that our international strategy has been incredibly successful and hit its targets several years early, with 679,970 students in 2021-22. We have made some changes to the graduate route, for reasons that I think have been well articulated.
Lord Grabiner (CB)
My Lords, does the Minister not think that perhaps the time has come to increase the cap? The £9,250 has been in place now for many years, and the only way that many universities are able to make it work is by charging some extortionate fees at the graduate non-regulated level.
Baroness Barran (Con)
I appreciate that, but the noble Lord will also understand the pressures that students face. We also have a responsibility to students to make sure that university is affordable.
Lord Johnson of Marylebone (Con)
My Lords, I declare my interest as a visiting professor at King’s and chairman of FutureLearn. If the Prime Minister goes ahead with curbs to the graduate visa, would my noble friend the Minister say how we will replace the £12 billion in economic benefits that international students bring to priority category 1 levelling-up areas, including towns such as Stockton, Middlesbrough and Darlington, which receive £240 million of benefits every year from international students at Teesside University?
Baroness Barran (Con)
With respect to my noble friend, he makes a very speculative statement, which makes it pretty hard for me to comment on it.
Viscount Hanworth (Lab)
The Minister is doubtless aware that the pension fund of university lecturers is mainly invested in Thames Water. Traditionally, the munificence of the university pension scheme was regarded as a compensation for penurious academic salaries. Is the Minister aware of how difficult it will now be to attract people of talent into the profession, given the collapse of the pension scheme?
Baroness Barran (Con)
Obviously, the pension scheme is an element, but I am not aware that the entitlement of university lecturers is changing. Clearly, it is up to individual institutions to make themselves as attractive as possible to academic staff.
Baroness Andrews (Lab)
My Lords, the noble Lord opposite asked a legitimate question—how poorer areas, which are benefiting hugely because they have universities in their midst, are likely to be affected if the number of overseas students drops and the university becomes in a more precarious and even more fragile state. This morning, on the radio, one university was cited as having a drop of 40% in its overseas students over the past year. How will that affect the university and the community it serves?
Baroness Barran (Con)
I think that the noble Baroness, on one level, knows the answer to her question, which is obviously that if there is less money going in, it will have a negative effect. But that is not the real question. The real question is: what are the Government doing to make sure that there is significant investment in those areas? There absolutely has been significant investment in all of the areas the noble Baroness cites, not just in relation to universities but also in colleges and institutes of technology, building the skills pipeline of the future.
Israel and Gaza
(6 months, 3 weeks ago)
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Baroness Bennett of Manor Castle
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what assessment he has made of Israel’s compliance with the summary order regarding Gaza issued by the International Court of Justice on 26 January, and what assessment he has made of the implications for the United Kingdom’s obligations, particularly with regard to arms exports.
The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con)
We respect the ICJ’s role and independence; it is up to the court to monitor Israel’s compliance. We have noted our concerns previously about this case, which we do not think is helpful in the goal of achieving a sustainable ceasefire. While there has been some progress in some areas of humanitarian relief, Israel must do more to make good its promises, and I am pressing them on this, directly.
I regularly review advice about the situation in Gaza. Our position on export licences remains unchanged but, of course, we keep this under review.
Baroness Bennett of Manor Castle (GP)
I thank the Minister for his Answer but of course, events have moved on since my Question was laid. The ICC prosecutor has made applications for five arrest warrants, alleging war crimes and crimes against humanity by senior Hamas leaders, the Israeli Prime Minister Benjamin Netanyahu, and Israel’s Minister of Defense. The prosecutor was advised to do so unanimously by an independent panel of experts—our own noble Baroness, Lady Kennedy of the Shaws, among them—which has set out why it thinks there are reasonable grounds to believe that Mr Netanyahu and Mr Gallant have committed war crimes and crimes against humanity.
Surely it now obvious that the UK should immediately at least suspend arms exports licences to Israel, given the clear risk that continuing them would put the UK in breach of international law. Surely the Minister will confirm here that the UK accepts the jurisdiction of the court in this case, under the Rome statute that the UK helped to write and, of course, agreed to.
Lord Cameron of Chipping Norton (Con)
What I would say to the noble Baroness is that the last time I was asked to make a political declaration outside our normal process of reviewing arms export licences, and to simply say that we would not sell any more arms to Israel, just a few days later Iran attacked Israel with a hail of over 140 cruise missiles. That position of acting outside our normal processes would have been completely wrong.
Let me answer very directly on the ICC’s announcement yesterday. I do not believe for one moment that seeking these warrants will help get the hostages out, help get aid in, or help deliver a sustainable ceasefire. As we have said from the outset, because Israel is not a signatory to the Rome statute, and because Palestine is not yet recognised as a state, we do not think that the court has jurisdiction in this area.
I would go beyond that and say that, frankly, this is mistaken in terms of position, timing and effect. To draw a moral equivalence between the Hamas leadership and the democratically elected leader of Israel is just plain wrong. It is not just Britain saying that; countries all over Europe and the world are saying that.
On timing, I point out to your Lordships’ House that the ICC was about to embark on a visit to Israel, which some of us had helped to arrange, and at the last minute decided to cancel that visit and simply go ahead with its announcement. It is not normally for the ICC to think about the effect, but as it clearly thought about the timing, maybe it should also think about the effect. As I have said, it will not help get the hostages out, and it probably makes change in Israel less likely.
Lord Robathan (Con)
I am very pleased with what my noble friend has just said. Does he also agree that if we and the rest of the West were to suspend arms sales, it would allow Hamas to regroup and return to the destructive and ghastly behaviour we witnessed on 7 October?
Lord Cameron of Chipping Norton (Con)
I thank my noble friend for that question. Britain and America are obviously in completely different situations in terms of arms exports to Israel. Our exports are less than 1% of the total, so not a meaningful amount, whereas the United States is a far bigger provider. As I said, I think acting outside our proper processes and guidelines —we have a process of going through Israel’s commitment, capability and compliance with the rules laid out in our export criteria—would not be the right thing to, for the reasons I have given.
Lord Purvis of Tweed (LD)
Does the Foreign Secretary recall that in the 2014 conflict between Israel and Hamas, during which there were just over 2,000 Palestinian casualties, he agreed with us on these Benches? As Prime Minister, he decided to pause military equipment licences to Israel on the basis of a disproportionate response by the Israeli military. That was the normal procedure, which he has referred to. Do we take it now that his view is that the current Israeli military response is proportionate?
Will the Foreign Secretary reassure me that, notwithstanding any of his opinions about the ICC, we will honour every obligation that the United Kingdom has signed up to in the Rome statute? These are treaty obligations when it comes to those who would be arraigned by the ICC.
Lord Cameron of Chipping Norton (Con)
There is a bit of a difference between 2014 and now.
Lord Cameron of Chipping Norton (Con)
I will tell you why. Today is day 227 of the hostages still being in captivity, including British citizens. All of this relates to what happened on 7 October. There was no “7 October” in 2014, so we are in a different situation. Of course we respect the independence of the ICC, but just as we respect its independence, it should respect the independence of politicians in not suddenly losing their voice and all their opinions about these things. I have a very clear view about what has happened, and I have been happy to share it with your Lordships’ House.
Lord Collins of Highbury (Lab)
I welcome the fact that the noble Lord is supporting the independence of the ICC, which is vital, but I hope he can truly find his voice. The UK supported UN Security Council Resolution 2417, which states that
“unlawful denial of humanitarian access”
and the act of “wilfully impeding relief supply” should be condemned. The noble Lord said on the BBC that
“Israel has not had a clean bill of health”
on allowing humanitarian aid to enter Gaza. Does he accept that Israel is in breach of that resolution, and if he does, does he not think that is a breach of international humanitarian law?
Lord Cameron of Chipping Norton (Con)
The noble Lord is right: I absolutely did say, and I repeat, that we have far from given Israel a clean bill of health on this issue. Not enough has been done to get aid in. We have had some recent promises, which are encouraging, about 500 trucks a day, about the opening of Ashdod port, and about the new pier adjacent to the beach in Gaza. Some of those promises are being fulfilled: Ashdod is open, the pier is working, and aid is being delivered, including British aid. But some of the promises are not being kept, and no one has been tougher on the Israelis than me in direct call after call and message after message about having to meet their obligations.
We have not given them a clean bill of health, but there is a world of difference between that and issuing arrest warrants at the same time as you are doing so for Hamas, and drawing this moral equivalence. It is not just the UK that takes this view. The Germans have said that simultaneous applications for arrest warrants gives the false impression of an equation. The Americans have called it outrageous. The Italians have called it totally unacceptable. The Austrians have said:
“The fact however that the leader of the terrorist organisation Hamas whose declared goal is the extinction of the State of Israel is being mentioned at the same time as the democratically elected representatives of that very State is non comprehensible”.
The Czechs have said that it is appalling and completely unacceptable. I do not want to get too political in your Lordships’ House, but the odd man out, in many ways, is the party opposite, which seems to be saying that it supports the ICC in every way.
Lord Harries of Pentregarth (CB)
While fully supporting Israel’s right to defend itself and fully supporting its desire to degrade Hamas’ military capacity, would the Foreign Secretary not agree that there is a legitimate worry about the use from the very beginning of the campaign of these 2,000-pound bombs, which, in a very densely populated area, are so difficult to use in a way that is both discriminate and proportionate?
Lord Cameron of Chipping Norton (Con)
I agree that, while Israel has the right to defend itself, to try to deal with Hamas and to prevent 7 October happening again, it is important, as we have said throughout, that Israel complies with international humanitarian law as it does so.
Lord Swire (Con)
Does my noble friend the Foreign Secretary share my concern that the continuing withholding of the now $430 million under the Israel-Norway Accord, which is largely from Palestinian tax revenues, fatally undermines the authority of the Palestinian National Authority? What more can he do to ensure that money gets to them, and quickly?
Lord Cameron of Chipping Norton (Con)
My noble friend is absolutely right. One of the most important things we can do in trying to bring this conflict to a conclusion is to work on the political measures that are going to be necessary to deal with these problems. One of them is to strengthen the Palestinian Authority, which needs the money that Israel is holding back from it. We have pressed the Israelis about that again and again. I would still say to the Israelis that you cannot fight something with nothing. You may not think the Palestinian Authority is ideal; you may think that it fails in many respects; but you need to find a partner that is not Hamas that you can work with in Gaza on the West Bank, and that partner should be the new technocratic government run by the Palestinian Authority.
Russia: Sanctions
(6 months, 3 weeks ago)
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Lord West of Spithead
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what assessment he has made of the effectiveness of UK sanctions on Russia, and in particular on the number of tankers and other ships trading in Russian oil despite those sanctions.
The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con)
My Lords, sanctions by the United Kingdom and G7 partners have cost Russia an estimated $400 billion, equivalent to four years of war funding, and contributed to a 30% fall in oil tax revenues in 2023. In many ways, the existence of the shadow fleet is a sign that sanctions are working. They are forcing Russia to spend billions to try to circumvent them. The UK is investing in the Joint Maritime Security Centre to track shadow fleet activity, and we are finalising new powers to sanction individual vessels.
Lord West of Spithead (Lab)
My Lords, I thank the Foreign Secretary for his Answer. There is no doubt that sanctions are having an impact. Indeed, you only need to look at the Russian-flagged tankers languishing in harbour; that is why Russia has to have this shadow fleet. My question relates directly to the shadow fleet. Thousands of these ships are being operated, many of them under flags of convenience. They are not properly insured or maintained, and they are at the bottom end of the spectrum. Many of them are going through the Great Belt without pilots, coming down the North Sea and through the channel and doing transfers in the Atlantic. It is a recipe for a disaster which will not be properly covered. We have huge clout in this country because we run merchant shipping, really: we have the insurance, all of the lawyers who work in this area and the IMO. Is there more that we can do to screw this down to put even more pressure on Russia? The Chinese are careful because of secondary sanctions. Could we do more to try to stop this?
Lord Cameron of Chipping Norton (Con)
The noble Lord is absolutely right to raise this. As he knows, we have invested money in the Joint Maritime Security Centre, and that is making a difference. We have sanctioned Turkish and Emirati shipping company owners involved in facilitating this shadow fleet. We deploy our diplomatic network to deter third countries where we can, and we are working through the IMO. We are going to have the power to sanction individual vessels and their owners. However, the noble Lord is right to say that there is more we can do. Fundamentally, these are mostly uninsured, leaky, unsafe, environmentally unsound ships, and we should be going after them whenever and wherever we can. It is possible to do more, particularly when they potentially threaten environmental disasters in the countries they are going past. One of the things we want to do at the forthcoming European Political Community meeting is to work with partners to see what more we can do to take this weapon out of Putin’s hands.
Baroness Smith of Newnham (LD)
My Lords, what assessment have His Majesty’s Government made of the fact that oil is being sold through China and India and then being resold, so in many ways circumventing the sanctions? The fact that other ships having been sanctioned and subject to secondary sanctions does not seem to have stopped those oil sales. Is there a way of further strengthening sanctions so that they really bite?
Lord Cameron of Chipping Norton (Con)
The noble Baroness makes a good point. There has been an effect on Russian revenue because of the price cap, but a lot of sales are still going through, using shadow tankers, and into other markets. One thing we are trying to do here to make sure that refined product does not leak back into the UK is to make sure that all importers of oil and oil products into the UK provide proof of origin to relevant enforcement authorities to demonstrate that the goods are not of Russian origin. We will do that, but, as I said in my earlier answer, there is probably more we can do with other countries and allies to chase down this shadow fleet wherever we can.
Lord Howell of Guildford (Con)
It is of course true that the revenues for Russia from all fossil fuel exports are down considerably. However, against that, crude oil on the high seas is going up, for the simple reason that Russia cannot export processed products and therefore is concentrating on crude oil. Would it be possible to get directly at the swarm of ships on the high seas that the noble Lord, Lord West, pointed out to us by pressing to reduce the price cap from $60 to $30? That would at one stroke reduce Russian revenues and reduce the possibility of these leaky and dangerous ships wandering around the globe.
Lord Cameron of Chipping Norton (Con)
The noble Lord with all his experience makes a very good point. I will certainly take it away and discuss with colleagues across government whether there is more we can do to bear down on the price and whether that would be effective. It is worth remembering that we are talking about 600 ageing oil tankers transporting predominantly Russian oil around the world. They do not have the support of any G7 services, such as insurance, so whether it is insurance, sanctions, environmental measures or the price cap, we are looking at everything we can.
Baroness Smith of Basildon (Lab)
My Lords, I return to an issue that we have raised before, which slightly leads on from sanctions: the efforts that have been made—I think they have accelerated—to get interest from frozen Russian assets that we can then channel into Ukraine. The Foreign Secretary has pointed on numerous occasions to the importance of international collaboration on this issue. Can he say something in that regard about today’s developments in Brussels and the upcoming meeting of the G7 Finance Ministers? How quickly could this become operational, and will there be any need for primary legislation to ensure that we can implement it?
Lord Cameron of Chipping Norton (Con)
What I can say to the noble Baroness is that good progress has been made. To be frank, we would perhaps have gone for a more maximalist version of trying to use the frozen assets themselves, but the idea of taking the interest from the assets and using that for Ukraine to pay the interest on a larger loan—which could be as much as £50 billion—is the lead proposal at the moment, and is being discussed by Finance Ministers in the G7. I am confident that we will get there, but, as we do, it is very important to say that we do not rule out taking further action on the frozen assets themselves. We may well get to a time when Russia is, or should be, paying reparations to Ukraine for the damage that has been done. At that point, those underlying assets that we still hold could be very important.
Lord Sentamu (CB)
My Lords, last week, in a debate on Ukraine, the noble Lord, Lord Ponsonby, and I asked the Minister about the greatest idea produced by the Foreign Secretary, which we felt was very creative, of using the assets that we have seized from Russia and turning them into money to help the war effort in Ukraine. His answer was that he agreed with us but that we would have to ask the Foreign Secretary about it, as it was his idea. Can the Foreign Secretary tell me what he has done about it?
Lord Cameron of Chipping Norton (Con)
What I have done about it this. We have had discussions with the G7 Foreign Ministers, where I have been talking to all our allies about why we should be doing this—the economic case, the moral case, the political case. I think that is widely accepted, but there is nervousness, particularly in some of the European countries where a lot of the assets reside—a lot of them are held in Euroclear, for instance—about using the underlying assets straight away. That is where this idea comes in, using the windfall interest from these assets to roll into something that is given to Ukraine so that it can pay the interest on a much bigger loan. That is the lead idea. We must not let the best be the enemy of the good; let us try to get the money out of the door and into the hands of Ukrainians so that they can pay for the war effort against Russia at this vital time. As I have said, that will not rule out looking at the underlying assets, which will of course still be frozen and will not be going back to Russia. We can look at those again later.
Lord Dobbs (Con)
My Lords, connected to that question, I congratulate my noble friend the Foreign Secretary on his success in getting a long-term British commitment to Ukraine in military aid for its defence against Russia; I think we have committed something like £3 billion per year until 2030. On its own, of course, that will not be enough. We need other countries to make the same sort of long-term commitment. What can this Government do to persuade other Governments to back what we have done?
Lord Cameron of Chipping Norton (Con)
The best thing we have done is to announce that the £3 billion— the noble Lord is right about that figure—is not just for this year and next year but for as many years as Ukraine needs it. That gives us the ability, just as with the 2.5% spending pledge, to go to other partners in NATO and elsewhere and say, “We have made this pledge. If you make this pledge too, we can give Ukrainians the certainty they need that the money will be there to support not just the munitions but the vital economic measures that they need as well”.
Lord Purvis of Tweed (LD)
My Lords, in previous debates on sanctions I have raised questions about the ability of Ministers to exempt British Overseas Territories from the shipping components of our sanctions. Can the Foreign Secretary reassure me that not one single member of the shadow fleet will be able to get a landing licence into a British Overseas Territory?
Lord Cameron of Chipping Norton (Con)
That is an excellent question. I will double check, but my understanding is that we are trying to track this shadow fleet wherever it goes, and use that information so that countries can use environmental legislation, insurance legislation and other legislation to confiscate shipments and stop them moving. That must be the case in our overseas territories, but I will double check that it is so.
Lord Foulkes of Cumnock (Lab Co-op)
The Secretary of State is quite wrong that it is in other capitals that the Russians have the greatest investment. The greatest Russian investment is here in London; it is in property, and in Abramovich’s sale of Chelsea FC—all that money is here. The Secretary of State said at the previous Question Time, as he has said before, that he wants to do something about this, but he is doing nothing about it. The European Union is calling for action; at the last meeting of the Council of Europe, I took part in a debate where the Council of Europe almost unanimously asked the United Kingdom to do something about it. Why is he not doing it? What legal obstructions or impediments are stopping him taking real action?
Lord Cameron of Chipping Norton (Con)
We have taken real action: we have sanctioned 2,000 individuals and entities under the Russia sanctions regime, over 1,700 of which were sanctioned since the full-scale invasion. We have taken huge steps. The point I would make is that there is a difference in scale, even with the riches of Abramovich—and we will come on to that—between the individuals who we have sanctioned and the Russian sovereign assets that are invested in things such as Euroclear and central banks in Europe and elsewhere. There is a difference in scale, and that is why the windfall interest from them is so important. On the issue of Abramovich, we are doing everything we can to try to make sure that this massive amount of money, which is in trust, can start flowing into Ukraine for the benefit of Ukrainian people and Ukrainian charities. It is a complicated issue—I can go into more detail if the noble Lord would like—but we are working very hard on it.
South Africa
(6 months, 3 weeks ago)
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The Lord Bishop of Southwell and Nottingham
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what are his priorities for working with the government of South Africa after their forthcoming general election.
The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con)
The United Kingdom enjoys a long-standing and close partnership with South Africa. In November 2022, His Majesty the King welcomed the President of South Africa to London for the first state visit of his reign. We look forward to continuing this relationship after South Africa’s elections on 29 May. Priorities would include boosting trade links, which are already worth £10.4 billion; tackling climate change and energy security; and working together to promote democracy and peace as South Africa looks forward to its G20 presidency in 2025.
The Lord Bishop of Southwell and Nottingham
I thank the Secretary of State for his Answer. In recognising South Africa’s significant role and potential as a global partner, does he agree that with a new Government there is an opportunity to renew momentum and engagement through existing aid programmes in supporting NGO and important strategic church partnerships, particularly as they further their endeavours in ongoing reconciliation and bridge-building? Is it also an opportunity for His Majesty’s Government to find additional ways to support South African aspirations for economic equality, especially in light of the extreme hardship arising from financial disparities in the country?
Lord Cameron of Chipping Norton (Con)
Every new Government is an opportunity to start the partnership afresh and see what more can be done. We have to wait for the outcome of the elections in South Africa. The most promising avenues are in trade and, particularly, climate change and energy, where the Just Energy Transition Partnership is in place with South Africa. Having been to South Africa relatively recently, I think the other area where we need to help it is in the fight against corruption and state capture and the problems in its energy system that have led to the blackouts and difficulties that it has been having.
Lord Polak (Con)
My Lords, at the United Nations, in stark contrast to South Africa politics under Nelson Mandela, South Africa has increasingly voted with the so-called axis of resistance as it relates to the wars either in Ukraine or in Gaza. The signing of the co-operation deal between South Africa and Iran last year shows a clear shift towards Russia, Iran and China. Will the Foreign Secretary ensure that HMG make it clear to the South African Government that this shift is both undesirable and unhelpful?
Lord Cameron of Chipping Norton (Con)
As I say frequently in speeches, we are living in a competitive and contested world, so it is even more important than ever that Foreign Ministers and our diplomats get out there and compete and make the arguments for why Ukraine is in the right and Russia is in the wrong, and why investment in South Africa and elsewhere from the United Kingdom and western partners should be an alternative to that from China. I agree with the noble Lord about some of the recent South African stances. Any comparison between the liberation movement in South Africa and what Hamas represents in Israel is well wide of the mark. I cannot believe that Nelson Mandela would ever have supported anything like what Hamas did on 7 October. When he is prayed in aid, it makes me wonder.
Baroness Smith of Basildon (Lab)
My Lords, 30 years ago when South Africa had its first free democratic elections, most of us watched those scenes on TV with huge emotion as people queued for hours outside polling stations to exercise their democratic vote. Many of us are quite envious that they have elections in May this year and we may have to wait a little longer. Can I put it to the Foreign Secretary that the relationship between the two countries—whether we agree or disagree—transcends elections and Governments and we should have in place a framework that allows for honest, genuine dialogue whichever Governments are in power?
Lord Cameron of Chipping Norton (Con)
The noble Baroness is absolutely right. We have a framework of co-operation and a close partnership, and I met my South African opposite number in February this year. The point I was making was that when we think about how we try to build those partnerships, it is often more difficult to build them in the run-up to an election. Obviously, the South Africans are very close to their election. Waiting for that election and the new Government—whatever it may be—would be a good opportunity to re-engage on our shared agenda.
Lord Oates (LD)
My Lords, does the Foreign Secretary share my regret that, notwithstanding the state visit by President Ramaphosa, over recent years the relationship between the UK and South Africa, both politically and economically, has declined significantly, with the value of UK exports less than a third of what it was when he was Prime Minister? Will he take steps to show that we value the relationship with South Africa by urging the Prime Minister to visit South Africa following its elections and by accepting the invitation himself to attend the service of thanksgiving and commemoration for 30 years of democracy in Westminster Abbey on 16 July?
Lord Cameron of Chipping Norton (Con)
I will certainly look at my diary for 16 July. However, that might be the week of the EPC so I think we will be extremely busy welcoming about 50 Heads of State and Foreign Ministers to the UK. We work hard at this relationship. Obviously, where it went into reverse in some regards was during the period of President Zuma and the problems of state capture when, quite rightly, Britain sanctioned a series of individuals involved in that episode. President Ramaphosa has been trying to recover from that. That is why I said in my answer to the right reverend Prelate that we should try to help South Africa deal with some of the things that took it backwards under President Zuma.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, the Foreign Secretary will no doubt have noted with concern the growing relationship between South Africa and Iran. What is his assessment of the potential threat from that axis?
Lord Cameron of Chipping Norton (Con)
When we look in Iran’s region, it is obvious that it supports Hamas, the Houthis, Hezbollah and a whole series of malign actors that are responsible for terrorist attacks or attacks on navigation for destabilisation. While it is important that we try to have a dialogue with Iran and deliver some very tough messages to it, it is quite clear that its influence in the region is malign, and we make that clear at every opportunity.
Lord Morgan (Lab)
My Lords, it is a pleasure to address the former MP for Witney. I taught in South Africa, in Witwatersrand, and I think that one of the important aspects of this is not so much diplomatic or political but our soft power. The links between South African universities and British universities were very powerful and people were well aware of them when I was there. For reasons we heard in an earlier debate, the number of graduate and undergraduate students from South Africa has declined and I wonder whether the Foreign Secretary has thought about how this could be improved.
Lord Cameron of Chipping Norton (Con)
The noble Lord is right that soft power and people-to-people links are incredibly important. I caught the end of the previous debate. The point I would always make, even before the introduction of the graduate route with the ability to stay on for two years, is that Britain has an incredibly clear offer to international students from around the world. If students have an English language qualification and a place at a British university, there is no limit on the numbers that can come. While we have important debates in this House about the rules we should put in place, that message needs to go out loud and clear to every country, including South Africa, with which we have so many great links.
Lord Vaizey of Didcot (Con)
My Lords, soft power is a very important aspect of how Britain projects its power across the world. We have mentioned the remembrance service at Westminster Abbey and the links between South African and British universities. This may sound like a superficial point, but it is not. When I went to the Chelsea Flower Show yesterday, I asked a gardening expert which garden was the best to visit. She said, “It’s the South African garden. It’s the first time they’ve been here for four years”. It may sound odd for me to say it, but I suspect that the Foreign Secretary would get the best headlines in South Africa this year if he went to visit that garden with the South African high commissioner. Is this not an example of how, while there are hard issues we have to debate with our friends and allies across the world, soft power also goes a long way in enabling those conversations?
Lord Cameron of Chipping Norton (Con)
I am embarrassed to admit to my noble friend that I have already been. Indeed, I enjoyed a very nice glass of South African white wine while looking around it.
Lord Sentamu (CB)
My Lords, the noble Lord was right when he said that we are living in a contested world. In Africa—I come from Uganda—Russia and China are the greatest investors; they build hospitals, schools and roads. A lot of money used to be spent by people in this country, but I am afraid that Russia and China are taking over. I suspect the reason is that some of the new Governments and their politics find it easier to deal with the two new colonial powers. What do we need to do to reawaken ourselves? “Made in Britain” used to be great when I was growing up as a little boy in a village in Uganda.
Lord Cameron of Chipping Norton (Con)
That is a very important question. In fact, I discussed this with the Gambian Foreign Minister this morning, who made the point about how much more democratic and equal the Commonwealth was than the Francophonie, and how much he enjoyed the Gambia being back in the Commonwealth. That is one of the frameworks we can use.
Larry Summers famously quoted an African leader saying, “The trouble is that when you come, you give us a lecture and when the Chinese come, they build us a road”. I think there is sense in that; we have to demonstrate that we are a willing and effective partner. Perhaps particularly on the Russian threat, we need to show that the UK can be a very effective security partner in helping to build capacity in countries that want it. Particularly in the Sahel, that could be an approach we can give some attention to.
Conflict-induced Food Insecurity
(6 months, 3 weeks ago)
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Lord Browne of Ladyton
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what diplomatic steps he is taking to address conflict-induced food insecurity, and to hold accountable those violating international humanitarian law through the deliberate use of hunger as a weapon of war.
The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con)
We use all our levers to address the issue of hunger during conflict. We use our diplomatic efforts, including in countries such as Sudan and in Gaza, where we push for humanitarian access. We use our funding and expertise as a development superpower, with £365 million of bilateral overseas aid spent on food security-related sectors. We also work through multilateral organisations, including at the United Nations under Resolution 2417, to call out the perpetrators of conflict-induced food insecurity.
Lord Browne of Ladyton (Lab)
My Lords, most conflict-related starvation occurs in internal and not international conflicts—most recently in South Sudan and Gaza. On 15 April, warning of famine in Sudan, the Foreign Secretary wrote that anyone
“supporting those responsible … must be held to account”.
What mechanism of accountability was he referring to? Given the ICC prosecutor’s action in seeking warrants, partly on the grounds of causing starvation as a weapon of war, that question is pertinent. In 2019, Article 8 of the Rome statute was unanimously amended to include deliberate starvation as a war crime, even in internal conflicts. Why, given the increasing prevalence of such acts and the UK’s support for the amendment five years ago, have we not yet ratified it?
Lord Cameron of Chipping Norton (Con)
The noble Lord is absolutely right that we supported the Article 8 amendment but have not yet put it in place. It is still under discussion, and we want to get it right. That does not prevent us from taking action, including in Sudan, where we are trying to restart the Jeddah process between the combatants and make sure that we get aid in. Those are steps we can take now.
Lord King of Bridgwater (Con)
Does my noble friend agree that the reality is not just conflict-induced starvation? The world faces an increasing shortage of food, which will become an increasing challenge with the interaction between population explosion and climate change. Just look at one continent: Africa, in part of which crops are totally destroyed by drought and in another part of which they are totally destroyed by floods. That is replicated on other continents. Is it not clear that hunger and starvation will now be a major issue as the population increases and the weather becomes more erratic?
Lord Cameron of Chipping Norton (Con)
My noble friend is completely right about that. We can see from the statistics that acute food insecurity is at a five-year high. The Global Report on Food Crises this year indicated that over 281 million people worldwide faced high levels of food insecurity. I agree that climate change has an impact and population can have an impact, but what is driving this insecurity at the moment across Africa and elsewhere is conflict. Trying to unlock some of the peace processes in those conflicts is where we could have the biggest influence.
Baroness Northover (LD)
My Lords, the ICC chief prosecutor has said that there are reasonable grounds to accuse the Prime Minister and Defense Minister of Israel of a potential war crime, as we have heard. That war crime is the:
“Starvation of civilians as a method of warfare”.
I note that the noble Lord said that he will respect the ICC process. Does he agree that 90 trucks via the sea bridge hardly matches up to the 4,500 trucks prevented from entering via Rafah? Does he agree that, as a first step, funding must be restored to UNRWA, on which the aid agencies heavily depend for logistics and delivery capacity?
Lord Cameron of Chipping Norton (Con)
I will answer both parts of that question. On the entry of aid into Gaza, it is absolutely right that Israel has not met some of its promises, like the 500 trucks a day, but there are other areas, like having this new pier on the beach in Gaza, from which aid, including British aid, has been distributed. That is a step forward, as is opening Ashdod port, where flour for bakeries has been delivered. Those do not look to me like acts of a nation embarked on genocide and war crimes, but of course we must keep up the pressure elsewhere.
I totally understand and respect the fact that UNRWA is vital for the onward distribution of aid—I discussed this with the head of the World Food Programme just last week—but we have to be cognisant that reports that UNRWA staff were involved in 7 October need to be properly investigated and properly dealt with. Two reports have been commissioned, but we have had only one. I want to see that second report and I want really strong undertakings from UNRWA so that we know our money is going to the right cause.
Lord Collins of Highbury (Lab)
My noble friend mentioned Sudan, and the Secretary of State is absolutely right to talk about conflict and food insecurity. One area is Tigray in Ethiopia: that conflict has spread much wider than Tigray, and food insecurity is running extremely high in Ethiopia. Certainly from the figures I have seen, 60% to 70% of pregnant and breastfeeding women in the north are experiencing malnutrition, which will affect those children for many years. Can the Secretary of State tell us exactly what we are doing with the Ethiopian Government to halt that extension of something as evil as malnutrition, which is affecting women, girls and children?
Lord Cameron of Chipping Norton (Con)
We co-hosted a humanitarian pledging conference in April in response to the rapidly escalating needs in Ethiopia. The conference mobilised $610 million towards the $1 billion we think is needed. At that conference, the Deputy Foreign Secretary announced £100 million in humanitarian funding. He has travelled to the region and meets and speaks regularly with President Abiy.
Lord Bellingham (Con)
My Lords, I will follow on from what the Foreign Secretary said about Sudan. This is truly a forgotten crisis, with 25 million people displaced, 25 million needing humanitarian aid, and 1.8 million fleeing into surrounding countries. Does he share my concern that the crisis moving from Darfur to Sudan’s arable farming area in the al-Jazirah province will lead to even more food insecurity and refugees? With Europe facing its own refugee crisis, including the channel crossing disasters, does he agree that this underlines the need for these migrant crises to be dealt with upstream and at source? Will he redouble our diplomatic and humanitarian efforts?
Lord Cameron of Chipping Norton (Con)
The noble Lord makes an extremely good point. Something like 9 million people have been displaced in the Sudan conflict, the scale of which puts other refugee crises into perspective. Eighteen million people are acutely food insecure, 5 million of whom we believe to be in an emergency situation. We need the Jeddah political process to get going; the SAF and the RSF are both at fault in their attacks on each other and the destruction they are bringing to that country. He is completely right to say that all our efforts to stabilise these situations, to provide aid and to help are good and right in themselves —they are moral acts by a country that believes in playing a moral role—but also help our own security by preventing large-scale movements of people. It is very important that we frame this in both contexts.
Baroness Blackstone (Lab)
My Lords, does the Foreign Secretary agree that the other countries that initially blocked funding for UNRWA have now restored it, with the exception of the United States? Why will the UK not restore funding as well, given the urgency to get UNRWA working again and delivering the aid so desperately needed by starving members of the Gazan population?
Lord Cameron of Chipping Norton (Con)
Our past pledges to UNRWA already take us up to something like the end of May, so it is not short of money on our account and has had additional funding from other countries. I want us to be meticulous on behalf of our taxpayers and all those—including myself—who are concerned about the fact that UNRWA staff took part on 7 October. We have seen the Colonna report, but we have not seen the UN Office of Internal Oversight Services report. I want to see that, and I want Philippe Lazzarini, who runs UNRWA, to make very clear statements about how that organisation will be run in future so that we can have confidence that our funding will not just deliver aid but help to deliver an organisation that is truly impartial.
Baroness Hussein-Ece (LD)
My Lords, the noble Lord talked about food entering Gaza. Month after month from that Dispatch Box, he has said that Israel must do more. We have seen that it has not done more. He referred to the temporary port that has been built and there have been droppings by sea. We have seen that they are not fit for purpose; people have been killed trying to access food dropped from the air. The Rafah crossing, which is vital for the majority of aid to get through, has now been closed for 17 days. There are thousands of trucks just kilometres away waiting to deliver food. What pressure is he putting on and what diplomatic efforts are taking place to ensure that some of these crossings happen, so that people do not starve to death waiting for food that is on the other side of the crossing?
Lord Cameron of Chipping Norton (Con)
I say two things to the noble Baroness. First, the Rafah crossing closed when the Israelis took over the Gazan side of it. There is a dispute now between the Egyptians, who have closed it on the other side, and the Israelis on the Gazan side. I do not want to apportion blame; all I know is that they are talking to each other and that the Americans are working extremely hard to bring them together to get a solution. We need Rafah open.
On the second point, I take issue with the noble Baroness. Yes, I am the first to say that Israel has not done as much as is needed, but it is not true that it has never responded to pressure. We asked it to open Kerem Shalom; it opened Kerem Shalom. We asked it to open a crossing in the north; Erez is now open. We pushed it again and again on the opening of Ashdod port; that is now open. There are not as many ships as I would like, but we have UK involvement in the Cyprus maritime corridor. Also, the Americans, others, and ourselves said that if it would accept a pier on the beach, we do not think it is necessarily the best way of doing things but it means that the aid goes directly into Gaza. That is now there. It is not true or fair to say that action has not been taken. It just has not been enough, and we will keep pushing. I am speaking to Minister Gantz in about half an hour, and I will have another good go then.
Procurement Regulations 2024
(6 months, 3 weeks ago)
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Baroness Neville-Rolfe
That the draft Regulations laid before the House on 25 March be approved.
Relevant document: 21st Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 20 May.
Securitisation (Amendment) Regulations 2024
Lord Roborough
That the draft Regulations laid before the House on 18 April be approved. Considered in Grand Committee on 20 May.
Agriculture (Delinked Payments) (Reductions) (England) Regulations 2024
(6 months, 3 weeks ago)
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Lord Douglas-Miller
That the draft Regulations laid before the House on 16 April be approved.
Relevant document: 23rd Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 20 May.
Contracts for Difference (Sustainable Industry Rewards) Regulations 2024
(6 months, 3 weeks ago)
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Lord Callanan
That the draft Regulations laid before the House on 21 March and 15 April be approved.
Relevant document: 21st Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 13 May.
Victims and Prisoners Bill
Tuesday 21st May 2024
(6 months, 3 weeks ago)
Lords ChamberRead Full debate Victims and Prisoners Act 2024 View all Victims and Prisoners Act 2024 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 57-IV Fourth marshalled list for Report - (17 May 2024)
18:50 - Division on Amendment 132 - Ayes: 211 / Noes: 208 - Amendment 132 agreed.
19:02 - Division on Amendment 133 - Ayes: 203 / Noes: 198 - Amendment 133 agreed.
19:19 - Division on Amendment 149A - Ayes: 91 / Noes: 192 - Amendment 149A disagreed.
Lord Bellamy
Member’s explanatory statement
This amendment is consequential on my amendment of Clause 44, page 45, line 4.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)
My Lords, as noble Lords will recall, there is a power created in Clauses 44 and 45 of the Bill that will allow the Secretary of State to refer release decisions made by the Parole Board to the Upper Tribunal. When we debated this issue in Committee, I said that we were satisfied at that time that the Upper Tribunal has the necessary skills and powers to deal with these referral cases, having consulted the Judicial Office on that matter last summer.
However, the Government have listened carefully to the arguments put forward for this amendment by noble Peers in Committee, including by two former Lord Justices, and, in the light of that debate, I asked the judiciary to reconsider this matter. The unanimous view put forward was that, given how the intervention power in the Bill has evolved over the time, the High Court is the most appropriate venue to hear referred parole cases. I therefore tabled amendments that will make that change.
I take this opportunity to put on record my thanks to the members of the Upper Tribunal Administrative Appeals Chamber for their work with my officials on the measures in the Bill and to make it clear that this decision does not, in any way, reflect on the important work of that chamber; it is simply a matter of deciding where this power should best reside within the upper judiciary system.
There are two other technical amendments related to the referral power—my Amendments 122E and 122F —which will ensure that there is clear, lawful authority to detain a prisoner while the Secretary of State decides whether to refer their case to the High Court. As the decision-making process cannot be fully undertaken until the board has directed the Secretary of State to release the prisoner, it is essential to have these interim protections, so that there is a proper authority to detain the prisoner in the meantime. I beg to move.
Lord Thomas of Cwmgiedd (CB)
I am very grateful to the Minister for what he said and the amendments he has put forward. For reasons that would be boring to explain, they achieve exactly the same result in practice as the amendments put forward by myself and the noble and learned Lord, Lord Burnett of Maldon. I am delighted that the Government have accepted this and I concede that their amendments are simpler.
Lord Marks of Henley-on-Thames (LD)
My Lords, I simply say that we support these amendments; we argued for them in Committee. A view I expressed then was that it was bizarre that the Bill provided for the Upper Tribunal to determine Secretary of State referrals from the Parole Board of release decisions, with the High Court involved only in cases with sensitive material.
We also agree that releases should be suspended pending decisions on such referrals by both the Secretary of State and the divisional court. The only further point I will make is that I hope that the Minister will be able to indicate from the Dispatch Box that such referrals should generally be dealt with as expeditiously as possible, to minimise the anguish of people waiting and the risk of prisoners having their time in custody unjustly extended by the delay.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I, too, thank the Minister for the government amendments in this group. The Government have listened carefully to the two previous Lord Chief Justices and decided that the High Court is the most appropriate place to hear parole referrals. The noble and learned Lord, Lord Thomas, said that the Government’s amendments in this group were better than his, which has circumscribed the debate.
The noble Lord, Lord Marks, raised an interesting point about how the courts should deal expeditiously with parole-type matters, and I will listen with interest to what the Minister has to say on that.
Lord Bellamy (Con)
My Lords, on the point raised by the noble Lord, Lord Marks, once referred to the court, the timetable and listing will be a matter for the court, but I am sure that it will take account of the need for expedition and the remarks made in the Chamber just now.
Lord Bellamy
“(5) In section 32ZZA (imprisonment or detention for public protection: powers in relation to release of recalled prisoners) (inserted by section 48 of this Act), after subsection (3) insert—(3A)The Secretary of State must not be satisfied as mentioned in subsection (3) unless the Secretary of State considers that there is no more than a minimal risk that, were the prisoner no longer confined, the prisoner would commit a further offence the commission of which would cause serious harm (and section 28ZA(4) applies for the purposes of that assessment).”The Secretary of State must not be satisfied as mentioned in subsection (3) unless the Secretary of State considers that there is no more than a minimal risk that, were the prisoner no longer confined, the prisoner would commit a further offence the commission of which would cause serious harm (and section 28ZA(4) applies for the purposes of that assessment).””Member's explanatory statement
This amendment is consequential on my amendment of Clause 48, page 52, line 27, inserting new section 32ZZA of the Crime (Sentences) Act 1997.
Lord Bellamy (Con)
My Lords, I am very grateful to all noble Lords who spoke in Committee to these matters affecting IPP prisoners and to all those who have continued to engage in constructive debate with us in preparation for Report. I fully share the desire to use this opportunity to do all that we reasonably can to help offenders serving the IPP sentence to progress towards release, where that is safe to do so. To that end, we have brought forward four substantive government amendments and are taking other important measures as well. Indeed, progressing IPP licence termination and swiftly considering cases for release remain one of the top priorities for HMPPS and this Government, and I emphasise that.
The first amendment, Amendment 139A, applies where the Parole Board directs the re-release of an IPP prisoner. The amendment grants the Secretary of State the power to decide that the recall should have no effect for the purpose of the two-year automatic period, which is the period before the licence automatically terminates. Under the current measures in the Bill, the two-year clock will be reset when an offender recalled during the automatic period is subsequently re-released by the Parole Board. This would mean they would be required to serve a further two years in the community before the licence would be terminated automatically.
However, the Government’s amendment would enable the Secretary of State to decide that the recall should have no effect on the automatic period if he considers it to be in the interests of justice, much as the noble Lord, Lord Carter of Haslemere, has proposed in his amendments to introduce a power of executive re-release, which I will come on to shortly. In these circumstances, if the recall is disregarded for the purposes of the automatic period, the clock will not reset on their release from prison and the offender would then be required only to remain on licence for whatever time remained of the two-year automatic period. I must stress, however, that this discretionary power would not apply to all IPP recalls in the qualifying period; it would be a matter for the decision of the Secretary of State in the light of all the circumstances.
The Government’s second amendment concerns the amendments of the noble Lord, Lord Carter—Amendments 137 and 146—to grant the Secretary of State the power to re-release a recalled IPP offender without the need to go through the Parole Board process at all and for the offender to benefit from the automatic period as if the recall had not occurred. Our Amendment 139B will permit the Secretary of State to re-release recalled IPP prisoners and mirrors a power that the Secretary of State currently has to re-release offenders serving determinate sentences—now referred to as risk-assessed recall review, known colloquially as RARR. This is an executive power, and it will be for the Secretary of State to decide if and when to use it. We have also included an amendment to enable the Secretary of State to impose licence conditions in a recalled IPP offender’s licence if the Secretary of State uses this power to re-release them on licence.
This amendment also, again, includes a parallel power for the Secretary of State to decide that the recall of an IPP offender should have no effect for the purposes of the two-year automatic period, again where it is considered in the interests of justice. This will ensure that the Secretary of State has the same discretionary power regardless of whether the decision to release a recalled IPP offender is taken by the Parole Board or by the Secretary of State using the RARR power. The noble Lord, Lord Carter, made a compelling case for his amendments in Committee. I hope that he will agree that the amendment introduced by the Government achieves the objectives of his amendments and that he will not press Amendments 137 and 146.
The Government’s third amendment concerns the amendment of the noble Lord, Lord Blunkett—Amendment 141—to put the IPP action plan on a statutory basis and require the Secretary of State to lay an annual report before Parliament. I fully recognise the noble Lord’s intention and I am particularly grateful for his significant engagement on this and other matters relating to this part of the Bill. We have therefore tabled Amendment 139C to require the Secretary of State to lay an annual report before Parliament about the steps taken by the Secretary of State in the reporting period to support the rehabilitation of IPP and DPP prisoners and their progress towards release from prison on licence termination.
The Bill includes a non-exhaustive list of the issues that it should address, including support for female offenders, those sentenced to detention for public protection and the engagement undertaken in the reporting period. The Government are committed to ensuring that the IPP action plan delivers tangible change by safely reducing over time the IPP population in custody and in the community, while still prioritising public protection. Through the IPP action plan, HMPPS is putting in place further measures to boost the support of those serving IPP sentences in custody and in the community, including a new policy to deliver multi-disciplinary progression panels to oversee cases at critical points, such as that early period following release or the period following a recall to custody. Delivery of the action plan is overseen by a senior IPP progression board chaired at a senior level which meets quarterly. I have asked that quarterly reports be supplied to Ministers, to ensure that the action plan is effective.
Lord Thomas of Cwmgiedd (CB)
My Lords, I rise to address the amendments that stand in my name. The purpose of these amendments can be briefly stated. It is to try to achieve a measure of justice for those on whom IPPs were imposed during the limited period 2005 to 2012. It is important to bear in mind what Lord Lloyd of Berwick, then Lord Brown of Eaton-under-Heywood, and then Lord Judge all did to try to right the problems that had been caused by this sentence. It was a sentence that Lord Judge described as the most draconian on the statute book, apart from a discretionary life sentence. I am extremely grateful for all that the Lord Chancellor and the Minister have done to try to deal with these issues, but we are side- stepping a fundamental issue: the way in which we release those who are subject to this sentence. We should not do that, and this House has a responsibility.
Of the amendments that stand in my name, in the time available, I wish to speak to only one: Amendment 149A. It is an attempt to compromise; to do at least something to give hope and provide justice. It leaves the release test as it stands but requires the Parole Board to take into account the concept of proportionality and other factors in making its determination. It is designed to give hope and a sense of justice to those who are behind bars under IPPs, and their families. There are three reasons I wish to highlight.
First, although a few were given IPPs who might have been given the most draconian sentence—a discretionary life sentence, under pre-2003 legislation, as a result of decisions of the Court of Appeal in the Kehoe and Wilkinson cases—the vast majority would have been given determinate sentences if the IPP sentence had not been put on to the statute book, or would have been released long ago without any risk assessment. The way our system worked historically and works today is what would have happened to them. Given that the vast majority of those under IPPs would have had that, how can it be just that, eight years later, we have done nothing—that is, in effect, what has happened —to revise this and put the Parole Board in a position to permit their release?
Secondly, if one looks at those who were sentenced in the period up to 2008, some were imprisoned who would have received a sentence of under four years. It is incredible to think that we are now releasing prisoners who have been sentenced to under four years because the prisons are overcrowded. Why can we not have regard to that? Again, this is unjust.
The third reason is that there can be little doubt— I referred to the evidence when I spoke in Committee—that the mental health of many of those who are still detained or have been recalled has suffered as a result of this sentence. The evidence is very strong and the effect on them is a matter on which we ought to reflect. The vital factor here is state responsibility—and, fortunately, we are beginning to live up to our responsibilities as a state. The position can be very briefly explained.
There is significant agreement that, if you do not know when you are going to be released, a long period of detention causes huge mental health problems. It is quite different for those who receive discretionary life sentences for the most serious crimes, described by Lord Bingham as sentences of a
“‘denunciatory’ value, reflective of public abhorrence of the offence, and where, because of its seriousness, the notional determinate sentence would be very long, measured in very many years”.
Such sentences are deserved in those cases—you can understand why people receive them—but how can it be just to keep in prison those who, during this specific eight-year period, committed something for which, before and today, they would have had a determinate term? It is no wonder that they and their families feel injustice.
I am sure that, if this point were put properly to the British public, as it is now being put in the media, they would understand. Therefore, I find it difficult to follow why people cannot go along with a measure of reform.
The crux of this amendment is to require the Parole Board to take into account proportionality—that is, looking at the length of term served as proportionate to the original offence, and some of these offences were not that serious—together with other factors, when determining whether the test of public safety has been met. It is vital to appreciate that the overwhelming majority of these people would have been released without any risk assessment. Looking at the position today, how can it be just that they should be kept there?
Now, the Minister might say that there is a provision in the Act that could be relied on. It is difficult to know precisely what the Minister will say, because he has not said it, but I am sure that is no answer to what I have said, because the difficulty is that what is in the current Bill does not require the Parole Board to do what this amendment requires it to do, which is to have regard to proportionality and other factors that affect the position. To my mind, there is a very simple question. It is 11 years after the abolition and I pay particular tribute to the noble Lord, Lord Blunkett, who has led on, and accepted responsibility for, dealing with this. It is a great shame that others will not do the same. We should, as a state, accept responsibility and bring about at least one step towards reform. It is not what I believe we should do, but I put this forward and support it as a measure of compromise.
Lord Blunkett (Lab)
My Lords, I know that we have had extensive debates on the range of issues on IPP and DPP. I will try to be brief, because everyone will want to reach the Statement on the infected blood scandal.
I want to pay tribute to those on my own Front Bench for their support in some difficult and tricky issues, and for their understanding, and to Peers from every corner of this House who have worked tirelessly together to work out how we can make progress and how we can help both those caught up in prison, those on licence and in fear of recall, and of course the families and campaigners. I too pay tribute to UNGRIPP and those who have been campaigning tirelessly alongside them. It has at last reached the public ear—in broadcast, print and online media there is now real attention to this issue, and a sympathetic hearing. That is a very good thing.
I want to say thank you to the Minister. Thank you for being prepared to engage with those committed, and for the concessions that have been outlined this afternoon in terms of my amendments. Government Amendments 133B, 138ZB, 139A, 139B and 139C deal substantially with my Amendments 41, 42, 134, 138A and 144. I am very grateful for both the sensitivity and understanding, and the ability to give, in a period leading up to a General Election, which is difficult for any Government to do on issues such as these, which are often toxic in the public arena. Together with the current Under-Secretary of State and his equivalent in the Commons, some progress—not as much as w