House of Lords
Imprisonment for Public Protection
(3 weeks, 6 days ago)
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Lord Moylan
To ask His Majesty’s Government what plans the Secretary of State for Justice has to meet families of prisoners serving an Imprisonment for Public Protection or Detention for Public Protection sentence.
The Parliamentary Under-Secretary of State, Ministry of Justice (Baroness Levitt) (Lab)
My Lords, the Deputy Prime Minister recognises the impact that IPP and DPP sentences have on the families of those serving those sentences. My noble friend Lord Timpson meets regularly with families as part of his ministerial responsibilities for these issues, and he values the insight that those discussions provide. The engagement he has ensures that the voices and experiences of families are heard. The Government remain committed to ongoing dialogue, recognising how this informs the action that we take to support progression and rehabilitation.
Lord Moylan (Con)
My Lords, there are nearly 1,000 IPP prisoners who have never been released, all of them now way beyond their tariff, and there are another 1,500 or so in the community subject to frequent and capricious recall. What can I say to the mother of the prisoner, whose name I supplied to the Minister in advance, who has been recalled again recently, despite being in employment and having a supportive employer? If the Deputy Prime Minister perhaps feels unwilling to meet the families of the prisoners, will he be willing at least to meet a delegation of noble Lords to come and talk to him about this continuing scandal?
Baroness Levitt (Lab)
My Lords, given his ministerial responsibilities, it is entirely appropriate that my noble friend Lord Timpson leads the engagement in this area. As the noble Lord knows, he holds quarterly IPP round tables with Members of your Lordships’ House to discuss progress and to hear directly from noble Lords about their concerns. Indeed, the next one is due to take place in a couple of weeks’ time, at which the Chief Inspector of Probation will answer noble Lords’ questions. The Justice Secretary also has met parliamentarians and campaign groups, and he remains fully sighted on this important issue. As regards the person whose name the noble Lord helpfully provided me with in advance, I am very much aware that my noble friend Lord Timpson and the noble Lord, Lord Moylan, are corresponding about this separately, and I do not think it is appropriate that I say something about the personal circumstances today.
Lord Keen of Elie (Con)
My Lords, the Independent Sentencing Review chaired by David Gauke recognised the unique challenges posed by the remaining IPP population and recommended further reforms to support progression towards release. What progress have the Government made in implementing those recommendations, and will the Minister commit to publishing regular updates on outcomes for IPP prisoners so that Parliament can judge whether those reforms are actually making a meaningful difference?
Baroness Levitt (Lab)
My Lords, I want to reassure all your Lordships that the Government completely understand and share the concerns about this very troubling cohort of prisoners, but the first duty of every Government is to keep the public safe, and that must come first. So, in order to try and reduce this cohort safely, through the action plan the Government are working on licence reform, progression work, recall improvements and support for those prisoners in order to demonstrate risk reduction. We have now provided those serving the IPP sentence with an earlier opportunity for licence termination and an additional opportunity for those serving these sentences thereafter. The IPP annual report and action plan for 2026-27 will be published in July.
Baroness Ludford (LD)
My Lords, Ministers are facing three Oral Questions about IPP prisoners within a fortnight, the third being mine. That is because we are determined, co-ordinated and—speaking for myself—an angry bunch. Why are the Government granting early release to a group of prisoners guilty of very serious crimes when, as the noble Lord, Lord Moylan, said, 900 prisoners subjected to the scandalous and ethically outrageous injustice of indeterminate IPP sentences have never been released and are being held in prison three, four or five times longer than their court-mandated sentences for much lesser, non-violent and often minor crimes?
Baroness Levitt (Lab)
There is a persistent myth that people got IPP sentences for rather trivial offences, which is in fact not true. It was always required at the time that it was both a serious offence and that they had demonstrated concerns about previous offending. There is this cohort that needs to be looked at, and the Government are anxiously trying to ensure that we make every move we possibly can to make sure that they are helped to demonstrate that they are no longer a risk. However, no Government—and that includes the Government who were led by the party opposite—will release people when the independent Parole Board has adjudged that they remain a risk to the public.
Lord Woodley (Lab)
My Lords, the impact of IPP sentences on family members is absolutely devastating, especially with miscarriages of justice, which IPPs indeed are on an industrial scale. On Wednesday 15 July, many of these families will be at Westminster again to protest against this never-ending injustice, marching from the Ministry of Justice at 11 am to the Houses of Parliament to hold one of their regular meetings. Therefore, will the noble Baroness ask the Minister, the noble Lord, Lord Timpson, whether he will kindly agree to meet the delegation of these family members on 15 July? Maybe he will even join them, bearing in mind that they will be outside his own building.
Baroness Levitt (Lab)
I will certainly pass that on to my noble friend—I suspect that he may already know. He regularly meets with the families, because we understand the pressures that are upon them and are anxious to hear what we can do to ensure that we can safely release this troubling cohort while protecting the public as well.
Lord Carter of Haslemere (CB)
My Lords, what are the Government doing to ensure that IPP prisoners are located in prisons close to their families so as to facilitate visits by their families? This must be one of the surest ways of achieving rehabilitation.
Baroness Levitt (Lab)
The noble Lord raises an important point. I am happy to reassure him that we have now reallocated the IPP prisoners. The vast majority—around 95%—are in the appropriate custodial settings, in terms of both the visits and the care that they need, in order to help them to get to a point where we can start looking at release.
Baroness Fox of Buckley (Non-Afl)
My Lords, I will be there on 15 July and urge everybody to go to the MoJ and join in—advert over. The point was made that we see these as trivial offences but some of them are serious, but what is trivialised is the recall. The mother of the prisoner to whom the noble Lord, Lord Moylan, referred recently handed her own son in on a recall after an anonymous malicious complaint. No charges have been made; nothing has happened. The mother says, “This is cruel. It’s torture”. It is a sword of Damocles hanging over families. Will the Minister and her department act with urgency? For IPP prisoners, when recalled for no criminal offences, it is on average 28 months before they can even see a probation officer. That is cruel, that is wrong and the ministry needs to do something about it.
Baroness Levitt (Lab)
Can I make two things clear? First, recall is not used as a punishment for a minor breach of licence. I am afraid that the noble Baroness is wrong about that. It is a means of protecting victims and the public when the Probation Service assesses that it can no longer manage that offender in the community. Recall is an important and swift public protection measure. Also, HMPPS has strengthened the scrutiny and quality assurance of recall decisions. There is a higher threshold for IPP prisoners in relation to recall. There must be not only a breach of their licence conditions such that there is a concern about the risk that they present but a causal link between that breach and the index offence for which they are serving the sentence in the first place.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
We will hear from the Conservative Benches and then we may come to the Cross Benches.
Lord Garnier (Con)
My Lords, I refer to the figure that my noble friend Lord Moylan mentioned—namely, the nearly 1,000 prisoners on IPP sentences who are still incarcerated and are well beyond their tariff. The Minister will know that not everything that is in her brief is necessarily worth reading out. The resort to the mantra of public safety is overused. There may perhaps be a handful of those 1,000 prisoners who are not safe to be released because they are genuinely dangerous or because they have become so institutionalised that they are incapable of living within the community. Can she please invite her noble friend Lord Timpson, whom we all admire, to work a lot harder than he does—and he works very hard—to ensure that at least 950 of those 1,000 prisoners are released on parole this year?
Baroness Levitt (Lab)
I join the noble and learned Lord in his admiration for my noble friend Lord Timpson, but the fact is that we have an independent Parole Board, which makes the decisions—not the Government—on whether someone can safely be managed within the community, as the noble and learned Lord knows. If they cannot be safely managed in the community and are released, they will be living next door to you—and no responsible Government are going to do that.
Post-16 Education and Skills: Funding
(3 weeks, 6 days ago)
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Baroness Wolf of Dulwich
To ask His Majesty’s Government what steps they are taking to maintain real terms per-pupil funding for 16–19 year olds, as set out in the Post-16 education and skills white paper, published on 20 October 2025.
Baroness Wolf of Dulwich (CB)
My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare an interest as a governor of a 16-19 academy.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, additional funding for 16-19 schools and further education over the next two years was announced yesterday. As a result, overall 16-19 programme funding per student in the academic year 2026-27 will rise by about 4% compared with 2025-26, rather than the 1.66% that we had previously estimated. This will build on the significant increase in funding rates in the academic year 2025-26, when the average per-student funding rose by 8.7%.
Baroness Wolf of Dulwich (CB)
I thank the Minister for her reply and was delighted to hear the announcement yesterday. But there is a more general issue. This country, unusually, underfunds 16-19 education compared with 11-16—lower secondary—education. The post-16 White Paper was very welcome because it acknowledged the critical importance of this phase. Yesterday the Government announced an increase to previously announced funding, but the details are unclear.
The key point for teachers is the base rate funding. The base rate funding that has been confirmed for 2026-27 is an increase of marginally over 0.5%, which is way below inflation and about a fifth of the increase estimated for pre-16. Meanwhile, we have a confirmed 3.5% pay increase next year for all teachers, which the Government have accepted will not be fully funded. We have FE colleges facing unfunded growth in student numbers; 16-19 schools are among the very best in the country for results in social mobility, but they are cutting their teaching programmes. Can the Minister tell us when we will get at least clarity on the 16-19 funding rate, the base rate, for the imminent new academic year?
Baroness Blake of Leeds (Lab)
I pay tribute to the noble Baroness’s dedication and persistence in supporting the FE sector, which I too believe is fundamental for the future success of our young people but also for the economy of this country. I cannot give her the detail that she wants, as she is probably aware, but we will announce the revised rates for the coming academic year later this month. There will be an increase in the 16-19 base funding rate—but also in the disadvantaged block funding rate for low prior attaining students, children in care and care leavers. Institutions will receive their increased allocations in the autumn.
Lord Mohammed of Tinsley (LD)
My Lords, although the funding increase in the post-16 FE sector is welcome, I press the Minister on that increase: will it reflect some of the increasing costs in that sector, particularly of energy, staffing, et cetera?
Baroness Blake of Leeds (Lab)
I thank the noble Lord. I anticipated his question. Yes, of course, we are very mindful of increasing pressures and costs—particularly energy, as he mentioned. There is a package of support going into the whole education sector, including better purchasing policy, collaboration with other institutions and looking at reducing the need to heat our schools. Of course, the cost of the heatwave is another factor at the moment. We are very mindful of those costs and in deep discussions with the sector, as we speak.
The Earl of Effingham (Con)
My Lords, to be clear, teachers deserve the best deal possible for their brilliant work, but yesterday the Government brought forward a 6.5% increase, bringing their overall pay rise to 17% since the election. The issue is that schools are expected to fund 1% of this increase through efficiency savings. School budgets have already been squeezed by national insurance rises and, as the noble Lord, Lord Mohammed, said, increasing energy costs; now they are being asked to make more savings to fund government spending. Would it not be incrementally beneficial to cut just a sliver of the welfare bill to fund this pay increase, instead of placing even more pressure on our already struggling schools?
Baroness Blake of Leeds (Lab)
The announcement was made only yesterday, so we are still in conversations with all the relevant parties. But in this large sector, there is welcome surprise at the actual numbers that were announced, in a very difficult fiscal climate. I hope that teachers recognise the real esteem in which we hold them and the important role that they have. There are always tough choices to be made and we will address the wider implications, as the noble Earl suggests.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, does my noble friend get increasingly exasperated, as I do, when Front-Bench spokesmen opposite get increasingly strident in their attacks on the Government? We have not cleared up their mess in defence spending, immigration and schools, which they left us after 14 years in power.
Baroness Blake of Leeds (Lab)
I thank my noble friend, as always, for his continued support from the Benches behind me. As well as that, the frustration I have is that there is no recognition or acceptance from the other side of the mistakes made and opportunities missed in those years. We see this particularly in the awful plight of the nearly 1 million young people who are NEET—not engaged in education and training. That is what we should be focusing on, and making sure that we do everything that we can for young people in this country.
The Lord Bishop of Leicester
My Lords, one way for schools and colleges to get the funding they need is through the pupil premium, and one way to ensure that they get the pupil premium funding to which they are entitled is through automatic enrolment for free school meals. Can the Minister confirm that local authorities wishing to run automatic enrolment schemes in their area would be acting in line with their duties to support the most disadvantaged children?
Baroness Blake of Leeds (Lab)
I was not expecting quite that angle, but the right reverend Prelate raises a very important point. It is absolutely heartbreaking when you know that children are eligible for this funding but, for whatever reason, the family do not come to the attention of people who could support them. I will look into the detail that the right reverend Prelate asked for and get back to him.
Lord Weir of Ballyholme (DUP)
My Lords, I refer to my registered interests in the FE sector. Although there is an excellent job being done by schools and FE bodies in support of young people aged 16-19, we sometimes concentrate on the institutions rather than the individual students. There is a concern that some young people with additional needs do not necessarily fit into the funding categories. What additional steps are the Government taking to ensure that young people do not fall between the cracks of the different levels of funding, which risks them getting into a downward cycle and ending up as NEETs?
Baroness Blake of Leeds (Lab)
The noble Lord raises a very complex issue. There are no simple answers for why an individual young person falls out of the system. The point that he makes, quite rightly, is that there needs to be far better connection and communication between all the relevant agencies that might have contact with that young person, whether through their families, parents or previous schools. There is still a terrible gap between the primary and secondary phases, for example. I reassure the noble Lord that we are investing significantly in SEND funding and are targeting the funding that we have at the most disadvantaged, but his point is right: we need to focus on those young people. We need to reach out to them, understand what barriers are preventing them from taking part in education and move with them, together.
Lord Young of Cookham (Con)
My noble friend Lord Effingham is one of the politest men in your Lordships’ House. Would the Minister disassociate herself from the accusation that he is “strident”?
Baroness Blake of Leeds (Lab)
I have a very good relationship with the noble Earl and I think he might be slightly flattered to be described as “strident”. I rest my case.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, before the Lord Speaker calls the third Question, I urge all Members—those asking and those answering questions—to be short, sharp, succinct and to the point. In that way, more Members can ask more questions of the Government, which I know the whole House wants.
Employment Tribunals
(3 weeks, 6 days ago)
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Lord Barber of Ainsdale
To ask His Majesty’s Government what steps they are taking to reduce waiting times for consideration of cases in the Employment Tribunal system.
The Parliamentary Under-Secretary of State, Ministry of Justice (Baroness Levitt) (Lab)
My Lords, the Government recognise that there are significant pressures on the employment tribunal. To try to deal with this, we are maximising sitting days and recruiting more employment judges to ensure swifter justice. We have also now expanded remote hearings through a virtual region, which enables about 2,000 sitting days to take place annually without geographic limits. It is hoped that the Fair Work Agency will also ease pressure on the employment tribunal; it is now enforcing rights such as the national minimum wage and, in due course, will enforce additional ones such as holiday pay.
Lord Barber of Ainsdale (Lab)
I thank my noble friend for that reply and I very much welcome the work that has been and is being done with ACAS and others to address this challenge. I hope that proposals for change will quickly be developed. The waiting period for employment tribunal hearings is clearly unacceptably high; it is two years or more in many areas. Important new rights and protections have been established by the Employment Rights Act, but they must be delivered in reality and not just on the statute book. Can the Minister give an assurance that, as well as speeding up the handling and determination of cases, attention will be given to ensuring the effective enforcement of tribunal awards without the need for complex and time-consuming county court procedures? The last official survey on this issue showed that less than half of successful claimants had secured the full payment of the award that had been made by a tribunal. This is—
Lord Barber of Ainsdale (Lab)
Can the Minister assure me that enforcement of awards will be taken firmly into consideration in developing new proposals to overhaul the whole system?
Baroness Levitt (Lab)
Will I make myself popular if I simply say yes? I will give a bit more detail than that. The law is absolutely clear that workers should receive the payments to which they are entitled, and we are committed to strengthening enforcement options. At the moment, a claimant can instruct a High Court enforcement officer, and using the officer is free of charge. That is intended to encourage the employer to pay the award. But, as part of the plan for change, we are looking at ways of strengthening enforcement options, including through the employment tribunal penalty scheme, which has moved to the Fair Work Agency. The agency will work closely with HMRC, the Insolvency Service and other relevant enforcement bodies to do this as effectively as possible.
Lord Keen of Elie (Con)
My Lords, it is the unqualified duty of His Majesty’s loyal Opposition to hold the present Government to account—not the previous Government.
Lord Keen of Elie (Con)
With the backlog in the employment tribunal now exceeding 50,000 cases, the Law Society has warned that lengthy delays leave employees and businesses in prolonged uncertainty. What target have the Government set for reducing the outstanding case load, and by what date do they expect waiting times to return to pre-pandemic levels?
Baroness Levitt (Lab)
Of course I accept that the noble and learned Lord is entitled to hold this Government to account, but I am also entitled to remind noble Lords about the record of the previous Government.
Simply to deal with the question, it is true of all parts of the justice system that we are working hard to help parties to resolve cases before they get to court. Court should be the end of the process, not the beginning. It is the most expensive bit and the bit that is most stressful for all those involved. But for cases which must reach court, we are maximising sitting days; we are increasing judicial recruitment; I have already mentioned the virtual region; we are looking to roll out digital systems and pilot AI transcription; we have invested in centralised telephone support so that litigants get a better service when they ring; and work is being done to see how legal officers can better support the judiciary. Judges are our expensive and scarce resort. We want to see how we can support them better and maximise judicial time.
Baroness Kramer (LD)
My Lords, the House will know that I do not believe that whistleblowing cases belong in the employment tribunal, but that is where they are. Does the Minister recognise that the cost of going to tribunal is a minimum of £50,000 for a primary hearing, and that the delay is at least three years before the case starts, then followed by appeals, often extending cases out to five to seven years, and that these are used as weapons by employers to make sure that individuals are silenced or accept settlement? It very much discourages whistleblowing and accounts for much of the failure to speak out in many of the scandals that many of us are aware of. Will she take action on this issue and create a new whistleblowing framework?
Baroness Levitt (Lab)
I pay tribute to the noble Baroness for her work in relation to whistleblowers. It is incredibly important. The delays across the employment tribunal generally are unacceptable as far as all litigants are concerned, and that is why we are working to try to bring them down but also to ensure that access to justice is really something meaningful and not just words. For most one to two-day cases, we can still list cases in 2026, but there are very long waiting times in the south-east and London south. I take the point that she makes, and perhaps she and I could meet and talk about it further.
Baroness Jones of Whitchurch (Lab)
My Lords, does my noble friend agree that managers and senior leaders of businesses need greater investment in the skills and ability to resolve workplace conflict at the earliest point, rather than letting those disputes fester and become entrenched? This would give a better impact on productivity, staff retention and business costs. What is being done to encourage that greater investment in skills in the workplace?
Baroness Levitt (Lab)
I first pay tribute to my noble friend for the work she does as chair of ACAS, and I agree with her about the importance of helping managers resolve issues before they fester. This was the point I was making earlier: we want court to be the end of the process rather than the beginning. I am very grateful to her for the work that her organisation is leading, which is intended to strengthen internal workplace resolution processes, including through an ACAS awareness-raising programme and strengthened internal resolution processes that aim to raise awareness for employers about conflict management and to increase the use of informal resolution before these disputes escalate.
Lord Bellingham (Con)
My Lords, the noble Lord, Lord Barber, mentioned the Employment Rights Act. The Minister will be aware that every single employer organisation, from the CBI through to the Federation of Small Businesses, has predicted that not only will it destroy growth and damage jobs but lead to a very large spike in tribunal cases. Can the Minister tell the House specifically about her department’s impact assessment for the Act and what it says about the increase in tribunal cases?
Baroness Levitt (Lab)
The noble Lord will understand that I am not going to relitigate the passing of the Employment Act all over again as part of this Question Time. The Government are managing the impact on the employment tribunal. One thing they are doing, commencing in October this year, is extending the time for individuals to make a claim from three to six months. We believe that that will help people to try to work things out beforehand or to prepare their cases better before they come to the employment tribunal. I am not sure if that entirely answers the noble Lord’s question, and I do not have the impact assessment in front of me, but I will write to him.
Lord Marks of Henley-on-Thames (LD)
My Lords, the noble Baroness’s view is undoubtedly that employment tribunals are intended to provide a cheap, efficient and effective way of resolving employment disputes. If she shares that view, does she not therefore agree that the issues raised by this Question and highlighted around the House are of great importance?
Baroness Levitt (Lab)
Absolutely—I do not think anybody who is interested in access to justice, whether it is the employment tribunal or anywhere else, can fail to be concerned by an increase in waiting times and in the open case load, which we sometimes call the backlog. There has been a huge increase in the number of cases coming into the system, not just into the courts but through ACAS. We are not entirely sure why that is, and one thing we need to do is to find out why there is an increase, but I definitely share the noble Lord’s concern.
Baroness Goldie (Con)
My Lords, further to the question from the noble Baroness, Lady Jones, I wonder if there is any work afoot to try to triage cases, because it seems to me that, in some instances, what an employer needs is to have his or her head knocked against the wall, and the employee may deserve the same treatment. Is there somebody at an early stage who can do that?
Baroness Levitt (Lab)
It is partly the role of ACAS to do that kind of thing, but the Department for Business and Trade and the Ministry of Justice, working together across government, have set up the dispute resolution system taskforce. That is to support the Government in considering options to reform the employment dispute system so that it works better for workers and businesses. The taskforce will consist of unions, businesses, legal representatives and third sector organisations. Using all that combined expertise, it will help us find ways of achieving earlier resolution for some of these troubling cases.
Children’s and Young People’s Mental Health Services
(3 weeks, 6 days ago)
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Baroness Tyler of Enfield
To ask His Majesty’s Government what assessment they have made of the Children’s Commissioner’s report Children’s and Young People’s Mental Health Services: 2024-25, published on 29 June.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, we welcome the report of the Children’s Commissioner. It highlights pressures on children and young people’s mental health services, including rising demand, long waits and the need for better support for those with neurodevelopmental and SEND needs. The findings will feed into our new cross-government mental health strategy, which will focus on prevention, earlier intervention and joined-up support.
Baroness Tyler of Enfield (LD)
I thank the Minister for her Answer. The Children’s Commissioner report certainly made plain that children’s mental health services are facing record levels of referrals. The Minister referred to the forthcoming mental health strategy; what we need to see is concrete action in relation to children and young people. Will the Minister reassure me that children and young people’s services will be a priority in the strategy, and will the strategy commit to narrowing the treatment gap for mental health support so that more young people with diagnosable need will be seen by the end of this Parliament?
Baroness Merron (Lab)
The mental health of children and young people is completely fundamental to the new strategy, which will cover all ages and be published later this year. But what really needs to be done, as I know the noble Baroness is aware, is to transform mental health care in this country, because the system currently responds too late, is not reducing waiting times and is allowing distress to escalate before intervention. The strategy will work to turn all that around, because we need that system-wide change.
Lord Patel of Bradford (Non-Afl)
My Lords, the Children’s Commissioner’s report is a timely reminder that we continue often to respond to crisis rather than preventing it. Twenty years ago, during the passage of the Mental Health Act, Parliament strengthened the safeguards around the admission of children into adult psychiatric wards. That should happen only in exceptional circumstances and only with specialist assessments. At that time, more than 350 children had been admitted, some as young as 11, into adult psychiatric wards. Ten years later, the figure was exactly the same. Can the Minister tell the House what the position is today? Also, what further action is being taken by education and community services to prevent that crisis in the first place?
Baroness Merron (Lab)
I do not have the figures the noble Lord very fairly asks for, but I will certainly ensure that they are provided. He will be aware that Parliament recently passed the Mental Health Act, which updated the Mental Health Act to which he referred. The real issue here is about a move to prevention rather than waiting for crisis. That is our whole direction of change.
Lord Watson of Invergowrie (Lab)
My Lords, I join my noble friend in welcoming the excellent report from the Children’s Commissioner this week. In her answer to the noble Baroness, Lady Tyler, my noble friend spoke of the need for early intervention and joined-up support. That is one of the issues mentioned in the Children’s Commissioner’s report. Part of that is highlighting the Young Futures hubs, and I know that the Government are committed to introducing 50 of them for 10 to 18 year-olds by 2029. They have a joined-up approach covering everything from education and mental health support to employment advice and crime prevention advice. Can my noble friend give us some idea about when the rollout of the Young Futures hubs will commence?
Baroness Merron (Lab)
The first wave of eight, which my noble friend referred to, is under way. It is backed by £4.2 million of investment. The subsequent 42 Young Futures hubs will be rolled out by March 2029.
Baroness Coffey (Con)
There was an initiative to have a mental health first aider in every school. What further work has been done to maintain that level in the Minister’s working collaboration with the DfE and local councils?
Baroness Merron (Lab)
Important though they are, we are accelerating the rollout of mental health support teams, because we now want to meet a more ambitious target of achieving full national coverage by 2029. We have already made progress. As of March this year, some 60% of pupils in schools and learners in further education were covered by a mental health support team. That is up from 52% the year before. The principle of integration where young people and children are is absolutely right. That is why we are not just investing in but accelerating the coverage of mental health support teams.
Baroness Finlay of Llandaff (CB)
Do the Government recognise that, as the report said, school staff often see the antecedents of mental health? Two areas where there is strong evidence are parental alcoholism, with a threefold increase in children considering suicide and a fivefold increase in eating disorders, and repeated physical punishment, particularly of children under the age of seven, resulting in emotional harm, so that simply intervening on the child may be too late, and intervention must be earlier to prevent problems.
Baroness Merron (Lab)
I agree with the noble Baroness’s observations. Early intervention is key. That is what our entire focus is on, in the ways we have already discussed, and also on developing a children and young people’s modern service framework because we want to reduce variation and ensure that children get the right support at the right time.
Baroness Pidgeon (LD)
My Lord, recent analysis from the charity Young Minds shows that, for the eighth month in a row, the average waiting time from referral to specialist support for young people was more than 300 days, and in the worst case it was two and a half years. Will the Government commit to using the forthcoming cross-government strategy to deliver open-access mental health support in every community for young people up to the age of 25?
Baroness Merron (Lab)
The point about age is important and one that we will be considering as we go forward with the mental health strategy. Waiting times are way too long, but there is a particular challenge that we have to meet, which is that some 10% of young people are waiting for an inordinate amount of time, as the noble Baroness said. I was very glad that the report does recognise that increased prevalence is a driver. One in 10 17 to 19 year-olds was in need in 2017 and now it is 1.4. I think that gives some idea of the scale and of why we have to make such a systematic change.
Lord Kamall (Con)
My Lords, the report contains a wealth of information and new data on referral patterns, waiting times and outcomes. I welcome the Minister’s response that it will feed into the forthcoming mental health strategy. How is the Minister’s department using this information to target resources and to identify where children’s mental health services are under the greatest pressure, so that, at least in the shorter term, support can be directed to where it is most needed?
Baroness Merron (Lab)
What the noble Lord says is absolutely right. That is why the Young Futures hubs, the early support hubs, focus on particular communities. We have taken a view that it is important to go to where need is greatest rather than to where it is easiest to deal with. I should add that we have expanded mental health services in terms of the workforce by delivering 8,500 additional mental health staff three years ahead of schedule. Around 18% of them are directly on children’s and young people’s services.
Lord Hussain (LD)
There is a proven, well-documented correlation between broken or highly conflicted families and poor mental health in children and young people. What are the Government doing to support keeping families united?
Baroness Merron (Lab)
The noble Lord raises the legitimate point that children’s and young people’s mental health is not just a matter for the health service but requires cross-government thinking on housing, income and other pressures. That is why the mental health strategy is, for the first time, a cross-government strategy led by the Department of Health and Social Care.
Supply and Appropriation (Main Estimates) Bill
Thursday 2nd July 2026
(3 weeks, 6 days ago)
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Taxation (Energy and Vehicles) Bill
Thursday 2nd July 2026
(3 weeks, 6 days ago)
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Political Party Finance and the Electoral Commission
(3 weeks, 6 days ago)
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The Earl of Kinnoull
That this House takes note of the regulatory regime for political party finance and the role of the Electoral Commission.
The Earl of Kinnoull (CB)
My Lords, at the core of any western liberal democracy is trust. The citizen must trust the institutions that make up their democracy and the people within those institutions. They must trust also that the oversight arrangements will work and, if someone or something breaches that trust, that there will be a mechanism to put things right. Within our democracy, and in common with other western liberal democracies, there will always be questions about political party finance. Political party finance in the UK is regulated by the Electoral Commission, which I will come back to shortly.
Trust in the ruling party in Scotland is at a very long-term low. There is the First Minister who could not see a huge and shiny motor home outside her mother-in-law’s house; the refrain in rural Perthshire is, “She should’ve gone to Specsavers”. This is the same First Minister who believes that full co-operation with the police is hours in their custody repeating “no comment”. Another First Minister is vigorously trying to stop a Scottish Parliament inquiry into something so damaging for our democracy—with no apology for the obvious and serious conflict he has—as such an inquiry would inevitably seek to look into his actions and inactions as well. Be it a Cabinet or a board of directors, members have joint responsibility for what has gone on. Indeed, a director is personally liable for their negligence.
The SNP leader claims the SNP national executive committee to be different. Members of the NEC, he feels, have no responsibility or liability for their actions and inactions over the decade of immoral mess. The judge in the case made it clear that the embezzlement was not particularly sophisticated, which only underlines how deep the NEC’s failure was, individually and collectively. The senior members of the NEC have then reached for the Pontius Pilate kit to wash away the blame. That is very wrong. The leader, former leader and long-term treasurer over the decade all owed a particular duty to their party and each year would have made the usual clear representations to their auditors. They remain the most active at trying to prevent more scrutiny that would examine their actions and inactions. This presents that horrible conflict. They do this to their great shame.
The seriousness of the situation means a lot of questions must be answered. The nation has rightful questions over the short money, the policy development grants, the money raised for the ring-fenced funds that have disappeared, and simply the money of the members of the SNP. To the extent that funds have been improperly used, restitution must be made. The Electoral Commission is the regulator of political finance and I expect it to play a public and leading role in the process, but a parliamentary investigation also is more than warranted. I ask the Minister: do the Government intend to be fully supportive of any Westminster or other parliamentary inquiry to look at this very serious matter?
The other recent situation that has been so damaging to our trust has been the saga of the £5 million and Nigel Farage. Mr Farage announced in March 2021 that he was
“stepping back from front-line politics”.
Christopher Harborne, who had been a major supporter of Reform UK Party Ltd, gave Mr Farage £5 million in early 2024. Subsequently, in mid-2024, Mr Farage stepped back into “front-line politics” in time to be elected as the MP for Clacton-on-Sea. He says that there was no need for him to report the £5 million gift to anyone. The trouble with this account of affairs is that Reform Party UK Ltd is a company, and during the relevant period there were three directors: Richard Tice, Mehrtash Azami and Nigel Farage. Nigel Farage therefore never stepped back from politics. He is a very strong personality and he sat on the small central board of his party at all the relevant times. I imagine his lawyers are fighting very hard to get him off on a technicality, but morally at least he is in the wrong.
The vital thing where any regulator is concerned is to ensure that they have the correct powers, the correct duties and the correct level of resources. The Electoral Commission is rather a new body, born in 2001 following the Political Parties, Elections and Referendums Act, or PPERA. It came to life in what was already a very large and very complicated field and canon of electoral law. In the intervening years since 2001, there have been several Acts of Parliament which have amended PPERA and several carefully thought-through reports pointing to a direction of simplifying and strengthening matters. I will briefly mention one or two of the key ones.
The Law Commission produced a 230-page report on electoral law in 2020. Although this was not so much about political funding, it picked up strongly on the theme of needing to simplify things. There were 106 recommendations. Recommendation 1 was:
“The current laws governing elections should be rationalised into a single, consistent legislative framework governing all elections”.
As we settle down to a 27th Representation of the People Bill later this year, I for one will recall this simple wisdom.
The Committee on Standards in Public Life, chaired by our own noble Lord, Lord Evans of Weardale, published Regulating Election Finance in 2021. This report, with its 47 recommendations, said at recommendation 1:
“The government should bring forward a bill to simplify and consolidate electoral law”.
That is the second respectable institution making the same powerful and obviously correct point.
Last year, in July, the Government produced a policy paper, Restoring Trust in our Democracy. The sponsoring Minister was Angela Rayner. This, essentially, was the trailing document for the Representation of the People Bill announced in the latest King’s Speech. There is, however, no mention of a consolidation Bill. I ask the Minister to comment on that.
In March this year, we had the welcome Rycroft review, which was aimed particularly at the difficult issue of foreign money. The Government’ response to this review was given in the House of Commons Chamber orally the day the review was published. It was most positive on the review and announced that there would be a ban on cryptocurrency and a donations cap of £100,000 for overseas voters. Can the Minister clarify exactly how these proposals will be brought forward? It is easy to see how the trust of the electorate can be in question when the legal environment is so complex and so unclear, and when institutions such as the Law Commission and the Committee on Standards in Public Life recommend major and logical change.
Before I close, I must set out at least some of the major areas where change would help, apart from a simple consolidation Bill. The first would be to decriminalise offences that are essentially administrative in nature. This would allow fines and enforcement notices to replace the full force of the criminal law. Regulators would no longer need to bother hard-pressed police to pursue wrongdoers, creating a much speedier and proportionate regime, as in most of the rest of regulated life.
Secondly, maximum fines are too low. The maximum fine for a breach of political finance law is £20,000 today, and that was set in 2009. For the special regime set up for the Scottish referendum, it was £500,000, which I suggest is a more proportionate number.
Thirdly, the Electoral Commission is today limited as to how it can give and receive information with other agencies and organisations. Most other regulators have statutory regimes that allow for this to happen, and the Electoral Commission needs to be put in a similar place. These things and others, I suspect, will be part of our work as a Chamber on the 27th Representation of the People Bill.
In closing, I return to the importance of trust in all of our institutions and in the people who work within them. As I survey the scene, I feel that the position is most unsatisfactory, and we owe it to ourselves and our citizens to be better here. The Electoral Commission must have greater legal clarity on its duties and powers. It must have sufficient resource to be able, as an independent body, to give confidence to us all in this difficult area of political finance. We will have an interesting debate and I look forward to every speech. In the meantime, I beg to move.
Lord Blunkett (Lab)
My Lords, it is a pleasure to follow the noble Earl, Lord Kinnoull, and to thank him for initiating this short debate. I agree entirely with his opening remarks in relation to what has happened in Scotland. Even my guide dog would have been able to see the motor home, never mind the multiple very clever coffee makers.
It is appropriate that we should be debating this before the latest Representation of the People Bill reaches us, because on the previous occasion, the 26th Bill, it was my pleasure to join with the noble Earl’s predecessor, the much-missed Lord Judge, in trying to get right what we were debating at that time—both the powers and independence of the Electoral Commission and where we were going. Much has changed in those very few years. I say to my noble friend on the Front Bench, whose fault it is not, that we did not really need the Rycroft review, important and informative as it is, to tell us that there was a major problem with bitcoin. It is remarkable that the Bill as drafted, and not yet amended on Report in the Commons, missed this out.
Sadly, that is an indication of our time, where reviews rather than action, missing the point, being somewhat behind the door, and looking at the past rather than the future have been too prevalent. We have got to get real in this area. It is time to understand the absolute reality and check what is taking place now, to equip our laws and our Electoral Commission for the future. If we do not, the basic tenets of our democracy will be undermined.
It is a sadness to me that one of the great donors to Reform UK—£5 million direct to the leader and £12 million to the party—turns out to have been born in Sheffield. This is not something I can be proud of. Mind you, the particular location was not in Sheffield at the time he was born, so maybe I can avoid that one.
We have a situation where it is suggested, including by Rycroft, that it might be possible that people who are registered to vote—this underlines the importance of those who pay taxes—should be enabled to donate. I ask my noble friend the Minister whether we should always have a cooling-off period when people change their location or seek to renew their electoral rights, so that we cannot have somebody changing their domain and their ability to donate very large sums at a whim. In other words, we have to be much more sure-footed.
In my short contribution, I think it is important that we move quickly on developing still further, and reinforcing, citizenship and democracy in our schools and colleges. As the new Representation of the People Bill indicates, we will be asked to approve that 16 and 17 year-olds can vote in general elections. It is beholden on us to make sure that they understand how our constitution works—in fact, it is beholden on all of us to take a good cool look at how our constitution works. We are not a presidency. We elect a Parliament, and Parliament then selects and puts forward a Prime Minister Only in circumstances with complicated PR would a situation arise where there would have to be a general election, because the parties that had colluded in deciding who should be the Prime Minister would have to have changed. Therefore, the suggestion at the moment that a change in Prime Minister should automatically result in a general election is a misunderstanding of how our democracy actually works.
Today, it is beholden on us to send a message to the House of Commons to get on with bringing forward the Bill, to complete Report and allow us to scrutinise it, and, above all, to look to the future, not the past.
Lord Maude of Horsham (Con)
My Lords, I join the noble Lord, Lord Blunkett, in thanking the noble Earl and congratulating him on introducing this debate. It is a timely and incredibly important subject. I speak as a veteran, at various stages in a long and chequered career, of engaging in cross-party talks on party funding.
The concern I have about where we are today is that the long-established convention on these matters of changing the rules on party funding—that they are pursued only after cross-party talks, with agreement being sought—seems to be being abandoned. The noble Earl made a powerful case for a much more comprehensive and simple approach to these matters, so it is a matter of regret and concern that the Government have chosen to pick a couple of cherries out of the Rycroft report and introduce them, at a relatively late stage, into a Bill already going through its legislative process. That is a breach of the approach which has been followed pretty rigorously.
I recall that, in the period after the 2005 election, when Sir Hayden Phillips—sadly, now the late Sir Hayden Phillips—was asked to undertake one of these reviews, Jack Straw and I, accompanied by the noble Lord, Lord Tyrie, had comprehensive discussions, which sadly did not reach agreement. They did not reach agreement because the Labour Party had a concern that a cap on donations of £50,000 could not be applied to donations by trade unions. At that point, the whole deal that was being fashioned—which would have gone some way to re-establish trust and support in the system—fell down.
There is another concern here, which is the introduction of a retrospective element into what is apparently being proposed. There is a cap to be introduced retrospectively on donations from legitimate electors—people who are entitled to vote but who happen not to be living in this country. I query the whole principle of saying that some voters are more equal than others. If there is a concern about the right of people living overseas—the noble Lord, Lord Blunkett, slightly raised this point—to have full rights in our Parliament and our democratic processes then that should be dealt with differently, but to say that for one particular aspect of participation in our parliamentary democracy they should be disadvantaged in this way seems plainly wrong. These matters should be treated very carefully indeed.
There was a very good reason, first set out by Sir Winston Churchill in the late 1940s, why parties should treat these matters very carefully. If a Government are seen to be using their position to advantage themselves and disadvantage their competitors, that can trigger a tit-for-tat approach, because no party has a lifetime hold on power. At various stages during the 2005 Parliament, and during discussions that took place subsequently in the coalition Government, the approach that Jack Straw and I took was that which the then Labour Party was strongly committed to. All of this was approached by seeking consensus wherever possible. I strongly urge the Minister to take this message back to his colleagues in the other place, because this is a dangerous path.
Lord Wallace of Saltaire (LD)
My Lords, in following the noble Lord, Lord Maude, with whom I worked in the coalition many years ago, I am thinking of the 2022 Act, through which the Conservative Government were certainly trying to advantage themselves and disadvantage their competitors. That is one of the reasons why we have this Bill before us today, and this is a debate to which we will return.
Last Thursday we debated the problem of rebuilding public trust in our democratic institutions, so it is highly appropriate that today, we move on to discuss the Electoral Commission as the guarantor of the integrity of our campaigns. To play its role effectively, the Electoral Commission needs to have sufficient powers and to be seen as independent of government. In last Thursday’s debate, the noble Lord, Lord Hannan, argued that political debate is
“a free and open encounter”—[Official Report, 25/6/26; col. 820.]
in which truth will always emerge victorious, regardless of the channels of influence available to, for example, Elon Musk, as opposed to the ordinary citizen. In his speech, the noble Lord, Lord Frost, denounced
“the absurd and dangerous Rycroft review … which was written … to justify unnecessary and authoritarian solutions.”.—[Official Report, 25/6/26; col. 808.]
The noble Baroness, Lady Fox of Buckley, decried
“self-righteous campaigns against foreign actors”—[Official Report, 25/6/26; col. 816.]
as an effort by the establishment to distract the public from what she sees as the real reasons for public discontent.
Both the noble Lord, Lord Frost, and the noble Baroness, Lady Fox, regard the BBC as a greater threat to democracy. All three dismissed the impact of money on politics. Yet all of us who have been involved in democratic elections know from painful experience how important financial resources are. Money on its own does not win elections if candidates are poor and messages weak, as Reform has been discovering. But effective campaigns carry costs. When one side is richly funded and the other is skint, campaigns are not an open and fair contest.
American democracy is providing us with a test case in the importance of money in politics. The Supreme Court’s ruling against congressional limits on political donations opened the sluice gates for donors to try to buy candidates. The sums of money now involved in congressional elections are eye-watering. A presidential campaign costs more than the GDP of several members of the UN. That brings with it corruption, and foreign interference. The Republican Party and the think tanks which drive its agenda have been captured by ultra-wealthy individuals and companies which resist progressive taxation and government regulation and often deny climate change and the impact of their products on human health.
Growing inequality between the extremely wealthy and the ordinary citizen exacerbates this distortion of democratic debate. Wealthy British expatriates who avoid paying tax but nevertheless want similarly to reshape British politics aim to change the balance of public debate in this country. The flow of private money from ultra-wealthy sources in America is now a greater threat to free and open debate in Britain than money flowing from Russia, China or—until the recent elections—Hungary. That money flows into third-party campaigns and partisan think tanks as well as political parties, and we will need to look at that.
So far as I understood last week’s speech from the noble Lord, Lord Frost, he sees the ultra-wealthy as better able to understand and support the real wishes of ordinary voters than government, or what he calls the “British political class”. I am not sure whether that makes him an anarchist or an illiberal democrat, which is to say, an authoritarian in the style of Viktor Orbán or Donald Trump. I believe in liberal democracy and in creating, so far as possible, a level playing field for all contending opinion in public debate and, in particular, in political campaigns. For that, we need a trusted Electoral Commission with sufficient powers to punish those who break the rules.
I hope that the Conservative Front Bench will admit the error it made in government in attempting to limit the independence of the commission and enormously increase campaign spending limits. Wealth piles up on one side of politics—which is not, whatever the noble Lord, Lord Frost, believes, the side of the poor or the left behind. Money is a vital aspect of political campaigning, but massive flows of money pollute politics and endanger democratic debate, and we must use the forthcoming scrutiny of the Representation of the People Bill to regulate that flow more tightly.
Lord Jay of Ewelme (CB)
My Lords, I have learned much from the debate so far, and we will learn a lot from the speeches still to come. It is a particular pleasure to speak after the noble Earl, Lord Kinnoull. I am conscious that I am somewhat outside my comfort zone in speaking today, and so I will speak principally as a voter. I vote assiduously in local elections; I used to vote assiduously in European parliamentary elections, but alas no more, and I would vote assiduously in general elections were I allowed to do so. I hope the Minister will tell us what plans the Government have to enable Peers to vote in general elections in future.
The need to tighten up the present arrangements for political party financing is clear, as the noble Earl, Lord Kinnoull, has said. In 2020, when Boris Johnson was Prime Minister, the Law Commission reported:
“The current laws governing elections should be rationalised into a single, consistent legislative framework”.
In April 2026, under the present Prime Minister, the Rycroft review recommended that there should be an annual cap on donations from British donors living abroad, a moratorium on donations in crypto assets, and that political parties’ ability to monitor donations and deal with the threat of foreign financial interference should be strengthened. That is all very sensible, and I am glad that some of the Rycroft report’s recommendations will be included in amendments to the Representation of the People Bill. Can the Minister update us on the progress of that important Bill and on proposals to strengthen the Electoral Commission, whose role in monitoring and enforcing the present system is crucial?
It strikes me that, as the noble Lord, Lord Blunkett, has said, this is all becoming quite urgent. The noble Earl, Lord Kinnoull, has rightly spoken of the importance of trust in our political system and in our political parties. The Electoral Commission’s annual public opinion tracker shows that 14% of the British public thinks that political party financing is transparent. Without transparency there is no trust, and without trust we will see the rise of parties on the extremes and a dangerous lack of public confidence in our democracy, so we need reforms soon.
There are alternative ways of funding political parties. France, Germany and Spain all permit public funding under certain conditions, and to do so here would not be especially innovative. There is already Short money and the policy development grants scheme, and there is free TV airtime for party-political broadcasts. None the less, I know the outcry that further public funding of political parties might cause. One can imagine the response of the Daily Mail if it were proposed by the Labour Party, and of the Daily Mirror if it were proposed by the Conservative Party. But if the choice is between the continuation of the present system, with all its failings, on the one hand, and public funding effectively monitored by the Electoral Commission on the other, I would not, as a taxpayer, self-evidently choose the former.
I therefore hope that all three political parties, in responding to this debate, will make clear their absolute commitment to reformed and properly monitored political party funding arrangements that will still arguments for extended public funding.
Lord Johnson of Lainston (Con)
My Lords, I welcome this debate into this important matter, but more to help put the record straight than to add further fuel to the misconception about how mainstream political parties raise funds. The noble Earl, Lord Kinnoull, raised some extremely important points, but the situations he illustrated were criminal acts in my view. The law is clear; it is the enforcement that is the problem.
With the exception of my noble friend Lord Leigh of Hurley, I think I have been involved in party fundraising for probably longer than anyone in this House. I see it as my duty to encourage people to support my party. Indeed, when asked by people from other persuasions if they should donate to their cause, I always encourage that too. I do not have an interest to register. I have stopped raising money for the Conservative Party for the time being—I am afraid I found I had run out of friends and people were crossing the road to avoid me.
In all my time as a treasurer, as chairman and as vice-chairman for finance for the last 15 or so years, I was never—not once—asked to influence something in exchange for a donation. All our donors wanted, and sadly seldom got, were basic conservative principles put to work in government. I see some union Barons opposite; they probably feel the same way about their own contributions. It is a totally incorrect idea that there is a nefarious influence, either from home or abroad. In fact, everyone involved in funding whom I dealt with in the Conservative Party was absolutely petrified that they might break the rules in some way.
What these debates and sentiments end up doing is building further on the myth that giving to a political party is somehow a bad act. We in this House should actually be making it easier to donate, with less friction, and, frankly, it should be more applauded. Noble Lords worry about the potential for Elon Musk to make huge donations, but that is illegal for him as a foreign citizen from a foreign entity. In fact, it would be worse for us if mainstream parties cannot raise enough money to take their messages out to the electorates and are superseded by fringe parties instead.
The proposals for enhancing the powers of the Electoral Commission have some merit, though. The reducing of certain classes of offence, as has been mentioned, to a civil matter is eminently sensible. The fear of good people acting as election agents or some village tombola raising a few hundred pounds should not be a matter for the police where genuine mistakes are made. This is a good move for our politics. I applaud the current leadership of the Electoral Commission for its very sensible approach to proportionality, which we should always bear in mind.
What I would recommend is probably a bit contentious on my own side, but it is quite simple: we should impose a cap—I have said this consistently—on donations from any individual. It could be £100,000, £50,000 or £75,000—whatever it is can be discussed. We should, at the same time, raise the threshold of reporting to a higher level, maybe £20,000, under which only a record should be kept, and remove small fundraising events entirely from the onerous rules which reduced the level of local activity in politics. No one person should be able to buy a political party, but many people should be encouraged to engage at a sensible level and not be hounded for it. Unless we do these things, we will further denigrate our system at a huge cost to our security and future.
I also think to some extent this should relate to the unions. I am very careful, and I do not like the political manoeuvring that tries to limit the power of unions to donate, because the Conservative Party has a foundation, which is also an aggregation of donations, which is a very important part of our funding. We should be aware of where influence is directed, and to suggest that the unions do not have direct policy-making power is absurd. Indeed, they have been championed in terms of how they have selected the new leader of the Labour Party and, potentially, the new Prime Minister. In any debate we should be very open about that because what we want is transparency. If we have transparency, we will have faith in politics.
At the end of the day, we are missing a key point here. The real issue is to confront the fact that we now have, in this Parliament, MPs elected not on national issues but on narrow sectarian issues based on communities abroad. We have serious issues of voter fraud, family voting, intimidation of candidates and people’s trust in our elections is declining fast. We are so worried that a rich American might give some money to Restore that we are totally missing the point about where we should be directing our attention. The people trying to influence our politics from abroad are not donating to the Conservatives, Labour or the Liberal Democrats. They are running their operations from abroad in order to influence voting intentions here. We are entirely missing the point if we think that it is about donations to parties.
We should use this debate not to spend our time limiting and controlling but to find ways to enlarge the support bases of our mainstream parties, showing the country that donating to a political party is a good thing, and using our powers here to encourage people to step forward and become a more meaningful part of our democracy. The alternative is state funding of political parties, which we can neither afford and I do not think we should support.
Baroness Hayter of Kentish Town (Lab)
My Lords, Labour’s 2024 manifesto promised to
“protect democracy by strengthening the rules around donations to political parties”—
an aim shared, I am sure, by all of us from whichever party or none. Trust in politics, Parliament, our system of government and lawmaking is crucial for the maintenance of democracy. Sadly, such trust has declined and we need action to restore it.
Money is one element. Donations to political parties have a whiff of buying influence or access, whether the money comes from companies or wealthy individuals. I say “wealthy” because it is big money that concerns people, not the purchase of £20 of raffle tickets, which, yes, we still do. The Government have taken action and, unlike the noble Lord, Lord Maude, I am delighted that the Rycroft review recommended a cap on donation from non-residents. It has been mentioned by other noble Lords. Most in the House will know that I have raised this issue ever since the previous Government extended from 15 years to life the period in which those who have left our shores but still have a UK passport can remain on the electoral roll. I welcome the cap, though I still cannot understand how someone who pays no tax here and does not use our services or contribute to our economy or to civil society should be able to fund a political party. They have no skin in the game, so why are they influencing our politics by financing a party’s ability to campaign and win?
We have already heard from the noble Earl, Lord Kinnoull, and my noble friend Lord Blunkett about the enormous amounts of money paid to Reform by people who no longer live here. I think some of them are based in Thailand and elsewhere. That money from people who do not live here—they may have a British passport—is not good for politics or our democracy. Further than that, how can we check on the bona fides of overseas donors in a sort of “know your donor” requirement? Where did they get the money from that they are going to contribute? Is it their own or has it come from a non-permitted donor? Is the donor even alive or in prison? Are they working for another Government? It may be that they are, quite legitimately, but does it not feel a bit odd that they are then funding our political parties? How will the Electoral Commission, or any individual party, police these donations and undertake due diligence, either on the person or on the source of their money?
Furthermore, how effective in terms of democracy is a cap of £100,000 a year per person? Over a five-year Parliament, a couple could give £500,000 each. That is £1 million per Parliament from an expat couple, who may not have lived here for decades and may have no intention of returning. I hope that, when the Bill arrives here, I and others in the House can persuade my Government to reduce this cap to £10,000 a year, or else make donations possible only for those who are registered for tax in the United Kingdom.
My second ask of the Government is to support my Private Member’s Bill, which will have its Second Reading tomorrow. This would require any person or organisation lobbying a Minister or Permanent Secretary to be on the register of lobbyists and report such meetings. It is not a lot to ask, and it is what virtually all our equivalent democracies do. I am an old lobbyist, so I have no problem with the practice. In fact, I think when I was lobbying on behalf of Alcohol Concern, the noble Lord, Lord Frost, was arguing exactly the other case on behalf of the Scotch Whisky Association. It is quite right that we both did that, but surely that should be out in the open, because many lobbying approaches are from people with money behind them. Good government means listening to everyone affected by policies or legislation, but it should not be in secret. We should be able to see who has the ear of government.
I finish by thanking the noble Earl, Lord Kinnoull, for his introduction, particularly his opening bits about Scotland. It is bad for the whole of the United Kingdom what has happened in one part of it.
Lord Frost (Non-Afl)
My Lords, it is very good that we are having this discussion today; I want to raise two issues. The first is the role of the Electoral Commission and the second is the composition of the electoral register.
On the first, I cannot entirely agree with the general approval of the direction of travel of the Electoral Commission in recent years. I worry that we are creating another quango, as we have previously in other areas, that in day-to-day practice is relatively unaccountable. We have touched on the reporting arrangements that were originally brought in for the Electoral Commission when it was created. There is not real accountability to the Speaker’s Committee; it is a financial scrutiny loop, really. Of course, the Speaker’s Committee has a government majority on it. That is why the Government that I was briefly a part of changed this in 2022, so that there was at least some attempt to pay due regard to broader strategic priorities in this area. It seems that we are now going to change this back.
The problem is that somebody has to decide how the Electoral Commission acts. If it is not proper accountability from outsiders, then it is the permanent bureaucracy that runs it. The permanent bureaucracy is not, in my view, neutral, and has a very strong worldview in these areas. We saw that on the Electoral Commission during the Brexit period when the commission went after people without properly understanding its own rules, putting individuals through the wringer. We saw it—I say this at the risk of distressing the noble Lord, Lord Wallace—in the highly contentious and political recommendations in some areas of the Rycroft review. We see it in some of the actions of the Electoral Commission even today. I do not think it should be a semi-political actor and I do not think its head should be a political figure, but that is what is beginning to happen. I happen to agree with the comments by the head of the commission a few months back:
“As a matter of principle, we do not think that capacity constraints are a legitimate reason for delaying long planned elections”,
but I do not think it is his job to be rebuking the elected Government in these highly political areas. There are real risks here.
The only thing that would be worse than government direction of the commission would be the commission becoming a player itself. It should be an umpire, not a player. The head of an electoral regulator carries automatic media authority. When he pronounces on contested questions, he lends the weight of officialdom to one side of a live political argument. Public confidence depends on visible restraint by the Electoral Commission. I worry that the powers that we are about to give it will push it in the opposite direction.
On my second point, on the electoral register, we all believe and often say that you must be a British citizen to be able to donate to a political party—Ministers often say this. Actually, it is not true. The condition is that you have to be on the electoral register. As we know, the electoral register includes many qualifying Commonwealth citizens, and indeed Irish citizens, resident here, so the right to bankroll a British political party in fact goes rather further. The real problem is not the donation issue itself, but the absurdity in the first place of having large numbers of non-British citizens on our electoral register. I must say that, when I have written and spoken on this subject, I find that people are incredulous—they literally cannot believe that you do not have to be a British citizen to be on the UK electoral register.
The scale is not marginal; it almost certainly runs to the millions. The Electoral Commission itself holds no record of it, but we can estimate it. In the 2021 census, there were 1 million adults here holding only a Commonwealth passport. That figure has plausibly doubled, at least, since then. The Electoral Commission’s own report in 2023 found that 66% of eligible Commonwealth citizens in Great Britain were registered to vote. This is not even properly policed. Zimbabwe withdrew from the Commonwealth in 2003 yet, more than 20 years on, its nationals can still register to vote because Parliament never amended the relevant schedule to the nationality Act.
This is not a new problem. The noble and learned Lord, Lord Goldsmith, recommended in 2008 that the rules should be changed to establish a clear connection between citizenship and the right to vote and donate. That has never been taken up. This is the real scandal. If we are really worried about foreign influence in our politics, we need to stop foreign citizens voting. If people want to vote in our country, they need to commit to our country and become citizens. This anomaly has lasted too long and it should be ended.
Lord Carter of Haslemere (CB)
My Lords, I declare an interest as I have been advising the charity Spotlight on Corruption on these issues. I am grateful to the noble Earl, Lord Kinnoull, for initiating this debate, since what is more important than the integrity of our electoral system?
Political party finance goes to the heart of this. For many years, there has been no restriction on how much a party can receive from donors, meaning that some parties have had a game-changing advantage during elections. Electoral success should not be significantly determined by financial power, since that diminishes our democracy and risks a handful of wealthy individuals subverting political discourse and policy-making. Now that we have more parties—some at the extremes of right and left—competing for power and receiving large donations, the need to instil a greater degree of fairness in how much each party can receive and spend has never been so important.
To their credit, the Government are addressing some of the issues in their Representation of the People Bill, such as the commencement of Section 54A of the Political Parties, Elections and Referendums Act 2000, which will require donors to declare whether they have received money from another individual in connection with their donation. Parties will be prohibited from accepting any donation without such a declaration. However, the wording of Section 54A, enacted—unbelievably—17 years ago but never commenced, is vague and too easy to circumvent in 2026. It prohibits money given to the UK donor
“with a view to, or otherwise in connection with, the making of the donation”.
However, the UK donor might have received the money from a person abroad who was not on the electoral roll and who purported to give it for a different purpose, in circumstances where it was obvious to each of them, but no one else, that it was intended as a political donation. The noble Baroness, Lady Hayter, touched on that point. One answer is to expressly prohibit foreign money unless earned by an elector here or abroad, since it would be much easier to establish whether money has come from abroad and test the legitimacy of that than to try to prove beyond reasonable doubt that the donor knowingly or recklessly made an unlawful declaration under Section 54A.
The Government have said they will impose a £100,000 limit on donations from an elector abroad, but this does not deal with non-electors abroad. It also seems inconsistent to treat electors in the UK and abroad differently. As an alternative to a donation cap, is it time for a tighter cap on campaign spending? After the 80% increase in the spending limit in 2023, both Labour and the Conservatives increased their campaign spending by tens of millions. Set at the right level, spending limits promote fairness by preventing wealthier parties massively outspending others, and thereby reduce the risk of electoral success being influenced by financial power. The amount of the spending limit should be independently agreed with the Electoral Commission, the Ethics and Integrity Commission and the Speaker’s Committee. Fair spending limits are arguably the best way of putting political parties on a more equal footing. As Professor Keith Ewing put it, not having fair spending limits is like
“inviting two people to participate in the race, with one participant turning up with a bicycle, and the other with a sports car”.
The Government should also facilitate criminal enforcement, which is virtually non-existent. Despite receiving referrals from the Electoral Commission, there have been no prosecutions by the Met, no doubt because of the complexities of electoral law, lack of resources and other priorities, but there is no point having rules if they are not enforced.
The Electoral Commission has the expertise in electoral law, and one option is to give it more resources to investigate offences; for example, by having greater powers to demand information from financial institutions and others, with the police retaining responsibility to refer cases to the CPS. Alternatively, as recommended by the Joint Committee on the National Security Strategy in its recent third report, we could create a new national political finance enforcement unit, staffed by secondees from across existing agencies.
To conclude, election Bills do not come around often. The Government are addressing some issues in their Bill but not going far enough. They need to take this rare opportunity to finish the job by tightening restrictions on political donations and spending, and by giving more powers to the Electoral Commission to investigate breaches.
Lord Massey of Hampstead (Con)
My Lords, I start by thanking the noble Earl, Lord Kinnoull, for introducing this debate on such an important subject for our country. I declare my interest as a former chief executive of the Conservative Party and indeed a donor to the party for over 25 years, although not on the scale of Mr Harborne.
Lord Massey of Hampstead (Con)
A great shame. I come to this debate from a slightly different angle, perhaps, from other noble Lords. I have always believed that assisting the work of a political party that shares one’s views and values is a form of public service. As a party, the Conservative Party has always been deeply committed to the principles of the Electoral Commission and we adhered very carefully to the rules and always carried out detailed due diligence on large donors. I agree with the idea of a cap on overseas donors and with the idea of increased fines for misconduct; however, I am concerned about some proposals in the Bill which would be unfair to companies wanting to support any of our parties.
I want to address another concern, which is the matter of electoral fraud, as I am concerned that some items in the Bill could have the unintended consequence of making this easier. Most political parties believe that companies should be able to donate to a political party. At the same time, we are all aware of the potential for foreign money to enter our politics, which of course can come through individuals as well as corporates. The question is: what is the test we ought to apply in practice to judge eligibility to donate? The Bill stipulates three tests—perhaps I am getting slightly ahead of myself, as it is not yet before us, but I am addressing an item that will be in the Bill. The three tests are UK-generated revenues, UK headquarters and majority UK control. I strongly agree with the last two: we need companies to be in the UK and majority controlled by UK shareholders. However, the idea that the revenue should be generated in the UK could create some unfairness for those who make some or all of their revenues outside the UK.
The revenue source condition will not stop a determined shell company, but it will penalise genuine UK-owned businesses. In addition, the information on the geographic source of revenue is simply not discoverable for private companies, in effect, making it impossible to apply this new test to any company. I ask the Government to look again at this revenue source requirement.
I now turn to voter fraud, which is another serious issue that should concern us all. The Bill may unwittingly open a door to fraud by allowing non-photo ID to be used as verification. It also provides for the acceptance, without proper checks, of digital ID and introduces the idea of vouching. For those who have not read about vouching, this means that voter A can tell polling station staff that voter B is eligible and has the necessary ID. These proposals amount to a significant loosening of our voter verification rules at a time when there are rising concerns at the growing number of election frauds that have been alleged over several years. If we are worried about interference in our politics, and we should be, we ought to be alive to the real risks posed by voter fraud in certain areas. In this context, it is not clear why any dilution in the stricter requirement introduced by the last Government should be introduced.
This fraud risk is reinforced by the proposal for automatic registration, which will provide further opportunities for wrongful voting, as we know the electoral roll is only 84% accurate. However, I commend the Government on one important change, which is that candidates for UK general and local elections will now have to prove their identity. It seems extraordinary, does it not, that until now we have allowed people to stand for Parliament without having them prove their identity? The whole system needs to be as rigorous as possible to reinforce public confidence in our electoral system and in democracy itself. It is all about trust, as mentioned by the noble Earl, Lord Kinnoull, right at the beginning of this debate.
A final concern I want to raise, and I will be very brief, is about votes for 16 year-olds. This change is manifestly inconsistent with almost all rules defining adulthood, including by this Government, and the eligibility rules of the overwhelming majority of OECD countries. In implementing the social media ban up to 16, the Government recognised the vulnerability of young people to malign influences, yet the Bill places an expectation of competency for them to vote as soon as they turn 16, which is a dangerous precedent and should be resisted when the Bill comes before us.
Lord Kerr of Kinlochard (CB)
The noble Earl, Lord Kinnoull, introduced the debate with his usual courtesy and wisdom, but he reminded us that, as a highlander, for all the courtesy, he carries a claymore. I cannot follow him in that—I am a boring lowlander.
I want to support the plea from the noble Lord, Lord Blunkett, for urgency with the Representation of the People Bill. It is worrying that it has been three months since the Rycroft report came out. I thought Rycroft was quite right when he presented it saying that he did not want to press a panic button, but he did want to ring an alarm bell. I think that it is alarming.
The particular angle I want to explore, one that has not been touched on so far in this debate, is hostile state actors using agents of opportunity, gullible, greedy or malevolent, in this country. We need to look closely at the financial links that have been well documented between RN in France and Moscow and the links that are well documented between the AfD in Germany and Moscow—the Fidesz link with Budapest is of course notorious. There were reports of close involvement, interference, by Russia in the Romanian and Moldova elections. I cannot stand that up, but the reporting seemed convincing.
Last weekend, I heard a senior Ukrainian say that with the war going rather better, even though the Americans have reduced their support, the worst thing for Ukraine, the thing it feared most now, was an election going wrong in a major European state. I think he was talking about France, but he might have been talking about Italy or Germany, or he could have been talking about us. What will happen if the Russians reach the same analysis, if they believe that undermining our trust in our democracy will assist in getting a party in power in a western European capital that is less willing to support Ukraine? You do not need a crystal ball; they have done it before and they know how to do it.
The Representation of the People Bill has been sitting in the Commons, and we do not know when Report will be. I think that the message we should send, the message from the noble Lord, Lord Blunkett, is that we want to see it soon and to see it amended and strengthened along the lines that Rycroft recommended.
We need to increase rather sharply the penalties for political parties which are found not to have checked their donors adequately, if parties do not know their donors, or if a state actor turns out to have been behind a donation by an individual, association or company. We should nudge the parties in the right direction by increasing the risks they run if they do not do so by giving the Electoral Commission stronger investigatory powers, such as the power to require information from other government agencies, as the noble Earl, Lord Kinnoull, recommended, and the deterrent of much higher penalties.
I do not share the concern of the noble Lord, Lord Frost, about the leadership of the Electoral Commission. The current leader of the Electoral Commission and the noble Lord occupied the same desk in the Foreign Office and they were both extremely effective. I hope that the Government are using the delay in the Bill to strengthen it and that, toughened up, it will reach us before the leaves are off the trees. Rycroft was right to sound the alarm.
Lord Shamash (Lab)
My Lords, thank you for allowing me to speak in the gap. I declare an interest, having been the election lawyer to the Labour Party for many decades. I will talk about one small, narrow issue. One frustrating issue is the consolidation of the Representation of the People Act—the number of volumes that I have on my desk is so wide. It is about time we did this; it has been called for for years.
I am particularly concerned about enforcement. The way to deal with it is quite tricky. If an MP has transgressed, you can commence an election petition. That is very expensive to do, and parties and people I have advised over the years have had to think twice about whether it something for which they want to take the risk. There is a piece of legislation that many noble Lords will know: the Recall of MPs Act 2015, where MPs can be recalled if they are convicted or suspended by the House of Commons. I invite my noble friend the Minister to think about how we could revisit that legislation and whether the better bits of it could perhaps be incorporated into a separate or amended bit of legislation, with some enforcement powers. When foreign money comes in and seeks to promote whoever it is, and that candidate wins an election, they are there; they are elected. The procedure to get rid of them must be easier, clearer and obvious to the public, otherwise people will give up because they do not have the resources or the political commitment to it. I ask the Minister to think about it, and I am happy to meet him separately to see how we could take this forward.
The noble Lord, Lord Jay, raised the issue of enforcement. It is important for the Electoral Commission to have the power to be able to achieve this, but we must be very careful about giving it too much power, because we do not want it breathing down the necks of all the politicians. I am sure many noble Lords who have been involved in politics over the years would not want that. I thank noble Lords and I hope that the Minister will now consolidate the Representation of the People Act.
Lord Pack (LD)
My Lords, I join other noble Lords in thanking the noble Earl, Lord Kinnoull, for such a helpful and timely debate. As we have heard from the contributions today, it is useful to debate this topic in advance of legislation coming to this House, but with a step back from the necessary microfocus we quickly get into when the legislation is in front of us. As someone who has also long called for consolidation of election law, I have been particularly heartened by the number of contributions, including the one before me, highlighting this issue and raising its importance.
When I asked an Oral Question in this place a while ago about the topic, it was perhaps understandable but a little disappointing that the Government’s position seemed to be that, because consolidation will take a long time to carry off, they were not going to prioritise it. One can therefore unfortunately characterise the Government’s position as: “Because it’s going to take a long time, we’re going to put off starting it”. The alternative interpretation is that, because it is going to take a long time to do, maybe that is all the more reason to start it sooner rather than later.
I very much agree with the comments by the noble Lord, Lord Carter, about the long delay in implementing the provision about the original source of money. It is welcome to say something nicer about the Government’s position in this case. It is welcome that the Government have definitely moved on that—it happened to be the topic of my first Oral Question in this House, and I acknowledge that the Government have moved on that issue. But underlying all this is a basic tension in a free and democratic society between, on the one hand, the basic principle of one person, one vote—an essential equality between us all—and, on the other, the fact that we all should be free to spend or give our money as we wish in a free and democratic society. That means that, inevitably, those with more money have an ability to chip away a little bit at the fundamental equality that there should be in a democracy.
Not all these issues are going to be easy to resolve or address, but it might be useful to focus on one area which has not had attention so far in the debate: donations that are made direct to candidates at election time and declared on their candidate expense returns. This is an issue on which I did some research with Chris Butler that was published in Political Quarterly a couple of years ago. I am sure all noble Lords are deeply familiar with that, but I will expand on it for those who are newer to the topic. If, for example, at general election time, someone makes a donation directly to a candidate, which is then declared on their election expense return perfectly legally and properly, the problem is that that money then essentially disappears from the system. Those donations direct to candidates do not appear in the Electoral Commission’s published register of donations.
Moreover, when Chris and I asked the Electoral Commission for copies of some of the expense returns that it had kept so that we could do our research, it decided—I am sure on good legal advice—that it could share those forms only with the names of the donors redacted for data protection reasons. We have a system where donations are declared on bits of paper but, when you ask to see those bits of paper, the name of the donor is redacted. That is, I think it is fair to say, an unsatisfactory situation. It is unsatisfactory not just in principle: our estimate was that around £3.5 million was donated at the 2019 general election in this way, so it is not merely an obscure, fun or trivial point but a route by which millions of pounds are flowing into our political system. Indeed, about one in four donations received by successful candidates who were elected were direct to them; the money was not recycled from a political party and then passed on to them. As I said, who those donations were from were, in effect, kept secret.
In some cases, where people are successful and are elected, there is the MPs’ register of interest, which people are meant to fill in and declare appropriate sums on. But that does not wholly solve the problem, because that applies only to donations of a higher threshold and only to people who are successful. The names were redacted on the forms that the Electoral Commission was willing to provide so one has to step cautiously in trying to compare those forms with the MPs’ register of interests, but Chris Butler and I found that about one in 10 of the donations appear to be of a significant enough sum to an MP that they should be on the MPs’ register of interests, and that there was no matching entry on the register of the right size. There may be some explanations in one or two cases, but there is a question about how the system does not appear to be properly joined up, and a non-trivial amount of donations that people who end up being MPs receive and should be declaring do not appear to be being properly recorded.
There are many other circumstances in which donations direct to candidates and direct to politicians are reasonable, legit and above board, and the system works well. I say that not only because, when I twice ran to be president of my own political party, I received donations directly, which are all properly recorded and can be looked up on the Electoral Commission website. I hope that the example I have given highlights how much of an issue there is around the donations of money directly to individuals.
I will briefly give one other example. It is true that the Representation of the People Bill, as it stands, introduces a cap on foreign donations, but that cap is a per candidate or per person cap. Therefore, very simply, under the current proposals any political party contesting all the seats in the country—most of the parties that contest across the board do not stand in Northern Ireland, so there are 632 seats, including the one held by the Speaker—would be able to donate 632 times the cap. As such, the figures that the noble Baroness, Lady Hayter, gave earlier are unduly modest on the amount of money that could legitimately be given within the spirit of what is currently proposed.
I very much hope that we will hear from the Minister some intentions and thoughts around tightening up some of the proposals, particularly for donations made directly to politicians and candidates. Of course, if the Electoral Commission is right—I grant that it will have taken specialist advice on this—that it is not allowed to release the names of those donors, that may be a suitable ground for an additional amendment to the Representation of the People Bill when it comes our way.
I will end on what may seem like a slightly less important point, but it concerns a fundamental, underpinning issue: the consolidation of election law. It is easy to always think that tidying up stuff and making it neater is never quite the priority. I confess that I have never put demanding the consolidation of election law as the headline story on the front of a Lib Dem Focus leaflet—and were I to find a colleague who was planning to do so, I would reach for the phone to tell the printers, “Don’t print this yet!”
None the less, the long-term commitment to keeping things neat, tidy, clear and comprehensible brings significant benefits. The Rycroft review rightly highlights the potential benefit in helping protect our democracy against foreign interference. Returning officers would absolutely talk about the benefits of it making their lives easier and, particularly in an environment of stretched budgets, making it more possible to run elections successfully in a more cost-effective manner. A bit like the frustrated parent who is trying to tell their teenage child to remember to tidy their bedroom now and again, I hope that, in that spirit, we will hear from the Minister on the topic of consolidation.
Baroness Finn (Con)
My Lords, I too thank the noble Earl, Lord Kinnoull, for bringing forward this important debate and for giving me the opportunity to discuss some of the issues beforehand.
There is a simple constitutional caution at the heart of this matter. A Government should not direct the power of the state to undercut the lawful flow of funds to their political opponents. Once that line is crossed, it is not easily uncrossed. It invites reprisal when power changes hands, and it weakens public confidence that electoral law is being made in the national interest rather than in the interests of the party temporarily in office. Party finance law is not ordinary lawmaking; it is the law by which the competitors in our democracy agree on the rules of the contest. The Government of the day are the trustee of those rules, not the proprietor.
The previous Government were right to be tough on hostile state activity. They passed the National Security Act 2023, creating the statutory framework for the foreign influence registration scheme. No one in this House should be complacent about foreign interference, but the existence of that threat does not justify Ministers blurring the distinction between foreign interference and lawful donations made by registered electors or genuine UK businesses. This side of the House has been consistent: changes to the rules should be made through proper cross-party consultation. That is a long-honoured constitutional custom, an argument so eloquently put forward by my noble friend Lord Maude of Horsham.
In its 2016 report, the House of Lords Select Committee on Trade Union Political Funds and Political Party Funding, chaired by the noble Lord, Lord Burns, recorded the importance of cross-party consensus on matters affecting the interests of rival parties. The committee quoted Sir Winston Churchill, to whom my noble friend Lord Maude referred today. In the other place on 16 February 1948, he said:
“It has become a well-established custom that matters affecting the interests of rival parties should not be settled by the imposition of the will of one side over the other, but by an agreement reached either between the leaders of the main parties or by conferences under the impartial guidance of Mr. Speaker”.—[Official Report, Commons, 16/2/1948; col. 859-60.]
That was the right principle in 1948 and it remains the right principle today. It is striking that one of the witnesses who repeated Churchill’s words to the committee was the then general secretary of the Labour Party, now the noble Lord, Lord McNicol of West Kilbride. He described that custom as a “principle of fairness”. I therefore simply ask the Minister: what has changed?
Sir Nick Clegg warned that issues of money and power in British politics should be dealt with on a cross-party basis. Jack Straw said that, in this area, the Government of the day act as a trustee for our democratic system. They were both right. Following Sir Hayden Phillips’s report, commissioned by Sir Tony Blair, cross-party talks were convened. In 2011, Sir Nick Clegg again convened cross-party talks on party funding and donations. In 2013, an unofficial cross-party working group published a draft Bill.
If cross-party consensus was already a well- established custom in 1948 then by 2026 it is more than a passing courtesy. Whether or not one calls it a full constitutional convention, it is plainly an established democratic restraint. The Burns committee ultimately concluded that
“while there is no formal convention that all reform of party funding must take place by consensus, history shows that governments of both main parties have acted with a degree of restraint; and indeed it is desirable to seek consensus. If any government were to use its majority unilaterally to inflict significant damage on the finances of opposition parties, it would risk starting a tit-for-tat conflict which could harm parliamentary democracy”.
That warning could hardly be clearer. Whatever party is in power, it would be detrimental for conventions to break down and to open the door to US-style hyper-partisan legislation. As Sir Nick Clegg warned the committee in 2016, if a Government acted unilaterally, they would
“rue the day … because one day the boot will be on the other foot”.
That is why the Government’s handling of the Rycroft review and the Representation of the People Bill is so troubling. I do not here criticise Sir Philip Rycroft’s review, nor do I deny that there are legitimate questions about transparency, enforcement and the resilience of our political finance system. However, an independent review commissioned by Ministers is not a substitute for proper cross-party talks led by Ministers.
The Labour manifesto contained a broad statement that the Government would
“protect democracy by strengthening the rules around donations to political parties”.
That sentence does not give Ministers carte blanche to rewrite the financial rules of political competition unilaterally. Ministers have said that officials have engaged with political parties through the Parliamentary Parties Panel on technical aspects of reform—that is not enough. Technical consultation with party professionals is not the same as cross-party political agreement. A review by officials or by an independent reviewer is not the same as party leaders, Ministers and opposition parties sitting down to agree rules that affect them all. The Government have now chosen to take forward some of the Rycroft recommendations, but not all of them, through the Representation of the People Bill. That selective approach is precisely why trust is so important. If Ministers cherry-pick from a review in a way that happens to disadvantage their political opponents, they should expect the closest possible scrutiny from this House.
I turn to the proposed cap on donations from overseas electors. I shall make one point absolutely clear: there is a fundamental distinction between foreign interference and a lawful donation from a British citizen who is registered to vote. I take note of what the noble Lord, Lord Frost, said about being a British citizen. There is a long-standing principle, originally recommended by the Committee on Standards in Public Life, that permissible donors should include those on the UK electoral register. Prior to 2022, British citizens overseas could already vote in UK parliamentary elections and make donations, subject to the 15-year time limit. In response to the comments made by the noble Lord, Lord Wallace of Saltaire, the Elections Act did not invent that principle; it removed the arbitrary 15-year cut-off. The Government propose a £100,000 annual cap on donations and regulated transactions by overseas electors, with retrospective effect from the date of announcement. We do not support that arbitrary cap or its retrospective application. All this should not happen without cross-party agreement.
I turn next to corporate donations, a matter so effectively addressed by my noble friend Lord Massey. If Ministers intend to adopt a post-tax profit test, they should first publish a full impact assessment showing how it would affect donors across all parties, including donations accepted by the governing party itself. They should explain how the rule would apply to start-ups, investment-heavy businesses, social enterprises, companies in volatile sectors and firms with uneven earnings. They should also explain why a profit test is preferable to a genuine business test backed by stronger due diligence and enforcement. The Government should not smuggle through a major restriction on corporate political giving under the banner of antiinterference.
The noble Earl, Lord Kinnoull, has rightly drawn attention to the important role of the Electoral Commission. We agree that it needs operational independence and sufficient resources to perform its functions effectively and command the confidence of the British people. The Murrell case is a salutary reminder that the improper use of party funds is not a technicality; it strikes at trust in political life. But that case also illustrates the point. The answer to wrongdoing is the effective enforcement of the law, as my noble friend Lord Johnson of Lainston made clear—it is not the partisan remaking of political finance rules in a way that burdens lawful opponents.
The Government’s present approach risks confusing two very different things. One is the legitimate need to protect our democracy from foreign interference and financial abuse. The other is the temptation for a Government to tilt the rules of political competition in their favour. This House should be vigilant in resisting the second while supporting the first.
We are ready to engage seriously on transparency, enforcement and the protection of our democracy, but we will not accept unilateral, retrospective and partisan changes to party finance law. We will not accept the conflation of British overseas voters with foreign actors. We will not accept broad restrictions on genuine UK businesses without proper evidence, proper scrutiny and proper cross-party agreement.
The Government should change course. They should withdraw from unilateralism, convene proper cross-party talks and return to the constitutional restraint that has served our parliamentary democracy so well. Above all, Ministers should remember that in this field they are not merely legislators—they are trustees of the democratic system itself.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Lord Lemos) (Lab)
My Lords, I welcome the opportunity to respond to this debate on the regulation of political finance and the role of the Electoral Commission. I thank the noble Earl, Lord Kinnoull, for opening the debate, and other noble Lords for their contributions to what has been a fascinating, timely and important debate.
It is clear from the contributions that we all share a deep commitment to sustaining trust in our elections and in our democracy. That is what is at the heart of the Government’s approach. I will try to respond to the many important questions raised, although I am afraid I am a bit hopeless at the namechecking—but I will do my best. I will certainly read Hansard carefully with my officials and, if necessary, follow up in writing any points I have missed.
I start by making the general point, which I know other noble Lords have made, not least the noble Earl, Lord Kinnoull, that our democracy in this country is central to our very identity as a nation. Our democracy is respected and, in many cases, revered around the world. We are all proud of that democratic heritage and seek to protect it.
That is why it is a priority for this Government to stop foreign interference in UK politics, including from foreign state actors, as the noble Lord, Lord Kerr, has said, and to protect our democracy. A key pillar of this is strengthening the rules on political donations and ensuring that they are effectively enforced. The Representation of the People Bill contains crucial reforms that will deliver stronger safeguards against interference from malign foreign actors. I recognise what the noble Baroness, Lady Finn, said, that the previous Government took action, which we have built on: greater transparency for voters and more effective enforcement. These reforms implement a number of recommendations from key stakeholders, including the Ethics and Integrity Commission and the Electoral Commission, and I will come in a moment to the question of consolidation of electoral reform.
On political finance, our reforms aim to strike the right balance between protecting UK elections from foreign interference while making sure—I emphasise and reinforce this point—that legitimate donors can continue to fund electoral campaigns. This includes an enhanced due diligence “know your donor” scheme to guard against the possibility of money from illegitimate sources finding its way into the UK’s political system, which the noble Lord, Lord Kerr, drew attention to. Recipients of donations over £11,180 will be required to carry out a risk assessment considering the risks of donations being from impermissible sources. As such, they will have to check for signs of foreign or unlawful funding before deciding whether to accept or return the donation. I note the points made by the noble Lord, Lord Johnson, about being overly intrusive in these matters, but these “know your donor” approaches will help with transparency.
I turn to company donations. Key stakeholders have also warned that the current eligibility criteria for companies to donate is far too weak, and we are also introducing new requirements on company donations. The noble Lord, Lord Massey, made a number of important observations about company donations; I fear I will not have time to deal with them all, but all companies will have to demonstrate that they have a genuine connection to the UK through strict new eligibility criteria. I note the points he made, and I am sure we will debate them again. Companies will have to have made sufficient revenue to fund their donations; be headquartered in the UK; and be majority owned or controlled by UK electors or citizens. It really is quite a simple principle at stake here: foreign companies and investors that have no meaningful stake in the UK should not be part of our democracy. These measures will help prevent the use of shell companies and reduce the risk of improperly sourced, impermissible funds being channelled into our politics.
I turn briefly to unincorporated associations. Stakeholders have also argued that existing rules surrounding unincorporated associations are a key vulnerability in our current regime. We are therefore tightening these rules and improving transparency. By reducing reporting thresholds, they will also be subject to stricter transparency requirements.
A number of noble Lords raised enforcement and the role of the Electoral Commission. The Government’s view is that having a properly empowered regulator in the Electoral Commission, which has the right powers, the right deterrence and the right capacity for enforcement, is essential to a functioning democracy. To that extent, I do not share the concerns expressed by the noble Lord, Lord Frost, although he made some other very significant points. These changes to the rules that we are proposing, around political donations, will address vulnerabilities and close loopholes in the existing systems.
However, to uphold trust in our democracy, we also need to ensure, as I have said, that enforcement of those rules is robust but proportionate. We are strengthening the powers of the Electoral Commission to ensure that enforcement is effective, and there is a strong deterrent for breaches of the rules. We are extending the Electoral Commission’s remit and civil sanctioning powers to include the enforcement of political finance offences relating to candidates. Currently, these can be pursued only through the police and the courts, which has led to a notable gap in effective enforcement since criminal prosecution is rarely pursued. Extending the Electoral Commission’s role will close this enforcement gap by providing more flexible and proportionate avenues for enforcement and promote more robust and encompassing regulation.
A point that the noble Earl, Lord Kinnoull, raised with me, and I want to make very clear, is that a robust political finance framework must be underpinned by a strong deterrent against serious malpractice. The current maximum fine the Electoral Commission can impose is just £20,000—that is insufficient. Therefore, we will significantly increase the Electoral Commission’s fining powers to a maximum of £500,000 per offence. We hope that that will have a deterrent effect and that it will improve enforcement.
I turn to the points made by the noble Earl, Lord Kinnoull, and the noble Lord, Lord Kerr. The Electoral Commission is hindered in its ability to share information with other regulators and law enforcement bodies, and we are therefore providing the commission with an explicit statutory gateway to share information, nurturing collaboration on cross-cutting issues, such as foreign interference. I know that many stakeholders want us to go further, and I am sure that we will debate that at some length, when the legislation comes before your Lordships’ House.
We recognise how vital it is for the health of our democracy that we have a regulator that is truly and fearlessly independent, and this is a central point in the Government’s approach. We are repealing the Government’s powers to designate a strategy and policy statement for the Electoral Commission. We regard that as an unwarranted requirement, and we want to put beyond any doubt the foundational principle of the Electoral Commission’s independence and strengthen confidence in its ability to oversee elections and regulate political finance without fear or favour in the future.
Virtually all noble Lords mentioned the Rycroft review. The Government welcome Philip Rycroft’s review, and we will be responding to the report in full very soon—not in due course but very soon. Obviously, I will not give any further hints.
I can tell your Lordships’ House, though, that Report stage in the Commons will be on 14 July. A number of noble Lords asked me about that, and I am happy to confirm that that is the case. My noble friend Lord Blunkett asked me about that with particular force, so I should acknowledge that.
We are already taking immediate steps to implement two of the review’s recommendations through the Bills currently before Parliament. First, we will cap donations from overseas electors that are over £100,000 a year. A number of noble Lords, including the noble Baroness, Lady Finn, and my noble friend Lady Hayter, commented on that. We want to cap donations from overseas electors, and the cap will include all donations from overseas electors received from 25 March, to respond to the question asked by the noble Lord, Lord Blunkett. Secondly, we will introduce a complete moratorium on crypto asset donations—they are far too opaque—until such point that Parliament and the Electoral Commission are satisfied that there is sufficient regulation in place to ensure confidence and transparency in donations being made in this way.
I now turn to some of the specific questions that noble Lords asked me. On the question of consultation on the Bill, which the noble Lord, Lord Maude, and the noble Baroness, Lady Finn, laid some emphasis on, we accept, of course, that individual political parties are important stakeholders and are crucial to this process. It is right that reforms that address systemic risks, such as foreign interference, opaque funding routes and inconsistent assurance tests, are also grounded in independent expert analysis and negotiated not only with those who are directly regulated and affected. This will ensure that the framework operates impartially, consistently and free from perceptions of favouring particular parties.
I take seriously the comments that both the noble Baroness, Lady Finn, and the noble Lord, Lord Maude, made about the need for restraint and vigilance about tit for tat—prisoner’s dilemma approaches to party funding. These measures will ultimately enhance trust and integrity in the system for the benefit of all campaigners.
On the question of overseas electors, raised by the noble Baroness, Lady Finn, and the noble Lord, Lord Carter, many donations from British citizens living abroad are legitimate and lawful. We would not seek completely to prevent them. We are acting on the independent recommendations in the Rycroft review—he identified the risks and recommended a cap rather than an outright ban. A cap will provide an additional but proportionate safeguard against the risk, and we are acting to implement this without delay. I know that my noble friend Lady Hayter has strong views on this, which she has expressed, but that is where we are.
Noble Lords will not expect me to comment on individual cases currently being investigated, either by the Parliamentary Commissioner for Standards or the Electoral Commission. But, in response to the opening remarks of the noble Earl, Lord Kinnoull, we take very seriously some of the issues that have been raised in relation to these individual donations, and we would encourage all the authorities, but particularly the Electoral Commission, to take any investigative or enforcement action necessary.
The Peter Murrell scandal does raise serious questions about the SNP’s misuse of donations, possibly public money and the scale of the cover-up. As the Prime Minister has said, there are clearly serious and legitimate questions that deserve answers and scrutiny. To the question from the noble Earl, Lord Kinnoull, it is now for the Scottish Affairs Committee to decide whether to undertake substantive work on this matter.
A number of noble Lords raised the question of the consolidation of electoral law. The noble Lord, Lord Pack, spoke eloquently on the long history of his commitment in this area. We understand the cause for the consolidation of electoral law and perhaps even modernisation in some ways, but the Government have made manifesto commitments. While it may be true, as the noble Lord, Lord Pack, suggested, that if something is going to take a long time you should get on with it—he made the analogy of tidying bedrooms, but I happen to have a poor track record in that department—these are manifesto commitments, and they are our priority. I think that he would expect and accept that.
In relation to my noble friend Lord Blunkett’s question about decriminalising administrative offences, our reforms will clarify that it is the Electoral Commission that is responsible for enforcing such administrative breaches via civil sanctions, allowing police resources to be directed towards tackling more serious criminal offences and clamping down on foreign money entering politics.
I will make a final specific point, and then I will wind up. On donations to individuals, the Government are extending the remit of the Electoral Commission to close the enforcement gap and strengthen the scrutiny of candidate finance.
I have already said that the Report stage of the Bill will take place in the Commons next week, on 14 July, and the Government will publish our response to the Rycroft review very soon. Those are two important milestones in this whole conversation, which we will return to in the autumn—as the noble Lord, Lord Kerr, said, before the leaves fall from the trees.
The Earl of Kinnoull (CB)
I thank all noble Lords who have taken part in the last very interesting 90 minutes. I thank particularly the Minister for answering very fully quite a lot of questions that were put to him in an encouraging way.
In summary, the first thing that was a common theme among everybody was that there is a problem with trust, and accordingly, we must do something about it. The point that I wish I had made was made by the noble Lord, Lord Blunkett, which was about education and the importance of educating people in our country about our constitution and the difficult things we have been talking about today. I do hope we will think on that all round.
I was not going to say, but I will say, that my logical deduction was that the noble Lord, Lord Johnson, does not exchange Christmas cards with Christopher Harborne when he said he had run out of friends and had stopped raising money.
I was on the Trade Union Bill committee when we sat for a very intense month and were chaired by the noble Lord, Lord Burns, in 2016. I well remember all the evidence we got and the necessity for there to be cross-party co-operation on some of these very difficult areas that were discussed by the noble Lord, Lord Maude, and the noble Baroness, Lady Finn.
The noble Baroness, Lady Finn, read out some quotes from our report. I remember those sessions, and the feeling that the noble Lord, Lord Burns, and I definitely had, being the two Cross-Benchers on that committee, was that, if you bash one of the three main parties, when the other party is in power you will get bashed back. We were very keen with our report to point that out and to try to make sure that we did not get into some sort of see-saw arrangement between the two parties. Speaking purely as a Cross-Bencher, I therefore hope that there could be some sort of starting up of cross-party consultation on this difficult area, without presupposing anything, to at least see whether there could be a landing area. The machine-gun was not being aimed at the Conservative Party; it was being aimed in a different direction, at the £5 million. I well understand that, so I am sure there is a way through that somehow.
Everybody praised the Electoral Commission. I was extremely interested in the remarks of the noble Lord, Lord Frost. From listening to them, I do not think that he was anti-Electoral Commission, but he was very keen to point out that it needed to remain independent and that it must be non-partisan and non-political. I agree with him on all those points all round, and his was a very valuable contribution. I had said that it was important that the Electoral Commission had the correct powers, duties and resources, but there is a fourth thing that is important, which is that it must remain very independent—truly Cross-Bench, as it were—and I think that has been widely agreed here.
With regard to what is going to go on, I spoke about the need for decriminalisation and I was very pleased to hear what the Minister said about that. I spoke about the necessity of raising fines and I was very pleased to hear what the Minister said about that. I spoke about the need to be able to share lots of information, and I had a very detailed briefing from the Electoral Commission about all the problems it has had with information sharing. I was very pleased with what the Minister had to say about that.
Two very interesting speeches on hostile states came from the noble Lords, Lord Kerr and Lord Jay. I must say that those are very wise points indeed and I hope that, when we come to the Bill, we will think hard about whether what is being proposed will cope with that particular threat, which is substantial. We must not miss the opportunity; as someone pointed out, even though there have been 26 of them, soon to be 27, they do not come along that often, and we must do that.
Finally, before I sit down, on the matter of consolidation, I do not think there is anyone who is anti-consolidation, and I hope that there will be a desire to move to try to consolidate at least the 26, soon to be 27, although there are also one or two other things that might go into it, such as the PPERA itself, and we must get on with it. I hope that the consolidation effort will not be tripped up by the worries about political party funding. There is lots in the consolidation that can get on with that, and that could get on. That is for another time and, in the meantime, I commend this Motion.
Live Music
(3 weeks, 6 days ago)
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Lord Brennan of Canton
To ask His Majesty’s Government what assessment they have made of the contribution of live music to the UK’s culture and economy.
Lord Brennan of Canton (Lab)
My Lords, I start by drawing the House’s attention to my declaration in the register of interests, including my membership of the Musicians’ Union and the Ivors Academy. It will not surprise a number of colleagues here that I will take this opportunity of a debate about live music to talk and plug my fan-led review of live and electronic music, which came out earlier this year.
I was commissioned by the Culture, Media and Sport Select Committee of the House of Commons, and it was a pleasure to be able to speak to music fans in conferences, round tables, venues, clubs and festivals right across the UK. I know the House is very familiar with some of the facts about the contribution of music to our economy and with the fact that, as outlined in my review, the live sector in 2024 was worth £6.7 billion to the UK economy.
One fine example of that from my own part of the world is the Green Man festival in Wales, which takes place in August. It is a proudly independent festival, run by the remarkable Fiona Stewart, who was recently profiled in the Times, and it sells out each year in half an hour, without anybody even knowing who is going to be playing at the festival the following year. It contributes £28 million to the Welsh economy, as well as doing great work in the community through the Green Man Trust, its charitable arm. I think that is proof positive that what music fans want to maintain is that independent spirit in an ever more corporate world, and that came through very strongly in my fan-led review.
I hope my noble friend the Minister will take this in the best possible spirit, but I do not want this to be a review that gathers dust on a shelf somewhere in the Department of Culture, Media and Sport. I want the Government to go through it, and when they come back to appear in front of the Culture, Media and Sport Committee in the Commons—I believe I might also be making an appearance in that time—I would like to hear very positive responses to the bits of the report that are recommendations for the UK Government. The report contains recommendations for the industry and for local authorities, but it also contains recommendations for the UK Government, and I hope they will take it on board.
I am as aware as anyone that, when you change the lead singer in your band, it does not always go well. But I have been encouraged so far by some of the mood music that is around politically in relation perhaps to a change in the Administration, in government, as to the Government’s approach to music. It has always been positive, but I hope very much that I detect something else in the air now that we are getting a new lead singer, and I hope that means my report will very much be taken to heart by the Government.
It contains what I call the seven essentials of live. The first is celebration. We should celebrate the incredible contribution that live music and electronic music make to our economy and culture—not just as a money-making exercise but as a public good in and of itself. There is growing evidence of how live music contributes to our well-being in this world of screens, social media and so on. It is something very special and that came across powerfully in the review.
The second essential was around ticketing. A number of us were slightly disappointed that the Government published a draft Bill rather than an actual Bill in relation to the King’s Speech proposals to tackle the issues around secondary ticketing. I hope that that will be given greater priority as we go forward. Fans are crying out for action to be taken around secondary ticketing and on ensuring that anti-competitive forces in the primary ticketing market are not taking hold and driving up prices unnecessarily for fans—or adopting practices such as surge pricing in the music industry world.
The third of the seven essentials is about the importance of the grass-roots music scene to the live music sector in this country—not just as the research and development of the music industry, bringing forward pipeline of talent for the next generation of great musicians that this country will produce but as something that is a good in itself. The grass-roots music scene is very important in and of itself, even for those who will never become the great megastars of the future. One of my recommendations in the report that the Government could take on board in its ticketing legislation, if it is just a draft Bill, concerns the live levy that has been introduced. It was introduced for larger venues such as stadiums and arenas to contribute a small amount of the ticket price on a voluntary basis to support the grass-roots music scene, which fundamentally holds up the whole system. That could be made a statutory levy if it is shown that the voluntary levy was not working. The Government have committed previously that if it is not getting to a level of 50% by this summer, they will look at it. I strongly urge them to look very closely at the statistics to see what is happening with the voluntary levy. Is it working on a voluntary basis? Are the big players putting their hands in their pockets and making their contributions? If not, the Government should live up to their word and make it a statutory levy.
The fourth of the seven essentials of live is about safety. There are several recommendations in my report for the UK Government, including asking them to develop a new level of accreditation for security staff at live venues. The fifth is around accessibility. Some venues, as I found in undertaking this review, have excellent accessibility credentials and facilities, but it is too patchy across the sector. Fans report very different experiences from time to time at different venues. One of my recommendations is that the UK Government could help to develop a disability access kitemark for live music venues.
The sixth essential is transport. Lots of cities around the country now call themselves music cities, but can you get a bus home at the end of the gig? You cannot be a music city if people cannot get home at the end of the gig. The report calls for the Government to lead research into economy mobility gaps between cities, towns and rural communities and for local government to do its bit around transport to make sure that you can get a bus at the end of the gig.
The final of the seven essentials is about giving music fans a real voice. Too often, their voice is not listened to and is not heard. It asks the Government to start a seed fund with the industry to set up a music fans association in line with the Football Supporters’ Association, which has been very successful in getting football fans’ voices heard, and to commission an annual survey.
I know that this is a very popular subject and wish that we had longer. However, I ask the Minister to take on board everything within my fan-led review and respond in kind positively, if not now, then when the Minister—whoever the Minister is—appears before the Select Committee in September.
Baroness Anelay of St Johns (Con)
My Lords, I will focus on the cultural importance of live music, which can enrich the lives of us all. The response to the noble Lord, Lord Brennan, shows that there is feeling around the House on just that. It supports artistic expression, preserves musical heritage and strengthens communities. Live events showcase artists from different backgrounds and cultures, promoting inclusion and cultural exchange.
Does the Minister agree that charities are vital in protecting and promoting opportunities to take part in producing live music or simply to enjoy it? Charities such as the LIVE Trust raises funds via voluntary ticket contributions to fund grass-roots music events and venues. Music for All provides grants and instruments to disadvantaged communities to ensure that everyone has the chance to participate in and experience live music. Youth Music invests in hundreds of grass-roots music projects, helping marginalised young people to learn about music production, singing and live performance.
Government can play a role in supporting the development of live music. In creating the Every Child Can fund for 2024-28, the Government pledged that they would work with the National Lottery Community Fund, young people and youth organisations to ensure that the monies would be spent in a way that reflected the priorities of young people to make, perform and produce music. What assessment have the Government made of the progress that has been achieved over the past two years by the Every Child Can fund”?
The Earl of Clancarty (CB)
My Lords, I congratulate the noble Lord, Lord Brennan, on an excellent speech. In policy terms, the guidance provided for culture as an area of competence for the mayoral strategic authorities—we discussed this at length during the passage of the devolution Bill—is that it needs to be a consultation from the bottom up. The DCMS and the Ministry of Housing, Communities and Local Government are, I hope, coming together on this. Every level of government should be involved, as well as stakeholders such as live music venues. I ask the Minister to confirm that. The danger with a larger governmental body will be rationalisation of assets.
On community assets, I applaud the Government’s intention explicitly to include cultural assets within that grouping, although I would still prefer them to have their own designation—as the noble Lord, Lord Brennan, asked for on another occasion. I welcome the £61 million the Government have set aside for that scheme, but I am disappointed that there was no reference to cultural assets in the recent announcement. It is important that local authorities and the public are fully aware that cultural assets are covered by this scheme, and the guidance clearly states this, with pertinent examples such as live music clubs and recording studios.
I am grateful to the Musicians’ Union for its briefing on the risk to live music in theatres. The disbanding of the RSC’s music department earlier this year is an unwelcome sign of the times; costs are cited and it is all too easy to replace real musicians with sophisticated software, which has its place in music but can never be a substitute for live music. I ask the Minister what thought the Government have given to those concerns.
Finally, European Movement UK calculates that over 25% of British musicians have lost all their work in the EU since Brexit, with average tour earnings down by 45%. In reality, nothing substantial to improve matters has happened in the last two years. With the cancellation of the 22 July UK-EU summit, when will this be discussed and resolved?
Baroness Keeley (Lab)
My Lords, I too congratulate my noble friend on an excellent opening speech. My focus today is on the pipeline of musicians and the music teachers needed to train them—a pipeline damaged by young people’s lack of access to music in state schools. Our Labour Government inherited an education system where music had been squeezed out of the curriculum by the EBacc, which, from 2010, incentivised schools to focus on subjects excluding music and arts. This damaged music teacher recruitment and the take-up of music at A-level and GCSE.
A-level music remains in crisis. Only 4,635 students took it this year—a record low, down 41% since 2013. GCSE music entries are around 27% down since 2010. Music teacher training and recruitment have fallen by around 51% since 2010-11 and it remains a shortage subject. Even last year’s welcome rise in the number of trainees came with a warning: the number of music teachers with no relevant qualification beyond A-level rose by 10% in a single year.
Teach First found that schools in the poorest areas are three times more likely to lack a trained music teacher, and 17% do not offer music A-level at all—more than triple the rate of schools in the most affluent areas. The Social Mobility Commission found that children from the poorest backgrounds are three times less likely than wealthier pupils to learn an instrument, sing in a choir or play in an orchestra.
UK Music has warned that fewer trained teachers and a shrinking A-level cohort are damaging the industry’s talent pipeline. Without music in schools, music in the economy, culture and society will be seriously impacted. This Labour Government have rightly committed to scrapping the EBacc, but now we face the task of rebuilding music education, particularly in state schools in our most deprived areas. I urge my noble friend the Minister to press DfE Ministers to do all they can to reverse this decline we inherited by rebuilding the music teacher workforce and restoring the bursary for music teacher training, so that every young person, whatever their background, has the chance to choose music.
Lord Vaizey of Didcot (Con)
My Lords, I congratulate the noble Lord, Lord Brennan, on his epically superb speech. I declare my interest as a trustee of the KOKO Foundation. As all noble Lords know, KOKO is a fantastically cool music venue in Camden. In fact, it was made live music venue of the year.
Stemming from my involvement with KOKO, I want to make a point about businesses in general. KOKO has never received a penny of government money. Since its creation, it has created about 10,000 jobs, paid £80 million in taxes and helped the regeneration of the area. But the recent increase in NI means that KOKO now has to attract 4,000 additional customers a week in order to meet its NI bill. At the same time, KOKO has set aside £500,000 for the foundation to help local people; it works with the Department for Business and Trade in welcoming foreign Governments to look at hospitality; and it has helped in many other ways. My point is more general: every time the Government impose taxes on business, they are harming or impacting venues such as KOKO.
Everybody knows the importance of live music. The recent Harry Styles tour, for example, generated about £1.1 billion in revenue beyond the actual events. However, we cannot be complacent about the success of the major live music industry in the UK. We did not go ahead with the Sphere—that was nothing to do with this Government—but the London fireworks are falling behind. Major countries in the world see live music and events as central to diversifying their economy. It is incumbent on the Government and on local government to work more closely with the private sector.
I echo the points that have already been made about secondary ticketing and flag the point about visas for musicians, which is becoming a particularly thorny issue for many involved in the live music business.
Lord Watson of Invergowrie (Lab)
My Lords, I congratulate my noble friend Lord Brennan on securing this debate and on his powerful introductory speech—at a time when live music is at the crossroads, to reference an iconic song by one of my heroes, the Delta blues singer Robert Johnson.
I want to focus on the crisis facing grass-roots music venues, on whose behalf the Music Venue Trust campaigns vigorously. I regularly enjoy music at such venues as Mercato Metropolitano, at Elephant and Castle, and the Ain’t Nothin’ But blues bar, in Soho. Sadly, two live music venues close every week across the UK. That is not because people are losing interest in music: there were more than 100 million audience visits to a gig in the UK in 2024, but 75% of those were accounted for by concerts.
Over 30,000 people work in grass-roots music venues, which are the R&D of the UK music industry and generated £8 billion in gross value added to the economy in 2024. Various new arenas are proposed to open in the UK over the next few years, but there is no record of such venues making a financial investment in the pipeline, and I think we are entitled to ask why that is.
My noble friend Lord Brennan mentioned football fans, in comparing them with music fan. That sport demonstrates what can be done to help develop the next generation. The Premier League shares 16% of its central revenues with the wider game. I see no reason why the top end of the live music industry cannot do the same, and reinvest in the talent and venues that are supporting it and supplying the next generation of performers.
Venues are suffering extreme hardship from unaffordable energy bills and other costs, as well as a cost of touring crisis. Live music generates huge returns for the Treasury, yet currently 20% of the value of every ticket sold at a grass-roots venue is lost to VAT, removing almost £5 million from the sector in potential investment in new and emerging talent. There is now no impediment to the Government zero-rating VAT on ticketing for grass-roots music venues. I urge my noble friend to consider that as a means of supporting this vital pipeline.
Baroness Wilcox of Newport (Lab)
My Lords, I declare my interest as chair of trustees of CDMT. I thank my noble friend Lord Brennan of Canton for his leadership of the fan-led review of live music. Its central message is simple: live music must work for audiences, artists and communities alike, and that starts with strong foundations.
In my home city of Newport, live music is not an abstract concept; it is part of our identity. You can hear it, see it and feel it. We have a proud musical heritage. That spirit lives on in grass-roots venues such as Le Pub, a community-owned venue that has nurtured local talent for decades while attracting touring artists from across the UK. It reminds us of a vital truth: the music industry is not built from the top down. Every headline act and every arena tour begins on a small stage somewhere.
The sector contributes billions to our economy and supports hundreds of thousands of jobs, but its value goes beyond economics. Every gig supports local businesses, strengthens town and city centres, and brings communities together, but these foundations are under real pressure. Grass-roots venues face rising costs, tight margins and increasing uncertainty. For Wales, this matters profoundly. We are a nation of song, culture and community; from the Eisteddfod to the streets of Newport, music helps define who we are.
Will the Government recognise the full value of live music, not only as an economic asset but as a cornerstone of community life? Will there be meaningful support for grass-roots venues so they can survive and thrive? If we want a world-leading music industry tomorrow, we must invest in the small stages of today. A nation that values its music must value where the music begins.
Baroness Coffey (Con)
My Lords, “Do You Want to Know a Secret”, “It’s Not Unusual”, “Hit the Road Jack”, “We Will Rock You” and “Song 2” are all songs that last just two minutes, the length of our speeches, but have had a long-lasting impact and show that music has the unique ability to bring people together across generations and communities.
I congratulate the noble Lord, Lord Brennan of Canton, on eloquently setting out in his speech the importance of the matter, and I congratulate him on getting the debate. We know that, whether they are in our great concert halls, theatres, churches, festivals, or grass-roots venues that nurture emerging talent, such performances enrich our national life and strengthen the social fabric of our country. The economic contribution is equally compelling, with the industry contributing several billions of pounds and supporting hundreds of thousands of jobs, yet none of this success is guaranteed. Our international reputation as a musical powerhouse rests upon the strength of our grass-roots sector, and pretty much every globally recognised British artist began by performing in small venues in front of audiences.
Too many venues face mounting financial pressures, particularly from rising energy costs and business rates. When venues close, we lose local culture and the opportunity for local talent to prosper. Therefore, supporting live music is both a cultural choice and an economic necessity. Venues were well supported during the pandemic—the Cavern Club was saved in Liverpool. I welcome the voluntary levy, which has raised more than £6 million since starting last year. It is right that the industry supports the grass roots, just as we see in football. The previous Government abolished permitted demolition rights for live music venues.
I appreciate that not every music venue will be saved. Even the Hacienda in Manchester, which hosted the career-defining gigs of the Stone Roses and New Order, and where Madonna had her first concert in the UK, is now a block of flats. But it is the changes to business rates that have hit really hard. While the Government gave 15% relief on business rates, I ask them to go much further, to make sure we have live music for generations to come.
Baroness Dacres of Lewisham (Lab)
My Lords, I welcome this debate and I thank my noble friend Lord Brennan of Canton for bringing it forward today.
I imagine many of us in this Chamber can still remember our first live music concert. It is almost a rite of passage. I certainly remember taking my son to see his favourite band at the time, Linkin Park. It was more than a concert; it was a shared experience and a memory that has stayed with us ever since.
The United Kingdom has long been one of the world’s great musical nations. Few countries have shaped modern music quite like Britain. From rock and pop to classical, lovers rock, grime, neo soul, and drum and bass, just to name a few, British artists have changed cultures around the globe for generations. For millions of people around the world, their introduction to Britain is not through our politics or our history but through our music. Last year, a record 23.5 million music tourists travelled to concerts and festivals across the United Kingdom, generating around £10 billion for our economy.
Every world-famous artist started somewhere. Before the arenas, the festival appearances and those platinum albums came their first performance at a local pub or a grass-roots venue. Those smaller venues are the lifeblood of our music industry. They provide aspiring musicians with an opportunity to learn their craft, develop the confidence they need, connect with audiences and build careers. Every legendary performer once stepped on to a small stage for the first time. If those stages disappear, we risk losing our artists who will inspire the next generation. Will my noble friend the Minister say what further assessments the Government have made of the long-term sustainability of grass-roots music venues? What further steps will they take to ensure that Britain’s live music sector can continue to thrive?
Baroness Gill (Lab)
My Lords, I, too, congratulate the noble Lord, Lord Brennan, on securing this debate and on his eloquent speech.
Live music is a defining strength of UK culture. Live music matters because it reflects the diversity of the UK, from grime, bhangra and indie to classical orchestras and global festival sounds. Events such as the BBC Proms, Glastonbury, and the Leeds, Reading and Wireless festivals and others showcase the richness, while local schools and community performances keep music venues accessible at every level. It is where, as we have heard, new artists break through and where established acts stay connected to audiences across generations.
It is also a massive contribution to our economy, as the noble Lord, Lord Brennan, has already outlined. In 2023, the UK live music industry contributed around £6 billion to the economy and attracted more than 23 million music tourists. The sector also sustains over 200,000 jobs, from performers to technicians to venue staff. According to a briefing from Live Nation, it welcomed 16 million fans to shows and festivals in more than 200 UK towns and cities across 750 venues just this year and generated an estimated £1.65 billion in additional consumer spending, including £1 billion for local economies.
However, as we have already heard, the sector is also facing challenges with AI, secondary ticketing, Brexit and visas for artists. In recent years, we have heard that AI has begun to reshape the music industry. It can generate songs, mimic voices and even simulate live-style performances without a human artist on stage, as again was highlighted earlier by the Musicians’ Union. While it is also used to support production, lighting and ticketing, its growing ability to replicate creativity is a serious concern: if music can be generated and performed without musicians, what happens to the uniqueness and value of live performance itself?
Baroness Wheatcroft (CB)
My Lords, this is proving to be a passionate debate and no wonder—music has the power to stir emotions, lift the spirits and uplift the soul. More prosaically, as we have heard, it can create jobs and boost the economy, so I add my congratulations to MP4’s guitarist, the noble Lord, Lord Brennan, on securing this highly relevant debate.
I will limit my remarks to two main issues. The first is the crucial importance of encouraging music in schools, which the noble Baroness, Lady Keeley, and others have already talked about. Being able to play a musical instrument is a great gift and while the player may never get to pursue a lucrative career in music, playing in amateur bands and orchestras is rewarding in many other ways and it has been shown that making music together can provide a much more constructive alternative for children to joining a different sort of gang.
Andrew Lloyd Webber’s charitable efforts to gift instruments to children in some schools has been hugely successful. It is the ownership—being able to play when they want—that makes all the difference, but he can only reach so far. The London Music Fund is doing what it can, but I encourage the Government to plead with orchestras, musicians and manufacturers to get involved in trying to ensure that children have the chance to make music. In recent times, it has tended to be the prerogative of those receiving a private education or private tuition—hence many of the big names on today’s music scene: Ed Sheeran, for instance, and Florence of Florence and the Machine; they benefited from a private education. Now we need to spread it.
My second point, and I am running out of time, is that we need to deal with the EU obstacles that are still being put in front of musicians. What are the Government doing?
Baroness Hyde of Bemerton (Lab)
My Lords, I am delighted to take part in this debate in the midst of King Harry’s record-breaking run at Wembley, while the other King Harry is busy cementing his place in football history. I thought I might sing a few minutes of “Bohemian Rhapsody” to illustrate the breadth and power of live music, but I remembered I was not Freddie Mercury, nor was this Wembley Arena. Oh well, “Another One Bites the Dust”.
I am sure noble Lords from all sides of your Lordships’ House have encountered “A Kind of Magic” when attending a live musical performance. It is good for the soul, good for local economies, and good to connect with others having a shared experience. Advances in technology mean researchers now understand more of how these communal live experiences shape us, whether that is a live music audience experiencing cardiorespiratory synchronising and interbrain coherence, or the shared embodied experiences of music between those playing and those listening—with thanks to Gabriel et al 2025.
But “Don’t Stop Me Now”. On this small, wildly creative island, “We Are the Champions”, or close to, being one of only three net exporters of music globally—the second-largest after the United States. Music tourism revenue reached £10 billion in 2024, supporting around 72,000 full-time equivalent jobs. Visit the UK and “We Will Rock You”.
While the UK sent this message to the EU, “I Want to Break Free”, live music in the UK has clearly been put “Under Pressure” by our exit from the EU, with 82% of musicians saying that their earnings have decreased because of Brexit, as other noble Lords have mentioned. I implore my noble friend the Minister: “The Show Must Go On”, because live music changes lives, brings all kinds of people closer together and is essential in enabling each part of the UK to thrive culturally and economically.
Baroness MacLeod of Camusdarach (Lab)
My noble friend Lord Brennan has consistently championed live music, and we are grateful for that. As we have heard, he is an accomplished musician himself, so he does his bit to enrich our lives within and outwith the Chamber.
I have no doubt that many in this House understand and applaud the cultural contribution live music makes. I am not so sure we think enough about its economic importance. From the Shetland Islands to the most southerly tip of England, music contributes to the economy.
Let me tell you about the splendid Skye Live festival, set up by Niall Munro in 2015. This three-day festival is independent and, against the backdrop of the Cuillins, it generates an estimated annual revenue of about £2 million and pours money directly into event production and local staffing. That is a great boost to Portree, a village of only 2,000 people. It serves as a prime driver for Scotland’s booming tourism industry, which now attracts a million and a half visitors each year and boosts the Scottish economy by nearly £600 million.
Live music brings jobs; it employs talented musicians, maintains venues, fills hotel rooms and campsites, and benefits the transport system. As we have heard, not everything in the garden is rosy: fewer people are attending live music events and touring to European countries is more difficult since Brexit. Venues large and small struggle to stay open, so there is a major contraction on the touring circuit and margins are getting ever tighter. This contraction means fewer paid performance opportunities, fewer chances to build audiences and less sustainable career development. It particularly affects artists based in Scotland, where the domestic market is too small to sustain many professional music careers on its own.
My plea to the Minister today is to be prepared to help. Without intervention, the live music sector risks becoming less diverse, less independent and less able to develop the artists who will become the headliners of the future.
Baroness McIntosh of Pickering (Con)
My Lords, I too congratulate the noble Lord, Lord Brennan, on securing this debate. I was fortunate to chair the committee looking into the Licensing Act 2003, where we heard powerful evidence that grass-roots venues were closing owing to the failure in this country, particularly in England, to properly implement the agent of change principle.
The agent of change principle is basic and easy to understand, but it is not followed in practice. We need to have it comprehensively implemented in England and put on a similar statutory basis as exists in Scotland. It is neither acceptable nor satisfactory that Section 106 guidance is seen as a substitute. The starting point is that agent of change is a practical response to a long-recognised defect in the way that British planning, licensing and nuisance regimes interact. The structural problem sits within a wider change in how land is used. The trend now is towards dense urban living, brownfield regeneration and intensified mixed-use development, which has made these conflicts more common. That is why the central question before us now is not whether the Government accept the principle of agent of change in the abstract, which they clearly do, but whether they are willing to move from soft policy to hard law.
I submit just one argument to the Minister today. In Scotland, the provision is limited in law to noise-sensitive development and noise sources, but they now at least have an established statutory basis. We need to move in England from applying the agent of change principle in policy and guidance only to putting it on a firm statutory basis, protecting existing lawful uses from unreasonable restrictions arising from sustainable development. That is the very least we can do for the music industry and grass-roots venues.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, I thank the noble Lord, Lord Brennan. As the last debate was a little short, maybe at the end he could give us a little performance.
From concerts and festivals in stadiums and fields to small local venues, such as churches, mosques, temples and pubs, as the noble Baroness, Lady Wilcox, mentioned, music brings us together as a nation, as my friend the noble Baroness, Lady Anelay, said. It is about celebration, as mentioned by the noble Lord, Lord Brennan.
I want to mention the BBC: it champions live music, providing a wide range to suit everyone’s taste, including that which is not played anywhere else. It nurtures and launches British musicians’ careers. The BBC Proms, the five British BBC orchestras and the BBC Singers support an amazing education programme across the UK. We need to get the next charter review right and secure sustainable funding for the BBC; otherwise, there will be disruption not just to our media ecosystem but to that of the UK’s creative industries, including music.
Then there is the disaster that is Brexit. I am so pleased that I can still debate with the noble Earl, Lord Clancarty—welcome. Europe-wide touring for British musicians has been severely crippled by bureaucratic post-Brexit barriers, and the Government have so far failed to achieve tangible progress for musicians as part of the EU-UK Trade and Cooperation Agreement. Can the Minister tell us whether there is any progress with short-term work permits and the 90-day rule?
Al Pinkerton, my colleague in another place, has a Private Members’ Bill which asks for a bespoke custom union deal with the EU. This is a sensible and practical way forward. It would provide solutions and could open negotiations to rejoin Creative Europe. It could also provide touring artists with expanded creative opportunities and frictionless travel for themselves and their instruments. Would the Minister agree that we need such pragmatic thinking to address these issues?
I have not got time, but I completely agree with the noble Baroness, Lady Gill, about the problem of AI.
Lord Parkinson of Whitley Bay (Con)
My Lords, I thank the noble Lord, Lord Brennan, for this very well-timed debate as we head into the peak summer season of live music across the nation, which brings investment, jobs and joy to so many people. We had a powerful reminder of that on the Tube this weekend: I was on my way back from the Bad Bunny concert in Tottenham and ran into fans who were coming from Take That at West Ham, Harry Styles at Wembley and Lily Allen at the O2. Like a series of rivers eddying, we all met. It could have been a hot and bothered day on the Underground, but everyone was in such good heart. As the noble Baroness, Lady Hyde, said, music is good for the soul.
The lady who sat next to us at Bad Bunny had come all the way from Italy, especially to see him and Harry Styles earlier in the week, and my noble friend Lord Vaizey will be pleased to know that my parents travelled to KOKO just last night—they are much cooler than me. As the noble Lord said, Harry Styles’s record-breaking 12-night residency at Wembley is estimated to have brought more than £1 billion to our economy. By my calculation, with just another 40 nights we can close the funding gap in the defence investment plan.
Music makes a huge contribution to our economy, so how can we help it to do more? Well, we can celebrate it. I know that the Minister is as enthusiastic as I am for the UNESCO Living Heritage inventory. Will she ensure that lots of live music and cultural practices are enrolled on that, from sea shanties to short pipes, from Eisteddfodau to evensong?
We have heard a lot about the pipeline—artists, venues and the classroom—as the noble Baroness, Lady Keeley, rightly pointed out. Music venues are closing, as the noble Lord, Lord Watson, said, at a rate of two a week. Of the 34 venues Oasis played at the start of their career, only 11 remain. If Manchesterism is to mean anything, it must surely be about arresting that decline.
The noble Lord, Lord Brennan, mentioned that, when the Government introduced the voluntary levy, they would look at whether it reached 50% of venues by this summer. In fact, the deadline was this Tuesday. Can the Minister say whether the Government will begin that assessment, and if they will make it public? Will they look in earnest at the agent of change proposals that have been advanced repeatedly by my noble friend Lady McIntosh, and by others?
Will the Government look again at the impact of their tax hikes? The Music Venue Trust’s annual report shows that the Government’s changes to national insurance and business rates shrank the workforce in grass-roots music venues by 19%—that is 6,000 jobs. Will they protect artists themselves? At a lunch earlier this week with the noble Lord, Lord Brennan, the noble Baroness, Lady Gill, and others, we heard how AI is already making it harder for songwriters and musicians. As the noble Earl, Lord Clancarty, said, there is no substitute for real music.
I hope the noble Baroness will listen to the many good ideas that have come from this debate to help ensure that music continues to move our soul, our economy and our culture.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I thank my noble friend Lord Brennan of Canton for initiating this important debate and all noble Lords for their valuable contributions. It is clear from the number of speakers how much passion and expertise there is among noble Lords for music. I may struggle to respond to all the points and questions during the debate but will follow up in writing where required. Unlike my noble friend Lady Hyde of Bemerton, however, I will not use lyrics to make my point. I think the noble Lord, Lord Parkinson, might have got a few in as well.
There can be no doubt among noble Lords of my noble friend Lord Brennan’s passion, talent and expertise, both as a performer and as a staunch advocate for the music sector over many years. I have been told we cannot encourage him to use any excess time to entertain us in your Lordships’ House, but hopefully we will find another time in the near future.
To quote my noble friend, I agree that everyone’s lives are enriched when they gather with others to enjoy live music. The sheer joy brought by our country’s performers from popular music, through folk, country, rock and jazz to some of the foremost classical performers is unparalleled. This Government are committed to protecting one of our country’s most valued and valuable sectors.
As my noble friend Lady Dacres said, British music has changed not just this country but other countries around the world. That reflects what my noble friend Lady Gill said about the richness and diversity of music within our rich and diverse country.
I commend my noble friend Lord Brennan for his recent work chairing the fan-led review of live and electronic music, launched in the other place by the Culture, Media and Sport Committee, which the Government warmly welcome and which I thoroughly enjoyed looking through. Fans and music lovers are at the heart of our live music ecosystem. The Government will be responding to the report’s recommendations shortly, alongside our upcoming music plan, which I will come on to. I can commit to my noble friend, however, that we do not intend to let his report and the views of fans gather dust.
As many noble Lords mentioned, music is a fundamental part of our nation’s life, with human experience sparking inspiration. As my noble friend Lord Brennan said, there is a benefit to our general well-being and our mental well-being. It is also a universal language that connects us across generations, backgrounds and communities. It is vital that all fans, wherever they live, have access to live music. Whether it is thousands gathering for a mega stadium gig, as I did last night at Wembley to hear Shania Twain and Harry Styles—I was fortunate enough to be there—or neighbours packing out a local pub to hear a local band, live music fosters a powerful sense of community in all its forms, bringing different generations together in shared spaces. It deepens local pride, connects our communities and gives a powerful voice to our national story, not least to Wales, as my noble friend Lady Wilcox of Newport said.
I welcomed the example given by my noble friend of the importance and value of music in her hometown of Newport. Those points were echoed by my noble friend Lady MacLeod’s description of the festival in Skye. As the noble Baroness, Lady Coffey, said, music strengthens our society.
A number of noble Lords, including the noble Lord, Lord Vaizey, and my noble friends Lady Wilcox, Lady Gill and Lady MacLeod, reflected on the positive economic impacts of live music. The music industry makes an incredible contribution to our economy; a record-breaking £8 billion in GVA in 2024 generated £4.8 billion in export revenues and supported over 220,000 jobs across the country. The suggestion that we use it to finance the defence plan is an interesting point made by the noble Lord, Lord Parkinson, which I will pass on. Indeed, the Government’s industrial strategy explicitly identifies our creative industries as one of eight priority growth-driving sectors, fully backed by our 10-year creative industries sector plan to support long-term growth.
The noble Lord, Lord Vaizey, asked what the Government would do to work with the private sector. To fulfil our ambitions for the UK to be the best place in the world to create and invest in music, we are delivering on our commitment to a dedicated music plan. We will soon set out how this Government are working hand in hand with the industry to unlock talent, empower entrepreneurs and give our creative businesses the definitive conditions they need to thrive. We are backing this commitment with a landmark investment, our new £30 million music growth package, which more than doubles previous government funding for the music industry.
My noble friend Lord Brennan highlighted support for grass-roots music and a number of noble Lords spoke about the importance of strengthening our grass-roots infrastructure. We have this at the heart of our music growth package, alongside boosting domestic touring and expanding international exports. Ultimately, this will support at least 40,000 creators and professionals across the UK over the next three years. The noble Baroness, Lady Coffey, and my noble friends Lady Dacres and Lord Watson of Invergowrie also mentioned grass roots. Alongside government investment, there is a vital role for industry here, too. We are actively backing the live music sector’s £1 voluntary ticket contribution, led by the LIVE Trust, to ensure that success at the top is reinvested into the grass-roots spaces that forge our global headliners. In relation to the point made by the noble Baroness, Lady Anelay, I agree. We recognise the significant role played by charities and, indeed, the LIVE Trust is one of the foremost examples that the noble Baroness shared.
My noble friend Lord Brennan of Canton and other noble Lords asked what will happen if the industry fails to adopt the voluntary levy at scale. While we welcome the significant progress made by the LIVE Trust, we have been absolutely clear that we are prepared to explore legislative options if necessary to ensure the long-term sustainability of our world-leading live music.
Noble Lords, including my noble friend Lady Keeley, raised creative education for our young people. The Government are committed to ensuring that every child has access to a quality creative education, with £13 million over three years for the National Centre for Arts and Music Education and our £37.8 million music and dance scheme. The noble Baroness, Lady Anelay, referred to the Every Child Can programme. DCMS is rebuilding opportunities through that £132.5 million programme, which will ensure that every young person has something to do, somewhere to go and someone who cares. That obviously includes access to music education—a point made by my noble friend Lady Keeley. The Government are committed to revitalising arts education, including music, through reform of the national curriculum. Arts Council England supports national youth music organisations to help talented young people from less privileged backgrounds access high-quality music and dance training.
The noble Baroness, Lady McIntosh of Pickering, asked about strengthening the agent of change in planning policy to better protect grass-roots music venues from noise complaints. The Government are currently consulting on strengthening the National Planning Policy Framework to ensure consistent application of the agent of change principle by local authorities.
Noble Lords, including my noble friends Lady Hyde and Lady Gill and the noble Baronesses, Lady Wheatcroft and Lady Bonham-Carter of Yarnbury, and the noble Earl, Lord Clancarty, all raised issues arising post Brexit, including European touring. Helping touring artists is a manifesto commitment. The UK and European Commission have jointly committed to supporting UK-EU cultural exchange, specifically recognising the vital activities of touring artists at the inaugural UK-EU summit. It is very good to have the noble Earl, Lord Clancarty, back to continue the debate on EU touring, artists and other matters that he has championed over the years.
Following the Prime Minister’s resignation, we have agreed with the EU that it will not be possible to go ahead with the summit on 22 July. We will, however, continue to discuss options with the EU for the summit to take place at the next and earliest opportunity. The noble Baroness, Lady Bonham-Carter, asked a range of EU-related questions. The only thing that I can say to the noble Baroness in this context is: please watch this space. I hope we will continue to discuss that and I hope I will be able to come back with some firm commitments at a later date.
My noble friend Lady Gill raised AI—I apologise if other noble Lords raised it. We are backing the sector with targeted investment while building safeguards around AI. We remain firmly committed to protecting creators while supporting AI innovation. We are launching a consultation on digital replicas later this year, establishing a taskforce on AI labelling and launching a working group for smaller creative organisations to drive progress.
Noble Lords, including my noble friend Lord Brennan, raised secondary ticketing. We are tackling industrial-scale ticket touting head-on. Through our upcoming secondary ticketing legislation, we will destroy the touts’ business model once and for all, protecting hard-working fans from being ripped off. We are working at pace—a phrase I do not like, but I have said it out loud now—and I will continue to push for this to be published at the earliest stage, not least for the purpose of my response in the Sporting Events Bill. We are working at pace to publish a draft Bill for pre-legislative scrutiny in this Session to ensure that our measures are truly effective and, more importantly, enforceable and future-proof.
I appreciate the wealth of expertise illustrated in today’s debate and the commitment to making sure that our fantastic, world-class live music sector is supported. I look forward to future discussions, with my noble friend Lord Brennan and others, to take forward this agenda.
Lord Vaizey of Didcot (Con)
My Lords, I know that the noble Lord, Lord Brennan, is going to sum up, because we have time.
Oh. Can we not use the remaining seven minutes for more points? I had such an incredible point to make.
Higher Education: Affordability and Quality
(3 weeks, 6 days ago)
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Baroness Deech
That this House takes note of the future affordability and quality of higher education.
Baroness Deech (CB)
My Lords, I declare an interest as a former Independent Adjudicator for Higher Education and principal of St Anne’s. Let me say at the outset that our universities are a brilliant global asset and, in order to carry out the innovation and research that they do, they must be free to be elite and not be held back by manipulative regulation or excessive preferential diversity targets. In my maiden speech 20 years ago, I pointed out that it was taken as axiomatic that students see themselves as consumers, with rights and outcomes, mainly that higher education is mostly about higher earning power over a lifetime. I begged to differ.
I understand this quantifier now, because the burden of loan repayments is so heavy, but it remains true that HE is not simply about equipping students with skills for employment. It involves unmeasurable assets which add up to a public benefit: induction into citizenship, leadership and employment, instilling ambition and motivation, the ability to savour work and leisure, independence of thought, intelligence and intelligibility, having a stake in the future and control over one’s destiny, and an informed interest in politics. The difficulty in gaining employment is not a weakness of HE; it is the result of this Government’s own policies and the expectations of arguably too many graduates.
Studies show, none the less, that only 8% of graduates regret going to university, and far fewer of them are out of work than in the non-university population. The quantity of a graduate salary should not be taken as a marker of success. Counting success by salary level undervalues the public good of teaching, nursing, social work and the arts—traditionally not so well paid. I profoundly disagree with the ranking of subjects according to how much graduates will earn, with creative arts at the bottom of the table. Is it seriously considered that creative arts, one of the glories of our culture, are to be axed because students will, and they know it, be precarious wage earners?
In sum, the sector faces a significant funding and quality crisis. Without sustainable funding and the maintenance of the standards which have put Britain at the top of the international league, there will be closures, further reliance on international students, who may well find that what they came here for no longer exists, a revolt against fee paying and loans, and lower research input and success.
The Government’s 2025 White Paper, Post-16 Education and Skills, categorises courses rather than institutions. Noble Lords should also read the Policy Exchange report, Tarnished Towers. I propose fewer universities, with a type of return to the former division of universities and polytechnics, and a fee differential. As an aim, I suggest that outstanding quality and differential are to be valued, in contrast to the universality of admission and outcome grades that we have at the moment.
There are some lessons to be learned from Europe. There, lower-ranked universities supply teaching and training and make contracts with local industries. Nearly all have far fewer luxury facilities and buildings than British universities. The pay of staff and leaders in Europe is about one-third that of their UK counterparts and ranks with civil service pay. I urge emulation of the ratio of European university leaders’ salaries, where they earn no more than three or four times what ordinary lecturers get, whereas here it is 13 or 14 times more, a ratio that destroys loyalty and replaces it with distance.
In Europe, grants are more often for living costs than tuition. This is excellent because, as the Sutton Trust has shown, social mobility is achieved here by students leaving home to mix with others who have the same ambitions and where the course is the best in their subject, rather than having to stay at home and going to the local university. The White Paper is right to reintroduce maintenance.
Our great quality is under threat. This is due to the low admissions requirements, the inflated degree results and the lack of data about or requirement of student input. The proportion of Firsts, which is 30%, and 2.1s awarded by each institution should be capped. The National Student Survey asks detailed questions about the education provided to the students and their opinion of it. It asks nothing about how much work they do and whether they have done it as required and on time; in other words, they are treated as passive consumers. The OfS is right to consider the credibility of the inflation of Firsts and Seconds, which does nothing to help employment prospects and contributes to the number of students complaining to the authorities that they have not received the grade they thought they were buying or that they should have received, if their disabilities were taken into account.
The figures about entrants’ lack of qualifications are shocking. Some 8% of UK undergraduates starting in 2024 had no formal qualifications and 75,000 students did not have a single A-level. This lack is concentrated in certain universities, which, I suggest, are ripe for transition to distance learning and skills provision. Ravensbourne, Bath Spa and Leeds Trinity took in more than 60% of students without qualifications. I recommend national entry qualifications; I leave aside mature students. There is a decline in standards of admission and assessment for both undergraduate and master’s degrees in response to many universities’ dependence on foreign student fees and pressure to widen access and close performance gaps in favour of students from disadvantaged backgrounds.
Some universities should transition to being different, low-cost digital institutions, making use of AI learning or merging with further education institutions. This may make room for higher grants for higher-quality institutions. Places should be gradually reduced, student loans tailored, and foundation years and access schemes reviewed for their worth. The OfS has the power to downgrade—although I would not call it that—an institution, or the institution can change itself into a different one.
As the White Paper acknowledges, international students are as much a problem as a benefit. I have no doubt that international students who come here for graduate work are not a problem: they have already proved themselves and are likely to be funded by external sources and collaborating with established colleagues here. So I welcome the Government’s global talent fund. However, universities are far too dependent on international undergraduate student fees. If China, for example, were to reverse its policies—or, as is already happening, the Chinese student-age population reduces and China’s own universities are doing so well that they might even attract non-Chinese students—the financial consequences here would be clear.
It is time for our universities somehow to wean themselves off that reliance, not only for the reasons I have given but because of the integration problems. I know from my time dealing with complaints that some foreign students felt that they were cash cows. They were not given orientation, they clustered together, their English was not good enough, and they had visa and funding problems, and so it was difficult to integrate them into academic work for those reasons. International students have long been overrepresented as complainants to the Office of the Independent Adjudicator. It is also possible that the entry regulations are being abused by those who seek to remain here rather than study in the short term.
I agree with the Policy Exchange recommendation that there should be a cap of 30% foreign undergrad students at each institution. We have universities in the top 35 of the world league tables, and the European Union has none. It is also the case that this top quality brings many more foreign students here than British ones going abroad, where, in my experience, they were disappointed by the lack of pastoral care and face-to-face contact with lecturers. So I am wary about giving any loans to international students as the record of repayment is very bad. They should, of course, pay full fees. Now that Erasmus is being restored, the cost to our Government will increase, because it has always been the case that three times as many overseas students came here as ours who went abroad. The Government have proposed an international student levy, which seems a good idea. However, there are complex issues, given that the number is likely to reduce in any case, while the attractiveness of the UK will remain.
The loans system is a real blot on the landscape. The average student debt is over £47,000. Most graduates will never repay it in full—and if they do, it can take 31 years. Those fees are insufficient in any case. The balance is £492 billion, and less than one-third are likely to repay. The issue is the high levels of unemployment undermining the repayment aim. The scheme is complex and not at all understood by the teenagers who sign up to it without full knowledge or understanding. Unbelievably, they may end up paying more than they borrowed, over decades, with shifting rules. The interest rate is excessive. It pushes graduates into very high tax rates, and it is a regressive system. They see it as a tax on ambition. The way out for women is to get married right after university and not work.
I predict that the outstanding debts will have to be written off sooner or later. After weighing it all up, I have concluded that the way forward is indeed a graduate tax for several decades. It is relatively simpler and easier to understand, avoids huge debts and can be progressive. Still, we should await the report of the Treasury Committee inquiry into the scheme.
I cannot leave this topic without looking into freedom of speech, which lies, or should lie, at the heart of higher education. There was a fight for centuries over freedom of speech in all arenas—freedom from religious domination. Just as it seems to have been won, there have re-entered a new religious repression, gender issues and racism. Because of the misuse of human rights and loss of liberal leadership, respect for divergence, curiosity, courage and tolerance is vanishing. This is a serious rot at the heart of the system. Universities have failed to uphold free speech and have tolerated extremism and antisemitism—which I have spoken about many times here—as if they are frightened of their students’ excesses. The OfS must take this on if the vice-chancellors will not.
The Government have finally implemented the complaints process for freedom of speech complaints, as mandated in the Higher Education (Freedom of Speech) Act 2023 so long ago. The jurisdiction is rather awkwardly split between the OfS and the Office of the Independent Adjudicator. The latter can deal only with students, and then only after the university’s internal procedures have been exhausted. The OIA would look to see whether the university’s procedures have been followed, not at the substantive issue of whether freedom of speech was actually threatened and whether it was permissible. The Office for Students, on the other hand, will deal with academics, staff, external speakers and student unions, and has more substantive enforcement powers.
The danger with both is that they may be too slow. After all, if a free speech issue manifests itself in May, the students and others will be long gone by the time there is a decision, and the costs will be high. There is no mechanism for immediate injunctive relief so, unless university authorities show muscle, we can expect more of the crowd and intimidation tactics that stop a speaker in his or her tracks.
It is time for an overhaul, with fewer, more diversified universities, more skills and technical ones, and a lifelong learning entitlement, and of quality of admission and grades, with caps on numbers, with the courage to deliver quality and free speech and to tell the world about the public good that our excellent system delivers. Will the Minister push for fewer, recategorised universities; capping Firsts and Seconds; the National Student Survey asking students how much work they have done; a national entry qualification; and a cap, even on undergraduates? Will she reconsider a graduate tax to keep our system at the front of the world, as it has been for so long?
Baroness Warwick of Undercliffe (Lab)
My Lords, I am grateful to the noble Baroness for giving us the opportunity to reflect on the future affordability and quality of higher education in this country. Her interest in HE is of long standing, and I recall her very effective role as inaugural chair of the Office of the Independent Adjudicator for Higher Education.
I will not attempt to address some of the issues that the noble Baroness has raised, but I will address others. This House is well aware that there are real pressures on students, graduates and our universities. Funding has been eroded in real terms, costs have risen, and institutions are being asked to do more for more students with fewer resources.
However, let us be equally clear: this is not a system in decline; it is a system under strain, but one that remains one of the country’s greatest national assets. Our universities are engines of growth. They sit at the heart of the Government’s ambitions for productivity, innovation and regional development. From digital arts in Dundee to naval defence in Plymouth, from graphene in Manchester to advanced manufacturing in Sheffield, and from compound semiconductors in south Wales and the extraordinary film and television industry in Belfast, our universities create opportunity.
In all parts of the UK, universities are doing much more than educating the next generation workforce. They are at the heart of industry clusters; they drive inward investment in towns and cities all over the country; they generate jobs; they spin out companies; and they work with public sector organisations in deep partnerships. Our universities have faults and there are real problems, to which I shall return, but they should not dominate our understanding of a sector which remains, in my view, one of the best reasons to be optimistic about the future of our country. That is why it is so important that this House pays attention to the challenges and is honest about the problems. We must encourage government and the universities themselves towards renewal in the national interest.
I have been pleased to see that Universities UK recognises this need. Following on from the work of its blueprint, published two year ago, Universities UK has now embarked on a programme of work that it is calling “future universities”. It is asking how the university system needs to change and adapt to deliver what the nation needs in the next decades. As a former chief executive of Universities UK, I am pleased to say that it is not afraid of criticism but is thinking hard about how the system can respond to it.
The sector has certainly widened opportunity. Over recent years, more students from disadvantaged backgrounds have entered higher education than ever before. Sutton Trust research shows that
“around two-thirds of upward mobility among people from non-graduate families is accounted for by higher education”.
The Government are right to want to continue to expand and widen participation, because access remains unequal. Higher education transforms lives. We see it in institutions such as Teesside University, which is supporting students from non-traditional backgrounds into high-skilled employment. We see it in the work done by the Open University, whose data shows that higher education study reduces prisoner reoffending by 22%.
Value, as the noble Baroness, Lady Deech, said, is not just about earnings. We know that graduates are more likely to be in work and less likely to be unemployed. On average, they enjoy better health, and graduate parents have a positive impact on the educational outcomes of their children. A newly qualified nurse from the University of Birmingham, a teacher from the University of Cumbria and a social worker from Cardiff University may not enjoy high salaries, but surely we value them. These are the professions on which our public services depend, and they are sustained by our universities and students who choose careers that allow them to contribute to society in a variety of ways.
The Office for Students has an important job to do in safeguarding the reputation of this country for high quality. The sector should be, and is being, held to account. There is very little understanding of the processes that universities use to uphold quality, from the way they design and validate programmes to the sector-wide structures that ensure consistency. They are not understood and may not be fit for the age we live in. The Quality Assurance Agency for Higher Education, once a globally recognised mark of the trust that you can place in our universities, now has a marginal role in England, although things are different in Scotland and Wales.
No one, not even the most ardent supporter of university expansion, would argue that there should not be high-quality alternatives to university education, but improving one should not come at the expense of the other. I strongly believe that those who believe that we have gone too far in the expansion of universities are wrong. We cannot win in a global economic competition by decreasing our ambition and aspiration.
High-quality provision depends on a sustainable financial system, and here we come to the central challenge. The real value of domestic tuition fees has declined sharply over the past decade. Scottish universities received about £2,000 less per student than those in England. The gap between the cost of teaching a vet and the money an English university receives to provide an education is about £10,000 per student per year. The Westminster Government are about to hand another cut to English universities through cuts to the strategic priorities grant. Despite having made the commitment to ongoing increases in the undergraduate fee, which is a good and brave move, the financial position of the sector is getting worse due to tighter immigration requirements and decisions such as the introduction of the international levy. Institutions have responded with innovation and efficiency, but there are limits. We cannot continue to expect world-class teaching, research and student support on a diminishing resource basis.
Finally, we have to resist false choices. This is not a question of universities or skills, or of academic or technical education; we need both. Without underestimating the need for change and the improvements that need to be made, let us be confident in what we have: a system that is of high quality, is globally respected, changes lives and drives growth. At a time of global competition and economic uncertainty, to weaken our universities would not simply be short-sighted; it would be an act of profound self-harm.
Lord Willetts (Con)
My Lords, I congratulate the noble Baroness, Lady Deech, on calling the debate. I declare my interest as a visiting professor at King’s College London and as a director of Thames Holdings. It would be in the spirit of an education debate to have some set texts. I have two set texts, although I am afraid that they are rather heavily oriented to economics. I should therefore apologise straightaway to the noble Baroness, because she made some very important points.
I am thinking of the Policy Exchange paper for which the noble Baroness wrote the foreword, as well as the very recent report from the Institute for Fiscal Studies on graduate earnings. It is worth focusing on these two documents, because they have very different accounts of what is going on. In the words of the Policy Exchange paper,
“the graduate … premium has plummeted”.
Those are its words and that is a widespread narrative in the media.
The IFS finds no such effect. In its words,
“average net returns … are large”—
and by “large” it means really large. After discounting lifetime earnings at a rate of inflation plus 3%--which is a very high rate that people object to when it is applied to student loans, but the IFS applies it to earnings—you find it is £290,000 extra earnings for a woman and £370,000 of extra earnings for a man over their lives. After you then allow for tax and loan repayments and make some rather heroic calculations about the counterfactual—what someone like that would have achieved by earnings had they not gone to university—even after all those deductions and the very high discount rate, you get a £90,000 gain for women and a £109,000 gain for men. The Government gain too. They are a net beneficiary through the repayments of loans and through the higher taxes paid by people with higher earnings, of £48,000 for women and £107,000 for men.
Unless there is to be a challenge on a comparable methodology—I have to say that the Policy Exchange methodology is not comparable; it takes the national living wage at an hourly rate, multiplies it by 40 in 2026 and compares it with graduate earnings in 2022, including part-time earnings—I think we have to take the IFS assessment as the authoritative assessment unless there is overwhelming evidence to the contrary.
This matters for the policy debate. The noble Baroness, Lady Deech, expressed concern about people with lower qualifications going to university. The IFS has looked at the outcomes for the 30% of students with the lowest prior attainment, and 85% of women and 60% of men are better off as a result of going to university. The evidence, not just in Britain but in other advanced western countries, is that if you take the marginal students—the people who just got in and who have particularly low attainments—and compare them with people just like them who did not go to university, you find a significant benefit from going into university.
However, behind this—behind these averages—on the IFS figures, after all the allowances, there are indeed 20% of men and 30% of women who are worse off, and they are concentrated in the performing arts and languages. That is why I, as the Minister, personally fought long and hard to make this evidence available and to get HMRC to agree that it would make its evidence available so it could be linked with educational data and these calculations would be possible.
However, I occasionally feel like the sorcerer’s apprentice at what has been unleashed, because the noble Baroness is right. This is useful information, it is the kind of information that prospective students should have, and indeed, the IFS research shows it is having an effect: a decline in participation in some of those courses, and an increase in participation in, say, STEM courses, which do better on these earnings measures. But that is supposed to be a useful tool; it should not be the be-all and end-all of the debate about higher education, because then the higher education debate looks appallingly different from at all other stages. On schools, we talk about teaching quality. The only thing we seem to be able to talk about and regard as a measure of quality is earnings, whereas the noble Baroness is right: there is more to higher education than that.
Nevertheless, it is the case that both the Government and the Opposition want to use this evidence to decide which departments, courses and universities they should close. So, they owe us an account of exactly how they are going to use this data, how they are going to interpret it, and what decisions are going to be taken.
For a start, the Government have said that they want fewer people to go on these courses and more to go on apprenticeships. As a minimum, analysis along the lines of that from the IFS should surely also be applied to apprenticeships. We need to compare like with like and, although there are some useful assessments of apprenticeships, they do not have anything like the rigour of this IFS analysis. Will the Minister commit today to apply this analysis to other forms of education and training as well?
Can we also know exactly how granular the information is? The IFS material is not the basis for deciding on an individual course at an individual university. Is that to happen and, if so, on the basis of what information? How up to date will that information be? There is a real dilemma here: the evidence in the IFS assessment is for people who did their GCSEs in the year 2002; is that to be the basis of a decision? If the students are more recent, how can we effectively forecast their lifelong earnings? There are important questions here and I very much look forward to the Minister’s reply, when I hope she addresses them.
The Lord Bishop of Leicester
My Lords, I too am grateful to the noble Baroness, Lady Deech, for initiating this debate. It is good to have the opportunity to contribute to thinking about the future affordability and quality of higher education. I do so as the Bishop of Leicester, but also with a close interest in the Cathedrals Group of Universities—14 universities whose distinctive history and mission speak directly to the themes before us: public service, social inclusion and the flourishing of local communities.
At its best, higher education is not simply an individual good but a common good. It forms professionals, nurtures civic responsibility and strengthens the social fabric of our nation. Many institutions across our system, including those in the cathedrals group, exemplify this tradition, with roots in civic purpose and long-standing commitment to education as a vehicle for service inclusion and human flourishing.
Historically, a number of these institutions were founded to train teachers for communities experiencing deprivation. That purpose continues to shape their work today: they now educate not only teachers but nurses, social workers, physiotherapists and paramedics—often in close partnership with schools, multi-academy trusts and health bodies. In my own diocese of Leicester, we see clearly how vital this local and regional role is. Our universities—that of Leicester, De Montford and Loughborough—are deeply embedded in place. They help to sustain public services, provide pathways for local people and act as anchors of opportunity within diverse communities.
This brings me to the importance of widening participation. This is not simply about entry into higher education but about ensuring success beyond it. It therefore requires sustained engagement, starting in schools, continuing through further education and extending into higher education and beyond. In many parts of the country, including areas of Leicester and beyond, the challenge is not only individual disadvantage but structural fragmentation. Too often, the system can feel disjointed, with schools, FE colleges and universities operating under different pressures, incentives and expectations. If we are serious about both quality and affordability, we must also be serious about coherence.
I argue that we need a more joined-up approach across the whole education sector, one that recognises the vital role of further education alongside higher education and the importance of strong, sustained partnerships with schools. A flourishing system is one in which learners can move with confidence along clear and supported pathways, whether academic, technical or vocational. Higher education institutions have a key role to play in this, but they cannot do it alone, particularly in the face of growing financial pressures.
Among these pressures are externally determined and potentially volatile costs, which continue to constrain universities’ ability to sustain the very activities we value most. One example is the increasing costs of pensions across the sector. The teachers’ pension scheme, in particular, has placed significant strain on university finances in recent years, with employer contributions at high levels. While a reduction is anticipated in 2027, this will not resolve the underlying challenge. The point is not to weaken pensions but to ensure that institutions have sufficient flexibility to manage these costs without undermining their broader mission. Without that flexibility, rising costs inevitably place pressure on staffing, investment and the range and quality of provision offered to students.
There is a moral dimension within all of this. If universities are less able to invest in partnerships with schools and further education, or to sustain provision in key professional areas such as supporting social good, the consequences will be felt not only in higher education but across our schools, our health service and our communities. If we fail to build a more coherent system linking schools—both FE and HE—into one flourishing system, then we risk leaving too many learners without clear and supported routes to flourishing.
I therefore urge the Government to take a broad and integrated view of higher education sustainability. Yes, we must consider funding levels and student experience. Yes, we must safeguard equality. But we must also address the structural pressures that sit beneath these debates, and we must strengthen the relationships across the whole education system. Universities know that they need to adapt and continually iterate their offer for a changing world. In order for this to be possible, greater flexibility for institutions and a stronger emphasis on partnership will be essential.
The universities of the Cathedrals Group remind us that higher education is not only an economic endeavour—
The Deputy Speaker (Baroness Finlay of Llandaff) (CB)
My Lords, we are resuming at 3.35 pm. That means that the debate was adjourned for 34 minutes. We will add injury time to the end time, so the new end time is 6.01 pm. The right reverend Prelate the Bishop of Leicester has some time left. We will resume with his speech and then proceed with the speeches in order.
The Lord Bishop of Leicester
I thank the noble Baroness very much. I am not used to having quite such a dramatic effect when I speak—I did not realise that what I was saying was quite so inflammatory.
I will be brief. The universities of the Cathedrals Group remind us that higher education is not only an economic endeavour but a moral and social one. It is about the formation of people, the strengthening of communities and the pursuit of the common good. If we are serious about that vision then we must ensure that the structures surrounding our institutions—financial, organisational and relational—enable them to fulfil that purpose.
Lord Patel (CB)
My Lords, if the right reverend Prelate the Bishop of Leicester’s speech was inflammatory, mine is burned—so I am starting afresh, ad-libbing. I congratulate the noble Baroness, Lady Deech, on securing this debate. It is not an easy task to win a ballot for debates among the Cross-Benchers, as the competition is usually pretty fierce, particularly as one of the competitors was the convenor—but she won it and I thank her.
I will briefly speak about the challenges that universities face around research. We know that our leading universities are world leaders in research. We contribute more publications than any other country in the world. Our citation index for universities is 1.54, which is extremely high, and 16% of publications are rated at more than 10% in citations.
The value of universities is enormous. We do blue-sky research, and universities contribute to early innovations and help build billion-pound industries. For the population of 0.8%, we have a publication record of about 6%. Some 60% of the publications are international collaborations. Of the £72 billion that the United Kingdom spends on R&D—which is 2.64% of GDP—higher education is responsible for 24% of all of it, which is £17.1 billion a year. What is amazing is that that is the highest of the OECD countries. Japan, for instance, is the next highest, but it is at 11%, compared with 24% for higher institutions in the United Kingdom.
Where do universities get their funding from? They get it mainly from UKRI, which is structured, dual-support funding of about £6 billion, given to universities on a competitive basis. The second is the so-called QR funding, which is related to the efficiency metrics of research efficiency funding. They also get it from charities, mostly from Wellcome and Cancer Research UK in the health sciences; from philanthropy; and, for some universities, from the alumni network.
However, there are deep structural flaws in how the universities get the funding and what happens. The so-called 80% full economic cost that they are supposed to get from UKRI is, in reality, about 68%. The funding deficit amounts to about £5 billion, which the universities have to fund from somewhere else. Mostly they do this now from international student levies, but that is going down. QR funding has gone down to less than 15% since 2019, so universities are in trouble around supporting research. If they do not support research then either there are job cuts or a plan to cut research in certain areas, and universities will not bid for charities’ research because the overall funding required to support it will be higher. The implications are severe.
There are also implications for PhD training, with UKRI supporting only 5,000 students, compared to the nearly 7,000 students it used to support. PhD training institutions have been cut from about 76 to about 45, so there are huge implications for the PhD training that supports university research—PhD students are the fuel that supports university research. If we take them out, it impacts on our industrial strategy and therefore on our economy.
We need something to fix this. What are the fixes? The fixes are restoring 80% support for research funding to 100% and supporting QR funding for REF to a level that is compatible with inflation and with other costs, such as energy, et cetera, rather than 15% down from 2019. What will the Government do to restore university funding to full economic cost and QR funding to the level it should be? In future, how will they control the global talent visas—not the international student visas—that attract international scientists to work in our highly competitive and globally recognised research universities?
Baroness Freeman of Steventon (CB)
My Lords, I thank my noble friend Lady Deech for initiating the debate. I declare my interest as principal of Hertford College, Oxford.
I was incredibly lucky to have one-to-one and one-to-two tuition at university. My tutor said, “I have you for three years. I’m going to spend two of them teaching you how to think and then, at the end, I’m going to teach you how to pass the exams”. Over two years, I learned how to learn by myself, how to think critically and how to interrogate evidence and ideas—I was perhaps less good at learning how to pass the exams, which was not my tutor’s fault. I then went on to do a doctorate; like all doctorates, it was on a weirdly specialised topic that few outside the field would think important—perhaps even few inside the field. Again, I was lucky in my supervisor. He reminded me that a doctoral degree is education. It is about learning skills, not about making advances in the field. Every chapter was training me in a different skill.
As a doctoral student, you have to become even more independent as a learner and a thinker, and do more creative thinking within the bounds of your topic. As an individual student, the skills gained from this kind of education are very flexible. The specific facts and knowledge are not the point. I suspect that noble Lords who have done a degree, even one that is related to their professional career, rarely use much, if any, of the knowledge from the course. Instead, subjects are more a way of embedding the teaching of critical thinking and learning, and that gives you transferable skills and the confidence to work in a wide range of fields.
For the country, this is very important. Higher education that equips people to be confidently adaptive, to learn things quickly and independently, and to be creative is vital to a workforce, as are diversity and plurality of thought. People have different experiences and have learned different ways of thinking and approaches. Now, more than ever, we surely need critical thinking skills, intellectual flexibility and diversity, as technology increases the pace of change in work and the spread of ideas through society.
How do we encourage this kind of learning? The answer is dialogue: structured argumentation, personalised challenging conversations and detailed feedback. I was incredibly lucky to get that from a great tutor and then from my doctoral supervisor. The time investment and the skill needed for this kind of teaching is intense. It is important that academics who commit to it are given adequate recognition.
I am sure many people will be starting to wonder whether AI can be a good tutor, at least for undergraduates. It is personalised, challenging and can respond to challenge. In some cases, it probably could be good. But whether we can take advantage of its pros without losing other aspects of good tutoring through poorly thought-through use of it remains to be seen.
So much of what we learn during higher education is social. It cannot all be delivered digitally. Human mentorship, sports, music, drama, administration and normal social interactions with people from different backgrounds can be at least as important as the course tuition itself. We have to learn key skills, such as resilience, appropriate risk-taking, confidence and humility. These are priceless. But of course, they are not; they have a price. As a country, we have to think quickly and hard about how we can have a higher education system that is affordable, gives students the chance to develop these skills and works in the world of AI.
Others have spoken, and will speak, with more experience about financial issues. I will just say that, as the number of young people in the UK falls following changes in demographics and immigration, there is the opportunity to increase the ratio of tutors to students more affordably if funding is not allocated on a per-student basis. What plans do the Government have for higher education funding as student numbers fall?
In the immediate term, we also need to address the costs for students. Looking at our undergraduate students at Hertford, we see a squeezed middle of students who come from households within the household income bracket where the government assistance tapers. As the cost of living has risen, those in that taper band have less assistance from the Government, but their families are also unable to give financial support. I would like to ask the Minister whether they are increasing the income bands used to assess student support as the cost of living increases.
Finally, I have a plea for those students who want to continue their studies, particularly to do a higher research degree such as a doctorate. These students, however promising, are really struggling to find the means to study, particularly outside the disciplines of science and medicine. Higher research degrees are not professional training for those who want to stay as academic researchers. They are for people who want to learn to research topics to the greatest depth and teach themselves new techniques and to be creative thinkers.
Half of our home students studying higher degrees at Hertford are now self-funding. We cannot afford for our future thinkers to have low diversity, either through narrow domains of study, restricting the number of people who have learned to approach problems in certain ways, or through narrow demographics: having only those who come from backgrounds where they can afford to fund themselves. I ask the Government to think about how they can best ensure that students from all backgrounds have the opportunity to be taught how to think and how to learn for themselves within the framework of a broad range of subjects, because that is what this fast-changing world demands.
Lord Tarassenko (CB)
My Lords, I congratulate my noble friend Lady Deech on securing today’s debate. Her commitment to the issues of quality and affordability in higher education is second to none. I declare an interest as the founding president of Reuben College, Oxford’s newest college: a 21st century college in a 900 year-old university.
In early 2025, just over two years after the launch of ChatGPT, a survey carried out by the Higher Education Policy Institute revealed that 90% of UK undergraduates were using AI in their assessments. As a professor from the University of Warwick recently put it,
“all typed work by students is now worthless as a means of assessing them and their knowledge”.
Many departments are going back to hand-written assessments for all tests that matter, and I believe that we should contemplate reintroducing all exams as part of summative assessments, such as finals. Right now, conversations about AI in the higher education sector are mostly defensive, and this needs to change. The question should not be “How do we catch students cheating with AI?” but “How can we reimagine the delivery of education in the age of AI?”
As with the social media ban, it appears that Australia is ahead of the UK in this domain. In a recent paper, two Australian academics argued that, as AI automates analytical tasks, the true purpose of a university must shift from teaching students how to generate answers to developing capabilities in reasoning, critical judgment and acting under uncertainty.
My estimate is that we need only about 20% of the lectures which we required prior to the advent of generative AI. Lectures should be given only to introduce a subject, occasionally go through a particularly difficult topic or proof, and then provide a synthesis at the end. In between, students can—and will, in any case—use their favourite generative AI tools to progress, at their own pace and with immediate, personalised feedback, through the subject framed by the lectures. The time which professors would save by giving only 20% of the pre-AI age lectures should be devoted to their facilitating small-group seminars, typically with 10 to 12 undergraduates in each group. In these settings, the students would not be allowed to have their smartphones or laptops with them. The professor would probe their knowledge and enable them to develop the critical cognitive capabilities now being blunted by the regular use of AI during the learning process.
Of course, small-group teaching, as opposed to giving lectures to 200 or 300 students, is much more inefficient. For such a strategy to be feasible, the higher education sector will need to embrace the use of graduate teaching assistants. As in the US, these would be PhD students or post-doctoral researchers, who would be trained to deliver high-quality, small-group teaching, working in tandem with the professor responsible for the undergraduate course.
The Department for Education cannot tell universities how to teach, but it controls the financial levers. The large-scale deployment of graduate teaching assistants to support small-group teaching would require DfE and UKRI to develop plans for an alternative model for funding PhDs. Those UK-domiciled postgraduate students who chose the option to become teaching assistants would be able to start paying off their student loan while doing their PhDs.
I am aware that the Office for Students has launched a research project to investigate how universities are using AI, with a nationwide data-collection phase closing at the end of next week. The OfS says that it will
“analyse the findings in collaboration with Advance HE”
and that it expects
“to publish the findings later this year to support institutions in using AI tools to improve students’ experiences of higher education”.
But we need to be bolder in our ambition if we are to maintain the quality of higher education in the age of AI. We need to start now to develop the rigorous training programmes required to turn PhD students and postdocs into expert facilitators, able to lead device-free sessions in which undergraduates can develop genuine critical thinking and independent reasoning.
AI-guided learning, framed by just a few lectures and combined with rigorous oral probing in small-group seminars, is surely of higher quality than 100 hours of sitting passively in a lecture theatre. We need the DfE to fund pilot programmes in selected university departments, from the humanities to engineering, to demonstrate how undergrad teaching can best be adapted for the age of AI. It is a challenge which we cannot ignore, and I hope that the Minister will be able to reassure the House that the DfE is devoting some critical thinking time to addressing the issue.
Lord Isaac (Lab)
My Lords, it is an honour to follow the noble Lord, Lord Tarassenko, and to see Oxford so well represented in this afternoon’s debate. With that in mind, I declare interests as provost of Worcester College in Oxford, but also as the chair of governors of the University of the Arts in London.
As has been widely acknowledged in the debate this afternoon, our universities are among the finest in the world. They generate world-leading research, attract international talent and contribute billions of pounds each year to our economy. Yet I think it is no understatement to say that the higher education sector is in crisis. Higher education should be an opportunity for all, not a financial burden that deters talented students from fulfilling their potential. I was fortunate to be the first in my family to go to university. I was supported by a student grant and I was able to graduate, believe it or not, without any debt. Times have changed, but I would like as many young people from similar backgrounds to enjoy the same good fortune.
Tuition fees have undoubtedly provided universities with a stable income, but rising living costs and concerns about debt are discouraging many able students from applying. It is therefore welcome that the Government have announced the return of maintenance grants for lower-income students. However, these are currently linked only to priority courses. My preference would be that such courses were defined more broadly, so that students from lower-income families have the same freedom of choice as their more affluent or more economically confident peers.
Of course, universities themselves, as we have heard this afternoon, face mounting pressures. Even with recent fee increases, we now know that four in 10 institutions are expected to be in deficit by the end of this year. Student numbers are falling, while heavy reliance on international students leaves the sector vulnerable to geopolitical uncertainty. I also fear that the new international student levy raises the risk that many international students are less attracted to studying in the UK, because inevitably—I speak as part of a governing body that has to assess the cost of international fees—we may well be passing these additional costs on to our students. Cuts and delays to the strategic priorities grant, together with the loss of world-leading specialist funding, add further pressures.
Quality must never become the casualty of financial constraint, and we must continue to invest in excellent teaching and research, including, as I wish to stress this afternoon, in the humanities. The recently announced deep cuts in the humanities at Exeter University remind us just how fragile these disciplines have become. I agree that, to deliver on these ambitions, universities must embrace new forms of collaboration, share resources more effectively and, as we have heard, make full use of digital technologies and AI. All this must, I suggest, lead to an improvement in teaching and will drive innovation.
Finally, I turn to creative education, which the noble Baroness mentioned in her speech. As I have said in this House before, the creative industries are one of Britain’s greatest success stories. They contributed nearly £150 billion to our economy last year, yet creative courses remain extremely vulnerable, because they are more expensive to deliver and ever fewer students are attracted to them. These courses must not become the preserve of only those who can afford them or who are prepared to take on debt. If they do, we risk denying future generations of David Hockneys, Tracey Emins and Alexander McQueens. Changes to the pre-degree courses imperil people just like them. We need a pipeline of people moving from further education to higher education and endorsing their preference for the creative industries. Creative education is the pipeline for one of the UK’s most successful industries, and its value, I suggest, cannot be judged solely by graduate earnings. These disciplines enrich our culture, strengthen our international reputation and contribute significantly to economic growth.
Our universities must remain accessible to all. They must offer the widest range of disciplines and be financially sustainable. The future prosperity of our country depends on it.
Lord Bew (CB)
My Lords, I thank my noble friend Lady Deech for securing this debate and express my agreement with many of the themes in her speech. I declare my interest as a jobbing academic and, having listened to what has already been said this afternoon, I speak with great relief that I did not have to compete with AI, although I think some very important things have been said on that subject this afternoon.
Because of the exigencies of my life, being married to an academic whose books were occasionally more fashionable than mine, I have travelled around a lot. I have taught in one of the old polytechnics, been a fellow of a Cambridge college, taught at a fairly basic, if I can say that, American state university and at an American Ivy League school, so I have seen educational systems in this country and abroad. I have been an external examiner in Galway and in the European university in Florence. I have been around a bit—it is multicoloured—and what I am going to say is based on that experience.
The first thing I want to say is that I agree with all those who have spoken this afternoon and said we talk so often in this country about our world-leading this and that, but the one thing that really is world-leading is our higher education. The figures are indisputable. If you look at the top 10 universities or the number of universities—it is 26—we have in the top 200 in the THE list, or look at the QS list and so on, the figures are indisputable. Holland is perhaps one country that comes even remotely near to the level of achievement of this country. We really are, in this respect, if not in others, genuinely world-leading, and it is something to be very proud of.
In the lead-up to this debate, I have been reading and preparing. On the research assessment exercise—or REF as it is now known—I was really surprised to see the very fine professor, Stefan Collini, saying:
“Few things would improve the intellectual culture of universities more quickly than the complete abolition of this flawed and coercive exercise”.
I can assure noble Lords that, if you are teaching in an unfashionable provincial university, as I was at the time, there is nothing more liberating. Anybody who has read a novel about provincial university life will realise the need for some sort of external coercive pressure, saying, “Research is important”. It is vital and liberating.
I know quite a lot about the educational system in Ireland and enormously respect the intellectual culture there, but one of the reasons why Ireland has only one university in the top 200 is simply the absence of a similar mechanism to the research assessment exercise over the last four or five decades. It definitely propels the system upward. I know it is gamed and I know there are brutal and silly aspects to it, but, none the less, broadly speaking, I am strongly opposed to the idea that it would be liberating to drop that or equivalent forms of that exercise. It is one reason for the research excellence of our university system.
If I may say something else from my experience of teaching in an American Ivy League school, I would make a traditional humanist point. Oxford and Cambridge are great research universities, but they are also great teaching universities. Princeton now is quite rightly shooting up the league table towards the top, but, like most American Ivy League schools, it is not an undergraduate teaching institution in the way that Oxford and Cambridge are. It is just not a priority. Again, from a traditional humanist point of view, I think it is something we can congratulate ourselves on.
One thing that we cannot congratulate ourselves on is something which was certainly not part of my student life in Cambridge: I am still amazed by the rise of antisemitism in our universities. I am just surprised, because that is something I never expected to see, so I want to qualify my praise for our system.
Finally, there is no question but that the golden age of financing is gone. The Chancellor recently said:
“It is not right that people who don’t go to university are having to bear all the cost for others to do so”.
These are our students, who are now the political class, telling us this, and there is no going back to the golden age. I think the implication has to be fewer universities than those we currently have. If you look at what the incoming Prime Minister has been saying about localism and the fact that more and more students are staying at home because of costs, that means fairness requires more good, locally established universities right across the country.
In conclusion, this particularly applies to my home place in Northern Ireland. I taught at both the main universities there. They both have great things to their credit. In 2024, Times Higher Education said that the University of Ulster was the best university of the year. Queen’s University, where I taught for most of my career, has just gone up a number of places, significantly and impressively, in the QS rankings, but the university also has a major financial crisis. It is time to look at whether we really need two universities in such a small place as Northern Ireland. I suspect that is also a debate to be had in other parts of the country.
Lord Biggar (Con)
My Lords, I speak as a former professor of Christian ethics at the University of Leeds, Trinity College Dublin and the University of Oxford. I declare an interest as the chairman of the Free Speech Union. I simply want to underscore the plea from the noble Baroness, Lady Deech, for our universities to become more muscular in the defence and promotion of liberal culture.
Britain’s universities are culturally strategic because they educate the elites who run our institutions, be they economic, social or political. Let us be clear: elites are a social necessity, even if elitism is something we should avoid. Because they educate our elites, universities are important not just for economic success, as they are, but for the kind of society we want to be. Do we want to be a society whose leaders have been educated to reason, to proportion claims to evidence and to yield to justified criticism? Do we want our leaders to be the kind of people who are capable of honest reasoning because they have been formed in the virtues of self-restraint, humility and courage, which are necessary for it, or do we want to be led by graduates indoctrinated by dogmatic, ideological professors who penalise dissidents? Do we want to be led by graduates who have witnessed university authorities let aggressively ideological students abuse and intimidate them? Do we want graduate leaders who have learned that the only way to advance in the world is to keep their thoughts to themselves and their mouths shut, and to run with the prevailing wind?
I take it that we do not want that; if that is so, our universities must become much more assertive in defending and promoting a liberal culture, by which I mean a culture where everyone is free under the law, without fear of penalty, to say what they believe the truth to be and then to test it in the critical give and take of reasons. As the noble Baroness, Lady Deech, wrote in her preface to the excellent Policy Exchange report mentioned several times already this afternoon,
“too many universities have repeatedly failed in their duties to … foster civil debate”.
Indeed, too many universities have tolerated highly uncivil aggression.
Let me give two examples. Five years ago, the admirably temperate and reasonable feminist philosopher Kathleen Stock came under attack for her gender critical views at the University of Sussex. After a sustained campaign of vilification led by students, and even supported by some of her academic colleagues, she became so depressed and demoralised that she resigned from the post that she had held for 18 years and, in effect, terminated her own academic career. To this day, as far as I can tell—trust me, I have hunted high and low—the authorities at Sussex have offered no public explanation of why they failed to support Kathleen Stock or of what they have done since to ensure that what happened to her will not happen again. To the outside eye, the aggressive illiberal ideologues at Sussex triumphed and nothing has changed.
Then, less than a month ago, in Oxford, Professor Michael Foran abandoned his lecture series on law and gender because pro-trans protesters had stormed the stage and intimidated his student audience, all the while passively observed by one the university’s disciplinary officers. I have been told that the university is unrepentant about its conduct, has offered no apology and thereby has granted aggressively illiberal hecklers an effective veto.
The problem is not just these individual cases; the larger problem is their generally chilling effect. As the late Sir Tom Stoppard said five years ago,
“It’s not so much cancellation as self-cancellation. People tread warily—they’re careful of what they say”.
In other words, a single successful cancellation causes a thousand horrified observers to beware of trouble and bite their tongues. On the eve of civil war in 1920s Ireland, WB Yeats famously wrote:
“The best lack all conviction, while the worst
Are full of passionate intensity”.
If, instead of civil war, we want a civil society led by virtuous, reasonable elites, not repressively illiberal ones, university leaders are going to have to muster greater liberal conviction and visibly face down the intensely passionate ideologues running wild before their eyes.
The Earl of Clancarty (CB)
My Lords, I am grateful to my noble friend Lady Deech for the opportunity to speak in this debate. I wish to make one single point, which is to draw attention to the threat to arts and humanities courses at universities, which is a long-term concern but one that appears to be getting worse. As the noble Lord, Lord Isaac, said, the latest victim of this is the faculty of humanities, arts and social sciences at the University of Exeter, a Russell group university, with over 110 academic roles proposed to be cut, affecting subjects including the visual arts, history, English and languages. But Exeter is not alone. The universities of Hertfordshire, Leicester, Nottingham, Cardiff, and Bristol, Goldsmiths, University of London, and others have all recently either closed courses or threatened closures in music, creative writing, film studies, theatre, English, theology and modern languages.
My worry is not just this trend, which has deep-seated roots—I will come back to that—but the Government’s attitude towards this trend, which is more than worrying. The DfE’s announcement in the press release last week of a new deal for young people says:
“Ministers will unveil plans to crack down on poor-quality university courses”.
On Tuesday, in an Oral Question, I asked the Minister for the criteria that would be used to define “poor-quality courses”. In reply she said that it is, in part,
“the ability to determine what the returns are from individual courses. It is for that reason that we will take action to prevent the expansion of those courses that are not providing the returns … that students have the right to expect”.—[Official Report, 30/6/26; col. 944.]
When pressed further by the noble Baroness, Lady Cash, the Minister referred to last week’s report from the Institute for Fiscal Studies, which identifies courses which effect the greatest financial return for students in terms of salary and those which do not, as the noble Lord, Lord Willetts, pointed out. In the graph which the IFS supplies in that report, courses such as philosophy, performing arts, other creative subjects, English and history lie to one degree or another on the low side of that equation. It is precisely those courses which are already suffering, while the Government seem to wish to discriminate against them further.
Also, the Minister said in reply to my question that, if necessary, they will legislate to do this. I dread to think what that might be in legislation. We are not hearing the language the Conservatives used of “Mickey Mouse courses” from this Government, but the effect will be the same. The Opposition do not now talk about Mickey Mouse courses. The noble Baroness, Lady Cash, in an Oral Question on 22 June, suggested, precisely because of the returns we are talking about, that creative courses should be the first to be cut. This way of thinking, from both the Opposition and the Government, of education in this narrow, crude transactionalist sense is deeply wrong, because it is narrow, short-term thinking concerned primarily with the economic effect on the individual.
There is no thought here of the sum total of a diversity of knowledge and experience, of their total value towards society, of the social value of subjects. Arts and humanities subjects, perhaps more than others, stimulate and engender the critical thinking so necessary in our society, and they are therefore entirely worthy subjects to be studied in universities. We know that many starting salaries can be low, but that should not invalidate the study of such subjects since it ignores, among other things, the larger-scale economic effect. In that respect, the creative industries are hugely important—in their profound social value and the acknowledged wider application of these studies for different kinds of work. In defence of these subjects, Vivienne Stern of Universities UK has said that
“in an age of AI, we’ll value the understanding of how human beings think and act more, not less, in the future”.
In terms of the pipeline, the Government are being inconsistent because the policy works so much against the intended encouragement of arts subjects in secondary schools through changes being brought in through the Curriculum and Assessment Review, particularly with the removal of the EBacc. It is, of course, those 14 years of arts subjects being squeezed in schools, and the knock-on effect that this had on higher education, which have, in part, left higher education in the precarious state it is in with respect to the arts, as the GuildHE report The Value of Creative Graduates pointed out in 2024. The British Academy has also pointed out that if we believe these subjects to be worth while, their further reduction at universities will create cold spots across the country. Of course, those cold spots will become more prevalent in the regions outside London.
I am confused about what the Government are trying to achieve. Are they trying to remove vocational subjects from universities and boost apprenticeships that way? If so, this is misguided, as not all vocational subjects are about apprenticeships. Whatever we may think of the long-term developments in higher education—I regret that art colleges are not the stand-alone institutions they once were back in the 1960s—that is nevertheless water under the bridge. These subjects have, or ought to have, a settled place in our universities. The University of the Arts London, and many of our arts and humanities departments, do a great job. To be fair, that is not what the Government appear to be criticising with this strange label of “poor-quality” courses.
I said at the beginning that these concerns had deep-seated roots. Many of these roots lie in the introduction of the loan system back in the 1990s, with the commercialisation, in effect, of our higher education system. The Government really need to look at how complicit they are now, alongside some university management, in deepening that culture, because it is bad for education and bad for society.
Lord Verdirame (Non-Afl)
My Lords, I too express my gratitude to the noble Baroness, Lady Deech, for securing this debate. I declare my interest as a professor at King’s College London.
I am one of the many Europeans who came to this country to pursue an academic career. I arrived at the age of 22 with a first degree from an Italian university, with respectable—but certainly not native—English, and with a social network that consisted of only two people, both Italian students. After my master’s degree, however, I obtained funding to do a PhD at the LSE, and I got my first academic job at Oxford. What academic immigrants like me found was that British universities, unlike universities in our countries of origin, were liberal and based on merit. They did not demand conformity. They were institutions where young academics especially could flourish. This was in part because, as a young researcher, one did not feel stifled by overbearing professorial egos, as was unfortunately the norm in Italian, German or French universities.
In my 32 years in this country, things have changed. These changes have been examined in the report by Policy Exchange that has been mentioned. It has a powerful foreword by the noble Baroness, Lady Deech. I associate myself with what she wrote in that report, and with the excellent introductory speech that she gave. The Policy Exchange report identifies several trends that many of us who work in universities recognise well.
First, there is the growth in managerialism and bureaucracy. Of course, universities need good administration, but administration should serve scholarship and teaching. When the best-paid jobs go to the administrators, you create the wrong incentives. Moreover, what is worse is that the academic managers too often understand their main role as ensuring and enforcing compliance with the myriad of regulations that govern academic life these days. In turn, they generate vast amounts of internal policies and processes that take time away from scholarship and teaching.
Another major change that has happened in these 30 years is that students are now treated as consumers who need to be satisfied. This has changed higher education for the worse. The purpose of education is not to flatter students; it is to form them. Satisfaction is completely the wrong notion. If anything, the objective of education should be to encourage dissatisfaction. I support a number of the recommendations in the Policy Exchange report, including abolishing the National Student Survey and making the OfS a light-touch regulator.
Another, even more sinister trend has emerged, and both the noble Baroness, Lady Deech, and the noble Lord, Lord Biggar, have addressed it. In the late 1980s, Allan Bloom wrote a famous book titled The Closing of the American Mind, in which he examined the narrowing of argument in American universities and the rise of intolerance and dogmatism. I fear the British mind may be closing too. In my field, international law, there is less diversity now than before. When I say “diversity”, I mean the diversity that matters in a university: not how we look but how we think. In the 1990s, there were Marxist, socialist, liberal and conservative international lawyers in academia. As many studies have shown, however, the range of political opinion in academia has become considerably more limited.
In addition, people holding minority views, as we heard from the noble Lord, Lord Biggar, are often not argued with—they are denounced. Even in academic international law—can your Lordships believe it?—the bigotry of seeking to denounce and ostracise those who hold different views, whether on migration, empire, sex and gender, the European Union or human rights, has taken hold. It beggars belief that this could happen among academics devoted to the study of the law of nations, which was invented in the early modern period so that nations divided by wars of religion could find common ground. There is a famous alumnus of Hertford College who disagreed with that view, but I hope we will prove him wrong; obviously, that was Thomas Hobbes.
We must remember that universities have not always promoted free thinking and advancements in knowledge. There have been long periods in western history when universities became the guardians of orthodoxy. We should not take too much comfort in international rankings: they do not spot these trends. By the way, while the top British institutions are still performing well, those just below them have been losing ground in recent years. The Government’s White Paper from last October deals with some of these problems and identifies some fixes, but many of the problems that have been debated today still need answers. It would be useful to understand where the Government sit in the range of opinion that has been expressed about the diagnosis of what is going wrong in academia. Do the Government agree that these problems exist and that there is a risk of decline?
It is often said that Britain can combine the best of Europe and America, and in many ways, we did that in the university sector. But the risk is a future where we end up in the opposite place: universities that are European in bureaucracy and overregulation, American in consumerism and levels of student debt, and, especially in the humanities and social sciences, eager to import every illiberal fashion, whether from Europe or America. That risk is real, but by no means a foregone conclusion. But there is no room for complacency. We must act urgently if we want to secure a better future for higher education.
Lord Hannay of Chiswick (CB)
My Lords, there can surely be no doubt about the timeliness—indeed, the urgency—of a debate on higher education, as the facts flow in of universities in financial trouble, of the lack of value of a university education, of universities being pushed towards unwanted mergers, and of the impact of the Government’s immigration policies on universities. There can be no better person to lead this debate than my noble friend Lady Deech, whose career in higher education has been so outstanding—although I warn the House that the line I will take on international students is a bit different from hers. Let us hope, therefore, that those with responsibility for universities in the new Government will read this debate and give it due weight, as they move towards decisions that cannot be made without damage being done to a sector of our economy that really matters to its future health and growth.
Any analysis of the higher education sector in this country could surely not escape the conclusion that it is potentially highly positive to our economy. After all, we do not have that many sectors of our economy where we stand second in the global rankings, behind only the United States, nor many where the benefits to such a wide spread of our economy, including often being the principal employer in relatively small towns and cities, are so marked.
You might expect such an economic treasure to be nurtured and promoted by the Governments of whichever party. If we had an industrial sector that had such characteristics, you can be sure that it would be treated like the crown jewels, but higher education is not. Instead, the Government’s immigration policies seem designed to damage the highly valuable contribution that foreign students make to our financial health and to our subsequent influence worldwide. The system for making loans to students for their tuition fees is manipulated to charge punitive levels of interest, which remain a burden on students for most of their lives. This would be hardly credible if it were not happening before our eyes.
I welcome the fact that the Government seem, belatedly, to have woken up to the immigration problem and to be planning to introduce in the autumn a new immigration channel for universities. I hope that the Minister, in replying to the debate, will supply some of the details missing so far from the initial announcement and that these will measure up to the damage already done.
Then there is the value of a university education to its recipients and our economy overall. I made myself rather unpopular many years ago when I asked the then Minister responsible on the Front Bench in your Lordships’ House, the noble Baroness, Lady Ashton of Upholland, who was announcing the target of 50% of our population to receive a university education, whether it was not wise to be able to answer the question of what the benefit to our economy was before announcing any target. Now, the question is being posed, rather haphazardly, and we still do not have an answer.
I hesitate to conclude these remarks with a call for another full-scale inquiry into the higher education sector, and I will not do so. But there are quite a lot of questions that need answering, and I hope that they will soon be answered, because the country is now putting at risk one of its greater assets, albeit doing so inadvertently.
Lord Londesborough (CB)
My Lords, I must thank my noble friend Lady Deech for securing this debate, which has been appositely framed with the words “affordability and quality”. I will tackle these words from an economic angle and from an employer’s perspective, reflecting, in part, on my own experience. Before I go down that path, I readily accept, like many others, that higher education should not be measured purely through the lens of economic impact, jobs, salaries and the ability to pay back student loans. Universities should be character-building through those vital formative years. It is where you develop life, social and communication skills and, indeed, have your beliefs questioned and challenged. You should graduate with much more than a degree, and many students develop friendships or partnerships that last for a lifetime. It would be remiss of me not to mention that I met both my wife and my business partner at university, and both would claim, quite rightly, to be of greater importance to me than my rather modest second-class degree in economics. That said, it is difficult to avoid the economic and financial consequences, and whether you look at this from the Government’s, employers’ or students’ perspective, the data is deeply concerning. Put bluntly, higher education is not working.
Let me start with our public finances. Sitting on the Treasury’s balance sheet is a current liability of £295 billion of unpaid student debt. That figure will reach £500 billion in the next decade, and much of that will eventually be written off. That would be less of a problem if we were a high-growth, low-debt economy, but we are not: our national debt has trebled in size in the last 15 years to almost £3 trillion, and we now spend more in servicing the interest on that debt—£130 billion a year—than we do on our entire education budget. That is a damning statistic.
With productivity growth averaging a feeble 0.5% over the last 20 years, our graduates—who have grown in number by 50% over this period—face double trouble: a sharp fall in the number of graduate jobs and a significant shrinking of the graduate premium on wages. It is no wonder that the latest British Social Attitudes survey found that 34% of people agreed that a university education
“just isn’t worth the amount of time and money”—
that is up from 14% who held that view in 2005.
There has also been a marked decline in those who believe that going to university leaves graduates “a lot better off” in the long run. It is down, from 50% in 2005 to 36% today. I acknowledge that these perceptions are challenged by the data analysis of such bodies as the IFS, but, none the less, the perceptions are there.
Turning to employers, low growth, with significantly increased employment costs, has resulted in much slower job creation—and that is before you take into account the impact of AI. Yet employers in multiple sectors continue to complain about all sorts of skills gaps, many of which could be filled by vocational training rather than university education. Supply is not meeting demand. Fundamental mismatches are growing.
Employers also complain that graduates are often poorly prepared for professional life, not so much in terms of the quality of their degree courses as in terms of personal discipline, social interaction and communication skills in general. This has been compounded by the increasing practices in higher education of working and studying from home and overdependence on online teaching and remote communications, not to mention the productivity-sucking distraction of smartphones and social media, which is an issue not just for schools but for universities and indeed the workplace.
I believe universities need to do a much better job in preparing their students for professional life. Degree courses should be rebalanced to address the broader human skills deficits cited by employers, and much more emphasis needs to be placed from year one on careers advice and development. Employers will often tell you that graduates from Europe are better prepared than their British counterparts for working life, and that was certainly my experience as an employer. We should be less hubristic and learn from our European counterparts, whatever the league tables suggest.
If we want higher education to be affordable, we should focus on quality, not quantity, and develop a more holistic approach to preparing our graduates, and indeed non-graduates, for the realities of the marketplace.
Lord Stevens of Birmingham (CB)
My Lords, I declare my interests as chair of King’s College London and as an honorary fellow of Balliol College, Oxford. At this stage of the debate, I will just draw out a few of the salient points that we have heard so far and pose one or two related questions.
The first is that I particularly commend the excellent speech of the noble Lord, Lord Willetts, which drew attention to the latest data published by the IFS. Indeed, although he did not mention it, we have seen new data from the Department for Education this month which demonstrates that graduates go on to earn higher average salaries even when compared with those who have similar GCSEs but did not go to university. That is clearly encouraging.
It is also encouraging that on 11 June we saw revealed that the number of students who view their university course as “good value for money” has risen to its highest level in more than a decade, and in fact, only 7% of students now say that, with hindsight, they would have preferred not to go into higher education. Interestingly, in contrast with that, when you ask the general public what they think the student response would be, they say that about 40% of students probably have regret, although it is only 7%. That is the good news.
However, as we have heard extensively, there is absolutely no grounds for complacency. For students, living costs are an increasing burden, such that more than two-thirds of full-time undergraduates now have paid jobs in term time. Teaching is under stress. The figures from Universities UK suggest that English universities now get £6.4 billion less for teaching, in real terms, than they did a decade ago. With tuition fees going up with inflation—in other words, staying flat in real terms—that £6.4 billion pressure is now baked in. So for students and teaching there are significant grounds for concern, as there are for research.
This week, the political headlines have been dominated by the £5 billion black hole in the defence investment plan, but there is a £5.4 billion black hole in the full economic costs of research recovery, as the noble Lord, Lord Patel, pointed out. On average, for every £1 of research that universities undertake, they can recover only 66p. This combination of pressures on students, teaching and research means that something will have to give.
While we tell ourselves about the brilliance of British universities—which I entirely endorse—these measures are based on the rear-view mirror to some extent, and if we are not careful, they are resting on past glories. The proportion of field-weighted citations in top decile publications in which UK researchers have participated worldwide has fallen from 11.5% a decade ago to 8% now. We may pat ourselves on the back, because it is only 6% in Germany and 3.2% in France, but in India it has grown over that decade from 3% to 9.6%; and in China, from 13.5% to 35%. So we have no grounds for complacency; we need a step change in teaching and research.
In that context, we need to avoid acts of self-harm as we do so. Had the noble Lord, Lord Rees of Ludlow, spoken, he might have referred to the Science and Technology Facilities Council, which proposed reductions of up to 30% in the funding for some areas of astronomy, and particle and nuclear physics, which is set to be extremely damaging for those disciplines.
One question I want to pose to the Minister is about a further potential act of self-harm that the Daily Telegraph reported on this week, which the Government have apparently been contemplating. I hope she confirms that that is not the case. It is, as part of a new reset deal with the EU, to offer EU students the automatic ability to access English universities at home tuition rates. If that were the case, it would be a hit of another £580 million to British universities. The consequences would be home students displaced by EU students, a further deterioration in the teaching experience and a further hit for research. In response to that piece in the Telegraph, the government spokesperson said:
“We do not recognise these claims”—
a classic non-denial denial. I invite the Minister to say, on the record, that the Government will not put this on the table and sell British students down the river, as part of an EU reset to the tune of £580 million.
Lord Liddle (Lab)
My Lords, the noble Baroness, Lady Deech, is to be congratulated on stimulating a very good debate. I agree with her fundamentally about freedom of speech and the shocking rise in antisemitism and intolerance in our universities, but I do not agree with the central thrust of her argument: that we should revert to having a more elitist higher education system.
I was a product of the elitist system when, in 1964, I got a telegram telling me I had won a scholarship to Queen’s College, Oxford, as only 6% of my age group went to university. I had a great time. My dad was a railway clerk, and I had a full grant with all my fees paid. I went on to do a master’s for another two years—all at the public’s expense. It was great.
However, I think we were right to make higher education a mass model; that degree of generosity to an elite could not be sustained. It was obviously unfair that people who did not go to university paid high taxes for the people who did, and therefore the fee system had a great logic to it.
I had the privilege of being chair of council at Lancaster University for seven years, and there I saw how wonderful this mass expansion of higher education had been. That institution had one of the best equity records among academic, research-intensive universities in recruiting state school students, and it also came out very well in the research assessment exercise. So, in principle, that can be done and we should resist the temptation to go back to a narrowly based elite system.
In our politics, the Member for Makerfield, who is about to become Prime Minister, will recognise that the core of the economic success of Manchester is its university sector and its contribution to the great revival of that city. That story is there right across Britain.
Obviously, there are, as my friend the noble Lord, Lord Stevens, said, no grounds for complacency, and there is something of a crisis. I think we can overcome this. We must not restrict international students. Prioritising immigration control over international students is the wrong decision. There are efficiencies that can be realised in universities; I saw that as chair of council. A small university such as Lancaster should be considering partnerships and mergers. Indeed, on one occasion, I proposed to the University of York that we merge to create a roses university, which would have saved quite a lot of administration. There are efficiencies that can be made. However, I agree with those who do not like the way humanities is being run down. That is not in conformity with my ideal of what a university should be about. The criterion for assessing the worthwhileness of courses cannot be only employability and earning power; we have to recognise the value of people who study the arts, or even theology. That is a very important contribution to society.
One thing that has not been mentioned in this debate is the great need for the post-16 education and training system to be improved. Universities should be thinking about how they can contribute to that. One of the radical things the previous Government did—in fact, it was Gavin Williamson, who I would not normally congratulate—was to introduce the idea of modular courses being part of the lifelong learning entitlement. Universities should be looking at how they can co-operate in partnership with further education colleges to make that a reality.
As my final point, I advise the Government to look at the affordability question, particularly for graduates on these plan 2 loans. I think it is very unfair and is one of the reasons we are finding, in the Labour Party, that a lot of young people are going off to the Greens: if you get a salary of 50 grand a year, you are effectively paying a 50% marginal tax rate. That is not acceptable for people who have spent years devoted to study.
Lord Trees (CB)
My Lords, I join fellow noble Lords in thanking my noble friend Lady Deech for securing this important debate. As we have heard several times this evening, two major problems are converging in the higher education field. The first is the underfunding of universities: the Office for Students has warned that 45% of higher education providers are likely to run a deficit in 2025 and 2026. The second problem, of course, is the colossal accumulation of student debt: in England alone, it has reached the figure of £295 billion and is continuing to increase, and much of it will remain unpaid.
There is no doubt, as we have heard from many noble Lords, that our best universities are world class and a jewel in our crown, and our objective should be to ensure their financial sustainability. But I question whether we need all the universities that currently exist. That may be a heresy from someone who has worked in higher education for 30 years, but we have to be honest about the problems we face and the possible solutions.
The seeds of this problem lie in the policy of then Prime Minister Tony Blair in 1999, who set a goal to have 50% of 18 to 30 year-olds attending university. Following this, the number of UK higher education institutions rose by 45% up to 2021, but the attendant fall in further education colleges was 40% over the same period. What was the evidence for that goal of 50%? It sounds to me more like a political slogan than an evidence-based objective. It created an image and impression that, if you did not go to uni, you were some kind of failure, and it encouraged many young people to pursue expensive degree programmes of questionable worth.
That is not just my opinion: the Augar report in 2019 concluded that
“too many students were being recruited to poor-value higher education courses … with both poor graduate retention … and poor graduate outcomes”.
In January 2026, an analysis by the Centre for Social Justice found, sadly, that over 700,000 graduates were out of work and claiming benefits.
To be kind, in 1999, the incredible recent developments in AI probably could not have been anticipated, but now it is quite clear that AI will have a differential effect on the job market, with vocational and customer contact roles—such as those in social and health care, catering and hospitality, building, plumbing, fixing things in general—less likely to suffer than many roles formerly regarded as for graduates. We are likely to need fewer graduates but more people trained in technical, vocational and practical skills. Indeed, many students will be better served by vocational programmes, preparing for employment and a defined career path. Five years after qualifying, a higher level 4 apprentice earns almost £12,500 more than a graduate from a low-value university course, and £5,000 more than the average graduate.
Although we are likely to need fewer graduates in toto, we will require graduates from those quality institutions providing the academic and technically demanding qualifications we absolutely still need in certain key sectors. Yet, by expanding the total numbers of universities and university students, we have reduced their unit of resource for all such programmes. An example in the HE sector with which I am familiar is that of veterinary education. Our veterinary schools are world class, with five in the global top 20, but their funding for UK students is inadequate, and to compensate for this shortfall, which the noble Baroness, Lady Warwick, reminded us was in the region of £10,000 per student per year, many vet schools are admitting substantial numbers of overseas students. Currently, over 20% of veterinary graduates from UK vet schools are overseas students.
This pattern is repeated in many other degree programmes, which provide the high-value graduates urgently needed for our strategic sectors, yet government support plus fees is inadequate. Because of changing immigration policies, which have been referred to, pursuing large numbers of overseas students is now an insecure and probably unsustainable means of propping up quality higher education. What plans do His Majesty’s Government have to close this funding gap? I suggest that we need to value the huge range of contributions to society by tertiary education in its entirety, ranging from vocational skills to academic degrees, and give targeted and appropriate funding to each element. Currently, I suggest that we are failing the country’s needs and the capabilities of our young people. Let us focus our finite resources in an evidence-based way to satisfy the aspirations of students and the actual needs of society for our economic and intellectual growth.
Baroness Finlay of Llandaff (CB)
My Lords, my noble friend Lady Deech is to be congratulated on securing this crucial debate. As a current pro-chancellor at Cardiff University and a previous chair of council at Cardiff Metropolitan, I suggest that this debate should not be framed as a choice between affordability for students and sustainability for universities. Why? Because a system unaffordable for students damages participation, and a system financially unsustainable for universities damages quality, choice, research capacity and economic growth overall.
In Wales, enrolments at Welsh higher education providers fell by 5% in 2024-25, compared with a 1% fall across the UK as a whole. Wales already faces participation challenges, particularly among learners from deprived communities and those needing more flexible routes into higher education. Wales has a more integrated tertiary education system, which creates an opportunity to plan across schools, colleges, universities, apprenticeships and lifelong learning, but high-quality provision is not cheap.
Cardiff University has not been alone in recording a recent underlying operating deficit. Almost one-third of the £33.4 million deficit in 2024-25 was through the loss of international student tuition fee income. To address this, we developed our academic futures strategy, which has embraced change across the whole university. As with other research-intensive universities, research has been cross-subsidised from other income streams, but, as my noble friend Lord Trees highlighted, that model is fragile when international recruitment falls.
To illustrate this, we cross-subsidised research by tens of millions of pounds in 2023-24, as well as receiving around 40% of UKRI funding coming to Wales in our major role in Welsh research and innovation capacity. A Universities Wales/London Economics analysis found that Welsh universities generated an estimated £10.97 billion in total economic impact in 2021-22, including teaching, research, knowledge exchange, educational exports and institutional expenditure. Every £1 of public funding for Welsh universities generated £13.10 of economic impact. Higher education is an investment, not simply expenditure.
Wales has some specific issues, with around only one in three young Welsh people engaging with higher education overall. However, they are more likely to return to higher education later in life, predicted at 55% by the age of 30. Welsh-medium provision is key to our identity but, realistically, Welsh-language teaching costs around £10 more per credit than English-medium provision. Better collaboration across the tertiary sector is hindered by competition law, increasing the risk of cold spots in provision if high-cost or low-recruiting subjects become financially unsustainable.
Artificial intelligence presents a systemic change to university operations. We have created master’s courses in AI, AI robotics, AI in business and AI digital media. These developing opportunities build on our high-profile research and innovation ecosystem around digital, cyber and AI, with a number of spin-out companies contributing to the AI growth zone for South Wales. AI skills will be essential to growth, with courses co-designed with industry to meet employer demand, particularly in prompt engineering and data ethics.
Cardiff University has established a continuous improvement hub to lead process redesign, following lean principles, and to make processes efficient, joined up and student focused, ultimately delivering cost savings in some areas. But we face huge changes. As my noble friend Lord Tarassenko raised, we must identify acceptable and unacceptable use of AI in an academic context. HEPI’s 2026 survey reports 95% of students using AI in at least one way and 94% using generative AI to help with assessed work, while 64% say that assessment has already changed significantly in response. Potentially, AI can improve learning support, feedback, accessibility, study coaching and productivity for both staff and students, but this must be balanced against the challenges around academic misconduct and a dangerous overreliance on AI.
Finally, as my noble friend Lady Freeman so rightly raised, there are concerns about the implications of the rapidly escalating use and emergence of AI, which currently has limited evidence to underpin it. We have three such concerns I would like to add to the list: first, widening inequalities as a result of access to paid-for AI platforms; secondly, AI’s ability to operate as effectively through the medium of Welsh; and, thirdly, the challenge of sustainably meeting AI’s energy needs and the difficulties of the green agenda.
Lord Mohammed of Tinsley (LD)
My Lords, I join other noble Lords in thanking the noble Baroness, Lady Deech, for securing this important debate. I thank all noble Lords who have taken part for the points they have raised, which are clearly important to many of us who are interested in the higher education sector. It comes at a crucial moment for higher education in England. I declare an interest, in that my daughter has just finished her first year at Sheffield Hallam University.
I note that a number of challenges are facing the university sector: mounting financial pressures, as we heard from many noble Lords; declining affordability for students, particularly given the cost of living crisis; a growing concern about quality and value for money; and the need to ensure that world-class universities remain engines of opportunity, innovation and economic growth.
This debate comes at a pivotal moment, as I said, because only this week, during Oral Questions, I asked the Government what long-term strategy they have to address the growing financial crisis facing our universities. I did so following a meeting that I attended in my home city of Sheffield, where students and staff from the University of Sheffield and Sheffield Hallam University came together to describe first hand the consequences of years of financial uncertainty, redundancies, course closures and growing anxiety about the future of institutions that are central to our city’s economy and identity.
For us, the starting point is straightforward. Higher education is not merely a private benefit; it is a public good. Universities educate the teachers, doctors, nurses, engineers, scientists and entrepreneurs upon whom our society depends. They drive research, regenerate communities and contribute billions to our economy. Any debate about affordability must therefore consider the financial burdens on students and the long-term sustainability of the institutions themselves. The current system is failing on both counts.
Students continue to face cost of living challenges and, while maintenance support has increased in recent years, it has not kept up with the real increases in living costs experienced during inflation surges, leaving many students working long hours simply to make ends meet. The House of Lords Library notes that term-time employment has become the norm for many students, not as a lifestyle choice but as a financial necessity. Education should expand horizons, not force students to choose between attending lectures and paying rent.
We consistently argue that maintenance support should reflect the real cost of living. We welcome the principle of reintroducing maintenance grants, but limiting them to selected subjects risks creating a two-tier system that values some students more than others. Financial hardship does not discriminate by degree subject. If we are serious about widening participation, support must be based primarily on need and not on Whitehall’s judgment about which courses deserve assistance.
At the same time, we cannot ignore the financial realities facing our universities. After years in which tuition fees failed to keep pace with inflation, many institutions are under severe financial strain, similar to what I described is happening in Sheffield. Some have become increasingly dependent on international students, as we heard from many noble Lords, including the noble Lord, Lord Isaac. That income simply subsidises domestic teaching and research, a model that is neither stable nor sustainable.
However, solving one problem by simply transferring ever-greater costs on to students is not the solution. We need a funding settlement that is honest and sustainable, and commands public confidence. That means the Government accepting their responsibility to invest properly in higher education as a national asset, rather than expecting universities or graduates alone to carry the burden.
Affordability must be matched by quality. Students and taxpayers alike deserve confidence that every course will offer high-quality teaching, strong student support and meaningful outcomes. Where provision consistently falls below acceptable standards regulators should intervene, but regulation must be intelligent and proportionate. We should be wary of reducing educational value to a narrow set of earnings metrics. A graduate entering social work, teaching, nursing or the creative industries may never command the salaries of those entering investment banking, yet these contributions to our society are no less valuable. Universities should certainly be accountable, but they should not be judged solely by graduate pay packets.
We have long championed diversity in the higher education sector. Universities succeed because they pursue different missions. Research-intensive institutions, specialist providers, civic universities and teaching-focused institutions all have vital roles. Regulation should encourage excellence in all its forms, rather than forcing every institution into the same mould.
We strongly support greater flexibility in lifelong learning. The proposed lifelong learning entitlement offers significant opportunities for adults to retrain, upskill and return to education throughout their working lives. As technology transforms our economies, as we have heard from many noble Lords, learning cannot stop at the age of 21, but flexibility will succeed only if employers, further education colleges and universities work together to create genuine accessible pathways.
Finally, we must remember that widening participation is about far more than admissions statistics. Students from disadvantaged backgrounds must not only enter university but thrive once they are there. They require adequate maintenance support, affordable housing, high-quality mental health services and effective career guidance in inclusive learning environments.
The measure of success is not simply who gets through the university gates, but who graduates, succeeds and fulfils their potential. Britain’s universities remain among our greatest national strengths; they deserve a funding system that is sustainable. Students deserve a funding system that is fair, and our country deserves a higher education system that combines excellence with opportunity. We believe that these goals are not competing ambitions but mutually reinforce one another. By investing in students, supporting universities and maintaining higher standards, we can ensure that higher education remains both affordable and world-leading for generations to come. I hope your Lordships’ House agree with the principles I have outlined.
Baroness Cash (Con)
My Lords, what a superb debate the noble Baroness, Lady Deech, has secured. I thank all noble Lords this afternoon for their excellent and informed contributions. I feel the least academically qualified in the House to speak among so many doctorates, master’s and prestigious holders of positions at some of the universities to which we have referred. What I have heard this afternoon is that where our higher education is good, it is really good—world-beating. Where it is not so good, there are so many factors to consider that what we need—as the noble Lord, Lord Willetts, has said this afternoon—is a lot more data to understand and dig into where it is going wrong.
We on these Benches welcome the work the Government are doing on apprenticeships. But we also believe that we need more data on whether those apprenticeships will provide fair outcomes for those who participate, in the same way that the IFS has undertaken an exercise on university degrees. We need to think about the lower-value courses. I take on board the point the noble Earl, Lord Clancarty, made about the creative arts. I spoke during a Question on history master’s degrees and made very clear my position: that the humanities are essential to the health of our nation and our future intellectual vigour. But we need to understand which of those creative arts courses are not performing. Again, I agree with the noble Lord, Lord Willetts, that perhaps there is more data to be collated by the Government. I invite the Minister to think about this—if not today, when so many other points have been raised, then on another occasion. We have to find a way of analysing some of those creative arts subjects, which really are not coming up to scratch for the students who are spending money and accruing a lot of debt to take part in them.
The noble Baroness, Lady Warwick, made some very important comments about social mobility and the value of education for children; when their parents are educated, that is very important for their outcomes. I declare an interest as the founder of a behavioural science business, MindGym, but also of its philanthropic arm, Parent Gym. We have always looked at what education means for families overall, and we should not neglect that.
However, as has been made clear this afternoon, we need to think about how to resolve the tension between individual aspiration and what we as a country can aspire to. There is some tension there, because in funding higher education and the courses students take, we need to think about our growth strategy, a point raised by the noble Lord, Lord Londesborough. How we fund all of this, and how we create employment at the end of it, is crucial; otherwise, it is not sustainable. I was alarmed to hear the noble Lord, Lord Stevens, refer to a dropping off of research. I had a beautiful passage prepared about our current research—I am now ad-libbing. I would be very grateful if the noble Lord shared that information, because I would hate to see our research dropping off. It is very important to continue to ensure that our universities are incentivised to invest in research, and that the Government look at how to encourage this.
The previous Government looked hard at how we build our economy and grow our future as a nation globally using our universities. In 2023, we backed the reform of how well universities share their research through the independent review of university spin-out companies, as some noble Lords may recall. It did work. The UK’s spin-out value has nearly tripled since 2020, second only to the US. In Cambridge alone, the cluster of firms around the university, known as Silicon Fen, now numbers over 5,000 and turns over more than £18 billion a year. The barrier now, according to the UKRI, is speed and early capital, and I urge the Government to build on the previous study and to act on that.
The other thing is that, whereas American colleges build lasting relationships with employers, sometimes securing places for their own graduates in different firms with places held specifically for their institutions, British universities do not have that culture or tradition to the same extent. It should become a measure of performance and not an afterthought. There are ways of measuring quality that benefit both the nation’s economy and individual students on outcomes.
I would caveat the recruitment of international students—bringing more international students here—with making sure that they do not lean on our loan system. The displacement and cost identified by the noble Lord, Lord Stevens, are serious. We already have an employment crisis for our graduates which needs to be addressed, and we cannot fund and subsidise international students at the cost of our own.
I support the case made today for minimum entry standards and for a cap on the proportion of firsts at any institution—both are modest, sensible steps. I also agree with much that was said by the noble Baroness, Lady Deech, and the noble Lords, Lord Verdirame and Lord Biggar, about the culture at our universities; I will come back to that in a moment.
I want to say briefly—the noble Baroness, Lady Finlay, touched on this—that AI could serve us so much better than it is currently doing. On this, I urge the Government, perhaps more than anything else, to consider that the cost-saving potential of the proper harnessing of AI is huge, not only in how universities deploy teaching and learning for students but in the efficiencies of how they run. The diagnostic technology now is incredible, and we have seen it used in the workforce quite regularly. We see it used in the NHS. This could be deployed across higher education to much greater effect, removing the managerial class, which so often creates the cultural problems and difficulties identified so well by the noble Lord, Lord Verdirame.
We have to come back, I am afraid, to the culture point, because without the muscular defence of liberal education, as the noble Lord, Lord Biggar, so beautifully put it, none of this is really of any value to us as a society or for the individual students. I am very proud that the Conservatives introduced the Higher Education (Freedom of Speech) Act 2023, but I am sorry that it was necessary to do it because of the nature and extent of cancel culture across our campuses. Vice-chancellors must be ready to confront cancel culture and insist on vigorous debate as a measure of the quality of an institution. I urge the Government to look at this more carefully so that we are restoring the value of a degree by restoring the confidence in the institutions that award it.
The year after the publication of John Stuart Mill’s On Liberty, in an Oxford museum in 1860, Bishop Wilberforce and Thomas Huxley argued out the theory of evolution in public before a packed hall. It is hard for us to imagine now how absolutely controversial that was—it was one of the great contests in the history of science, won by argument and not by cancellation or silence. Too many higher education institutions today appear to struggle with that concept. I urge the Minister to address this, along with the many other issues on her desk, as she moves forward.
The Minister of State, Department for Education and Department for Work and Pensions (Baroness Smith of Malvern) (Lab)
My Lords, I thank the noble Baroness, Lady Deech, for raising this subject. In my two years in this place and in this job, it has become very obvious to me that there is nothing that the House of Lords likes more than a debate about higher education, perhaps because people are able to bring such expertise and experience, as we have seen today.
I begin, as many noble Lords have, with a recognition of the value of higher education, and of our higher education sector. It is, as many have said, world leading. It includes four of the world’s top 10 universities and has educated 59 current or recent world leaders. It generates significant economic value, contributing over £265 billion to the UK economy and supporting around 750,000 jobs. The noble Baroness, Lady Freeman—who I congratulate on her relatively recent appointment as principal of my former college, Hertford—was absolutely right in identifying that the sector enables the development of critical, independent and creative thinking. I recognise the point by the noble Baroness, Lady Cash, that this is also something that we need to safeguard within our universities.
Beyond its economic impact, higher education is, as others have argued, associated with substantial social benefits, including better health outcomes, longer life expectancy and higher well-being among graduates. Higher education providers also play a vital civic role, strengthening local communities and contributing to public services, place-making and regional development. That is why this Government are committed to maintaining a world-class higher education sector that delivers for students, our society and the economy. I share the view of my noble friend Lord Liddle: however powerful the overarching speech of the noble Baroness, Lady Deech, we disagree that we should be aiming to reduce the opportunities to benefit from higher education in this country and the number of universities.
An analysis of our skills need shows us that we need more higher-level skills, not fewer. That is why the Prime Minister has set a target to increase the proportion of young people with level 4 and above skills to two-thirds by the age of 25. I hope that also reassures the noble Lord, Lord Trees, the right reverend Prelate the Bishop of Leicester and my noble friend Lord Liddle. Having a variety of opportunities to gain higher-level skills—through higher education but also through apprenticeships and other technical education—is very much part of this Government’s approach to seeing the tertiary sector as one and interrelated. That is particularly in terms of co-operation on modular courses and new pathways into higher education. The relationship between higher education and further education is at the heart of our plans, as is the development of the lifelong learning entitlement, which will enable people to come back to learning in both HE and FE for higher-level courses throughout their lives.
We of course recognise that the sector’s financial environment is challenging, but the sector is rightly independent from government. That means that it is providers’ responsibility to manage their finances and ensure that their business models provide long-term sustainability. Nevertheless, we remain committed to securing the sector’s future. That is why, after them having been frozen for eight years, we increased tuition fee caps in line with inflation in 2025-26. We will increase them once again in line with forecast inflation in 2026-27 and 2027-28, and then legislate, when parliamentary time allows, to increase tuition fee caps automatically for future academic years. That is, over the coming years, £6 billion-worth of safeguarded index increase in income, underpinned by the Government. That is a quite different position to be in than for many public sector organisations at the moment.
We have been clear, however, that future uplifts will be conditional on higher education providers achieving a higher quality threshold through the Office for Students’ quality regime. More broadly, the Post-16 Skills and Education White Paper sets out our commitment to placing the sector on a more sustainable footing, supporting providers to drive efficiency, strengthen financial resilience and adopt more effective operating models.
I agree with my noble friend Lady Warwick on the importance of UUK’s future university work. This is an important piece of work. I also agree with the noble Lord, Lord Mohammed, on the diversity of the higher education sector being one of its strengths. We spelled that out in the White Paper that we produced last year.
The noble Lord, Lord Stevens, invites me to comment on stories in the Daily Telegraph. He knows not to believe everything that he reads in the Daily Telegraph. He also knows that I will not be giving, to use a cliché, a running commentary on what is happening within discussions about the EU reset. He is right, however, that we should not penalise UK students or university finances through any agreements that we might make as part of that reset.
Several noble Lords rightly identified research as a very important element of the work of our universities and talked about the funding that is available for it. This Government are investing a record £86 billion in R&D from 2026-27 to 2029-30. As part of this, UKRI will deliver an expected £38.6 billion of research investment, rising to nearly £10 billion per year by the end of that period. In the Department for Education, we are working closely with DSIT to deliver the White Paper’s commitments, which include research funding reform and improvements to research grant cost recovery. Early action includes reforms to the Research Excellence Framework 2029 to reduce the burden and place stronger emphasis on institutional strategy and areas of strength, supporting more sustainable research planning. I agree with the noble Lord, Lord Bew, about the significance of the REF and the contribution it makes. That was an important point.
The noble Baroness, Lady Freeman, raised the issue of support for postgraduate and doctoral students. The Government are working with UKRI through the new deal for postgraduate research to strengthen financial support and the overall student experience. We have increased the minimum stipend by 40% in cash terms between 2021 and 2026 and have provided better support to students through revisions to their standard terms and conditions of training grant, with changes implemented from October 2025. I also recognise that for our higher education sector to remain world-leading, it must continually uphold the highest standards of quality, integrity and student outcomes. It must also remain accessible and affordable, ensuring that students from all backgrounds are able to benefit from the opportunities that higher education provides and from the undoubted outcomes and lifelong benefits that higher education brings.
The noble Lord, Lord Willetts, and others, referenced the work of the IFS, commissioned by the Department for Education and published last week alongside the LEO statistics. The noble Lord worked hard to make it as detailed and wide-ranging as possible. There is a clear message there. It is still very worth while to go to university. In terms of the lifelong returns, that varies by subject, but the vast majority of people who go to university will gain, as well as all the social benefits that noble Lords have identified, a considerable return over their lifetime from having done that.
Having said that, and given the work that we are doing and the differential between subjects that the research identifies, it is the case that, for some subjects, the financial return is not as great, and for some it is actually negative. Of course, that does not mean that people should not continue, for example, to train to be teachers—as I did—or social workers. Of course it does not mean that people should not study performing arts of creative subjects—for all the sorts of reasons that the noble Earl, Lord Clancarty, spelled out. What it does mean is that everybody should make those choices, particularly given the investment they are making, on the basis of the best possible information. We are determined, working with UCAS and Discover Uni, to provide much clearer information to people making those decisions about what they can expect from a higher education course and where they can expect that to enable them to go.
We have committed to increasing the number of starters on courses that lead to priority occupations related to our industrial strategy. That is the reason for producing, as we have, what we have called our Pathways to Priority Occupations document. We will use that and a whole range of other information and data to make decisions on support for higher education. We want to make that available for people making decisions about which courses they will do.
In relation to the point made by the noble Lord, Lord Willetts, and the noble Baroness, Lady Cash, about the returns to apprenticeships, there is already a variety of evidence on the economic returns to apprenticeships that has been published by the department, the Centre for Vocational Education Research and others. We will be considering how to apply a methodology similar to that used by the IFS to apprenticeships as we go forward.
We are committed to raising teaching standards in higher education, so that every student receives the high-quality education and strong outcomes that they deserve. We continue to support the Office for Students as it implements a stronger and more integrated approach to assessing the quality of teaching. Where lower-quality provision is identified, it should be improved for existing students before it expands further. We are working to ensure that the Office for Students can impose recruitment limits on those providers. As I have already said, the White Paper sets out plans to reward and incentivise excellence through measures such as linking tuition fee uplifts to the Office for Students’ high-quality ratings.
Several noble Lords, and the noble Baroness, Lady Deech, raised questions about how we protect academic standards. It is right of course that confidence in degree outcomes is key to maintaining the reputation of English higher education. That is why we have committed to a range of actions to explore risks to standards, including whether recent patterns of improving grades can be explained by an erosion of standards rather than improved teaching or assessment practices. I am sure that there is continuing improvement in both teaching and assessment. We are also looking closely at assessment integrity and the external examining system, including the threats and opportunities that artificial intelligence presents. Alongside this, we are working with the Office for Students to understand the risks presented by generative AI to academic standards.
I agree with the noble Lord, Lord Tarassenko, and I recognise the point made by the noble Baronesses, Lady Finlay and Lady Cash, that there are important opportunities in the use of AI within higher education. I do not believe that the primary opportunity is to reduce the number of staff, but there is a range of ways. I know, from having spoken to vice-chancellors, that there is a lot of work going on in higher education on how the benefits and opportunities from AI can be recognised.
I want to say something about how, in considering how we protect academic standards, we address the risks posed by certain delivery models that have developed in the sector. In particular, we have seen an enormous growth over recent years in franchised provision. This is why we are taking forward proposals to strengthen oversight of franchising in higher education by requiring large franchise providers to register with the Office for Students. The response to the consultation on that, published last December, sets out the details which will ensure that student loan funding is better protected from misuse and that students studying at franchise providers can have confidence that their courses are subject to rigorous quality requirements.
The changes we are making through regulations will ensure that large, unregistered provision is brought within the OfS’s strengthened regulatory regime while not increasing the burden on smaller providers. These regulations are the next step in the Government’s programme of work to strengthen the integrity of the student finance system and ensure that franchise provision operates in students’ interests, with clear accountability and robust safeguards for public money. The lead providers must also take responsibility for ensuring the quality and governance of their partnerships and act swiftly where standards fall short, as will the Government and the Office for Students.
These risks to quality and oversight also underline the importance of safeguarding the proper use of public money. This Government take very seriously the need to ensure that we protect the student finance system from exploitation. That is why we are bearing down on any misuse or risk of misuse of that system. Where that occurs, and I am afraid we have seen some evidence of that through the Office for Students, it undermines student outcomes, damages public trust and diverts funding away from legitimate higher education.
Further, we intend to consult on a new minimum English language requirement that will ensure those receiving student finance are able to engage fully with their course. We want to ensure that public funding supports students who are able to benefit from the investment the Government make in higher education. I know that mature students, in particular, may come to higher education through different pathways and different academic routes. We are really keen to ensure that access to higher education remains open, but the aim also has to be to ensure value for money and protection for those students. Frankly, students should not be mis-sold courses that they are not equipped to undertake. We will not set up arbitrary barriers to participation but will, in consultation and in the light of evidence, think carefully about the potential impacts on students and providers as we take forward this approach to safeguard students, safeguard our student finance system and balance access with successful participation in higher education.
Several noble Lords raised student finance, including the noble Lord, Lord Isaac, and my noble friend Lord Liddle. Our student finance reforms are already regearing that system to better support disadvantaged students, make things fairer for graduates and create a more flexible, responsive post-18 education system, as I have said, through the introduction of the lifelong learning entitlement. We are also future-proofing maintenance loans by committing to increase them in line with forecast inflation every year. We are making care leavers automatically eligible for the maximum rate of maintenance loan from the next academic year, providing vital support for one of the most vulnerable groups in society. We are reintroducing targeted means-tested maintenance grants from the academic year 2028-29 to provide disadvantaged students with up to £1,000 per year on top of existing maintenance loans, funded by a levy on providers for international students.
We know, as we have heard today, that some graduates are concerned about the cost of loan repayments, and that is exactly why we are making the system we inherited fairer. Maximum interest rates on plan 2 and plan 3 student loans will be capped at 6% for the academic year 2026-27, delivering stability and protection for graduates from escalating student loan interest. We increased the repayment threshold for plan 2 loans in April 2025 and have increased it twice again. This is higher than the average graduate salary of £28,100 three years after graduation. I have already this week argued why I do not believe a graduate tax is the answer to the problems of student finance.
As I am coming to the end of my time, let me close this debate by thanking the noble Baroness, Lady Deech, for bringing this important and timely issue before the House. This Government remain firmly committed to a higher education system that is both world-leading in quality and fair in its access, and one that delivers value for students, graduates and taxpayers, including those who do not go to university, and that equips learners with the skills they need to succeed throughout their lives. I look forward to continuing to work with noble Lords across the House to ensure that our world-leading higher education sector continues to thrive.
Baroness Deech (CB)
My Lords, this debate has sounded the alarm to the Minister and the department about what is going on in our universities. In fact, ever since Prime Minister Tony Blair, the attitude of successive Governments has been somewhat “light the blue touchpaper” in relation to numbers and “stand back and see what happens”.
There is a real crisis, and the fact that we have gathered this afternoon such a galaxy of leading academics of this country is in itself a tribute to the effect of higher education. In fact, there are dozens of other Members of the House—maybe more than that—who could not be here this afternoon but who are also the most distinguished academics. However, I hazard a guess that many of them, like me, and as the noble Lord, Lord Liddle, said, benefited from free tuition, maintenance grants and a smooth passage through higher education.
Not least of our luminaries in this House is the noble Lord, Lord Rees. If ever there was an exemplar of scientific research at the highest level, recognised around the world, it is him, and it is a privilege that he sits here. I think he stands in himself for a more flexible attitude to higher education, less of a division between humanities and science, and the contribution that scientists can make to the general well-being of the country. We should learn from that and adopt a more flexible approach, whether it is allowing students to have more of a mixture of subjects or turning some universities into places that offer a different sort of learning, or even over a shorter time. I would call the noble Lord, Lord Rees, the CP Snow of our age, because that is what he has expressed to us in his time here.
There were some disagreements among us, but I think there has been very broad division on the fact that AI needs careful attention, as the noble Baronesses, Lady Finlay and Lady Cash, and the noble Lord, Lord Tarassenko, said. Many of us agree that salary is not the main issue. How many of us said to ourselves, “What’s the salary going to be?” when we went to education? I am sure we did not say that. When I was choosing students at admissions and said to them, “Why have you chosen this subject?”, if they said to me, “Because of the salary”, I can assure your Lordships that it would have been an immediate thumbs-down. It is the morality, as the right reverend Prelate said, and the personal qualities that are drip-fed into you by those precious three or four years, and many of us have agreed on that—the noble Baroness, Lady Freeman, and others.
As people spoke, I was thinking, “Is it not such a good thing now that members of the Royal Family go into higher education, and even the women?” That was not the case so long ago. The values of higher education will indeed show themselves out in the attitudes and benefits that the Royal Family can bring to us.
Access remains important. I agree with the noble Baroness, Lady Warwick, who herself did so much for the higher education sector, that access is important, but, putting it rather crudely, I think access should now swivel to class rather than ethnicity. I think the problem is with poor students, especially poor white students, rather than focusing all the time on diversity of ethnicity.
As I have already mentioned, research is vital. We led the way with the Covid vaccination and AI. Unless research is supported, as the noble Lords, Lord Patel, Lord Bew and Lord Stevens, and the noble Baroness, Lady Finlay, said, Britain will sink back. Our research is world beating and it benefits us personally.
Freedom of speech has been a passion of mine for a long time. I was pleased to hear the noble Lord, Lord Verdirame, and the noble Baroness, Lady Cash, express their anxieties. It is something that we absolutely must all promote, lest our universities sink down.
Student loans remain a real problem. I confidently predict that they will topple over and the whole system will not survive. It cannot. Something else will have to take its place. My bet is on some form of graduate tax. One can see student loans becoming unaffordable and the debt to the country mounting up and being a deterrent.
We are all keen to see the arts flourish regardless of salary, and we hope that the Government will recognise that. We need to see vocational education flourish, whether through apprenticeships or different types of universities, as the noble Lord, Lord Trees, said, so there is much that unites us. I remain troubled about international students as they will be a great cost to the system, especially if, as was formerly the case, three times more EU students come here than our students go there, and they are not paying their full whack and not repaying. That is a real problem.
We have a wonderful system. All of us here implore the Minister to listen to what the academics here have said and to preserve that system with special attention to the arts and the fragility of the loan system.
Motion agreed.