Skills and Post-16 Education Bill [HL]

Lord Johnson of Marylebone Excerpts

Committee stage
Wednesday 21st July 2021 Lords Chamber

[Baroness Berridge (Con)]

My Lords, I beg to move Government Amendment 91A and speak to Amendments 91B, 91C, 99C and 99D in my name. These are primarily aimed at amending Clause 15, which in turn amends the definition of “higher education course” in the Higher Education and Research Act 2017, to make express provision for the regulation of modules and to make clear what a module of a higher education course is as distinct from a full course.

The current student finance system does not offer funding for modules, nor is there any fee maximum for such modules or a specific corresponding regulatory system. The lifelong loan entitlement will transform student finance by supporting more flexible and modular provision. This legislative change is needed to ensure that we can deliver modular provision. Taken with the amendments that we have previously laid, this clause makes specific provision for modules in Part 1 of HERA 2017, which relates to the regulatory regime under the Office for Students. The amendments also relieve higher education providers, the OfS and the designated quality body of certain additional burdens which would otherwise arise from the addition of the concept of modules under HERA. These relate to certain requirements to provide or publish information—for example, under Sections 9, 11 and 65 of that Act. We want to reduce bureaucratic burden on providers, and these changes will ensure that the introduction of funding for modules through the LLE will not add to this.

Clause 26 sets out the territorial extent of the provisions in the Bill. This is a standard clause for all legislation. In essence, and with minor technical exceptions, the LLE provisions extend to England and Wales but apply in relation to England, because we are making amendments to the English student finance system. Overall, these changes will help to pave the way for more flexible study and for greater parity between further and higher education. As noble Lords will be aware, we will be consulting on the detail and scope of the lifelong loan entitlement this year. Our commitment to supporting students through the LLE is a key consideration in the public consultation which we will launch in due course. This will include seeking views on specifics of our regulatory system.

[Lord Johnson of Marylebone (Con) [V]]

My Lords, I speak to Amendment 92 in my name and draw attention to my interests in the register, as chair of TES, the education software and information group, and of Access Creative College, an independent provider of training for the digital and creative industries.

Amendment 92 is a probing amendment, to test the Government’s ambitions for the lifelong loan entitlement and to probe their assumptions about what provision is worthy of funding under it. We do not yet have critical details on the LLE, for which the Bill provides the legislative underpinning. That will emerge only following the consultations that the Minister has just mentioned, and then in secondary legislation due in 2024, ahead of the LLE’s actual introduction in 2025. In theory, the combination of the LLE and the introduction of the system of modular funding that the Minister has just mentioned, for sub-degree chunks of study, will make it easier for adults and young people to access learning in a more flexible way, to space out their studies and to earn while they learn if they wish.

Since 2012-13, English HE students have been eligible for loans only if they are studying at an intensity of 25% or more of a full-time equivalent course and are following a full course for a specified qualification, hence students studying individual modules or shorter courses of less intensity have not been eligible for loans. This has been an important factor in the decline of part-time adult learners. The LLE will, in theory, help to address this problem—therefore so far, so good, and I very much welcome it.

However, there is real complexity involved in the introduction of the lifelong loan entitlement, and a danger that theory and practice might diverge in crucial ways in certain respects. One of the main sources of danger is that the Treasury, partly out of its desire for quick savings from higher education in the spending review, may water down the promised skills revolution by insisting on retaining the so-called equivalent or lower qualification rule. Indeed, I expect that the Treasury will put up a valiant attempt to keep the ELQ rule whatever the consultations on the LLE say when they are eventually produced.

The traditional rationale for the ELQ restriction is that funding available for student support is finite and that it is necessary to put in place limits to ensure that all eligible students who wish to enter HE for the first time can do so. Accordingly, the ELQ rule prevents those studying a second HE course, at an equivalent or lower level, from receiving tuition fee loans or maintenance support for the course. For example, if you study classics for an undergraduate degree in your 20s at UCL, you could not then reskill in your 30s by undertaking a diploma in graphic design at UAL.

Restrictions apply even to those who previously followed privately funded courses which they self-financed. These ELQ restrictions seem complex and very unusual, when you look across the global HE landscape. For example, they do not exist in Canada, Australia, or New Zealand, whose HE systems are quite similar to England’s. The obvious trouble is that the ELQ rule not only constrains student choice about how best to retrain if they already have a qualification but treats tertiary education—post-18 education—as a one-off event, rather than as part of a process of lifelong learning in a world in which people can expect to have multiple careers over their working lives. Keeping it will therefore make a nonsense of the entire lifelong loan entitlement.

My contention is that any savings which the Exchequer might make on the subsidy in the loan book from retaining it are outweighed by the broader economic costs incurred by making it so difficult for students to change subject and retrain for new careers. We need a serious economic impact analysis of the ELQ rule before we can consider the secondary legislation on the LLE. Indeed, since it was introduced in 2008, various Governments have already effectively acknowledged the flaws with the ELQ by peppering it with ever more complicated exceptions, such as those applying for medicine, dentistry, and initial teacher training. Part-time ELQ exemptions have been made for engineering, computer science and technology, extended to STEM courses in 2016-17. In 2018 further exceptions were made for nursing, midwifery, allied health professions, and so on.

ELQ restrictions were possibly appropriate for a restricted grant-based HE system, but, under the current loans-based system, they are anachronistic and antithetical to the broader objectives of the Government’s skills reforms. That is why the 2019 Augar report rightly recommended that the ELQ rules be scrapped entirely for those taking out loans for levels 4, 5 and 6—yet nothing has happened since.

Skills and Post-16 Education Bill [HL]

Lord Johnson of Marylebone Excerpts

2nd reading
Tuesday 15th June 2021 Lords Chamber

[Lord Johnson of Marylebone (Con)]

My Lords, I too congratulate the noble Baroness, Lady Black of Strome, on her extraordinarily fine maiden speech. I am looking forward to learning a lot from her in a lot of different areas.

I too welcome this Bill. It is an important bit of legislation, possibly the most important for the levelling-up agenda in this Parliament. I have a few reservations and would appreciate reassurance on a couple of points from the Minister. I declare my interest as a visiting professor at King’s College London, a senior fellow at Harvard Kennedy School and chair of two private education companies Tes, and Access Creative College, a provider of further education training for the creative industries.

There is a huge amount to welcome in this Bill, but for me there are two features in particular: the lifelong loan allowance, which is being put on a statutory footing; and the introduction of modular funding, which a long-overdue reform that will bring valuable flexibility into our student funding system. However, I have some concern that the Treasury may water down the rocket fuel of the promised skills revolution. A number of noble Lords have already hinted at where this might arise. One of my concerns is around the rigidity of the current system that prevents people from studying at an equivalent or lower level than an award that they already have, as the noble Lord, Lord Puttnam, said in his excellent speech. To my mind, that makes a nonsense of the lifelong loan entitlement. I appreciate that the Government are consulting on it. I hope that the results of that consultation come out the right way, because if we stick to it, it will prevent people from reskilling effectively.

My other area of concern is around what I see as the Treasury’s persistently flawed conception of how to measure value for money in post-16 education. The idea that you can measure the worth of a course by the proportion of the student loan that ends up being repaid is far too reductive. If we stick with it, it will stop us from properly funding what are socially useful and valuable but lower-earning professions and paths in life. We already see hints that this is the prevailing view and that it will continue to be the prevailing view in the list of some 400 qualifications that are eligible for funding in the lifetime skills guarantee. That list of 400 qualifications is still too restrictive. As far as I can see, it does not include any creative arts courses, for example.

My concern, as this Bill makes its way through this place and the other place, is that when the section lands on the new student finance system, the Treasury uses this legislation’s fine print to further defund those areas of provision that have lower rates of repayment associated with them, through a mix of potential policy tools, including student number controls by subject, higher minimum entry requirements by subject and a variety of others, most notably the potential for much lower fee levels for those courses.

Those are all big risks as this Bill makes its way through this place. I would appreciate any reassurance that the Minister can give on that front. I am particularly concerned about what it would do for the provision of creative education courses. It is highly likely that, if we go down that path and defund courses on that basis, it will starve the supply of talent into some of our most promising industries as an economy—performing arts, creative design, creative computing, music technology, music performance and so on. That would be a sad outcome for us as a society and it would also be an economic nonsense. These were industries that were growing at five times the rate of GDP before the crisis, and we should not do them the disservice of starving them of talent as we come out of it.

My sense is that if the Treasury wants to save money, and I understand that it wants to invest money in other areas or education systems to support catch-up elsewhere, which is entirely understandable, I recommend that it looks at lowering the repayment threshold on the student loan as a far more sensible source of much larger sums of money. The Higher Education Policy Institute, for example, has calculated that lowering the repayment threshold to just below £20,000 from the current level of £27,295 would save £3.8 billion and reduce the proportion of the student loan that is not repaid to one-third, from current levels of over one-half. That seems a very sensible and more fruitful area of reform for the Treasury to look at.

Time is running out, but I welcome this Bill. It is a really important Bill. I congratulate the Minister and the Secretary of State for bringing it to Parliament. I will certainly be supporting it. However, it is clearly something of a down payment on a much bigger set of changes that, ultimately, we will need if we are going to have a joined-up system of post-16 education and skills. We have a rather bewildering array of regulatory and funding bodies out there in the landscape: the OfS, the Education and Skills Funding Agency, the Institute for Apprenticeships and Technical Education, and so on. The time is surely coming, now that through this Bill we are introducing much more flexible systems of funding, for us to move to a joined-up system of regulation and funding for all post-16 education.

International Education Strategy

Lord Johnson of Marylebone Excerpts

Wednesday 22nd May 2019 Westminster Hall

[Joseph Johnson (Orpington) (Con)]

I congratulate the hon. Member for West Bromwich West (Mr Bailey), the former Chair of the Select Committee on Business, Innovation and Skills, on giving us the opportunity to discuss this important issue.

As hon. Members have said, our world-class universities have been a great asset for our country for generations. They have attracted young, bright people from all over the world, giving them an opportunity to receive a first-class higher education and giving us an opportunity to inculcate an understanding of our culture and worldview. That has ensured that we do not recede as a cultural reference point, which is more important than ever now that we are doing Brexit.

It is a huge asset for us that more world leaders have been educated in the UK than in any other country but the US. Frankly, I am concerned that the next generation of world leaders—the next Bill Clintons, the next Benazir Bhuttos—may not choose to study in the UK. All of us in Parliament have a duty to ensure that they put the UK at the very top of the list of countries around the world where they want to study.

Frankly, one would think that a Government committed to global Britain and to extolling the projection of our values around the world would do more to cultivate the important opportunity that international students offer us. As hon. Members have made clear, however, part of the problem is that since 2010 we have included students in our net migration target, so we are doing precisely the opposite: through a welter of restrictive Home Office policies, we are deterring people from choosing the UK over other countries. That explains our substantial underperformance in comparison with core competitors around the world.

Of course market share is not the be-all and end-all of any activity, but it is an important indicator of competitiveness and we are losing it very rapidly: our market share has fallen from approximately 12% in 2010 to just 8% in 2016. We must look seriously at why that significant rate of decline is happening. As hon. Members have said, we are seeing some growth in absolute terms, but there has been a dramatic fall in the proportion of students from some of the most important countries in the market for international higher education, including India, which the right hon. Member for East Ham (Stephen Timms) rightly mentioned.

Like other hon. Members, I welcome the publication of the international education strategy: it is good that we have an ambitious goal for higher education and other education exports. My hon. Friend the Member for Henley (John Howell) was right to say that exports can come in many forms—not just students coming here, but transnational education, for example.

We should not be phobic about international students coming to study in this country, but I am afraid that is the impression that we have all too often given because of the Home Office’s restrictive approach. That is why I and the hon. Member for Sheffield Central (Paul Blomfield) have tabled a new clause to the Immigration and Social Security Co-ordination (EU Withdrawal) Bill that would acknowledge the important contribution of international students in two key ways. First, it would insure universities against the risk that a Government will decide to reduce net migration swiftly by slashing international student numbers. Any future Government who intend to cap numbers will first have to secure parliamentary approval.

Secondly, the new clause will ensure that we take a much smarter approach to post-study work. As hon. Members have already said, it has been severely restricted in recent years on the back of shoddy evidence produced by the Home Office back in 2012-13. Students will invest their time, money and human capital elsewhere if a competitive post-study work regime is not available in a particular country. Our core competitors—the US, Canada and New Zealand—offer international students the chance to work for up to three years after graduation, and Australia offers up to four years. Hacked back to just four months in 2012, our offer is simply not competitive. Although the international education strategy promises to increase that to six months, it is still not enough. Twelve months for some more advanced courses is also not enough.

While we wait for the Immigration and Social Security Co-ordination (EU Withdrawal) Bill to come back to the House on Report, I urge the Minister to look at the strong support the new clause has from MPs of all parties, and to assure me that the Government will take steps to welcome the clause and implement its recommendations.

European Union (Withdrawal) Act

Lord Johnson of Marylebone Excerpts

Monday 14th January 2019 Commons Chamber

[Joseph Johnson (Orpington) (Con)]

I had never rebelled against the Government before this month. I wish to use the brief time I have to set out four reasons why I shall vote against the deal tomorrow.

First, I believe that the Government are selling this package to the House on the false premise that we are somehow going to have a trade deal in place by the end of 2020. As Sir Nick Macpherson, the former permanent secretary to the Treasury, made clear last week in a tweet, that is a highly unlikely scenario. A deal even by the end of 2022—the possible period by the end of which we will have finished the transition period—is exceptionally unlikely. In his view, it is conceivable that we will have a deal in place by the mid-2020s. It really is, as the former permanent secretary to the Treasury said, “time for some honesty” from the Government. Forget all the flowery letters that have been exchanged today. Were the Government really being straight with the House and with the country, they would come clean and admit that we will have many years of the purgatory of the backstop ahead of us.

Secondly, any trade deal that we eventually strike will be worse for the economy than our current arrangements. As the Bank of England has noted, Brexit is a unique experiment. There is no precedent for an advanced economy anywhere in the world withdrawing from a trade agreement as deep and complex as the EU. Although it is not legally binding, the political declaration does set a direction of travel for the negotiations, reflecting the Prime Minister’s red lines of ending freedom of movement and securing an independent UK trade policy. Those red lines necessarily mean that we have to leave the single market and any form of customs union, as foreshadowed by the Chequers White Paper. The political declaration accordingly prioritises “comprehensive arrangements” for goods, and scandalously neglects services, on which all we are aiming for is in effect bog-standard third-country market-access terms. We are fundamentally a services economy and our services sector is being thrown under a bus.

Let us take financial services—one of this country’s few globally competitive sectors and one that is very important to many families in Orpington. The Centre for European Reform reckons that a free trade agreement would reduce financial services exports by almost 60%. The consultancy Oliver Wyman reckons that will mean a hit to the Treasury’s revenues of around £10 billion. So much for the Brexit dividend.

Thirdly, this package leaves the deck heavily stacked against us in the negotiations that will come. The political declaration starts by giving the EU most of its goals on its strong point, which is goods exports, for which the EU had a surplus with us of £95 billion in 2017, but it offers very little to our crucial services sector, in which we had a surplus of around £28 billion. Given that we have necessarily already conceded the £39 billion financial settlement in the legally binding withdrawal agreement, we now have little leverage left with which to secure concessions from the EU in the months to follow. If the EU chooses to play hardball with us, it will simply let the UK enter the backstop in December 2022 then wait until our services sector pressures the Government into accepting a deal—any deal—that will remove the EU’s feet from our windpipe and restore some measure of privileged market access to a sector that is so important to our economy.

Approval of this deal will lead to many years of excruciating trade negotiations—talks that will trigger waves of fury from Brexit campaigners and leave voters throughout the country at each inevitable UK concession on issues such as fisheries, Gibraltar and eventually, of course, freedom of movement itself. The package that the Prime Minister has negotiated simply sets us up to fail as a country. It is better that we all realise that now, before it is too late.

Finally, this deal is bad for our sovereignty. During the referendum, some implied that they were prepared to let Britain suffer economic damage in return for greater sovereignty and greater control. Of course, one of the great paradoxes is that the deal is remarkable in offering a double whammy: both economic harm and a loss of British sovereignty. That is one reason why many prominent Brexit campaigners are saying that this deal is worse than staying in the EU. There is now no single Cabinet position on what to do next, let alone one backed by the Conservative party or Parliament as a whole. Such is the farce that this has become that I believe we have no choice now but to go back to our constituents and ask them, reluctantly, to provide further guidance.

--- Later in debate ---

[Mr Hammond]

The deal that the Prime Minister has presented to Parliament very clearly is a compromise between the views of people on both sides of this argument. It will not deliver 100% of what anybody wants, and the Prime Minister herself has recognised that only this afternoon.

I want to mention my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), because I think he summed up what is still a dilemma for many—that the middle is being squeezed from both sides—and I wish him well in his consideration of these important issues over the next 24 hours.

Opposition Members made many points. A group of them—the hon. Members for Rotherham (Sarah Champion), for Gedling (Vernon Coaker) I think, for Blackpool South (Gordon Marsden), for Scunthorpe (Nic Dakin) and for Merthyr Tydfil and Rhymney (Gerald Jones)—while clearly rejecting the Prime Minister’s deal, which I acknowledge, were all I think signalling that they would wish to be able to support a deal and to find a way forward, explicitly recognising that no one is going to get everything that they want.

I listened carefully to the contributions and the concerns that were expressed, and I believe that the architecture of the Prime Minister’s deal is capable of accommodating such concerns if that is what we as a nation want to do. It is in that spirit that the Government have accepted the amendment proposed by the hon. Members for Bassetlaw (John Mann) and for Don Valley (Caroline Flint). However, we must distinguish between adjustments to the negotiated future relationship and seeking to renegotiate the withdrawal agreement—something that is simply not deliverable. I shall return to that theme later.

A number of hon. Members on the Opposition Benches—the hon. Members for Bath (Wera Hobhouse), for Aberdeen North (Kirsty Blackman), for Midlothian (Danielle Rowley), for Edinburgh West (Christine Jardine) and for Huddersfield (Mr Sheerman)—simply wished to turn back the clock and pretend that this whole thing had never happened. I urge hon. Members expressing that view to consider carefully the wider consequences for our political system if that were to happen. I would say to Scottish colleagues who expressed that view that their arguments would be more powerful if they could show an ability to consider the consequences for the UK as a whole, as well as the consequences for Scotland.

I thought the hon. Member for Manchester Central (Lucy Powell) made a crucially important point, which is that the House needs to find a way to show what it is for, not just what it is against. She went on to make, I think, the sole pitch of the evening for the Norway model.

[Joseph Johnson]

Has the Chancellor by any chance read the powerful letter in today’s Financial Times from the former EU Financial Services Commissioner, Jonathan Hill? He said that he had yet to meet anybody who felt that the Norway model would work for the UK’s financial services industry. In fact, he felt that EEA members had so little influence on the EU’s rule making for financial services that they were grateful if anybody even replied to any of their correspondence.

[Mr Hammond]

I have been making effectively the same point myself for about the last year. We concluded that the EEA model would not work for Britain’s most important sector, financial services. The deal that the Prime Minister has negotiated has within it good and strong provisions for financial services and will be a much better result for the financial services industry than the EEA model would be.