Higher Education Funding
Liam Byrne Excerpts(9 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Willetts
My hon. Friend makes an important point. This is not public spending, as is explained in the Office for Budget Responsibility “Fiscal Sustainability Report” at page 174, paragraph B.21, which states:
“given the way the National Accounts are measured this does not directly affect our fiscal forecast.”
But that does not mean that we should be cavalier or wilful and say, “It doesn’t matter what the write-offs are. That is a problem for 2046.” My hon. Friend is absolutely right, and that is what I want to touch on. Clearly, we have to do this prudently, which is why this appears as an item of spending in some BIS departmental budgets. Quite rightly, BIS Ministers and Treasury Ministers have to discuss what they think will happen on the write-offs. Incidentally, a very sensible reform a couple of years ago, when even the Treasury understood that having this in the annual budget bouncing around as forecasts was nonsense, was for the accounting charges to happen at a rate of one thirtieth a year. We want to recognise this issue, but it would be a mistake for it to be regarded as just like normal departmental expenditure.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I am conscious that this may be the last time in this Parliament that we have a debate on higher education on the Floor of the House, so it is appropriate to salute the right hon. Gentleman’s extraordinary career and contribution, not just to this field of public policy, but to public policy in this country more generally. [Hon. Members: “Hear, hear.”]
During the last year or so, the right hon. Gentleman has been sanguine about a debt write-off rate that has risen quite dramatically. Why does he therefore think that a debt write-off rate of 100% would be a bad thing? Does he draw from that hypothetical argument that there is an optimum rate, and if so, will he share it with us?
Mr Willetts
I thank the shadow Minister for his generous remarks. I, too, as the former Secretary of State was saying, shall miss the House and even, no doubt, these debates. The shadow Minister asks a very fair question: what has happened to the RAB charge and why? The RAB charge is a peculiar calculation. First, it is a forecast, not public spending, and it has several elements. One element is a schematic assumption of the cost of Government borrowing. One reason why I am less worried about the so-called RAB charge than some other Members in the debate is that the RAB charge calculation assumes that the cost to Government borrowing is 2.2% real, when it is not. That is fixed by the Treasury. It may have been before the right hon. Gentleman was Chief Secretary, but under the previous Labour Government in 2005, when they first launched their scheme—very similar in structure to the scheme we have now—the RAB charge was 42%. One of the reasons why it was 42% was that it assumed a Government cost of borrowing of 3.5% real. In 2005, they announced that the actual cost to Government borrowing was 2.2%, and in a stroke, that reduced the RAB charge to 33%.
One piece of advice I would give to my excellent successor is that he should go back to the Treasury and ask why we are all having an argument about a figure that is based on a completely incorrect assumption for the cost of Government borrowing. If he does not do it, and the right hon. Gentleman were to be in Government, I will make a modest prediction that one of the first things that will happen to the RAB charge is that there will be a different and more realistic cost of Government borrowing, and lo and behold, the RAB charge will suddenly be discovered not to be 45%. As the OBR helpfully point out, 1% off the cost of Government borrowing lowers the RAB charge by 10 percentage points. So we are stuck on a calculation, one crucial element of which is fixed by Treasury stipulation. It does not respond to the real world.
Another bit of the calculation absolutely responds to the real world, and with excessive sensitivity. The other reason why it has gone up is what it is thought the £21,000 repayment threshold will be worth in 2016. Clearly, it will be worth more relative to earnings than we thought it would be when we set it. That is because, rightly, Ministers take the OBR earnings forecast, and the OBR’s assessment of what will happen to earnings year on year has kept on changing.
There was a deliberate decision to have a higher threshold than the previous scheme. We wanted to lower graduates’ fixed monthly outgoings. The hon. Member for Huddersfield (Mr Sheerman) asks whether graduates will be able to get into the housing market, and all the lenders to whom I spoke made it clear that when it came to mortgages they looked at fixed outgoings. So if the threshold is raised, fixed outgoings are lowered and the capacity of graduates to take out mortgages is increased. That was one of the arguments for the higher threshold. Nevertheless, it has turned out that that £21,000 will be worth more in 2016 relative to earnings than was expected.
The real impact comes because it is then assumed that the £21,000 threshold is uprated with earnings, year after year for the next 30 years. In other words, the real value of that threshold, relative to earnings, over the 35 years of a graduate’s experience, is entirely determined by the performance of wages between 2011 and 2016 compared with the OBR forecast in 2011. That is a peculiar way of modelling a graduate repayment scheme. The Labour party, which says that that proves it is unsustainable, did not increase the £15,000 threshold during the entire five years after it came into force. The Labour party lowered the RAB charge by changing the figures for the cost of borrowing, and the threshold stood at £15,000 without an annual uprating.
What is happening? The reason why I am so uncomfortable with this focus on the RAB charge is that this is a forecast that we have to make, but it is a very peculiar forecast indeed, and we need to keep it in proportion.
Mr Byrne
I am grateful to the right hon. Gentleman for that contribution, because I think he has given us one of the best arguments that I have heard this afternoon for precisely the review that my right hon. Friend the Member for Southampton, Itchen (Mr Denham) has called for. If the right hon. Gentleman poses significant questions about the right interest rate and the right earnings threshold—which we all know was a compromise with the Liberal Democrats—there are obviously some serious questions that demand a review. That is why the logical conclusion is that the Minister should stand up later today and admit that he has changed his mind. I hope that the right hon. Gentleman will just underline an acceptance that, although we might dispute the right way of calculating a RAB charge, being concerned about the level of debt write-off is none the less very important, because the lower we can keep it, the more money there is for future generations.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The right hon. Gentleman should save some speech for later.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
This has been a simply excellent debate, and I am grateful that it has presented the Minister with an unanswerable case for the review called for by the Select Committee. Nobody listening to the arguments and evidence presented this afternoon could leave the Chamber and say that everything at the moment is fine and perfect and that nothing must change. Wide-ranging concerns have been raised across the House, and I hope that when he winds up the debate, the Minister will confirm that he will launch that review immediately.
I congratulate the members of the Select Committee on initiating this debate, and I pay particular tribute to the hon. Member for Northampton South (Mr Binley). This will be one of the last set-piece debates in which he participates, and we will all want to salute his sagacity, wisdom and wit, not just in this debate but in many other debates and Committees over the years. At the core of the speech that was referred to earlier, Harold Wilson made a great deal of the difference between amateurs and players, and Members across the House will share the view that the hon. Gentleman is not an amateur but very much a player. The House will be much poorer for his departure.
The reason this debate is so important was set out with great eloquence by my hon. Friend the Member for Huddersfield (Mr Sheerman) and by the Royal Society in its excellent report in 2011, “The Scientific Century: securing our future prosperity”. Unless we grow smarter as a country, we will grow poorer. Over the last century or two, about three quarters of economic growth has been driven by innovation, and there is no reason to doubt that that trend will continue into the future. That is why we need universities that are stronger, and world-class institutions that sit within a world-class system. It is not good enough just to have a country of great universities; we need a system that ensures that world-class universities work together pursuing excellence in mission in a good way. That is why it is not good enough to permit the current system to stand unadjusted and unaltered, because the basic truth revealed by this debate is that our system is falling off a cliff.
The Government are fond of rhetoric about a long-term economic plan, and we wish there were one. However, if we are to be candid with each other, we all know that the current student finance system was not the platonic design of the right hon. Member for Havant (Mr Willetts), but the outcome of a messy negotiation. The Liberal Democrats needed something back for breaking their pledge not to raise fees, and what they received were guarantees on income thresholds that have basically left us with a broken system that is not fit for the future and needs to change.
My next point is that there is tremendous urgency to this matter—that argument was made with much power and eloquence by the hon. Member for Northampton South. We all know that living standards need to rise, and that will be a big part of our debates over the next three or four months. We also know, however, that the only strategic way that Britain will lift itself out of the current cost of living crisis is first by creating a better supply of good, well-paid jobs, but also by building better ladders to those jobs for people, no matter where they start in life. Right now, that is not happening in enough places. In fact, in swathes of the country, the number of jobs in the knowledge economy is not increasing but decreasing.
I started my career flipping burgers in McDonald’s, and I have done every job under the sun. I have started a technology business; I have created jobs for others. I happen to think that any job is better than no job, but during my career I have also learned that a good job is better than a bad job, and right now in large parts of the country there are not enough good jobs. There are 22,000 fewer jobs in the knowledge economy in north-east England today than there were in 2009. In my region of the west midlands there are 2,000 fewer jobs in the knowledge economy, and there are also fewer such jobs in the south-west and in Scotland. All over the country people are tempted to vote for extremist parties because no one is giving them a sensible, realistic story about how we rebuild the opportunity economy for the years to come. Universities are critical to rebalancing our economy in a new way.
Having created those jobs, we have to build the ladders to them. Industry tells us—as I am sure it tells the Government parties—that the skills problem is becoming more and more pronounced. KPMG says that a third of manufacturers cannot reshore jobs to this country because of a skill shortage. Jaguar Land Rover, which works on my doorstep, reminds me that we need around 90,000 engineers a year in this country, and we have some 50,000 graduates—a 40% deficit each year. The Royal Academy of Engineering tells us that we will need 820,000 STEM professionals between now and 2020. We are just not producing enough of them.
The great tragedy in constituencies such as mine, which has the highest youth unemployment, is that we do not have a training and skills system—or a university system—that will create the people for the jobs in the good businesses that we actually have. I asked the Library this morning to tell me how many jobs have been added to the shortage occupation list. Hon. Members will know that if a job is on that list, people from outside the country can be fast-tracked in. I was told that 61 jobs have been added to the shortage occupation list since the last election. In part, that has allowed businesses to fast-track in nearly 200,000 people from outside Britain because they could not find the skills on these islands. Those people brought 142,000 dependants with them, so some 334,000 people have come to Britain because businesses could not find the skills here.
I am a supporter of an immigration system that is a little more generous than the Government have given us, especially when it comes to post-study work visas and students, but the fact that businesses are forced to recruit from abroad because they have failed a resident labour market test is an admission of failure and shows that our skills system is not working. That is why the Committee’s report is so important. As the Chair of the Committee pointed out with such eloquence, this report is not a one-off. It is now one of several reports that have been published over the last 18 months that tell us that the system is in crisis.
Most recently, we had the Higher Education Commission report that questioned the fundamental stability of the system. In April last year, the Institute for Fiscal Studies said that 73% of graduates will never pay back their loans in full. The Public Accounts Committee said that between £70 billion and £80 billion of loans will be written off by 2042—I make that about £500,000 of debt write-off every hour of every working day for the next 28 years. That should concern us all, because it is money that is not available for reinvestment in the future. What has happened over the last three or four years is probably one of the biggest off-balance sheet financing tricks in the history of the public finances. Up to £200 billion has been moved off the public books and shunted from the present into the future. The hon. Member for Northampton South mentioned the curse for future generations and that was a point well made.
In 10 years in this House, I have learned that if something sounds too good to be true, it probably is. That is why we should pay attention to all the warnings we have heard from the PAC, the IFS and now the Business, Innovation and Skills Committee and the Higher Education Commission. I am grateful for the opportunity to salute the contribution from the right hon. Member for Havant, but even he had to admit that the RAB charge, imperfectly constructed as it is, draws our attention to the risks of preserving in aspic every single precise feature of the current design, whether that is the sticker price of tuition fees, the earnings threshold or the rates of interest. The current RAB charge is telling us is that all is not well. The right hon. Gentleman did not say whether he thought that a 100% RAB charge was a bad thing, but I took from his remarks a general acceptance that a high RAB charge is bad and a low RAB charge is good. Therefore, the current trajectory is in the wrong direction and things should change. If things should change, good people should reflect on what those things should be. We should call that reflection a review—and that is what the Committee has called for. An unanswerable case has been made to the Minister this afternoon.
Two extra risks add to the urgency of the review. The first is the marketisation of the higher education system which is driving fiscal risk substantially. The University and College Union raised this issue as early as September 2010 and warned, in an excellent paper, of the fiscal risks of sub-prime education. The union asked us to look at the US, which has had problems of over-recruitment and inadequate safeguards on quality and academic freedom. Those issues have bedevilled higher education in some parts of the US. The union warns us to guard against those risks, but the truth is that we have seen a twentyfold increase in publicly backed funding to students at private colleges—the figure for this year is forecast to be £600 million. The PAC warned us that the Department
“went ahead with its reforms to expand the role of private colleges without ensuring there were controls in place”.
That is an added fiscal risk that we cannot ignore.
The second great risk, which several hon. Members have mentioned, is the hastily constructed plan to uncap student numbers. The rumours in the higher education sector suggest that the plan was largely cooked up in the Treasury rather than BIS. It was certainly unveiled with some speed in the final days—if not hours—before the last Budget and it proposes an ambitious expansion of student numbers, funded by the sale of the student loan book. Most of us were surprised when the Secretary of State for Business, Innovation and Skills told us that the loan book sale was off. We were even more surprised when the Minister answered a question by saying that civil servants were still working on it. In the letter, which he kindly provided yesterday, he was unable to tell me how much the Department is spending on a policy that the Secretary of State has ruled out—I guess that is the reality of coalition Government.
As these fiscal risks multiply, what has most concerned people is that the Department has refused to spell out the departmental expenditure limit provision for maintenance grants and teaching in 2016-17 and beyond. That will be the third year for the extra students who were taken on by universities last year. I suspect that people want to know that the unit cost of funding for 2016-17 will be protected, but that was the big omission from the Minister’s letter to me yesterday. I notice that the student loan book sale is still in the OBR’s fiscal forecasts, so perhaps it will magically appear from left field and save the day, but it would be a significant risk.
We have report after report saying that the current system is not sustainable. The former Minister who was the architect of the current system has told us that some features and functions might need to be adjusted over the next 20 years. We have the extra risks from marketisation and uncapping student numbers. The Minister, with his responsibility for science, is the champion of evidence-based policy making in the Government. I am not sure how he can hear the evidence that has been laid before him this afternoon and say that it is so underwhelming that we do not need a review and that the current system is perfect in design and should persist long into the future.
Especially welcome in this debate have been the contributions that have pointed towards the need for much bolder thinking about a different future for our higher education system, one that offers for the first time a proper, apprenticeship-based professional and technical route to degree-level skills. All of us agree that there is no prosperous future for people without skills, so we must transform—indeed, revolutionise—the number of people on an apprenticeship track who get the chance to go up to degree-level skills. The fact that only 2% of apprentices go on to that level of study is unacceptable and needs to be revolutionised.
I hope that one aspect of the new system will allow further and higher education institutions to come together in a more valuable way, both with each other and with the business communities that they serve. I also hope that the review that I know the Minister will promise in a moment will look at every possible option for protecting the unit cost of funding but also bringing down the cost to students. We know that reducing tuition fees will lower the RAB charge and therefore lower public sector net debt, which is the stated intention of the Government.
Finally, I would like to underline the point made in the excellent speech by my hon. Friend the Member for Sheffield Central (Paul Blomfield). We cannot abstract this debate from what is happening to our young people. Today’s generation is the first for a century who will be poorer than the generation who came before. There are now more young people living in poverty than there are pensioners. Unemployment for young people is still too high and apprenticeship numbers for the under-24s are now falling. We have to change that and it is incumbent on us to do so. That was the argument made in an excellent book called “The Pinch”, which was published towards the end of the previous Parliament.
When I was preparing my own thoughts on higher education reform, one of the documents that influenced me most was a paper prepared in 1962 and 1963 by a group of senior policy makers who wanted to persuade Harold Wilson to implement the Robbins review, which he subsequently did in 1964 and in the years thereafter. One of the phrases that rang out from those pages is that we must not and cannot be
“afraid to build splendidly for our young.”
As we approach the next election, those are good words to inspire us.
Greg Clark
I want to make some progress. I have the least time of all, which is appropriate in a Backbench Business debate. However, if I have some time later, I will of course take an intervention.
Since the Committee took its evidence, which the Chair will acknowledge was about a year ago, the evidence in favour of the positive effects of the reforms has been mounting. We have discussed whether to undertake a review. I encourage the successor Select Committee in the next Parliament to undertake a stocktake of the system in practice. I suspect that it will draw the same conclusion as I have.
In the words of the OECD, which is widely regarded as the leading authority in the world on comparing education systems, the UK is one of the few countries that has figured out a sustainable approach to higher education finance and the investments pay-off for individuals and taxpayers:
“among all available approaches”—
the OECD includes 34 countries—
“the UK offers still the most…sustainable approach to university finance.”
In responding to the debate, I want to summarise how the advantages are clear for students, the taxpayer and universities.
The system is good for students, because it has allowed more of them than ever before to fulfil their dream of a place at university. Many Members have acknowledged the importance of achieving what has previously been beyond the reach of many of our fellow citizens. This autumn, for the first time in the history of this country, half a million applicants were placed in higher education. The head of UCAS put it this way just last month. It is, she said,
“a stunning account of social change, with the most disadvantaged young people over 10 per cent more likely to enter higher education than last year and a third more likely than just five years ago – 40 per cent more likely for higher tariff institutions.”
Despite predictions to the contrary, students have seen that going to university is an exceptional investment. Graduates earn on average £9,000 more than non-graduates. In the past year, the graduate premium for young graduates—those under 30—has risen to £6,000. Graduates are half as likely to be unemployed as non-graduates and two-thirds are in highly skilled jobs, a proportion that has been rising substantially as we recover from recession. Students know that they will pay nothing up front and that they will pay back only if and when they can afford to do so. It is important to be clear to the House that for a graduate earning £30,000, a high salary compared with the population as a whole, for the benefit of a three year degree they will repay £2.22 a day. That is an eminently reasonable reflection of the value they obtain from that degree. It is no wonder that students are responding with such alacrity—more than ever before.
Let me say why the system is good for taxpayers, as the OECD director said. The reforms have made it possible—without them it would not have been possible—to abolish the cap on student numbers. That is overwhelmingly in our national interests, as I think most Members would acknowledge. The earning power of graduates means that it is not just the graduates themselves who gain—the Exchequer gains hundreds of thousands of pounds over a graduate’s lifetime of employment. That is many times more than even the most conservative estimate of the so-called RAB charge. Andreas Schleicher of the OECD said that what one loses through non-payments is small versus the tax revenue uplift from more students earning more in work and that this premium is expanding.
It is important to emphasise—it has not been clear in some of the contributions—that this subsidy is nothing like a commercial loan, in which any debt that is written off is somehow a mistaken lending decision. It is not like that. It is a reflection of a set of deliberate policy choices to write off, for example, outstanding debt after 30 years, and to repay at 9% above earnings of £21,000. It is highly progressive, according to the Institute for Fiscal Studies: the lowest earning 10% get a 93% subsidy and the highest earning 10% get a 1% subsidy. For the record, I am perfectly content with all the policy choices that produce the published RAB charge.
Greg Clark
I have been very clear on this. I am not persuaded that there is any reason to increase the ceiling. I think the ceiling at £9,000 is reflective of the costs of providing a good education to people.
Oral Answers to Questions
Liam Byrne Excerpts(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Nick Boles
Some parts of the public sector set a fantastic example—the Ministry of Defence is a very good example and the NHS is another—but not all Government Departments and, I suspect, not all of us as Members of Parliament, are doing everything we could. I urge every part of the public sector to do everything it can to create apprenticeships so that more young people can get on the ladder to a successful career.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is very bad news that the number of apprentices under the age of 19 is falling and that the number of apprentices who go on to study degree-level skills is just 2% and rising at a very slow pace. The Opposition are clear that our priority for expanding university level education is for technical degrees so that more apprentices can earn while they learn up to degree-level skills.
May I ask the Minister about the expansion plans? In the autumn statement, the Chancellor said that he would sell the student loan book to expand the number of degree-level places. On 20 July, the Secretary of State said that he and the Deputy Prime Minister had put that plan in the bin. Will the Minister tell the House what the story actually is? Are we going to expand degree-level places, and how on earth are we going to pay for them?
Nick Boles
Frankly, what is regrettable is that the Government of which the right hon. Gentleman was a major part created entirely phoney, Mickey Mouse apprenticeships, called programme-led apprenticeships, which involved no employment at all, no job and lasted less than a year. We make no apologies for culling those qualifications, which were a fraud on employers and young people. We are increasing the funding for higher apprenticeships and the plans have been set out.
Greg Clark
My right hon. Friend is absolutely right. I pay tribute to him for the work he has done in this field, which is respected on both sides of the House and across all the institutions of higher education. One of the great pleasures of taking this office was to check my desk drawer and discover that there was no note from my predecessor with some unwelcome news. It is a very happy inheritance.
My right hon. Friend is absolutely right: the system we have in place for student finance, which he took through the House, is proving remarkably successful. We have seen record student numbers, and only this week the OECD said that the
“UK is…one of the few”
countries
“that has figured out a sustainable approach to higher education finance”
and that
“that investment…pays off for individuals and tax payers.”
He grasped the nettle and made the reforms, and those reforms are now working.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I welcome the Minister to his post, and as he rightly acknowledged, he has some big shoes to fill—I, too, pay tribute to his predecessor, the right hon. Member for Havant (Mr Willetts), and the extraordinary work he undertook. I am surprised, however, that he did not leave the new Minister a briefing on the disaster of the student loans system and the £50 billion to £100 billion extra that will now be written off as public sector net debt as a result of the spiralling resource accounting and budgeting charge.
My question today, however, is different. This week, the Minister has to decide whether to abolish the disabled students allowance. All over the country over the next month, disabled students will be applying to Oxbridge and medical schools, and they deserve to know whether they will have good support in place—not just PCs, but people. This week, will he heed the call from vice-chancellors, the National Union of Students and Members on both sides of the House and ensure that disabled students do not have their chance to study—wherever they get into—destroyed by the abolition of that vital allowance?
Greg Clark
I second the praise that the right hon. Gentleman gave to my right hon. Friend the Member for Havant, but it is curious that he should reflect in the way he did on the finances of the system. I would have thought that he of all people might have cause to reflect on the state of the finances. Reading his recent pamphlet, I noticed that he said that to win arguments
“we must show that we will spend taxpayers’ money sensibly, effectively and efficiently.”
I wonder whether, on reflection, he would regard that as consistent with his record in government.
On the disabled students allowance, I think everyone here shares the ambition, as I stated in my first answer, that everyone who is capable of benefiting from a university education should be able to do so. That of course applies forcefully to people with disabilities. The decisions we take on support for people with disabilities will be entirely about making sure that they have the support to be able to pursue their studies to the best of their abilities.
Ukraine (Flight MH17) and Gaza
Liam Byrne Excerpts(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister
Obviously, Parliament is due to be suspended tomorrow, but if it is necessary for Parliament to be recalled to discuss this or any other issue, that facility is, of course, open to the leaders of the parties. Indeed, it has on occasion been exercised by Mr Speaker. I think it is good that we are having this statement today. I am trying to answer as many questions as fully as I can. Obviously, throughout the recess, the Government will be on the case of these issues and parliamentary colleagues will be able to contact us.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
Everyone in this House condemns the rocket attacks, but the Israeli defence force is firing the most dangerous of weapons in the most dense of communities, and it is very clear that Secretary Kerry and Ban Ki-moon think that not enough is being done to minimise civilian casualties. Does the Prime Minister accept that analysis? What we really want to know in this House is what he will do today, tomorrow and through the week in the Security Council to stop the slaughter of the innocents in Gaza and beyond.
The Prime Minister
I could not have been clearer that I think there needs to be restraint and the avoidance of civilian casualties, and the Israelis need to find a way to bring this to an end. I have made all those points repeatedly.
Oral Answers to Questions
Liam Byrne Excerpts(13 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Maude
I would expect community organisers to work closely with those organisations and to ensure that there is no duplication of effort. These community organisers, many of whom already exist and do great work in communities, will not carry any kind of bureaucracy or organisational structure with them. Their job is to put people together, give support to organisations and make connections where they are not already being made.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
This morning, figures showed that youth unemployment has rocketed up, and this afternoon we expect the Government to confirm that they will cancel the education maintenance allowance. Without work and without study, surely we need our youth charities more than ever before, yet the National Council for Voluntary Youth Services says that three quarters are now cutting projects. Just what have the Government got against young people, and why is there such a narrow place for young people in the Government’s vision of the big society?
Superannuation Bill
Liam Byrne Excerpts(14 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
May I start by expressing my gratitude to the Minister for the Cabinet Office and Paymaster General for the way in which he has brought the House up to date on his discussions and negotiations, for the tone and tenor of his remarks this afternoon, and for restraining himself from repeating the history of civil service compensation since 1859? The whole House is in his debt for that.
As we have said throughout all the stages of the Bill, we agree that civil service compensation is in need of reform. Indeed, we set it on its way. We now need to take account of the result of the judicial review, which tells us that what is needed is reform, but the right reform made in the right way. As we set about that exercise, and what I hope is the finalisation of our debates on the Bill this afternoon, it is incumbent on us to remember that for 500,000 civil servants—people who have given their lives to working in the public service—the Bill should not be a “blunt instrument” for negotiating purposes. For many people, it is about how they might keep their home, help their children through university or avert financial hardship while they have to look for a new job. The House must remember that the Bill’s provisions are important and will have real-world impacts.
John Hemming
As someone who interests himself in procedural issues, perhaps I could think of the clause as being more like a supernova clause after which the sun will not rise again. Not being a Government Minister, I have the advantage of having no confidential knowledge whatever of the Government’s strategy. The interests of judicial review are relevant given that one would expect a judicial review when the order for the new scheme is laid, as it would be laid under the Bill relatively soon. In those circumstances, the Government will not want to take a completely new piece of legislation through the House because of a judicial review. It is possible to accelerate the proceedings of a judicial review, and the courts would probably look on such an approach favourably given the situation for the country and the importance of having legal certainty, but it is quite important to have the facility to deal with such a situation if it arises. However, I support the idea of having a supernova clause because there is a point at which the sun need not rise again.
Mr Byrne
I want to speak briefly about Lords amendments 4, 5 and 6, as well as amendment (a), tabled by my hon. Friend the Member for Hayes and Harlington (John McDonnell). During proceedings on the Bill, my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell) has consistently raised concerns about the arbitrary caps that the Government introduced at the start of this process, which now form the body of clause 2. I confess that we are still not clear about why the caps are still in the Bill given that clause 1, which was newly introduced on Report, effectively gives the Government the power to impose any settlement after the consultations that we discussed earlier have been completed. We heard, in the Minister’s helpful update to the House, that there is a degree of agreement with at least some of the trade unions, which the Government have declared will supersede the terms in the Bill. Why then do they not seek to introduce a sharp instrument containing the specific terms they have agreed with the trade unions, rather than the blunt instrument containing general powers that is the Bill before us?
We are pleased that the Minister has given a clear commitment, in a letter to right hon. and hon. Members, that it is his ambition to
“repeal the caps in clause 3 insofar as they could impact on the new civil service compensation scheme”.
His letter also says that if the caps were ever revived he
“would table an order…so as to increase the caps to such a level that would…reflect what would otherwise apply under the new scheme.”
Most of us will welcome that good progress.
In earlier debates, we raised concerns that the Bill would allow the revival of caps at any time in the future even after a negotiated settlement was in place. We fear that the relevant measure, which the Government call a sunrise clause, would put an undesirable amount of power in their hands during negotiations, as they could simply threaten to revive statutory powers whenever they ran into any dispute on any matter, not just issues of redundancy. Given that it would allow the Government to resurrect the terms of a long-dead provision, it is not so much a sunrise clause as a zombie clause, which would live on for ever. Whatever we call it, the measure is entirely without precedent in a Bill of this nature. Indeed, the only recorded precedent of such a measure is in the Prevention of Terrorism Act 2005.
We are pleased that there will be a limit of three years on the caps if they are revived, and that the Government cannot extend that period. Given what the Minister has said this afternoon, however, I do not see how he can argue that the correct balance of time and the correct limit to any revived power should be three years. The whole House will welcome what the Minister said this afternoon about his ambition that the revival of the caps should never be triggered. If that is true—and I am prepared to accept that it is—I do not see why he cannot accept the very sensible amendment tabled by my hon. Friend the Member for Hayes and Harlington. Although we are happy to accept amendments from the Lords, we shall support amendment (a).
Mr Maude
The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) asked why we needed to keep the caps at all. The answer is simple. The caps will be established in primary legislation, but the new civil service compensation scheme, which I hope to lay before Parliament next week, before the House rises, does not have the full force of primary legislation, despite the changes to the Superannuation Act 1972 made by clause 1.
I shall be frank. We want to avoid being in the position that followed the High Court judgment in May this year, which resulted in the previous Government’s February scheme being quashed. The effect of the scheme being quashed is that the existing scheme remains unreformed and in force. Indeed, the old scheme—unaffordable, unsustainable and unreconstructed—is in force today. Of course, in preparing the new scheme we were at some pains to ensure that it would be legally robust, and we shall vigorously defend any legal challenge to it. However, as was apparent from the litigation against the previous Administration’s scheme, there can never be guarantees in litigation. Even litigation that is destined ultimately to fail can be disruptive, because of the uncertainty it causes until the case is concluded.
Oral Answers to Questions
Liam Byrne Excerpts(14 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Letwin
The coalition Government certainly agree that citizens advice bureaux form a fantastically important part of the fabric of the big society and support for people locally, and I believe that Members throughout the House recognise the value of their services. We will support them in every possible way, and I should be delighted to talk to the hon. Gentleman about any specific issues in his constituency.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I believe that strengthening civil society is a common cause between us. Labour is certainly very proud that the sector doubled when we were in government. Now, however, charities are saying that they face cuts of a little over £3 billion during the next couple of years. How many jobs does the Minister expect to be lost in charities that do not have Conservative advisers at their helms or on their boards? To the untrained eye it seems that, worryingly, some charities are now more equal than others.
Mr Letwin
The right hon. Gentleman is well aware that more than three quarters of charities receive no Government money, and therefore will not be affected. He ignores the opportunities presented by the new public service reforms. The Work programme, for example, is creating huge opportunities for the voluntary and community sector, and there will be increased funds from that source. There will be more funds for drug prevention, rehabilitation and recovery, and for the rehabilitation of prisoners. Payment-by-results contracts will be available for a huge range of new voluntary and community sector operators. I expect the right hon. Gentleman to see an expansion, not a reduction, in the sector and its activities.
Departmental Business Plans
Liam Byrne Excerpts(14 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Letwin
I am grateful, Mr Speaker, for that help, but I have to say that I had not anticipated anything better than I received, because Labour Members presided over a Government who acted like a magazine and we intend to preside over a Government who act like a Government. That is a profound difference and I recognise that it is very uncomfortable for Opposition Members.
Before I go on, I should correct myself as I believe I slipped into referring to 100,000 incidents of antisocial behaviour when I meant 10,000. I apologise to the House. That is an example of transparency and straightforwardness, which I hope will be replicated as we move forward.
In addition, the second part of each business plan explains how Government will give people unprecedented access to the data they need—in a simple, easily accessible form—to scrutinise how we are using taxpayers’ money and what progress we are making in improving society through our reforms. These transparency sections of the plans are being published in draft to allow Parliament and the wider public to say whether each Department is publishing the most useful and robust information to help people hold each Department to account.
Select Committees will, of course, play a vital role in the task of holding the Government to account. My Cabinet colleagues are therefore contacting Select Committee Chairmen to inform them of the new processes and to invite them to discuss the business plans in more detail in their Committees.
Once the reforms described in these business plans are fully implemented and the transparency reports are fully in place, we will have a real people power revolution— where people themselves are equipped with the power and information necessary to improve our country and our public services, through the mechanisms of democratic accountability, competition, choice and social action. I commend this statement to the House.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I start by welcoming the new Minister for milestones to the House. I could tell that he was the right Minister for this job when I received his statement three hours before he stood up. I thank him for that and urge the same habit on his hon. and right hon. Friends.
I also welcome the thrust of the Minister’s statement. When Labour came to power in 1997, we discovered that the Conservatives had run public services into the ground. Now, thanks to Labour’s investment—and, yes, Labour’s management—crime is now down 43%, hospitals have the shortest waiting lists on record and our schools and teachers are delivering record results for our children aged 11, 16 and 18, with 70,000 a year achieving good results.
The question was always going to be: what was the way forward after Labour’s job of repair? I am glad that the Government have seized on some of the principles set out in our White Paper, “Smarter Government”, published last year. It was described at the time as
“a radical dispersal of power to patients, parents and citizens”.
Today, however, the Minister tells us that his first step is to make departmental plans transparent. May I tell him that the only revolution he has delivered this afternoon is to make bad plans transparently bad plans? There will be no power shift if he is going to destroy the power of NHS patients to be treated within 18 weeks; the power of parents to get one-to-one tuition for their children if they are falling behind at school; the power of citizens to summon police officers to talk about issues of local concern.
I have only one question: if the Minister is serious about improving government—and I believe he is—will he review the ending of basic rights to high-quality public services across this Government? When it comes to public services, the public want guarantees, but all he has offered them this afternoon is an online gamble.
Mr Letwin
First, I should welcome the welcome. As I think the right hon. Gentleman knows, I am one of the longest-term proponents of consensus not only between members of the coalition but across the whole House. If the right hon. Gentleman is in effect saying that the Opposition will now back the general principle of having a clear timetable for actions, input measures, outputs—
Mr Letwin
Yes, summoning police officers to talk about that. We propose something very different, which goes beyond that. Yes, we will have beat meetings, but we will also allow people to vote for police commissioners so that they actually have accountability. That is what we mean by choice and power, as opposed to the mere window dressing of the ability to talk.
Oral Answers to Questions
Liam Byrne Excerpts(14 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Hurd
We have planned a series of initiatives for the forthcoming years to promote wider volunteering and to connect people again with their own power to make a difference locally—that is the heart of the big society. I cannot be drawn on the detail of those plans, because they are subject to the spending review.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
If voluntary service for young people is to work, the third sector has to still be alive. This afternoon the Chancellor is going to try to drive a steamroller over the big society. Can the Minister explain why, in answer to parliamentary questions from my hon. Friend the Member for Glasgow Central (Anas Sarwar), three quarters of Whitehall could not say what contracts they had in place with the third sector? How can the Department protect the third sector from cuts this afternoon if it does not know what contracts are in place? Is the Minister not, in effect, flying blind?
Mr Hurd
I suspect that the right hon. Gentleman will eat his words later when he hears the Chancellor. I do not see any steamroller in evidence in relation to the big society, which is absolutely central to the Government’s mission. A central strand of that mission is to open up the public services to a more diverse set of providers, including and specifically contributions from the voluntary and community sectors. As the right hon. Gentleman well knows, they are in a position to add a huge amount of value. That is a specific commitment of this Government, and we are going to deliver on it.
Public Bodies Reform
Liam Byrne Excerpts(14 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I am very grateful to the right hon. Gentleman for early sight of his statement—in the Financial Times, The Guardian and The Daily Telegraph this morning. He is a man who appreciates the courtesies of this House, so I know that he will provide you, Mr Speaker, with an explanation of how the media could possibly have been briefed before Members were.
May I, however, start on a note of consensus? I thank the Minister for his work in completing a process that was set in train during my time at the Treasury. In March I told the House that 123 quangos would need to close, and from first glance at this statement it appears that two thirds of the 192 arm’s length bodies that need to close are those that I announced in March. Instead of 20% of quangos being closed, the Minister has announced that 25% will be.
I am grateful, too, that his tests largely confirmed the approach that I set out in March. I welcome his endorsement of the principles of a sunset clause for quangos and of triennial reviews. I am especially grateful for his confirmation of our decision to mutualise British Waterways, which will be an important institution in the third sector that I know we both support.
May I, however, raise the slightly obvious question about the way in which the right hon. Gentleman has conducted this exercise? All of us want to improve accountability—it was one of the three principles that we set out in the ALB review in March—but we also want to save money, and once upon a time I thought that the current Prime Minister agreed, because, in a typically thoughtful and measured intervention, he said in October 2008:
“Sound money means…destroying all these useless quangos and initiatives.”
Now the Minister tells us that the Prime Minister in fact got it wrong. Saving money
“is not the principal objective”,
he told the “Today” programme this morning.
Labour’s plan would have saved £500 billion by 2012-13. Now we are told that the Government’s approach will not in all cases save money at all. In fact, it could cost more money than it saves at the Audit Commission, the RDAs, the UK Film Council, Standards for England and the Human Fertilisation and Embryology Authority. I am afraid that the Minister has become the most expensive butcher in the country. His friend the Chancellor will no doubt be delighted.
Will the Minister, first, set out the total cost of implementing the plan this year and next? He should have those figures at his fingertips now that the review is almost complete. Secondly, can he explain the impact on jobs and unemployment? Organisations such as the UK Film Council help to strengthen industry and tax revenues. What estimate has he made of the impact of his announcement on growth and jobs?
Thirdly, the principle of independence is sometimes important, and I am glad that he acknowledges that, but it is not clear how he has applied it in all cases. For example, we need to hear a little more from the Minister about the Football Licensing Authority. The Secretary of State for Culture, Media and Sport infamously had to apologise for blaming Liverpool fans for the Hillsborough tragedy; now the Government are scrapping the organisation established to ensure that a Hillsborough never happens again, without being clear about what will be put in its place.
Finally, in March I introduced a new principle whereby quangos would be set up only as a last resort. The Minister’s statement confirms his presumption that state activity should be undertaken by bodies that are democratically accountable. His party’s manifesto promised 20 new quangos—one third of the extra quangos that he has abolished today. Will he confirm that those quangos will not go ahead?
Mr Maude
It is very good to have such a consensual approach from the man who famously told the world on leaving government that there was no money left. There will be savings as a result of the process, and there need to be because the right hon. Gentleman was a prominent member of a Government who left office spending £4 for every £3 of revenue. They were having to borrow £1 out of every £4 just to keep the lights on, the teachers in the schools, the pensions being paid and the doctors and nurses in the hospitals. This Government have to clear up the mess that his Government shamefully left behind, and there will be savings from the process.
Mr Maude
We became used to the previous Labour Government bandying around large numbers in respect of the savings that they proposed to make, but we know that when the National Audit Office went around after those much vaunted efficiency exercises over which he and his colleagues presided, it found that in most cases they had not saved money at all. It was all about the optics and trying to make a point; it had nothing to do with reality.
I am sorry to say that jobs will be lost as a result of this process, but, in order to clear up the fiscal mess that the right hon. Gentleman’s Government left behind, that is sadly an inevitability. Savings will be made as a result of the exercise, but, as I said at the outset, it is not principally about saving money, although it will do so. It is principally about increasing accountability—the important presumption that when an activity is carried out by the state, and there is no pressing need to do so at arm’s length from government, it should be carried out by someone who is accountable democratically, either a Minister who is accountable to this House and, through this House, to the public, or a local authority that is accountable to local residents.
It is very good that the right hon. Gentleman agrees with our approach and thinks it sensible. He tried to claim credit for it himself, actually, so, as the various bodies that we have discussed today start to complain, as some will, and as some vested interests will with a very loud voice, I shall be able to tell them that our approach is a consensual one—that the Labour party wants to play its full part in responsibility for the whole exercise.