Rural Economy

Baroness Shephard of Northwold Excerpts

Thursday 19th December 2024 Lords Chamber

[Baroness Shephard of Northwold (Con)]

My Lords, I congratulate the right reverend Prelate on calling this very important debate, and on bringing to it his great knowledge, his experience and his insight into the workings of the rural economy and rural people. Today’s debate is timely. The new inheritance tax rules for family farms announced in the Budget have dealt a hammer blow to every rural community in the country. I very much fear that, if the Government do not modify their proposals, as suggested, for example, by the Institute for Fiscal Studies, they really will have damaged any prospect of growth in the rural economy for generations. Because growth in the rural economy depends heavily not only on the prosperity of the farming sector but on its stability. Nicholsons, a farm machinery business in Norfolk, is already facing increased wage costs from national insurance changes and says that the uncertain future for family farms will

“reduce investment in people, infrastructure and technology, if not wipe it out altogether”.

The very essence of the prerequisites for growth will be lost.

These issues were impressively rehearsed in the recent debate on family farms called by my noble friend Lord Leicester. From memory, there was only one speaker in favour of the Government’s intentions. I am sorry to repeat myself from that debate, but I do feel that the Government have got this wrong: their plans may destroy and not grow the rural economy. Rural communities, as described by the right reverend Prelate, already face many challenges. I agree with him that one of the most vital is that of access, getting to work, getting to schools and colleges, getting to health service provision, and of course getting access to broadband internet and phone coverage.

I will give some examples of difficulties of access. Difficult or non-existent transport links can mean that almost all working households in rural areas, whether they can afford it or not, have to have a car, and sometimes two cars—certainly for part-time or shift work. Domiciliary care workers struggle to provide a reliable service to their clients. Travel at night can be difficult for many. Providing school travel, in particular for special needs pupils and for colleges, is an added cost for rural local authorities. A visit to the GP or out-patients’ clinic can take the best part of a day.

There has been a slight improvement in access to internet and phone coverage for rural businesses in the year to September 2023, but it is still not as good as that in urban areas. And, of course, there is our old friend, the power cut. This is a regular occurrence where I live if there are gales, snow, frost or storms—or sometimes, one wonders, just for fun. Having been brought up without either electricity or running water, I obviously have an armoury of candles, torches and storm lights. But this is a serious problem for rural households and businesses.

As in all communities, we face potential conflicts: choices, for example, between providing the affordable housing which would prevent the closure of schools and the hollowing out of our villages, or catering for the thriving second-home and tourist market, with jobs for builders, craftsmen, designers and architects, and in hospitality and retail. Then there is land use: for building, for solar power and wind farms, or for food production.

However, all communities face their own challenges, not just rural communities. We are nearing Christmas, it is the last day of term and I feel I should say that those of us who live in rural areas enjoy some of the most wonderful benefits: a beautiful environment; strong and self-reliant communities, supported by incredible volunteers in every sphere, from the car hospital service to lifeboats, to supporting those isolated by ill health, age or location; our rural schools, nearly a quarter of which in Norfolk are church schools, where teachers strive to nurture and to encourage ambition and aspiration; and our network of churches, a lifeline for many. I have a message of cheer for the Minister. We do not know whether the Treasury consulted Defra, of course, but, if she somehow has the feeling that the Treasury picks on Defra, I can tell her that all her predecessors—several in this House, including myself, whether at MAFF or Defra—felt the same. It goes with the territory—but happy Christmas.

Higher Education (Basic Amount) (England) Regulations 2010

Baroness Shephard of Northwold Excerpts

Tuesday 14th December 2010 Lords Chamber

Finally, the top universities in America—the elite or private universities, to which reference has been made—are able to run a needs-blind admissions system because they have such massive endowments. There is no chance whatsoever that our top universities—barring maybe one or two—could ever achieve such endowments within the medium term. That system is not feasible here. I repeat, therefore, that we will get all the downside of the American system without the public benefits which that system provides. For this reason, I strongly endorse the amendment because the Government should be forced to think again. This legislation is ill thought through, corrosive and socially divisive.

[Baroness Shephard of Northwold]

I intend to make very brief comments because a lot of noble Lords obviously wish to come in and a lot of arguments have already been aired. I welcome the noble Lord, Lord Triesman, as I have not had the chance to welcome him to his present position. I note that the same silky tongue is at work and I am certainly one of those who in the past had very cordial relations with the noble Lord, Lord Triesman, when he was in his trade union situation. Indeed, it extended to him sending me Christmas cards but I do not think that he will send me one this year. Well, he might; yes, he is telling me that he may.

I must declare three interests: I am chairman of the council of the Royal Veterinary College, chairman of the Institute of Education and chairman of the Oxford University Society. This debate is being conducted against cries of outrage from the Opposition but those cries cannot and must not conceal the facts of the matter—the situation in which we are. The Opposition, when in Government, introduced the fee system and the mechanism for uprating which we are debating. We have been castigated for doing this in a hasty manner but that mechanism was put in place by the Opposition. As Steve Smith has said, writing in the Times on 6 December, the coalition Government,

“has chosen a system that builds on the logic of the one introduced in 2006”.

The Opposition, when in Government, set up the Browne review which recommended, among many other things, the lifting of the fees cap. It was a great pleasure and a great illumination to hear from the noble Lord, Lord Browne, today. Liam Byrne, the Chief Secretary to the Treasury, left office with the previous Government uttering the immortal words, “There is no money”. I have sympathy with a number of the sentiments expressed by the noble Baroness, Lady Sharp, because self-evidently the Opposition have no solution for the problem that they have created and it is down to the coalition Government to find the solution. It is obvious that they have no solution because when the noble Lord, Lord Ashdown, asked the noble Lord, Lord Triesman, for his own policies the noble Lord threw no light. We remain in darkness in that respect.

In contrast, the coalition Government have promised a White Paper—I believe that it will be in the New Year—so that the many detailed complexities and implications of the fees decisions can be examined and consulted upon. I look forward to that White Paper because there are questions that need answering about, for example, the funding of students who are already graduates. We do not have those answers at the moment. I should have thought that almost everyone in this House would be able to produce other questions for which we need the clarity that a White Paper would provide.

The Government have proposed help with fees for the least well-off students for the first year of study and, possibly, for the second. They will invest £150 million to provide a national scholarship programme. Universities which charge fees of over £6,000 will have to demonstrate how they will attract students from the least advantaged backgrounds. The income threshold for the repayment of fees is to be raised from £15,000 to £21,000, which will make around a quarter of graduates better off than with the threshold left in place by the Opposition—not that, from listening to this debate, you would have guessed that—while for the first time, part-time students will be eligible for loan support for tuition costs on the same basis as full-time students.

I believe that the Government have made the best possible fist of the situation bequeathed to them by the previous Government. That is why I will most certainly be supporting the Government today. However, if the fee rise is rejected today, Universities UK has calculated that some 59 per cent—that is its figure, not a government figure—of current higher education places will be lost. I do not see that as fair, inclusive, or socially advantageous but it may be that some of the contributors from the party opposite will explain how they see that as fair and advantageous.

There are also those who advocate delay today. I suggest that if they have ever run an institution, an organisation or a business, they ask themselves how they could make any attempt at planning staff numbers, course numbers or student numbers if they do not know the most basic thing: what the income will be of the institution that they run. By rejecting the fee increase today, we will be imposing on all our higher education institutions the chaos of confusion and uncertainty. Everyone in this House supports higher education. Many of us are the beneficiaries of it. But I would not want to impose that uncertainty on those institutions that we hold dear by withholding a decision today.

[Baroness McIntosh of Hudnall]

Will the noble Baroness not concede that part of the reason why Universities UK and other institutions that are not members of that organisation are worried about the possibility that this regulation may not go through is that they know that the Government propose to withdraw the teaching grant? That is what will make their financial situation so unpredictable, not the question of whether fees go up.

[Baroness Shephard of Northwold]

Who does the noble Baroness think is responsible for the situation that we are in? It is her party, the party opposite.

[Baroness Blackstone]

I declare an interest as vice-chancellor of the University of Greenwich. Like my noble friend Lord Giddens, I have worked in other higher education institutions, and at one time, as many noble Lords know—I shall return to this as one or two things have been said about the earlier introduction of fees—I was the Minister responsible for post-16 education.

I support my noble friend Lord Triesman in this amendment. I do so not in a spirit of outrage; I am not outraged—I am disappointed, saddened and worried. There is a real danger that we are walking into a trap, which we have made for ourselves and which we will later regret. It is important when making fundamental changes of this kind that we do so in a considered way, and my noble friend’s amendment asks that we should give more consideration to these serious issues.

I do not want to repeat everything that has been said before, nor to go into a great deal of detail, but I want to focus on three or four of what I consider to be the fundamental points before we go down this route. There are many issues of detail where I believe that the proposals are in fact flawed, but those are for another time.

First, I shall focus on what a number of other speakers have already touched on—the abolition of all funding for teaching in the arts, humanities and social sciences. The value of these subjects is enormous. In any civilised society, we invest time, effort and money in ensuring that our young people become well educated in these subjects. This is an investment, not a subsidy. One of the things that I found regrettable in the report of the noble Lord, Lord Browne of Madingley, was that he referred to higher education in terms of a subsidy. It is in fact an investment in our futures, our economy, our society, our well-being and the quality of our lives, and these subjects are fundamental to all that.

I cannot tell noble Lords how much misery and despair the decision to stop all teaching funding in these subjects has caused among academics right across the country and among students, both undergraduate and postgraduate. No country in the world has stopped public funding for a major part of the work that is done in teaching in its public universities, and I deeply regret that it looks, unless we can make a different decision today, as though this country will be the first to do so.

On the question of the cut in the teaching grant from £3.5 billion to only £0.7 billion, I am perfectly aware of the need to tighten our belts and to reduce public expenditure but no other part of the public sector—no other institution in receipt of public funding—has been asked to cut by 80 per cent. Why should we be asking our universities to do this?

My second point has not been given enough consideration so far today—the enormous cost of the tuition loan scheme when these new fees are introduced. Instead of fee loans for a three-year degree at less than £10,000 under the present system, the Government will have to borrow to fund loans of up to £27,000 per student. That will mean billions of extra borrowing by the Government because many universities are going to charge the full amount, as my noble friend Lord Triesman has already said, and because the Government have seriously underestimated the levels of repayment that are likely to be achieved. The noble Baroness, Lady Sharp, referred to the fact that the RAB costs will be much higher than the Government have claimed.

We are thus faced with the absurdity that the taxpayer will end up by paying more for the new system than for the present one. Every reputable think tank that has looked at this comes to the same conclusion, so it is not just my view; it is the view of those who have carried out careful analyses, in an objective way, of what is being proposed.