Hospitality Sector: Tipping

Alex Sobel Excerpts

Wednesday 7th March 2018 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Bristol North West (Darren Jones) on securing the debate.

The hospitality sector has traditionally employed significant numbers of young people who, it is clear to me, are being taken advantage of by unscrupulous employers who use legal loopholes to maximise their profit at employees’ expense. The world of tipping is governed by custom and, as we know from visits abroad, it can differ from country to country. Even here in the UK, there is no definitive guide on when we should tip and how much we should add to the bill. In restaurants, of course, that is pretty straightforward, but what if there is already a service charge added to the bill? What about gastropubs? I do not want to come over like Alan Partridge, but it can be a little bit complicated at times.

There is one constant among all this etiquette, which is that people expect, when they give a tip to the waiter, that the waiter will get the tip exactly as it has been handed over. It should not be used as a way to subsidise employees’ pay, which is the situation we are in today. My hon. Friend eloquently set out what has been going on at Aqua Italia. I think that is a situation most customers would probably find objectionable if it were drawn to their attention. It unfairly penalises workers for events that are outside their control. They are effectively at the mercy of the customer, and of course the more the customer spends, the more they need to recover in tips.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I thank my hon. Friend for an eloquent speech. Students in my constituency got in touch with me about the practice whereby, when customers leave without paying, their tips and wages are docked for those customers. Surely businesses should be taking that on, not penalising workers who are already low paid?

[Justin Madders]

My hon. Friend is absolutely right. That practice is common in petrol stations as well, when people drive off without paying. It is not something that should be visited on the employees, some of the lowest-paid people in our country. It is not right or fair that they should be penalised for something that is entirely out of their control. There are other things the employee cannot control: what if the customer has a complaint about the food, which has been prepared by someone else, and does not leave a tip? What if they have had to wait a long time before being seated? They might be in a bad mood anyway and just not feel like giving a tip.

Those are all vagaries that can affect whether a tip is given at all, but they should not be used to undermine the lawfully agreed pay rate, potentially breaching minimum wage regulations. I accept, as my hon. Friend the Member for Bristol North West said, that it is quite difficult to reach a calculation and know whether the regulations have been breached, but it is certainly possible.

I have heard it said that some employees can end up paying more to their employer in tips than they actually earn in wages for their shift. Does that not tell us something about how this system is completely out of kilter? Conversely, if they do not receive enough tips, they can have money physically taken from them, possibly taking their pay below the minimum wage—albeit maybe not across the whole reference period, but certainly for that particular day—which could leave them out of pocket altogether.

There are other challenges like that, in the hospitality sector in particular. The practice of cancelling shifts at short notice can also lead to people being out of pocket. What kind of country do we live in if somebody can pay for their childcare and their transport to work, only to get to work to be told that they are not needed and can go straight back home again? That is not acceptable.

The blunt truth is that this and many other arrangements in some areas of the hospitality industry are just a scam. They are a device to increase profits at the expense of workers. That is part of a wider problem in that this sector and others seem to treat workers, especially young people, as a disposable commodity. This industry has always involved a fair amount of casual work, but there are companies out there that seem to predicate their business model on exploiting their staff. I believe this is part of a wider trend, which has crept into our economy over the last few years, that work is now insecure and exploitative, and it is not the cornerstone it once was to enable people to build their lives.

That culture has led to an explosion of zero-hours contracts: it says that anybody wanting to become a nurse has to pay £9,000 a year for the privilege of working on the ward and allows an employer to pay less than the minimum wage by calling a job an apprenticeship. It is a culture in which the only way to get into some roles is to take an unpaid internship, which can last for months and have no guarantee of a job at the end. It is a culture that classes more and more jobs as self-employed, thereby avoiding a range of employment rights. It is a culture in which mass redundancies are met with a shrug by those with the power to do something about it.

Domestic Gas and Electricity (Tariff Cap) Bill

Alex Sobel Excerpts

2nd reading: House of Commons
Tuesday 6th March 2018 Commons Chamber

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I have lived my whole adult life under the liberal energy market —an oligopoly—that was created by the Conservative party in the 1990s. I have personal experience of prepayment meters and of having to feed 50p pieces into the meter and then often having to sit in the dark when the 50ps ran out. I support the principle of the price cap but, as my hon. Friend the shadow Secretary of State said, we do not know when it will be in place, what the level will be or by how much bills will be reduced.

As all my hon. Friends have said, a price cap was Labour policy during the 2015 election, and I pay tribute to our Front-Bench team at the time, to our continued support for the policy and, latterly, to the Government. I also pay tribute to Which? for its campaigns to reform an energy market that is failing the majority of consumers. In 2014, the “Fix The Big Six” campaign called for the energy market to be referred to the Competition and Markets Authority. The subsequent CMA investigation found that weak consumer engagement and competition allowed energy suppliers with unilateral market power to exploit approximately two thirds of customers through excessive prices on default tariffs, leading to £1.4 billion consumer detriment a year, which is what the price cap will attempt to resolve.

Ofgem is now implementing a package of remedies recommended by the CMA to improve consumer engagement and encourage customers to switch to better value deals, to which the hon. Member for Wells (James Heappey) referred. However, nearly 60% of consumers remain on default standard variable tariffs. In February 2018, the difference between the average price of an SVT offered by the big six and the cheapest tariff in the market was £3,051—a huge difference for consumers. Are the Government choosing to act, or has the failure of the CMA and big six to provide customer value forced the Government to act?

The Bill only proposes a temporary price cap, and I am concerned that energy providers may use that to offset initial price reductions with increases once the cap is removed. It is also not certain that customers on a capped default tariff will benefit as market conditions change in the future. The Government are relying on future digital technology to solve the problem, but I am concerned about a long-tailed digital divide lasting decades, a point lost on many Conservative Members—as cheaper— fixed-term tariffs may be withdrawn from the market, an effect which was observed following the introduction of the prepayment meter cap in April last year.

In 2016, 4.4 million customers paid for electricity using a prepayment meter, which is 16% of all electricity customers, and 3.5 million prepaid for their gas, which is 15% of gas customers. That marked a slight reduction in the number of customers on such meters after a long-term increase. Customers on PPMs cannot easily switch to credit meters, which would give them access to a wider range of market tariffs, including the cheapest. In 2016, just 4% of PPM consumers changed to credit meters. That is an increase on previous years, but there continues to be a substantial number of cases in which the supplier refuses to let the customer switch or sets a condition, such as a credit check or security deposit, that the consumer does not meet; I have experienced that in the past. In 2016, 14% of electricity customers and 18% of gas customers who requested a change to a credit meter were prevented from doing so. Indebted PPM customers—about 10% of all PPM consumers—generally cannot switch to a credit meter, but those with a debt below £500 have the right to change supplier, which gives access to cheaper PPM tariffs. The number of successful switches by indebted PPM customers remains low at fewer than 3,000 in 2016, which is just 5% of the consumers who applied to switch supplier, but that has risen following an increase in the debt threshold for customers to be eligible. And I have to say that much of that debt has been caused by Government welfare policies.

Concerns about competition led the CMA to introduce a transitional safeguard tariff for PPM customers, which was introduced last April and is administered by Ofgem, so we have a model for the cap. As a result, the average price fell by around £60 for a typical dual-fuel PPM consumer. That is great, but it is nowhere near the level that PPM customers need to reach to be anywhere near where credit customers are. The cheapest available prepayment tariffs remain consistently more expensive than the cheapest tariffs available to those using direct debit, and that is a scandal. The growth of smart metering should increase tariff choice for prepayment meter customers by lowering the technical and structural barriers to competition. By the end of 2016, prepayment meter customers were slightly more likely than other customers to have smart meters—14% of electricity prepayment meters and 16% of gas prepayment meters were smart—but that indicates how long it will take us to move to smart technology, which many Conservative Members are ignoring.

I am concerned that standard variable tariff customers will have the same experience as people on prepayment meters, and also that the energy companies, particularly the big six, will try to force people on standard variable tariffs to go on to prepayment meters. The Government need to be mindful of that during the passage of this Bill.

My hon. Friend the Member for Harrow West (Gareth Thomas) and others have referred to municipal energy companies and co-ops. Robin Hood Energy has been mentioned, and White Rose Energy has been started by my local authority in Leeds—I declare an interest both as a customer and having been the deputy executive member for climate change and sustainability when White Rose Energy was launched.

Both White Rose Energy and Robin Hood Energy have worked to take people off prepayment meters and to ensure that customers are on the best possible tariff—I looked at my bill this morning, and it told me that I am on the best possible tariff for both electricity and gas. That is a model of great practice implemented by a great local authority in Leeds.

I am concerned that the Bill does not provide an effective and holistic solution to the problems facing people on standard variable tariffs. Utilising technology to ensure faster switching, and utilising mechanisms to ensure more people move off prepayment and to ensure greater market choice should all be central to the Bill, rather than just the sticking plaster of a temporary cap that may penalise some customers. Before Third Reading, I hope the Minister will investigate the effect of the unintended and potentially perverse consequences of the Bill as it stands.

Fireworks

Alex Sobel Excerpts

Monday 29th January 2018 Westminster Hall

[Susan Elan Jones]

I suspect that trading standards may like to pay them a visit, as that may not be entirely in keeping with current legislation, let alone any future plans that the debate may bring.

There are many concerns about domestic animals. The 2005 report by the RSPCA, “Firework fears and phobias in the domestic dog”, which was based on extensive research, informs us that almost half the owners questioned—49%—reported that their dog was frightened of loud noises. Forty five per cent. of owners reported that their dog showed fearful behaviour when it heard fireworks. It is widely accepted that cats and other domestic animals can be significantly affected by firework noises. The right hon. Member for Meriden (Dame Caroline Spelman) and my hon. Friend the Member for Gower (Tonia Antoniazzi) mentioned the issues concerning horses: reported incidents in 2017 rose by 243% compared with 2016, and 15 horses died and 60 were injured according to reported statistics—clearly not all incidents are reported to the British Horse Society.

Let us not forget farm animals. Farm animals and livestock can also suffer from distress injury. That can mean livestock bolting in distress, which may cause danger to humans and vehicles if the livestock are near a public highway. Fowl have been known to smother each other in their attempts to hide from the noise in their environment. Animals have been known to go into premature labour and lose their offspring. Similar distress to animals from jet engine noises has previously been noted, too.

In 2016, just before a parliamentary debate on fireworks, the National Farmers Union issued the following statement:

“Farmers care deeply about the welfare of their animals, and are rightly concerned about anything that could jeopardise their wellbeing. Fireworks, especially when used at unpredictable times of year, have the possibility to frighten livestock, which can lead to lower production and even stock loss. Poultry especially are at risk of a ‘smother’, where birds huddle together which can result in some birds dying. In addition fireworks can pose a fire risk if hot embers land on barns or in fields of standing crops. This is particularly an issue during the summer when crops are more likely to be dry.

While the NFU does not have a position on when it is appropriate for fireworks to be let off we would call on everyone using fireworks to consider the safety and wellbeing of their neighbours and neighbours’ animals.”

The statement continues:

“It is important to let farmers know beforehand that you are planning on letting off fireworks so they can take necessary precautions to protect their animals. Fireworks should always be used safely, and pointed away from buildings, standing crops, and fields with animals in them.”

I know that hon. Members representing rural or semi-rural constituencies will join me in agreeing with every word expressed by the NFU in that statement. Many of us will also have heard local horror stories about fireworks. Last autumn in my constituency, a kitchen was destroyed within minutes when a young child set off a firework. After the incident, which could have been much worse, the child’s mother said:

“We were lucky to escape from the property unharmed this morning and my advice to everyone would be never store fireworks in the house.”

Those words are well worth sharing in our debate today.

On a totally different note, there are also those who feel that, at a time when we are constantly reminded to be more vigilant about the ever-present threat of terrorism, loud explosions from fireworks at random times of the year can be unsettling for a lot of people. One example that comes to mind is from November 2017, when an altercation between two men in Oxford Circus tube station caused a mass panic that resulted in several injuries. There are examples every year that show that bonfire night seems to be an opportunity for a special and criminal night of arson and disorder, with its own very real dangers for emergency service personnel. I suspect that my hon. Friend the Member for Halifax (Holly Lynch), who is present, will mention that if she speaks in the debate.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

On that note, in Yorkshire, prior to bonfire night we have mischief night, when young people in particular misuse fireworks, throw them at other people—I have had a firework thrown at me—put them through people’s doors and attack firefighters in west Yorkshire. We need action, not just around bonfire night but mischief night.

[Susan Elan Jones]

I had not heard of that particular custom but it sounds as if that is the case.

Having said all that, many would argue that fireworks are pretty well regulated across the UK. There are separate, stricter regulations for Northern Ireland, but even for the rest of us, there are a good number of statutes that relate to firework use—I will not go into all of them.

The Fireworks (Amendment) Regulations 2004 are designed to tackle the antisocial use of fireworks. Since January 2005, the sale of fireworks to the public has been prohibited except by licensed traders. However, fireworks can be sold by unlicensed traders on Chinese new year and the preceding three days, on Diwali and the preceding three days, for bonfire night celebrations between 15 October and 10 November—I assume those buying them at the end are having a late bonfire night—and new year celebrations between 26 and 31 December. A licence costs £500 and is issued by a local authority, subject to strict criteria. The penalty for operating without a licence is an unlimited fine and/or up to six months in jail. Under the 2004 regulations, it is an offence to use fireworks after 11 pm and before 7 am without permission, except on bonfire night, when the cut-off is midnight—it certainly was not in the case of the child in north Wales I mentioned—and on new year’s eve, Chinese new year and Diwali, when the cut-off is 1 am.

Fireworks are categorised from F1 to F4. Category F1 fireworks are

“fireworks which present a very low hazard and negligible noise level and which are intended for use in confined areas, including fireworks which are intended for use inside domestic buildings.”

Category F4 fireworks are

“fireworks which present a high hazard, which are intended for use only by persons with specialist knowledge and whose noise level is not harmful to human health.”

In other words, they are professional fireworks for use in large open spaces.

Regulation 8 of the 2004 regulations prohibits the supply to the public of category F3 fireworks whose noise exceeds 120 dB. According to Age UK, damage to hearing can be caused by noise of 85 dB. The illegal use of fireworks can result in prosecution and a fine of up to £5,000 and/or a prison sentence of up to six months. A £90 on-the-spot fine may also be levied. The penalty for committing an offence of supplying a category F2 or F3 firework to any person under 18, or supplying a category F1 firework to any person under 16, is a fine of up to £5,000 and up to six months’ imprisonment.

In addition, under section 31 of the Pyrotechnic Articles (Safety) Regulations 2015, an “economic operator” —a retailer—must not sell: a Christmas cracker to anyone under 12; F1 category fireworks to anyone under 16, or F2 and F3 category fireworks to anyone under 18. They also must not sell F4 category fireworks to members of the public, as those may be supplied only to a person with specialist knowledge.

Fireworks, including sparklers—those were my favourite—can be bought for private use only between 15 October and 10 November, between 26 and 31 December, and in the three days before Diwali and Chinese new year. Storage of fireworks of less than 2 tonnes requires a licence from the local authority; storage of more than 2 tonnes of fireworks requires a licence from the Health and Safety Executive. Both bodies may inspect storage facilities if they wish. The Explosives Regulations 2014 state that a licence is required to store fireworks except where their quantity is less than 5 kg. That strikes me as pretty extensive.

At the start of the debate, I spoke about my positive childhood experiences of local community bonfire nights, so it is both instinctive and subjective for me to say that I am cautious about a total ban. Others with less positive experiences will of course take a different view.

Budget Resolutions

Alex Sobel Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Alex Sobel (Leeds North West) (Lab/Co-op)]

As we have just heard from my hon. Friend the Member for Glasgow North East (Mr Sweeney), we are on the cusp of the fourth industrial revolution, but if we are to be ready for it, we must do more than this industrial strategy does. The Britain of five to 20 years from now will look very different from the country in which we live and work today. If we are to ensure that new technology does not lead to higher levels of underemployment and a workforce whose skills have become obsolete, we must first ensure that automation leads to innovation. If Britain is to be a world leader in new technology, as the Government contend, we must think bigger and be bolder.

Our economy has drifted from manufacturing to the financial and service sectors. Between 1978 and 2017, the number of service sector jobs rose by more than 20%. That shift was highlighted by representatives of a civil engineering firm in my constituency who told me that, although demand for their services was increasing, recruiting staff with relevant skills was becoming increasingly difficult. I welcome the £64 million investment in retraining that is mentioned in the White Paper, but, in the context of £1.5 billion worth of cuts in the adult skills budget, it hardly scratches the surface of the investment that is needed to end a skills shortage that will hamper any serious industrial strategy.

We should aim to create an energy revolution by taking steps such as reforming ownership of the grid, including common, state and mutual forms of ownership. That will open the energy market to smaller companies, and will create a more competitive market. We need look no further than Leeds, where we created White Rose Energy. We also need an insulation revolution that gives not just homeowners but landlords and housing associations incentives to insulate their houses, so that we can save energy, create jobs and provide warmer, safer houses.

I am pleased that there is to be some investment in infrastructure for electric vehicles, but the Government need to listen to the Industrial Strategy Commission’s recommendation that infrastructure investment should be universal. My constituency does not have a single public charge point. How shameful is that? We also need to take more urgent action to tackle climate change. I urge the Government to listen to Labour Members and to commit to themselves to ensuring that 60% of the UK’s energy comes from low-carbon or renewable sources by 2030.

We need a Government who will think bigger. We need a Government who show a commitment to our planet and the health of future generations. We need a Government who are not afraid to be bold and invest in this country and its people. As Britain looks to a future outside the European Union, it has never been more crucial to embrace change and lead the world, not only in producing and welcoming new technology, but in shaping our society to ensure that change works for the many, not the few.

University Tuition Fees

Alex Sobel Excerpts

Monday 27th November 2017 Westminster Hall

[Alex Sobel (Leeds North West) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Sir David. I thank my hon. Friend the Member for Hartlepool (Mike Hill) and the Petitions Committee for bringing this debate, after the online petition was signed by 160,000 people, so that we can discuss the subject.

This is the issue that first drew me into elected politics as a student at the University of Leeds. I was concerned that the Dearing review would bring forward fees, ending the free education that I enjoyed along with many other Members of this House, and it led me to seek election to the student union executive at Leeds University. I spent that year and every year since then campaigning against tuition fees and for a return to free higher education. This debate is close to my heart. I hope that the Government will take heed and reflect on the damaged caused by increased fees.

This Government and the coalition that preceded them, who introduced £9,000 fees, view higher education as nothing more than a pre-work training course and a source of personal economic mobility. That marketised view of education does nothing to differentiate educational institutions from private profit-making entities and markets such as retail. To a free market ideologue, the system created by the Conservative and Liberal Democrat coalition is entirely logical; for the rest of us, however, it is deeply flawed. My view, and that of the thousands of people who signed the petition, is that tuition fees are not sustainable. I am sure that my hon. Friends will agree that education is not a business but contributes to the common good of the nation—what we used to call the common weal.

To look overseas, Chile under Pinochet reduced and then stopped providing direct grants to universities. Bahram Bekhradnia of the World Bank team that went to Chile to help to reform the system said:

“Universities were funded for teaching only via the tuition fees that students henceforth paid. And students received loans from the government to enable them to pay their fees. Sound familiar?”

This Government’s system is straight out of the Pinochet free market playbook, one widely recognised to have failed. Those are not my words but those of somebody from the World Bank. He continues:

“Well, after three decades, the Chilean government has now concluded that this is an unsatisfactory way to fund higher education…Chileans are looking for a new system under which the government will provide grants to universities funded from general taxation.”

They have started down that path and away from a fees-based system.

Looking at a country that undertook the free market experiment in higher education over 30 years ago, and which we are still in the early stages of, is instructive about what will happen here in future. First, in Chile, the debt of former students is colossal in relation to their earnings—by far the highest in the world. England has started to catch up: graduate debt is exploding as cohorts of students from the new funding regime complete their degrees. Secondly, just as in primary and secondary education in this country, previous Chilean Governments encouraged private institutions of variable quality in tertiary education, which now educate 80% of people. As a result, there are serious concerns about some private institutions creaming off taxpayer-funded loans for students and making unsatisfactory provision in return. Thirdly, the funding arrangements make it difficult, if not impossible, for the Government to steer the higher education system in a way that is possible with direct grant funding. That matters when higher education is a vital element of a country’s economic and social development, as Governments around the world, including the UK Government, increasingly believe.

That is a vision of our future unless we change the system. The Chilean Government under Michelle Bachelet have started to reform the system: 80,000 university students received free education last year and the majority of students had a cost reduction. It took Chile 30 years to reverse the mistakes of a free market in higher education. Let us not repeat the same mistakes here.

It is shameful, given that the contribution of the public purse to universities is one of the lowest in the OECD, that we are not seeing greater levels of state funding for something that contributes so much to our nation’s welfare. The Government contribute no more now with £9,250 fees than when £3,000 fees were introduced. In fact, with the proposed freeze at £9,250 this year and next year, universities are seeing a real-terms funding cut. Students are paying for the majority of the system but seeing cuts to university funding from central Government. Students and universities are victims of the Government’s chaotic policy. Free market ideology means the Government take no responsibility for the destruction and dismantling of our once renowned centres of education but degrade our institutions by starving them of state funding. It is time to call a halt to the coalition Government’s free market experiment and this Government’s continuation of it, and to implement a system that encourages readily available higher education for anyone with a will and a desire to learn.

--- Later in debate ---

[Joseph Johnson]

My hon. Friend is right: putting the funding of nursing places on to the sustainable basis that other students are on will enable far greater participation, and result in an uplift in the numbers of nursing students in this country.

Taxpayers already contribute around half of the costs of the higher education system. We believe that it is right that graduates should also contribute, and that that contribution should be linked to their income. As I have said, that means that those who have benefited the most from their education repay their fair share. The hon. Member for Leeds North West (Alex Sobel) gave us interesting insights from Latin America, which I know is a source of great inspiration for those in the Labour party at present. We look with interest to see what other lessons he draws from Venezuela and countries from that part of the world, as Labour develops its ever-shifting policy on higher education.

Every year, the Government consider the appropriate maximum level of tuition fees, and sets a cap. The Government consider whether the maximum tuition fee amounts should be uprated in line with inflation, to support continued investment in course delivery. We are committed to ensuring the ongoing sustainability of our world-class higher education sector. The student finance system ensures that teaching in our universities is well funded, but that individuals do not pay until they are seeing a good return on their investment. As I said, continued investment in the higher education sector has seen funding per student per degree increase by 25% since the 2012 reforms.

What is more, funding per student is today at the highest level it has been in almost 30 years. The recent decision to freeze the maximum level of tuition fees in the 2018-19 academic year takes account of the views of young people, their parents and Parliament. We have evaluated the current position of our universities, and on that basis, we have decided not to uprate tuition fees by inflation for the 2018-19 academic year. Students will therefore see maximum fees of around £300 less than if the maximum fee had been uprated with inflation.

The hon. Member for Reading East (Matt Rodda) mentioned that his constituents were struggling to repay the cost of their higher education. To help him put it in context, as a result of our decision to increase the repayment threshold to £25,000 with effect from April next year, if one of his constituents earns £30,000 per year, that constituent will be repaying about £1.20 per day. We think that is a reasonable amount for someone on that level of income to repay as a contribution towards the cost of their higher education.

[Alex Sobel]

Is it not correct that those earning far more will end up paying less because they will repay their loan much more quickly? The total amount of interest that they pay will therefore be far less than somebody on £25,000, who will take much longer to repay their loan.

[Joseph Johnson]

That is right. The amount that someone repays is linked to the amount that they earn in any one year, and the repayment will be more rapid for someone on a higher level of income.

The current student finance system removes the financial barriers for those hoping to study, and avoids students facing upfront tuition fee costs. We have maintained the universal accessibility of the system, which allows all eligible students to access the required finance, regardless of their background and financial history. Critically, monthly repayments depend on income, not on interest rates on their debt, or on the amount borrowed. From April 2018, we will increase the repayment threshold to £25,000, and adjust it annually in line with average earnings after that. That change will benefit around 600,000 borrowers, and will continue to benefit future borrowers. Many borrowers who have already graduated will see their monthly repayments reduced. That change forms part of a considered and costed proposal that reinforces the principles of our student finance system, and puts money back in the pockets of graduates.

Student Loans Company

Alex Sobel Excerpts

Monday 20th November 2017 Commons Chamber

[Joseph Johnson]

We want the student repayment experience to be as simple, smooth and effective as possible, and it is striking that the level of complaints is as low as it is. Of course there will be complaints, such as that made to the hon. Lady by her constituent, and she is right to raise it. We want to learn from all student experience, and the SLC does learn from the relatively few complaints it gets—it is important to do so.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I have been in contact with Leeds University union about many cases, particularly those involving overpayment. One student was given incorrect information and made a repayment, but now cannot get a further loan, having been told by the SLC that he had made a voluntary repayment. Another student was given four years’ loan but was subsequently told that he did not meet the residency requirement, so the full amount has now been demanded, even though the SLC admits that that was its mistake. How will the Minister ensure that students are treated fairly when the SLC makes a mistake and students are already deeply in debt?

[Joseph Johnson]

Of course we want all students in repayment to be treated fairly by the SLC and we take the issue of overpayments particularly seriously. As I said in response to the hon. Member for Blackpool South (Gordon Marsden), we can expect to hear more on the theme of overpayments and the interaction between the SLC and Her Majesty’s Revenue and Customs in a couple of days’ time at the Budget.

Clean Growth Strategy

Alex Sobel Excerpts

Thursday 12th October 2017 Commons Chamber

[Claire Perry]

To reassure my hon. Friend, I should say that, as I mentioned, Canada has agreed to end it, as has the Netherlands. China has agreed to reduce its carbon emissions by 60% to 2032 and India has said that it wants to lead the world in solar generation. All countries—with the exception, perhaps, of one big one—have woken up to the fact that the world is moving away from coal. In doing so, they are creating prosperity and jobs.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I have spent the morning reading the clean growth strategy. On first reading, it appears mainly to be a repackaging of old announcements, with only small packets of new funding and increased existing funding being spent over longer periods. I am glad that the Minister touched on electric vehicles. The gap with respect to the old plans that we already have is 12 megatonnes of CO₂. Today’s announcement does not bridge that gap, as can be seen in the chart on page 85 of the strategy. The gap remains. The funding for electric charge points is woefully inadequate, and I call on the Minister to look again at supporting large-scale electric vehicle charging funding, working closely with local authorities to ensure that EV charging points are in commercial and residential areas, not just on major roads. I ask her to commit to a minimum level of public EV charge points per head of population or per electric vehicle. I am glad she mentioned the Netherlands, because it has one public EV charge point—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Members are meant to ask a succinct question.

[Alex Sobel]

I will just get the question—

[Mr Deputy Speaker]

Just give it now or else you will be sitting down.

[Alex Sobel]

The Netherlands has a charge point for every two to seven vehicles, whereas the figure in the UK is much higher. Are we going to have the same—

[Mr Deputy Speaker]

I think the Minister has got the gist.

Tuition Fees

Alex Sobel Excerpts

Wednesday 19th July 2017 Commons Chamber

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I congratulate my hon. Friends the Members for Blaydon (Liz Twist), for Bury North (James Frith), for Hartlepool (Mike Hill) and for Manchester, Gorton (Afzal Khan) on making excellent maiden speeches today. I came into the House with them and I am sure that we will carry on our journey together to help transform this country.

I have been waiting for 20 years to make a speech in a debate on higher education funding and tuition fees—ever since 23 July 1997, when Ron Dearing published his report and I was an executive officer at Leeds University union. In the past three months, I have spoken to hundreds of students from the University of Leeds and Leeds Beckett University. Since Parliament dissolved, they were not aware that their fees were rising to £9,250 from £9,000. The fact was not made clear to them at all. The Government seem to have created a tuition fee rise escalator. In other areas, they are abandoning such escalators, but not for tuition fees. Fees are expected to hit £10,000 by 2020. I wonder how many students are aware of that.

The teaching excellence framework adds an additional element, starting an Olympic-style race with gold, silver and bronze medals awarded for quality. Future increases will be linked to the rostrum, creating a new hierarchy in higher education whereby gold medal-winning universities will be able to place their fees ever higher.

The Institute for Fiscal Studies has shown that the average student now graduates with more than £50,000 of debt. The replacement of maintenance grants with loans also means that the poorest students are worst hit, whereas the richest 30% of households would have lower borrowings, at “only” £43,000. The poorest are hit hardest, the richest are hit the least and the middle are hit in the middle. Is that the sort of system we are trying to create? How much further does debt need to rise before the Government stop the debt spiral they created in 2012?

Graduates have raised the issue of loans with me consistently over the last period and before I was a Member of Parliament, because students currently repay loans at a rate of 9% of their earnings over £21,000. The repayment threshold was due to rise in line with earnings, but in 2015, after the previous general election, the Conservative Government froze the threshold until at least 2021. We are now seeing inflation rising but the repayment threshold staying the same, which is creating a real-terms increase in the payments. In addition, people have to deal with the high interest rate. We are talking about mortgage-style debt—this is not a short-term loan—but the Government are treating it like Wonga. Students are having to pay 3% above RPI; this is currently 4.6%, but in September, when the new academic year starts, it will go up to 6.1%. Why are students being lent money without fully knowing the terms that they will be repaying? Why are they totally at the whim of the economic climate and of the Government? A further irony is that graduates who earn more pay their loans back more quickly and incur less debt than those on lower incomes, who have to wait longer to repay their loans and are continually having to pay back interest.

So we have a quadruple whammy of rising fees, real-terms cuts in the threshold for when graduates have to pay back, rising interest rates and larger debt for lower-earning graduates. Has not the worst of all worlds been created? Students know that no aspect of this system is fit for purpose, and the general election showed just that, with many new hon. Members, some of whom spoke today and made maiden speeches, now representing university and student-heavy seats because students have lost trust in the Government. They know that the only party that will fix this broken system is the Labour party, with the action on both fees and loans outlined by my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner).