Oral Answers to Questions
Lord Willetts Excerpts(11 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andrew Rosindell (Romford) (Con)
9. What steps he plans to take to protect and support the work of the British Antarctic Survey following his decision not to merge that body with the National Oceanography Centre.
The Minister for Universities and Science (Mr David Willetts)
I saw the important work of our scientists when I visited the Falklands and the Antarctic last February. The Natural Environment Research Council has committed to maintain funding of the British Antarctic Survey at £42 million a year for the rest of this spending period. The NERC should, in future, have a discrete funding line for the Antarctic from within the ring-fenced science budget, subject to future spending reviews, to ensure that there is a visible UK commitment to Antarctic science and our presence in the region. It is a fitting tribute that the southern part of the British Antarctic Territory has been renamed Queen Elizabeth Land in honour of Her Majesty the Queen at the end of a glorious jubilee year.
Andrew Rosindell
The whole House and the entire nation will be delighted at the Government’s announcement that part of the British Antarctic Territory will be named after Her Majesty Queen Elizabeth II in this diamond jubilee year. The House is also delighted that the British Antarctic Survey has been rescued from the previous proposals. Is it possible for the British Antarctic Survey to work more closely with the Falkland Islands? Does the Minister recognise the importance of having British sovereign territories in that region of the world to conduct scientific research and endeavour?
Mr Willetts
I appreciate my hon. Friend’s work on behalf of the Falklands and the British presence in the Antarctic. There is already practical co-operation. I have seen for myself the support that the Falklands Islands provides to the British Antarctic Survey. While I was in the Falklands, I met the director of the newly created South Atlantic Environmental Research Institute in his office at Stanley cottage. Although the NERC cannot legally fund the institute, we are offering non-financial assistance by giving advice, hosting visits and facilitating partnerships with British universities.
David Rutley (Macclesfield) (Con)
11. What support his Department is giving to the life sciences sector.
The Minister for Universities and Science (Mr David Willetts)
Last week, the Prime Minister launched the “One Year On” report for our life sciences strategy, which included a new commitment to sequence 100,000 genomes. In the autumn statement, the Chancellor announced an additional £100 million for life sciences research and, in the past year, more than £1 billion of private sector investment has been attracted to the UK on the back of Government initiatives for the life sciences. We are therefore succeeding in creating the right environment to attract global life sciences investment.
David Rutley
I welcome the Government’s progress report, “Strategy for UK Life Sciences—One Year On”, and the Minister’s strong support for this vital sector. Given the critical contribution of life sciences and pharmaceuticals to Macclesfield’s local economy, what plans does he have to build on this important momentum in the year ahead?
Mr Willetts
We need to do more and we can do more. We are going to work closely with British businesses, including AstraZeneca, which I remember visiting with my hon. Friend in his constituency earlier this year. That company has received a conditional offer through round 3 of the regional growth fund. We are continuing to back this very important, internationally competitive industry.
Mr John Whittingdale (Maldon) (Con)
12. What steps he plans to take to reform the law on copyright; and if he will make a statement.
Kerry McCarthy (Bristol East) (Lab)
16. What recent assessment he has made of his changes to higher education and to the level of student tuition fees; and if he will make a statement.
The Minister for Universities and Science (Mr David Willetts)
The proportion of English school leavers accepted by universities for 2012-13 was the second highest on record. Final data show that acceptance rates from disadvantaged areas increased. More students are getting into their first choice universities.
Kerry McCarthy (Bristol East) (Lab)
But UCAS data show that there was an overall 11% fall in applications for higher education in 2012-13, and early indications are that the number of applicants for 2013-14 will fall further. Is the Minister worried by that emerging trend, and if so, what will he do about it?
Mr Willetts
Of course, entry to British universities is competitive, and we have many more applicants than places, but we will continue to get across the message that no student has to pay up front to go to university, and that students start paying for university only if they are earning more than £21,000. That is a very fair way of financing our universities.
Julian Smith (Skipton and Ripon) (Con)
What measures is the sizzling science and higher education Minister putting in place to ensure that applicants to universities have the very best information on the outcomes of their courses?
Mr Willetts
For the first time, we have required that key information sets contain the information that prospective students want about, for example, employment outcomes from particular courses at particular universities. People are entitled to that information—it was not available before, but now it is.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
I am afraid the Minister is trying to gloss over the facts of his record. The reality is that two years on from the Government’s decision to treble tuition fees to £9,000 a year, applications have dropped by 54,000, which is 11%; acceptances are down, as are the numbers of mature learners and part-time learners; his core and margin policy has caused nothing but chaos and confusion; his AAB policy has been a dramatic failure; and to top it all off, legitimate international students are choosing to go to our competitor countries to study as a result of Home Office policies. Is not the truth that the past two years under this Government have been a disaster for students and universities alike?
Mr Willetts
The fact is that the confusion is over the Opposition’s policies. We know they are planning to reduce fees to £6,000, but there is no indication of what they will do to compensate universities for the loss of those revenues. The only time the hon. Lady came to the House to explain her policies, it became clear she would abolish bursaries for students under access funds. Under this Government, we have more students going to university, well-funded universities and more students getting their first choice than ever before. We are proud of those reforms.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
17. What support he is providing for new business start-ups.
Harriett Baldwin (West Worcestershire) (Con)
19. What recent discussions he has had with the Secretary of State for Culture, Media and Sport on the use of satellite broadband for delivering internet access in rural areas.
The Minister for Universities and Science (Mr David Willetts)
We see satellite broadband as an essential means to deliver faster internet access for rural communities, businesses and individuals. Everywhere in Britain can therefore access broadband via satellite. This is an issue we regularly discuss with the Department for Culture, Media and Sport.
Harriett Baldwin
How will the latest round of European Space Agency negotiations support the UK companies that want to deliver satellite broadband to my constituents in West Worcestershire?
Mr Willetts
We got an excellent outcome from the European Space Agency ministerial last month. Britain is now the leader of the ARTES 2 programme for the development of the next generation telecommunications platform. It is great to see British businesses taking a lead here, and this will increase broadband speeds and reduce costs for UK users in rural and remote areas, making satellite broadband even more accessible.
Ann McKechin (Glasgow North) (Lab)
T1. If he will make a statement on his departmental responsibilities.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
T3. Does the Minister agree that it is the wide range of educational provision in the higher education sector that really benefits young people, and if so, what is he doing to increase the diversity of that provision?
The Minister for Universities and Science (Mr David Willetts)
I agree with my hon. Friend about the importance of diversity, and that is why we have liberalised the rules on the size of institutions that can take the name “university”, as a result of which 10 more higher education institutions fulfilled that criterion, seven of which have already received approval from the Privy Council to become universities.
Mr Chuka Umunna (Streatham) (Lab)
This has been a sad week for British retail. Comet has closed its doors after 79 years of trading. I am sure that the whole House will want to convey our deepest sympathies to the 6,900 employees who have subsequently lost their jobs at the worst possible time of year. Given that in less than a year the owners appear to have lost the £50 million dowry they received to buy the business and left the taxpayer with a £49.4 million bill, will the Secretary of State commit to publishing the findings of the inquiry he has set up into this affair?
Julie Hilling (Bolton West) (Lab)
Bolton university is making up to 90 people redundant because of the fall in student numbers, while 60,000 of the young people awarded places at university last year did not turn up. Will the Minister admit that the tripling of fees has created chaos and will harm the British economy?
Mr Willetts
We do not recognise that description of what is going on. We have very enterprising universities, including Bolton, that are thriving as more students get their first choice of university than ever before. And, of course, there is no cap on the number of overseas students legitimately entitled to enter the country to study.
Neil Carmichael (Stroud) (Con)
In my constituency, we have a thriving manufacturing sector, but one area of concern I have is the availability of skills, especially in engineering. Does the Minister agree that we need to redouble our efforts on science, technology, engineering and maths—the STEM subjects—at school to ensure that we have a good pool of skills in that sector?
George Freeman (Mid Norfolk) (Con)
The rising world population means that by 2050 we will need to double world production, albeit with half as much water, land and energy. Does the Minister agree that British agricultural science, not least at the Norwich research park, has a potentially huge role to play in helping the world to feed itself? May I welcome the agricultural science strategy and ask that it look to draw in as much investment from around the world into Britain’s science base as possible?
Mr Willetts
This is an area where British science has a lead. We have already invested more in the Norwich science park, which I visited with my hon. Friend, and we will continue to do so as part of our industrial strategy.
Oral Answers to Questions
Lord Willetts Excerpts(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Karen Lumley (Redditch) (Con)
3. What assessment he has made of the effect of the business Olympics on exports and inward investment.
The Minister for Universities and Science (Mr David Willetts)
Over 4,000 business leaders and others attended 17 business summits at the British business embassy at Lancaster House. Every one was attended by a BIS Minister. I was very pleased to attend five, which were excellent events. We expect them to generate £1 billion of additional sales by UK companies, and £6 billion of direct investment over the next four years.
Karen Lumley
Wild Automotive, a great company in Redditch, has increased export sales by 73% over the past two years. What more help can this company and others in Worcestershire access to continue this great record of growth?
Mr Willetts
I congratulate that company on its performance. UK Trade & Investment is running export week in the next week, with more than 100 events throughout the UK, which is a great opportunity for businesses to get further advice about exporting. The automotive sector, of which the company in my hon. Friend’s constituency is an example, is now running its first balance of payments surplus since 1975.
Nic Dakin (Scunthorpe) (Lab)
4. What estimate he has made of the proportion of loans for students starting courses in 2012 with fees of £9,000 a year which will not be fully repaid.
The Minister for Universities and Science (Mr David Willetts)
We estimate that around half of all borrowers will have some part of their loan written off, as repayments are contingent on their future income. Our reforms are more progressive than the previous system, because people start to repay only once they are earning over £21,000. The new system helps reduce the deficit and is affordable and sustainable for the Government, while offering protection to those who may not go on to high paid employment.
Mr Willetts
There is no such gap. That report was an eccentric interpretation of the evidence. Our figures have been checked by the independent Office for Budget Responsibility, and the independent Institute for Fiscal Studies has produced its own estimates and reached conclusions that are very similar to ours.
Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)
Well, that eccentric report was produced by the highly respected Higher Education Policy Institute, and one of its arguments is based on the findings of the self-same Institute for Fiscal Studies, even though the Minister has just said that it underestimates the figure. The Government originally assumed 32% non-payment, but the IFS, as quoted in the report he dismisses as an eccentricity, cites 37%, and today he has said it will be up to 50%. That is where the £1 billion figure comes from. How will the Government explain that away?
Mr Willetts
Perhaps it would help my right hon. Friend if I explained that there are two different measures. The answer I gave the hon. Member for Scunthorpe (Nic Dakin) was that we think about half of all borrowers will have some part of their loan written off. There is a separate calculation for the value of the loans that will be written off, which we estimate will be about 30%, so both figures are correct. Nothing can be completely certain in this life, and repayment essentially depends on future earnings, but what is certain is that starting to repay only when one is earning more than £21,000 is a jolly sight better than repaying when one is earning more than £15,000, which was the system left by the Labour party.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
It is clear that the maths supporting the Government’s higher education funding policy is staring to unravel. The Office for Budget Responsibility has shown that tuition fees count towards inflation and will add 0.2 percentage points to the consumer prices index in the fourth quarter of this year, so the impact of the Government’s policies not only will be felt by students, but will have wider implications. Because CPI is the measure by which public pensions and benefits are increased annually, the Government’s welfare bill and civil service pensions will be affected at next year’s annual uprating. Therefore, does the Minister accept that his policies are disastrous not only for students, but for Government finances in general, and what conversations is he having with other Departments about mitigating that?
Mr Willetts
Let us be absolutely clear about what our reforms will do. They will save money for the Exchequer, but at the same time they will ensure that universities have, if anything, an increase in the cash they receive for teaching, and graduates will repay only when they are earning more than £21,000 a year. That is a fair deal for all the partners in the higher education system.
Charlie Elphicke (Dover) (Con)
Is not it the case that costs would be lower if the cost of courses was lower, particularly for the Open university, which was not always supported by the previous Government as fully as it should have been, and for further education that is skills-based? I thank Ministers, in particular, for their recent intervention in Kent college to secure skills-based education in Kent.
Mr Willetts
My hon. Friend is absolutely right. There is, of course, a range of options for access to higher education, and the Open university is an important part of them.
Stephen Mosley (City of Chester) (Con)
5. What support his Department has provided to university and business research partnerships in the last 12 months.
The Minister for Universities and Science (Mr David Willetts)
We want to see the best possible links between universities and businesses. The Chancellor recently tripled public investment in our UK research partnership investment fund, which promotes investment in shared research and development facilities on our campuses. Winning bids must include sponsorship from businesses or charities, so the scheme will deliver more than £1 billion of new R and D investment in total.
Stephen Mosley
I welcome my right hon. Friend’s response and highlight for him the success we are achieving in Chester with the Riverside innovation centre and work between businesses and the university of Chester. May I ask him to visit the innovation centre in the near future?
Mr Willetts
I have happy memories of visiting the university of Chester when Opposition spokesman and so will certainly try to visit as a Minister. My hon. Friend describes just one example of the reason why the World Economic Forum recently placed the UK second out of 144 countries for the quality of university and business collaboration in R and D.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Minister agree that there is so much in Lord Heseltine’s review, “No Stone Unturned”, that it shines a light not only on the eyes we see under the rock, but on the policies that affect the relationship between universities and the business and research communities and the entrepreneurship we need in all our regions to make this country economically vibrant?
Mr Willetts
Lord Heseltine’s report was excellent. The message that we need to see growth across the entire country is absolutely correct. It is also correct that universities across the country are crucial drivers of local economic growth, and that is one of the many reasons we are supporting them.
Duncan Hames (Chippenham) (LD)
In past years, Higher Education Funding Council for England letters have never done much for Wiltshire. Will the Minister be flexible in his approach to student number controls on universities seeking to co-locate with high-tech businesses, and so bring university education to our fine county?
Mr Willetts
That is an ingenious piece of local lobbying on which I congratulate my hon. Friend. I will certainly bear that in mind. We are continuing to reduce the number controls that we inherited from the previous Government; we have been able to achieve that successfully through our reforms. Now, one in three students is choosing a university without number controls, and we want that to go further.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
9. What steps his Department is taking to encourage participants in further and higher education to gain experience and training in business and industry.
The Minister for Universities and Science (Mr David Willetts)
We are supporting students to gain vital work experience by growing high-quality apprenticeships across the economy. We are also supporting the roll-out of student enterprise societies in every university to support the creation of student internship and graduate job opportunities with local enterprises.
Gordon Henderson
In my constituency, the human resources department of our local Morrisons regional distribution centre is working closely with Sittingbourne community college to ensure that school leavers have a better understanding of what employers expect from potential employees. Will the Government encourage human resources departments based in the head offices of large companies to liaise in a similar way with universities, to better equip students for the workplace?
Mr Willetts
That is an excellent and imaginative idea. I think some of that happens already, but we are actively promoting such initiatives in a series of round tables that the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk (Matthew Hancock), will be leading. Universities are now obliged to put on their websites key information about graduate employment outcomes from their courses, which will encourage initiatives such as that described by my hon. Friend.
Alex Cunningham (Stockton North) (Lab)
10. What discussions he has had with the Secretary of State for Energy and Climate Change on investment in green manufacturing jobs.
George Freeman (Mid Norfolk) (Con)
Next week is global entrepreneurship week. May I welcome the work that the Government are doing to support entrepreneurship, particularly their support for the national student entrepreneurship union, for silicon valley coming to the UK next week and for the launch of the important Cambridge cluster portal, which highlights that in Cambridge there are now 1,400 technology companies employing 53,000 people and more than 10 billion-dollar companies? Does that not suggest that our policy for an innovation economy is working?
The Minister for Universities and Science (Mr David Willetts)
That is an excellent example of the success of our innovation policies. Like other BIS Ministers, I will be welcoming visitors from silicon valley, who I am sure will be coming to England and Cambridge to see how it is done.
Mrs Linda Riordan (Halifax) (Lab/Co-op)
T5. Every pound invested in the construction industry generates nearly three in economic activity. What support is being given to construction companies, such as Marshalls in Halifax, to get them building, boost the construction industry and protect and create jobs now—before it is too late for these companies?
Neil Carmichael (Stroud) (Con)
I welcome the good news that the British Antarctic Survey is to continue as an independent organisation. May I underline the need to ensure that it remains on a firm and sustainable footing, and also add my thanks to the Minister for helping in that matter?
Mr Willetts
My hon. Friend is absolutely right. The decision by the Natural Environment Research Council to continue supporting the British Antarctic Survey has been widely welcomed. At the beginning of this year I had the opportunity to go to Rothera and the Antarctic and can personally confirm the excellence of the research that the British Antarctic Survey does.
Mark Durkan (Foyle) (SDLP)
Ministers tell us that they are well minded against capricious regulation, perverse taxation and over-interpretation of EU judgments. Will one of them therefore listen to the consortium of intermediate alcohol producers and exporters across the UK? They have profound concerns about the impact on their business of HMRC’s changes to notice 163, which go far beyond a one-off adjustment to a marginal tax rate.
Higher and Further Education
Lord Willetts Excerpts(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Universities and Science (Mr David Willetts)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“congratulates all those who have recently achieved their educational qualifications; notes the number of full-time higher education students in 2012 is expected to be higher than in any year under the previous administration; believes that the pupil premium, which is designed to raise the attainment of pupils from low-income households, represents a powerful mechanism for widening participation in higher education; welcomes the increased spending on widening participation in higher education, including the higher maintenance grants, the National Scholarship Programme and the extension of tuition loans to part-time students; further notes the Institute for Fiscal Studies’ recent finding that the new student finance system ‘is actually more progressive than its predecessor: the poorest 29 per cent of graduates will be better off under the new system’; supports the extra information provided to prospective students through the student finance tour and the Key Information Set; further supports the efforts being made to ensure the best possible match between students and institutions, with one-quarter of all undergraduate places removed from centralised number controls; and congratulates the Government for working with employers to deliver an unprecedented increase in apprenticeships, with 800,000 new starts since September 2010.”
I welcome this opportunity to debate our reforms to higher and further education. It is the right time to have this debate, as hundreds of thousands of students are starting at university. We congratulate them on their achievement and wish them well at university. We also welcome this opportunity to set out our policies. I will describe our approach to higher education and my excellent new colleague, the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk (Matthew Hancock), will set out our approach to training and further education.
Mr Willetts
In a moment.
Of course, it is also right to scrutinise the Opposition’s policies, as set out in the motion. I will turn to the previous Minister for universities, the right hon. Member for Tottenham (Mr Lammy), in a moment. I hope he will accept that under the inevitable partisanship of these exchanges, we should remind ourselves that all three political parties, faced with the dilemma of how to finance higher education in the future, have concluded that the right way forward is to have no up-front payments by students, but instead to have a graduate repayment scheme, paid for through pay-as-you-earn and incorporating the best features of a graduate income tax. All three parties, when faced with the responsibilities of Government, have reached the same decision.
Mr Willetts
We have published our White Paper and have set out our proposals in several consultation documents. We are implementing those proposals step by step.
Shabana Mahmood
The Minister has tried to defend his £9k policy, but has avoided saying anything about the 80% cut to teaching grant funding, which has necessitated the trebling of tuition fees to £9,000 a year. What does he have to say about that?
Mr Willetts
That leads me on neatly to setting out what our reforms are accomplishing. The first thing they are accomplishing—[Interruption.] The hon. Member for Birmingham, Ladywood (Shabana Mahmood) will have to be patient, because I am going to set out the figures for her. Our reforms ensure that students will continue to get well-funded higher education, while at the same time—we make no apology for this—saving money for the Exchequer, because of the fiscal crisis that we inherited from the previous Government. The total amount of cash going to universities to pay for the teaching of students is £7.2 billion for 2011-12, £7.4 billion for 2012-13 and £7.9 billion for 2013-14. We are increasing the amount of cash available to finance the education of university students, while significantly reducing the Exchequer contribution.
Contrary to what the Opposition spokesman said, we are maintaining a partnership between Exchequer funding and private funding. The latest OECD figures, which were published yesterday in its excellent education handbook, estimate that approximately 40% of the costs of educating students will be met directly by the Exchequer. The other 60% does indeed come not from students, but from graduates when they can afford to pay it back. That is a sensible way of financing higher education in an age of austerity.
As well as providing more cash for universities while saving money for the Exchequer, our second achievement is increasing the choice and flexibility in the system by liberalising the controls over numbers that we inherited. We have started that this year with our liberalisation for AAB students. We estimate that approximately one in four students will benefit from the freedom of choosing a university without any of the old corporatist controls on the total number of places at individual universities that we inherited. We are proud to be going further next year by including ABB students, meaning that one in three students will enjoy those freedoms.
Mr Willetts
I want to make some progress, but I will of course give way to the Opposition spokesman for a second time.
Shabana Mahmood
I thank the Minister for giving way a second time. Will he remind the House why he had to introduce his core and margin model? Does he remember telling the House on many occasions that £9k fees would be the exception, not the norm?
Mr Willetts
I did not recognise what the hon. Lady said about fees of £7,500. I have explained to the House many times the basis of the calculations. We introduced the policy to bring more diversity into the system. There are local further education colleges across the country that, for the first time, will be able to offer higher education, financed out of our core and margin policy, which is to be welcomed.
We have therefore increased choice and flexibility. We have also transformed the amount of information that is available for prospective students, which we believe will drive up standards in universities as prospective students think about what contact hours they will have, what the class sizes will be, how universities score on the national students survey and, crucially, how universities score on employment outcomes for graduates.
Indeed, this morning, I joined Which? at a London comprehensive for the launch of its excellent new website, which offers far more information to prospective students than ever before. It was a great moment. It was also a pleasure to be joined by the president of the National Union of Students. The NUS is working with Which? to provide better consumer information for prospective students.
Mr Andrew Smith (Oxford East) (Lab)
If the information that the Minister is giving out is so good, why are withdrawals from the application process up by 16%? Does that not show that the more information people get about the costs that the Government have imposed, the more they are put off?
Mr Willetts
No. I think that we have succeeded in getting across to prospective students the important message that they do not have to pay up front to go to university. I hope that all Members from all parts of the House, regardless of their views on the fees, will agree that we should all communicate the message that no student pays up front and that they pay back only as graduates. I pay tribute to the enormous efforts of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) in that regard.
Emily Thornberry (Islington South and Finsbury) (Lab)
I wonder whether the right hon. Gentleman will help me communicate a message to one of my constituents, who is here legally as an overseas student. He is unable to go into the third year at London Metropolitan university because, for some reason, he is no longer allowed to go there. He wishes to pay the fees and wants to complete his degree. Will the right hon. Gentleman help me convey to him why his education has been so abruptly and unfairly stopped?
Mr Willetts
Several points have been made about London Met, so let me explain the latest position to the House. I fully understand that there are genuine overseas students who are here legitimately and who need as much assurance as we can offer them about their ability to pursue their studies. That is why we set up a taskforce on the day that the UK Border Agency took its operational decision. The taskforce has met several times. It is led by the head of the Higher Education Funding Council for England and other bodies are involved. Next Monday, as a result of the efforts of the task force, there will be a mini clearing procedure. We are collecting offers from universities around London and elsewhere of places on particular courses, which will be available to overseas students at London Met. I will be happy to keep the House updated, in whatever way is suitable, as the taskforce makes progress in ensuring a fair deal for overseas students.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Why did the Department for Business, Innovation and Skills not stand up to the Home Office and the UK Border Agency, and not stand up for British universities and their reputation around the world, by not allowing this crazy decision to go ahead, which is doing untold damage to this world-class industry?
Mr Willetts
It was an operational decision by the UK Border Agency, for whom the matter is very clear. Highly trusted status, which is enjoyed by individual universities, is highly prized and brings heavy responsibilities. UKBA’s assessment, independently made, was that London Met was not meeting the responsibilities that it needed to in order to have highly trusted status. In those circumstances, it was unable to advise Ministers that the situation should be allowed to continue. That is the background to the decision, but we are focusing on ensuring the best possible support for legitimate overseas students as constructively as we can.
Simon Hughes
Does the Minister agree that we need to persuade everybody to get the message across not only that there are no fees to be paid up front or while at university, but that there are still places available not just for first-time, 18-year-old students but for more mature students? We should also encourage people to consider university not as the only option in the weeks ahead but as one option.
Mr Willetts
My right hon. Friend is absolutely right, and that leads me to my next point.
Another feature of our reforms is that we have done everything to encourage students from the widest possible range of backgrounds to continue to apply for university. I remind the House of the figures, which the Opposition spokesman carefully ignored in her lengthy speech. The percentage of applications to university by young people has indeed fallen—I accept that—to 31.6% from 32.6% last year. Last year’s rate was the highest on record, and this year’s is the second-highest on record. It is a higher rate of university applications than in any year when the Labour party was in government. I believe that that is because we have successfully communicated to young people that they will not have to pay up front to go to university. Of course, we are also increasing maintenance support for students at university this year. The maintenance grant and support for bursaries are going up. That is why we still have record rates of application to university, and we should celebrate and remember that fact.
Steve Brine
Given that the Minister inherited a commitment to cutting £600 million from the budget, what would the outcome have been if he had not taken the decision to base university financing on a system of student fees and loans? Presumably it would have been a dramatic drop in numbers and my having to say to thousands of my constituents, “Sorry, university’s not for you.”
Mr Willetts
We inherited from the previous Government a simple line in the 2009 autumn statement announcing £600 million of cuts in higher education, science and research. Absolutely no work had been done about where the cuts should be and how they should be delivered, but they would have meant either falling student numbers or less support for science and research. We have been able to offer cash protection in a ring-fenced science budget, and as I showed the House earlier this evening, there has been an increase in the total funding available for teaching in our universities. To achieve that when we are facing the severe financial problems that we inherited from the previous Government is evidence of our commitment to opportunities for young people and to universities and research.
That is exactly what the outside experts say. For example, I remind the Opposition spokesman of the assessment by the Institute for Fiscal Studies. It stated in June:
“The HE funding regime to be introduced in England in September 2012 will be substantially more progressive than the current system. Roughly the poorest 30% of graduates, in terms of lifetime earnings, will be better off…than under the current system…Universities will also be better off, on average, and the taxpayer will save around £2,500 per graduate.”
Only yesterday I met the head of the education division of the OECD, who was here to launch “Education at a Glance”, its annual publication. He described our system of repaying loans as
“the most advanced system in the OECD”,
and added that
“probably no system does it better.”
That was what the impartial head of the OECD’s education division said yesterday.
Mr Willetts
I hope that the hon. Gentleman will agree that he should endorse the assessments of the IFS and OECD.
Tristram Hunt
While the Minister was having that conversation, did the OECD back the Government’s strategy of an 80% cut in the teaching budget at a time when every other major nation is investing in education and higher education and thinking about those industries as part of the future rather than cutting them? We are in the same bracket as Romania.
Mr Willetts
The OECD actually believes that our proposals are a way of continuing to ensure that a good number of people go to university even when we are having to save Exchequer funding. It believes that other countries can learn from our model.
I have set out our policies, and I should like to turn to the Labour party’s policies, about which the hon. Member for Birmingham, Ladywood said surprisingly little in her lengthy speech. We know from the motion that Labour’s policy is £6,000 fees. There is a long and unhappy history to Labour’s higher education policy. I will not take her through the whole of it, although I am tempted. I will jump straight to where we are at present, as stated in the motion and in the longest single statement of Labour’s policy that we have found, the speech by the shadow Secretary of State on 2 December. His explanation of that policy took up a tiny fragment of the speech, a few lines. It was the type of fragment of text that academics in our universities love to pore over. He said:
“I’ll explain how this works: reducing the maximum level of fees to £6,000 while compensating universities for the difference costs £1.1 billion.”
That was his starting point. Well, the Department’s official costings show that his policy of bringing fees down to £6,000 would cost £2 billion. That £2 billion is currently going to our universities to pay for the education of students and for outreach, bursaries and access programmes that we thought Labour supported. He would take away that £2 billion of funding for higher education. He claims that he would miraculously be able to finance that, although admittedly he would only have £1.1 billion so he is £900 million short already.
Let us go through how the shadow Secretary of State claims he would plug that gap. He stated:
“£350 million will come from automatic savings from reducing the cap to £6,000 because it will mean some associated expenditure, such as on as fee waivers, will no longer be required”.
The trick is in the words “such as”, because it is not just fee waivers. Let us be clear about what that “associated expenditure” is. It is programmes to assist with student retention; outreach programmes whereby universities go to local schools and encourage students to apply to university; and bursary programmes financed out of the higher fees to offer our students increased financial support. I have a simple question for the hon. Member for Birmingham, Ladywood. I have already permitted her to intervene twice, and I will do so again. Can she offer a guarantee that no student at university would be worse off as a result of the changes that she would make to save that £350 million?
Shabana Mahmood
I am very happy to intervene on the Minister, and I can absolutely guarantee that. What he is missing in his desperate attempt to attack the much more progressive £6,000 fee proposal is that it would automatically obviate the need for quite so many fee waivers and bursaries created by his more expensive system of tuition fees.
Mr Willetts
That is a very confusing intervention. First, the hon. Lady said that she could guarantee that nobody would be worse off, then she said that Labour’s policy would obviate the need for bursaries. Let us be absolutely clear that no student will pay fees up front. They will be paid by graduates. Bursaries matter because they are cash for students now. Is she pledging that the extra money from fees above £6,000, some of which finances bursary programmes and extra support for students, would continue after fees were reduced to £6,000? Yes or no? Would all bursaries be preserved?
Shabana Mahmood
The position of bursaries would be unaffected under the £6,000 proposal. We are saying that the additional cost incurred by moving to £9,000 tuition fees would be brought down. We would not need quite so much money, because people would not have the same level of debt.
Mr Willetts
We are talking about future graduate debt, and the House is noticing that the hon. Lady is wriggling on the issue. We are saying that the extra funding helps to pay out cash for students at university through higher bursaries that are paid for out of revenues from higher fees. Students will have observed the failure of the Labour party to commit to maintaining that money.
Let us look at the next item that will supposedly meet those losses. We have established that the cost is not £1.1 billion but £2 billion, and that £330 million of that already comes from a set of measures that students will dislike. The shadow Secretary of State went on:
“£300 million comes from cancelling the Government’s planned cut to the corporation tax on the banks”.
That is the next extraordinary device that he thinks will help him save that money. Let us be clear: this Government have introduced a bank levy to raise at least £2.5 billion a year. That was set out by the Chancellor in the 2012 Budget, to take account of the benefit to the banking system from additional reductions in corporation tax on banks. In other words, we are already raising this money; we are already collecting extra money from the banks through the banking levy which is to offset the effect of lower corporation tax. There is no reduction in the taxation on banks that the Labour party could use to pay for this policy; the banking levy is extracting that funding.
If any Member of this House were remorseless in ensuring that every pound of revenue was extracted from our banks to contribute to education and other purposes, it would be my right hon. Friend the Secretary of State. We are already extracting a large amount of money from the banks, and it is evidence of the bankruptcy of the Labour party’s thinking that when faced with any problem or public expenditure challenge it keeps claiming that it can meet the cost by taxing the banks. The evidence shows that the funding is simply not available to pay for it.
Reversing the VAT increase—£13.5 billion—is supposed to be met by taxing the banks. The Opposition have called for more capital spending—£5.9 billion—which will supposedly be met by taxing the banks. Reversing the child benefit savings of £2.5 billion will apparently be met by taxing the banks. Reversing tax credit savings—£5.5 billion—will be met by taxing the banks. They want more regional growth funding, and now we learn their plans for universities as well. There is simply no way in which taxing the banks will solve the gaping black hole in the Opposition’s financial proposals, and we will not let them get away with it.
Mr Willetts
Let me continue to make progress.
The final item, and the biggest on the shadow Secretary of State’s list, is in some ways the most curious. Some £500 million is to come from the top 10% of graduates. I quote the shadow Secretary of State, who wishes to ask
“graduates earning over £65,000 in each year of their working life—to pay more through a combination of a higher interest rate…and to continue to pay for an additional two years.”
That is £65,000 in each year of their working life. The shadow Secretary of State is possibly the only person in the Chamber who could have imagined earning £60,000 a year in each year of his working life. The idea that a levy on people earning £60,000 in each year of their working life could raise £500 million is absolutely incomprehensible. Does the Labour party perhaps mean that when someone’s earnings eventually reach £65,000, they will be charged a higher rate or be charged retrospectively? Again, however, there is no way in which such a measure could raise anything like £500 million, not least because in a free and voluntary system in which we have—quite correctly—protected the right of people to make early repayments of their loan, people whose earnings are heading that way will simply repay their loans. The idea that they will find themselves trapped in penal repayment terms when they are earning over £65,000 a year is complete fantasy. There is no £500 million.
I am, incidentally, offering the hon. Member for Birmingham, Ladywood a free briefing on her policy, and I hope she appreciates how helpful it is. I am trying to explain it to her. In addition, if she were to move to anything like the commercial terms envisaged by the Opposition, consumer credit legislation would come into force and she would find a whole host of new regulatory requirements placed on her scheme that it would not be able to meet because of the design of the scheme that we inherited from the previous Government. It would simply become unworkable. There is no £500 million to finance the Opposition’s proposal, and they have no way of financing fees of £6,000.
Mr Thomas
Perhaps I can bring the Minister back to the Government’s own policy—or lack of it. Perhaps he will explain why it is fair for a student and their family to be able to probe the offer from a mainstream university using freedom of information legislation, but not that of a commercial, for-profit university.
Mr Willetts
It has come to a pretty pass when a loyal Opposition Back Bencher has to help those on the Front Bench by diverting attention from his party’s own policies, but that is what it has come to. The fact is that there is a black hole in the Opposition’s accounts, and we need to know whether they will cut £2 billion from resources that are now going to our universities. How are they are going to provide an extra £2 billion that is financed properly and honestly, and not by the slick accounting tricks used in the only attempt that they have so far made to explain their policy?
George Freeman
The Minister is famously well read, and I wonder whether he saw the comments made by Lord Mandelson in his paperback autobiography. He said that when he launched the Browne review in November 2009, he
“assumed, as the Treasury did, that the outcome would have to include a significant increase in tuition fees. I felt that they would certainly have to double.”
Is not the truth that dare not speak its name on the Opposition Front Bench that the Labour party would have doubled fees had it stayed in power?
Mr Willetts
I do recall that vivid and frank admission from the former Secretary of State.
The final irony of the Labour party’s proposals is that it is not at all clear what purpose they achieve. Let us be clear: there is nothing in those proposals for students who are currently at university; there are only risks. There are risks of having less money to pay for the student’s higher education, and, as we have seen, of less money for their bursaries. There seems to be no proposal to change the repayment terms of the scheme—9% on earnings above £21,000—and there is no reduction in the monthly repayments that graduates pay. There is, therefore, nothing in those proposals for people in their 20s or 30s; it will simply mean that they end their repayment period a bit earlier than they would otherwise have done. There is absolutely nothing for recent graduates.
Therefore, there is nothing for students, nothing for recent graduates because monthly repayments are not reduced, and there is no help for the poorest graduates, the one third who are better off under our scheme because we fully accept that they will not be able to repay the full amount under the current scheme. The Opposition managed to spend £2 billion that they do not have, with no help for students, no help for recent graduates, and no help for the poorest graduates. That is an extraordinary achievement.
I do not know which bit of the policy-making process produced this proposal, but the Opposition really need to do better. Just possibly, the Leader of the Opposition recognises that problem. In September last year he was asked on the “Andrew Marr show” about his policy, and about the status of the commitment to £6,000 and whether it was a policy that the Labour party would take into the next election. He said:
“The status is that it’s something that we would do now, that it’s something we’re committed to. But the manifesto’s three and a half years away. We'll announce the manifesto”.
It does not even look as if the Leader of the Opposition believes that that policy will ever make it into the Labour manifesto, and after what we have understood about it in today’s debate, I am not at all surprised.
Mr Clappison
I will later, if I have time. I think I have used up my extra minutes already, although I know that the right hon. Gentleman is very interested in this subject.
Although I disagree with OFFA in principle, I pay tribute to its outgoing head, Sir Martin Harris, who is a man of great academic distinction. That brings me to the question of his successor. As my hon. Friend the Member for Northampton South (Mr Binley) touched on, the Business, Innovation and Skills Committee expressed concerns that led it to withhold approval for his appointment. I share these concerns and, as a parliamentarian, take little pleasure in seeing a Select Committee’s view being completely ignored, but I wish Professor Ebdon well, will take a close interest in his work and will endeavour to help in any way I can. His recent interview with The Daily Telegraph, however, has attracted much comment. [Interruption.] I can see the Minister in a leaping position, as though he wants to leap into the debate. I will certainly give way, if he wishes intervene.
Mr Willetts
I look forward to continuing these exchanges in a variety of ways, but let me assure my hon. Friend that the most recent advice that I and my right hon. Friend the Secretary of State have sent to OFFA makes it clear to Les Ebdon, for whom I have the greatest respect, that he is to work within the framework of agreed Government policy, as set out in the higher education White Paper. We explicitly set out in our letter that he has a duty to protect the ultimate right of higher education institutions to select their own students. That right of universities to choose their own students was put into law by the previous Government—possibly by the very Committee that he sat on—and is one that we will continue to respect and protect.
Mr Clappison
That is like the small print of a contract. I have seen the advice to OFFA and what is said on its website. I do not know whether my right hon. Friend, through that intervention, sought to withdraw the injunction given to OFFA last year—the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) is looking very interested—that universities should focus more sharply on their outcomes, rather than simply on their inputs and activities in trying to generate applications. The universities were given the clear message that there had to be a sharper focus on targets. If my right hon. Friend the Minister is withdrawing that, I would be pleased to hear it. Otherwise, what he has said remains the case, as it always has been, including under the previous Labour Government—it has been put in the small print as a longstop.
Mr Clappison
That sharper focus was the clear message in the guidance. If my right hon. Friend is prepared to withdraw that, I will happily give way to him.
Mr Willetts
Let me try to set out the position—this goes back to my comments about the Opposition’s policies. We are talking about universities having perhaps £700 million of access spend, because of the extra revenues they have from higher fees. It is absolutely right to say to OFFA that we want it to scrutinise the effectiveness of all that spending. Some of it goes on summer schools and some of it goes on outreach visits to secondary schools, and there are also foundation-year programmes. Indeed, there is a whole range of things. When we are talking about expenditure on such a scale, it is rather important to ask OFFA to work out what works and what does not. That is a legitimate question when substantial sums of money are involved.
Mr Clappison
I would be grateful if my right hon. Friend could therefore clarify—perhaps I will leave it to the wind-up, because I am intervening in my own speech now—what else “outcomes” can mean other than admissions. That is the only way one can look at it in this context. My right hon. Friend’s advice was to go beyond applications and look at outcomes, and outcomes in this context can mean only admissions. If there is another meaning, I look forward to his clarifying that, but as I see it, the position is that OFFA’s original activities were given a “sharper focus”, as the advice to OFFA from the present Government puts it. I shall be taking a great interest in this matter.
I am also particularly interested in what Professor Ebdon has said—perhaps the Minister would care to deal with this in the wind-up as well—about what he describes as the “most selective universities” in terms of admissions. He said:
“It would be wrong to underestimate the challenges they face.”
I think we should praise and celebrate our most selective universities, including Oxford and Cambridge, not seek to undermine them. My frame of reference is the fact that they are a great national asset. They are not doing anything wrong. If Ministers and Professor Les Ebdon want something to look at, they should perhaps look at those universities that have an extremely high drop-out rate—not Oxford and Cambridge, or the other selective universities—which is such a waste of public money and resources.
I hope that the Minister will be able to convince me in his winding-up speech and answer the concerns that have been raised. At the moment, I feel very much as though I am not helping to build the big society—which is what I want to do—but recreating the Soviet Union, because that is what this apparatus reminds me of.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
My hon. Friend the Member for Sheffield Central (Paul Blomfield) is spot-on about the effect of such high tuition fees on those wanting to apply for postgraduate courses. Like him, I want to focus on one particular issue, which is clearly linked to the Government’s plans for higher education and their policy of £9,000 tuition fees, but which has not been given such a high profile in the debate so far.
As others have mentioned, Ministers wanted students to consider degrees costing less than £9,000, to reduce the Treasury’s exposure to student debt. What has not been highlighted in the debate is Ministers’ plan significantly to increase the role of commercial, for-profit universities owned by private shareholders to help to achieve that objective. They have significantly increased the number of courses run by such institutions for which students can secure a student loan.
I should say that there are already a large number of students studying and doing well at private universities in the UK. However, it is far from clear that Ministers have grasped the scale of risk involved in allowing an even bigger expansion of access to student loans for commercial universities without proper safeguards. In the US, the for-profit higher education world has been rocked by a series of scandals involving very high drop-out rates, very low degree completion rates and aggressive recruitment practices. Indeed, according to a recent American Senate investigation, in the three previous years almost 2 million students had withdrawn from for-profit institutions without completing a degree but with significant personal debt. One such institution had a drop-out rate of 84%.
I accept that Ministers have said that some safeguards are needed as the commercial, for-profit part of the universities sector grows. It would be helpful if the Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock), whom I congratulate on his appointment, set out in his response a little more detail about the Department’s plans.
For-profit commercial universities are still much less well regulated than mainstream universities. Surely Government Members would want the marketplace, as they describe it, for university education at least to be on a fair basis. Surely all for-profit companies offering a university education that want to recruit students who can access publicly backed loans should be subject to the same information and publication requirements as public universities. Those requirements should include student data and financial information and, as I made clear in my intervention on the Minister—uncharacteristically, he resorted to blather and ducked the question—be subject to freedom of information legislation.
When he replies to the debate, I encourage the Minister not to follow the example of his right hon. Friend the Minister for Universities and Science but to answer the question: when will Ministers bring forward plans to require commercial, for-profit universities to be subject to freedom of information legislation? When will they be required to provide the same level of data and information as mainstream universities so that they can be held to account in the same way?
Mr Willetts
Briefly, we are using the designation power—the power to designate courses and institutions—much more actively than the previous Government. That will ensure both the financial strength and the quality of provision in courses at alternative providers. There are still differences in the regulatory regime and it cuts both ways—FOI legislation cuts one way, equalities cuts the other, but that is the power we are using.
Mr Thomas
I say gently to the Minister that it is interesting that he and his colleagues in the Treasury are examining whether commercial, for-profit universities should be exempt from VAT in order to create a level playing field, but other sensible regulations, such as the requirement to be answerable to FOI legislation, as mainstream universities are, do not apply. Our collective experience of banking regulation and its failings, about which hon. Members across the House have uncomfortable memories, ought to encourage Ministers to be wary of market failure. As I have said, surely commercial universities that want exemptions should be properly held to account.
In her excellent opening speech, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) set out clearly how this policy of higher tuition fees exemplifies the Government’s failures in a series of other areas. Our motion outlines a clear, sensible alternative, and on that basis, I commend it to the House.
Mr Gordon Marsden (Blackpool South) (Lab)
I begin by commending all speakers for the Opposition. My right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) was forensic on debt, and my right hon. Friend the Member for Tottenham (Mr Lammy) was impassioned about participation. My hon. Friend the Member for West Bromwich West (Mr Bailey) was sharp on upskilling as was my hon. Friend the Member for North West Durham (Pat Glass) when she spoke about the chaos in the FE sector. My hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) spoke about teaching, my hon. Friend the Member for Sheffield Central (Paul Blomfield) about social mobility, and my hon. Friend the Member for Harrow West (Mr Thomas) about the problems of private providers.
We move from one fee fiasco in higher education to another in further education. In her opening remarks, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) spelt out the uncertain future that faces the nearly 400,000 adult learners affected by the proposals. That situation came about as a direct result of the blood offering made by Ministers from the Department for Business, Innovation and Skills to the Chancellor’s cuts in late 2010. As if appalled by the implications of what they had done, they then sat on the issue and dithered for over a year before commissioning any surveys or discussing its practical consequences with stakeholders. Those consequences are now putting huge pressures on the FE sector.
FE colleges, which are key drivers of social mobility and hubs within our communities, are being hit left, right and centre by Government policy. First they were saddled with the 25% cut in resource grants, then the abolition of the education maintenance allowance put a strain on their budgets and, for the first time in many years, they have seen a fall in the number of enrolments of 16-to-18 years olds. They are now confronted with an FE loans policy that operates on a base assumption that student numbers will drop by 20%. In fact, the Department expects as many as 45% of learners—up to 150,000 people based on current numbers—to drop out, and that will hit learners old and young alike as the viability of college courses is affected.
The system is inevitably more complex than HE loans because of the varying start dates, course durations and the costs of FE courses, and no central administration similar to that of UCAS has been entrusted to the Student Loans Company. I say no more. Many hon. Members bare the casework scars from that organisation, and there are no pilots in place to trial the new system.
Mr Marsden
You have not. With their ability to offer a second chance, FE colleges are at the vanguard of promoting social mobility and loans could be a huge barrier to that. Four thousand pounds is a huge amount of money during the recession and could be a major deterrent for learners, restricting the social mobility that I thought the Business Secretary was keen to promote. He should not just take my word for that, but should listen to his party’s immensely respected former spokeswoman on education in the Lords, Baroness Sharp. In May this year she said:
“I cannot understand why we, as a government, why on earth we are pushing forward with loans for level 3…I really think that if we are concerned about social mobility, it’s very important that we try to overturn it.”
She speaks for women, with whom level 3 FE courses are popular. The Departments statistics show that women make up roughly two thirds of the cohort who will be hit by FE loans. For many women—those doing low-paid jobs or juggling family and caring commitments—a £4,000 a year loan is not a realistic proposition.
My discussions with women learners around the country reminded me of the outlook of many of my women students when I was an Open university tutor. They wanted to broaden their horizons and welcomed what their completed qualifications could offer them. However, none felt they would be able to do those things under a loans system. The Government, and not least the Minister, have told us that we should forgo Government activity in favour of nudge theory. The jury may be out on the latest intellectual fad, but Ministers need to be reminded that people can be nudged away from things as well as towards them.
HE access courses are a popular route for female learners, so I am glad that, after a long campaign, the former Minister for Further Education, Skills and Lifelong Learning announced a series of concessions before the summer recess. That was a welcome first step, but his successor needs to ensure that those commitments are implemented rapidly and effectively. Even so, Million+ warns us in the briefing for today’s debate that the net result of the overall changes will, in the long term, be fewer mature learners, and that progression by those who want to study later in life will be undermined.
However, the Government have not budged an inch on scrapping direct financial support for level 3 and above apprenticeships and forcing apprentices to take on individual loans. In responding to the FE consultation, the UK Commission for Employment and Skills specifically counselled the Government that not just large employers are concerned and lukewarm about the proposals, but adult apprentices themselves. UKCES gave the Government at best an amber light, and at worst a red light, and yet they press ahead. If huge numbers of adults drop out, the Government’s much-vaunted drive to increase apprenticeships, which is heavily dependent on increases in post-25 apprenticeships, will be in tatters. The numbers will simply fall off a cliff. That might blow a hole in the Government’s hubris, but more importantly, it will deny the life chances of tens of thousands of adult learners.
At the other end of the age spectrum, grants are offered for small and medium-sized enterprises to take on 16 to 24-year-olds, but they are moving at a snail’s pace. That is why the Opposition proposed earlier this year to expand the number of apprenticeships, by buddying up with large employers and expanding group training associations. In the meantime, local authorities, including many Labour local authorities, must pick up the slack as the Government stall and flail around. Councils such as Liverpool, Wakefield, Barking and Dagenham, Knowsley, Dudley, Oldham, and my council, Blackpool, work with local colleges and providers to place young people in quality apprenticeships.
Many young people are still unable to access some of the most competitive apprenticeships without the necessary pre-apprenticeship training. The Government’s fiascos—they first allowed and then curtailed short-term apprenticeships—have wasted precious months and years, as the Association of Employment and Learning Providers said in its September newsletter. Young learners in further education face a double-whammy. Those not in education, employment or training and those just above have not had the training and support to allow them to access apprenticeships, while those in the middle must compete with young people who have stronger academic grades.
On top of that, Department for Education Ministers have failed to fulfil their part of the FE bargain by dropping work experience from the schools curriculum, dropping independent advice and guidance, and by failing to help young people to climb the FE or apprenticeship ladders. They do not say that that is what they are doing; they simply abdicate their responsibility for providing frameworks to make those things happen.
The classic example is the Government’s response to Jason Holt’s excellent review on how small and medium-sized enterprises could be given more support and encouragement to take on young people. The Department’s response to his plea to them on careers advice and guidance was this:
“Whilst we welcome the specific suggestions made by Mr Holt …we believe it should be up to schools, together with local partners including employers, to determine how best to address this challenge”.
I am therefore not surprised that, in this week’s issue of Further Education Week, Mr Holt states:
“I am disappointed the Government has not taken more notice of my proposal…I had hoped they would require schools actively to promote apprenticeships and to put a stronger emphasis on equipping pupils with…skills…there is still no obvious structure in the school system to encourage young people to think of apprenticeships…The Government’s decision to hand the baton to already hard-pressed and financially constrained schools will result in little actually happening.”
When I chided him on this last week in Question Time, the Secretary of State said that he did not regard the hands-off approach at the Department for Education as the last word on active Government. The new Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock), has a golden opportunity. He is a Minister in the Department for Education as well as BIS. Will he take up the cause and address Jason Holt’s concerns? His predecessor would have done so.
At the same time, little or nothing has been done to respond to the pleas from business to get involved in such programmes—again, waffle but no action. This is a dithering Government. For all their talk of being joined-up, the chasms and conflicts between the Department for Education and BIS are widening. They have wasted the best part of two years, failing to use billions of pounds of public procurement to guarantee apprenticeships from companies bidding for large contracts.
While the Opposition have been working closely on policies to give young people a linked partnership of opportunities—from school days and college through to further education, including for older learners—the gap between the two Departments has become a chasm. While they want to erect barriers, we want to build bridges. As my right hon. Friend the Leader of the Opposition said this week, we need a skills system that does not leave us a country where the 50% who do not go to university feel completely left out. We plan to build that new agenda with schools, young people, businesses and trade unions working to fashion new vocational training systems. My right hon. Friend has said it all: while the Government dither, we are stepping forward. I commend the motion.
Oral Answers to Questions
Lord Willetts Excerpts(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Graham Jones (Hyndburn) (Lab)
5. What support his Department is providing to start-up businesses expanding in developing areas of industry.
The Minister for Universities and Science (Mr David Willetts)
We aim to make the UK the best place in the world to start and run a business. That is why we are reintroducing the Smart awards for innovative new businesses, creating 24 new enterprise zones and committing a further £200 million to enterprise capital funds.
Graham Jones
CN Creative in Accrington in my constituency is a growing company that designs and manufactures the best electronic cigarettes in the world. It is planning to move its entire production from China back to the UK, to my constituency, but the banks will not lend it the money it needs, which is preventing the move and jobs coming to Britain. Does the Minister realise how damaging it is to start-up companies when they cannot access credit?
Mr Willetts
We agree; it is very important that banks are encouraged to lend to successful businesses. That is what the coalition is doing. Incidentally, the old pessimism that manufacturing will always go east is clearly now being reversed. We are optimistic about the prospects of manufacturing in this country.
Justin Tomlinson (North Swindon) (Con)
Following today’s fantastic announcement of a further £267 million investment programme in the Honda plant in my constituency, what measures will the Minister take to help start-up businesses to take advantage of the potential opportunities in the supply chains of Honda and the UK automotive industry?
Mr Willetts
Immediately after these questions my right hon. Friend the Secretary of State is going to Swindon to join Honda in this very welcome announcement. The Department absolutely understands the importance of the supply chains behind these large companies. Of course, the commitment to the supply chain is one of the many reasons why Britain is moving up the competitiveness league table.
Steve Brine (Winchester) (Con)
7. What recent assessment he has made of the employment outcomes of graduates.
The Minister for Universities and Science (Mr David Willetts)
University remains a great route to a rewarding career: 90% of full-time, first degree leavers are in work or further study six months after graduating, and graduates earn on average £100,000 more over their working lives. We recognise the need to do all we can to help universities and businesses to prepare students for the labour market.
Steve Brine
The Minister might be interested to know that in 2010-11 the university of Winchester recorded that 96% of its full-time teacher training graduates had gone into teaching jobs, but is he satisfied that higher education institutions are doing enough to focus prospective students on the employment prospects they can expect if they choose to study and spend significant sums of money at their institutions?
Mr Willetts
I congratulate the university of Winchester on that excellent achievement. That is why this month we are introducing, for the first time, a requirement that universities release the information on the percentage of their leavers who are in work after six months, course by course, so that prospective students can assess their performance on that crucial measure.
Jonathan Ashworth (Leicester South) (Lab)
The Minister is well aware that going to university improves employability, but he will also be well aware that tuition fees are acting as a disincentive for many students. Specifically, I have been approached over the summer by Muslim students who are concerned about sharia-compliant financing for their tuition fees? I know that the Department is looking at this, so will he update us on progress towards achieving a model for those students?
Mr Willetts
The encouraging evidence from the UCAS application data is that people from poorer backgrounds are not being put off going to university. There is no evidence that changes in patterns of university applications are affecting poorer students in particular. I have been considering the issue of sharia-compliant student loans, and we continue to do so.
Jane Ellison (Battersea) (Con)
8. What steps he is taking to increase levels of employee ownership.
Heidi Alexander (Lewisham East) (Lab)
14. What recent discussions he has had with his ministerial colleagues on the UK Border Agency’s decision to revoke the licence held by London Metropolitan university to teach international students.
The Minister for Universities and Science (Mr David Willetts)
I am in regular contact with colleagues in the Home Office. The decision to revoke the licence was a matter for the UK Border Agency.
Our priority now is to ensure that the university’s legitimate overseas students are given the help and advice they need to continue their studies. To deliver this, I set up a taskforce within hours of UKBA’s decision, which has already started work.
Heidi Alexander
I am grateful to the Minister for his reply. He mentions the taskforce, but the direct experience of one of my constituents is that it is anything but useful. She went as far as saying that it told her nothing that could not be found on the UKBA website. What steps will the Minister take to ensure that the help and advice given by the taskforce really enable legitimate students to access alternative courses?
Mr Willetts
The crucial task in which the taskforce is now engaged is preparing a kind of mini-clearing system in which there will be firm information about places available at specific universities and on specific courses that would have been available for suitably qualified overseas students at London Met. I can tell the hon. Lady and the House that that matching process will open and start on 17 September. We also know that the UKBA will not send out any letters about their 60-day limit to apply to the overseas students affected until 1 October.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I have a registered interest.
I put it to Ministers that although enforcement is critical, the message that needs to go out from the Government is that Britain is open for business in higher education, and that we care greatly about it for students, universities and our economy. What message is being sent by this Department to ensure that the world knows that we welcome higher education students and are proud of our record?
Mr Willetts
I very much agree with the right hon. Gentleman, as do the Government. Of course Britain is open for business. That includes being open to attract students from around the world who have a legitimate entitlement to study here. There is no cap on the number of overseas students who can come to study in Britain. Through our Foreign Office posts around the world, we have re-emphasised that message in the light of the experience of London Met.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
The attitude of the Minister and his Government to the international reputation of the UK’s higher education sector and its importance to our economic growth is shockingly complacent. May I press the Minister on the legitimate international students at London Met who are partway through their studies? Will he guarantee that no such student will be financially worse off as a result of the licence revocation? If that is not possible, will he reconsider with his colleagues in the Home Office alternative routes by which legitimate international students may complete their studies at London Met?
Mr Willetts
I understand that one feature of the offers of places in the matching process that will be launched in 10 days’ time is that many of the universities will offer courses at the same or lower fees than the students would have experienced at London Met.
John Pugh (Southport) (LD)
15. What support his Department is providing to the port of Liverpool; and if he will make a statement.
Harriett Baldwin
The whole new ministerial team will already be aware that Malvern is the capital of cyber-valley owing to the cluster of private cyber-security firms that are located there, close to GCHQ. Will the Minister update me and the rest of the House on the steps that the Department is taking to encourage growth in that important sector, and will he visit Malvern?
The Minister for Universities and Science (Mr David Willetts)
My hon. Friend is absolutely right about the strength of the cyber-cluster in Malvern. Yesterday evening we held a major conference at the Foreign Office, at which I and colleagues briefed representatives of FTSE 100 companies on the threat to cyber-security, the practical steps that they could take to ensure it and the strength of the British cyber-security industry.
Mr Chuka Umunna (Streatham) (Lab)
May I first welcome the Secretary of State’s new team of minders to their positions on the Front Bench? I note that he is so irrepressible that he needs not one but three minders to keep him in check. His new minder of state, the hon. Member for Sevenoaks (Michael Fallon), told the Financial Times yesterday that he would
“make sure business feels it has a senior champion in the department.”
Does the Secretary of State not feel that he himself has been a sufficient champion of business across Government of late?
Andrew Selous (South West Bedfordshire) (Con)
T2. How much does the UK earn from overseas students, and what assessment has the Minister for Universities and Science made of the potential for further export growth from that sector?
Mr Willetts
We estimate that overseas students in higher education bring £8 billion to the British economy, which shows what a major export industry it is. We can be very proud of the success of our higher education sector, and that is why Britain has no limit on the number of suitably qualified overseas students who can come here to study.
Mr William Bain (Glasgow North East) (Lab)
T3. This morning the OECD predicted that the British economy will shrink by 0.7% this year. When will the Secretary of State get on and set up a proper British investment bank, and follow the example of institutions in Germany and Brazil that between them invested nearly £100 billion last year?
Roger Williams (Brecon and Radnorshire) (LD)
Business investment in research and development is absolutely essential for growth, and yet UK business invests less in R and D than our international competitors. What can the Department for Business, Innovation and Skills do with the Treasury to encourage more investment in R and D in our businesses?
Mr Willetts
The hon. Gentleman is absolutely right about the importance of R and D. We are improving the tax reliefs available to businesses, and especially to small businesses, when they invest in R and D to encourage them to do so.
Kevin Brennan (Cardiff West) (Lab)
The Secretary of State mentioned the importance of growth in his Department’s mission, and yet, as we have heard, the OECD has this morning revised its growth forecast for the UK economy from plus 0.5% to minus 0.7%. Does he not see the need to change course?
Paul Blomfield (Sheffield Central) (Lab)
I am pleased that the Minister of State has had the opportunity to spell out the importance of international students to the UK economy, and his Department has estimated that the contribution could double. I am sure that he will share my frustration at the way those prospects are being undermined by the Home Office. What is he going to do about it?
Mr Willetts
We completely understand the importance of the Home Office maintaining the integrity of our immigration controls, but BIS—and the whole Government—believe that legitimate students who have a visa entitlement to come and study in Britain should be welcome. There is no cap on those numbers and we are making every effort through UKTI and British embassies abroad to continue to communicate the message that Britain is a great place to come and study at our colleges and universities.
Andrew Stephenson (Pendle) (Con)
There has been a series of positive announcements from the aerospace industry in the last few months, especially from companies such as Rolls-Royce, which employs more than 1,000 people in my constituency. Will my right hon. Friend say more about what he is doing to support the aerospace sector?
Ann McKechin (Glasgow North) (Lab)
Further to the Minister of State’s comments about overseas students, can he explain why there has been such a substantial decrease in applications, given the consequent substantial impact that will have on the British economy?
Mr Willetts
The evidence from UCAS—admittedly it is imperfect—does not show a fall in overseas applications. Indeed, more students are either coming to Britain to study or remaining overseas and studying for British degrees. That adds up to more than 1 million people who want to come and study for British university qualifications. That is a fantastic effort, and we can increase that number.
Oral Answers to Questions
Lord Willetts Excerpts(12 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr David Hamilton (Midlothian) (Lab)
2. What recent assessment he has made of the effect on business confidence of the economy entering recession.
The Minister for Universities and Science (Mr David Willetts)
Business confidence has held up so far this year, and is well above its 2008-09 lows. The CBI business confidence index came in at plus 22 in April, one of its highest readings in the past five years.
Mr Hamilton
Does the Minister accept that consumer confidence is extremely important? If Beecroft’s fire-at-will measure is implemented, as proposed by some Members on the Government Benches, that confidence will sharply decline. I say that as someone who was unemployed for two and a half years; people cannot plan ahead or do anything, and it brings added jeopardy to families. This is therefore extremely important: if we want confidence, we must get rid of the Beecroft report.
Mr Willetts
It is very important to maintain confidence in the British economy, and people can take confidence from the fact that employment is up, and that inflation is down so their living standards are protected. They can take confidence from the fact that exports are up, and they can take confidence from the fact that public borrowing is down so interest rates are down. Those are the reasons why we are confident in the British economy.
Mr Philip Hollobone (Kettering) (Con)
May I tell the Minister that the chief executive of Northamptonshire chamber of commerce has said that
“the news the economy was in recession paints an “unduly pessimistic picture”
as far as Northamptonshire is concerned? Mr Griffiths says the news is contrary to what he is hearing from his members, and his local quarterly economic survey shows a far “more positive picture”. He believes that that gives a
“more accurate indication of the underlying trends in the economy.”
Mr Willetts
There are great examples of business success across Britain, in both small and large companies. The coalition is committed to ensuring that we deliver growth and prosperity in the future.
Mr Iain Wright (Hartlepool) (Lab)
Back in the real world, has the Minister seen this week’s report by the Institution of Mechanical Engineers, showing that more than half of manufacturers have no confidence in the Government and think the Government are performing badly, and only 14% think the Government are doing well? In the same week, the CBI said manufacturing output will fall sharply in the next quarter because of contracting demand, producing a double-dip recession made in Downing street. Does the Minister believe the manufacturers, who wish to engage with Government to create a long-term industrial strategy, or does he side with his Cabinet colleagues, who believe business should merely stop whingeing and work harder?
Mr Willetts
I agree with what the director general of the CBI said the other day. I thought he put it very well:
“We have always said that the path back to sustainable economic growth will be a long and difficult one, with many bumps along the way. To re-balance our economy towards exports and investment will take time and patience.”
We are absolutely committed to rebalancing towards exports and investment, and in my conversations with engineering businesses and others across the country it is clear they understand that that is exactly what the Government are doing.
Mr James Gray (North Wiltshire) (Con)
Will the Minister join me in congratulating businesses across North Wiltshire, who are reporting extremely good conditions? Honda has just announced a new line, the excellent automatic hand dryer I used a short time ago in a House of Commons lavatory was made by none other than Dyson of Malmesbury, and a number of enterprise awards have been given to firms in the constituency. The picture is actually not bad at all. Will the Minister congratulate those companies?
Mr Willetts
My hon. Friend is absolutely right. There is a spirit of innovation in our country of which we can be proud. It is one of the reasons that our exports to the emerging economies of India, China and Brazil—which are the most competitive and important economies of the future—are shooting up, even while, sadly, we are held back by the economic problems of the eurozone, brought on by membership of the euro, a policy advocated by the Labour party.
Mr John Spellar (Warley) (Lab)
3. What steps he is taking further to develop the motor and components industry.
Susan Elan Jones (Clwyd South) (Lab)
7. What recent assessment he has made of the Government’s relationship with the business community.
The Minister for Universities and Science (Mr David Willetts)
The Department has an honest, constructive and positive relationship with business based on the shared belief that enterprise and Government working together can get us out of recession—not more taxation, regulation and borrowing. Ministers also have one-to-one strategic relationships with key international companies.
Susan Elan Jones
I am grateful to the Minister for that answer. Will he tell us why he does not agree with the chair of GKN, Mr Mike Turner, who is calling for a more active “industrial strategy”? Why does he not listen to him? Surely Mr Turner knows something about business.
Mr Willetts
I have great respect for Mike Turner of GKN. We do believe in the importance of an active industrial strategy, and we have seen the fruits of our approach in the announcement only the other day of the new investment by General Motors. We have also seen it in the announcement of investment by GlaxoSmithKline. We are up for working with business to deliver the industrial strategy and that is what we are doing.
Miss Anne McIntosh (Thirsk and Malton) (Con)
May I inform my right hon. Friend that relations with business in rural north Yorkshire are excellent but could always be improved? In particular, what can we do to promote the local enterprise partnership in rural north Yorkshire, east Yorkshire and York?
Mr Willetts
I am sure that there is always more we can do to promote LEPs, but they are already playing a crucial role in the allocation of the regional growth fund. I very much look forward to visiting Norfolk later today when I will have the opportunity of announcing further investment in that important county.
Mr John Denham (Southampton, Itchen) (Lab)
In the time that Ministers in this Government had dozens of meetings with Google, one of the few British IT companies to achieve global status, Autonomy, has been taken over and today tragically destroyed. May I suggest to Ministers that instead of spending so much time cosying up to American giants that just want to protect their monopolies, they should talk to people such as Mike Lynch, the founder of Autonomy, to understand why it is so difficult for British innovative companies to get the long-term finance on their own account that they need to become global leaders?
Mr Willetts
Let us make it absolutely clear. My fellow Ministers and I talk on an even and equitable basis with Autonomy and Mike Lynch, of course, and with HP and Google. Indeed, we have set up a council to plan our strategy for e-infrastructure and high-performance computing in which their advice is greatly valued. Yes, it is very important that we invest in high-technology companies, but I cannot believe that a former Secretary of State is actually saying that we should have direct controls to stop a company such as Autonomy being taken over.
Duncan Hames (Chippenham) (LD)
8. What recent assessment he has made of the employment circumstances of apprentices on completion of their placement.
Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)
11. When he last met representatives of the Russell group; and what matters were discussed.
The Minister for Universities and Science (Mr David Willetts)
I met vice-chancellors from the Russell group on 8 March at an event at Nottingham university. We discussed university access, research and international issues.
Mr Kennedy
I thank the Minister for that reply. On access, particularly for international students, he must be aware of how loudly alarm bells are now ringing in the Russell group and the tertiary education sector right across the UK because of the plummeting number of applications from international students as a result of the Home Office’s net migration targets. As this is worth nearly £8 billion a year to UK plc, can he not put pressure on his Home Office colleagues to see sense?
Mr Willetts
The latest evidence from UCAS shows that applications to British universities from outside the EU are going up, but it is absolutely right that we should back our very successful higher education sector. It is not a business, but it does have a lot of exports and the 400,000 students who come here from abroad to study can be regarded as an export success. That is why there is no limit on the number of genuine students who can come to the UK to study. There is no cap on their numbers.
Jonathan Ashworth (Leicester South) (Lab)
I want to reinforce the point that the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) just put to the Minister. The new visa regime is causing huge instability and sending a very discouraging signal internationally. Given how important the HE sector and the Russell group are to trade, and given that it is such an important exporter, will the Minister speak to the Immigration Minister and urge him to change these rules?
Mr Willetts
Of course we are in close contact with the Home Office on the implementation of these rules, but the key point is that there is no cap on the number of overseas students who can come to Britain. I take every opportunity on trade missions abroad, as do the Prime Minister and other members of the Government, to communicate very clearly in crucial counties such as India that there is no limit on the number of legitimate students with the appropriate qualifications who would be very welcome to come here and study at British universities.
Nicholas Soames (Mid Sussex) (Con)
12. What steps he is taking to promote exports to the far east; and if he will make a statement.
Norman Lamb
I will rise above it, absolutely.
Exports to the far east are growing very significantly. UK exports to China have grown by 15% over the past year, for example, and we are working hard to secure a free trade agreement with Japan, which would deliver significant benefits to the UK.
Mr Kevan Jones (North Durham) (Lab)
20. What recent assessment he has made of the contribution of the higher education sector to economic growth.
The Minister for Universities and Science (Mr David Willetts)
Higher education contributes to growth. We have just had universities week, celebrating our universities’ contribution to the Olympics, to the economy and to national life, and estimates by Universities UK indicate that higher education contributes more than £31 billion to our GDP. University education is of course, however, also worth while in itself—in ways that cannot be measured by economists.
Paul Blomfield
The Minister acknowledges the importance of higher education as a major export earner. Does he therefore agree with his hon. Friend the Member for Orpington (Joseph Johnson), who wrote an excellent piece in the Financial Times last week, arguing that we should catch up with our competitors and stop classifying students as migrants, as part of a strategy to win a bigger market share for our world-class university system?
Mr Willetts
I absolutely support the objective in that statement of winning a greater market share for our higher education sector, and we can be very proud of the international demand from students wanting to study at our higher education institutions. There is no cap on the number who come here, and we will do everything possible to correct any misunderstandings around the world that may be inhibiting people from applying.
Mr Thomas
At a time when many mainstream universities are extremely worried about where sufficient funding for research, which is vital to Britain’s long-term economic growth, will come from, why does the Minister think that a multi-million pound VAT cut for commercial universities is a good use of public funds?
Mr Willetts
One reason why we have protected the science and research budget and, for the first time, included the research funding going to universities via the Higher Education Funding Council for England is so that our universities can be confident that they have secure and protected research funding for the life of this Parliament.
Mr Jones
Durham university is not only world-class but, along with the other four universities in the north-east, a key driver of the regional economy. What assessment has the Minister made of the visa changes and the capacity of Durham, and those other four universities, to attract overseas students, especially when we read in the press that students from India and other countries are choosing Canada and the United States, rather than the UK?
Mr Willetts
Let us be clear about what the Government have done. We have tackled abuse in bogus colleges and the issue of overseas students who, sadly, did not have the necessary academic qualifications to benefit from coming into higher education in this country. That abuse had to be tackled. We now have a clear message that legitimate students are welcome, with no cap on numbers, to come from anywhere in the world to study at British universities. I work very closely with our universities, including the university of Durham, on trade missions to get that very positive message out across the world.
David Mowat (Warrington South) (Con)
16. What discussions he has had with the Secretary of State for Energy and Climate Change on the potential effect on process manufacturing of the Government’s policy on energy pricing.
George Freeman (Mid Norfolk) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Minister for Universities and Science (Mr David Willetts)
My Department has a key role in supporting the rebalancing of the economy and businesses to deliver growth while increasing skills and learning. May I repeat, Mr Speaker, that the Secretary of State has a long-standing commitment to be in Berlin and Düsseldorf and therefore regrets not being able to be with us today?
George Freeman
Does my right hon. Friend agree that the UK’s life sciences in areas such as biomedicine, clean energy and agriculture offer a huge potential opportunity for us to drive a sustainable recovery here in the UK by supporting sustainable development in the developing world, and that our science base, not least in Norwich research park in my county of Norfolk, has a key part to play in that revolution?
Mr Willetts
My hon. Friend is absolutely right. Indeed, I will be visiting Norwich research park later today and will be able to announce £250 million of research funding going into life sciences across the country. Alongside the commitment to human health that we have already made, this will be a commitment to research in animal health, plant breeding and the agricultural industries of the future.
Mr Chuka Umunna (Streatham) (Lab)
This Government inherited an economy that was growing, with unemployment falling and a recovery settling in. The revised GDP estimate for the first quarter of this year, far from being revised up, as some expected, has just been revised down. With the country in a double-dip recession created by this Government, 50 businesses going under every single day, and over 2.6 million people out of work, this shambolic Government have been squabbling over a report produced by a millionaire Tory donor that suggests that all would be well were it not for people’s rights at work. Why on earth are they going along with this nonsense instead of, for example, implementing the active industrial strategy that we need?
Mr Willetts
Let us be clear: this coalition Government also inherited an economy that had been hit by a major financial crisis because of Labour’s failure to regulate financial services, and unsustainable levels of Government borrowing which the head of the International Monetary Fund said earlier this week caused her to shiver when she thought what would have happened if they had not been tackled. We are committed, rightly, to reducing the burden of red tape and regulation on the economy, and alongside that we are constructively investing in and supporting the industries of the future.
Mr Umunna
This is a no-growth Government with their head in the sand. They blame businesses, they blame the people who work in them, and now they blame the eurozone, when countries such as Germany and France are not in recession and we are. They said that they would increase lending to small businesses, but there has been a net contraction in lending to small businesses in every single month of this Government. They said that they would support different industries, from defence to renewables, but they have failed to do so. They boasted that their regional growth fund would create more than half a million jobs, but the National Audit Office tells us that it has created less than a tenth of that. We have always known that Tory-led Governments are heartless. Do today’s figures not demonstrate that they are hopeless too?
Mr Willetts
That pre-prepared speech had nothing to do with the reality of the industrial strategy being pursued by this coalition, which is delivering big increases in exports to the big markets of the future. Exports to China are up 18%, exports to India are up 29% and exports to Brazil are up 11%. Employment is up, inflation is down and public borrowing is down. [Interruption.]
Mr Speaker
Order. The hon. Member for Hartlepool (Mr Wright) is usually such a measured and emollient fellow. He must calm himself.
Mr Willetts
We are committed to working with all our partners across the British economy, including business, to ensure that there is investment in the high-tech businesses of the future. The recent announcements of investments in General Motors, Jaguar Land Rover and GlaxoSmithKline show that the strategy is bearing fruit.
Peter Aldous (Waveney) (Con)
T6. Last week, UK Trade & Investment put on an extremely useful event for businesses in my constituency and that of my hon. Friend the Member for Suffolk Coastal (Dr Coffey). Subsequently, my constituent, Simon Chater, has expressed concern about the cost to small and medium-sized enterprises of using the overseas market introduction service. Will the Minister confirm that UKTI is doing all it can to support SMEs that are seeking to export, including working with other Departments to identify new markets?
Adam Afriyie (Windsor) (Con)
When it comes to growth in small businesses, I commend the Minister for Universities and Science for the energy and intelligence with which he has enacted high-tech policies for high-growth industries. However, we must be careful not to pick individual winners within those sectors. Does he agree that backing Britain’s successful high-tech sectors is the key to releasing economic growth and securing the jobs and competitive international advantage that we should enjoy?
Mr Willetts
I agree with my hon. Friend. It is important that we act on the advice that we get about the big, general-purpose technologies of the future and do not randomly hand out grants to particular businesses, as happened all too often in the past.
Paul Blomfield (Sheffield Central) (Lab)
T5. Will the Minister for Universities and Science reassure the House that the introduction of any student premium to offset the impact of tuition fee increases, as proposed earlier this week by the Deputy Prime Minister, will not be at the expense of the funding that is provided for the widening participation premium and currently allocated to universities by the Higher Education Funding Council for England?
Mr Willetts
I have just written to the Office for Fair Access and HEFCE to ask them to assess the effectiveness of the very large amount of money that is now used for that purpose through the widening participation premium and universities’ access funding. We fully recognise that the different strands of money have different purposes, and that some of it is there to meet universities’ particular needs through WPP funding.
Nigel Adams (Selby and Ainsty) (Con)
As someone who benefited from a similar scheme in the 1990s, may I ask the Minister to update the House on the progress of the new enterprise allowance scheme? Will he ensure that it is yet another flagship programme, like the new apprenticeship schemes?
Kelvin Hopkins (Luton North) (Lab)
The Million+ group of universities has concluded that the new fees regime to be imposed on mature students will deter many thousands of them from going to university. That will damage their life chances, and it could damage the universities, but it will also restrict the talent available in our economy. Will the Government think again about fees for mature students?
Mr Willetts
Many mature students are part-time students, to whom this Government have for the first time extended loans to cover the cost of fees. That is one of the many features of our higher education reforms of which we are very proud.
Anna Soubry (Broxtowe) (Con)
I am sure the House will join me in celebrating the fact that SMS Electronics in Beeston in Broxtowe has been a lucky recipient of a Queen’s award for enterprise. Many small businesses tell me and others that they need less regulation and oppressive red tape if they are to grow. Will a Minister please confirm something that I was told today: that under the previous Government, there were six new regulations every working day?
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
Sixty redundancies have been announced today at the open-cast mine at Kirkconnel. It is in the constituency of the Under-Secretary of State for Scotland, but it will affect my constituency in east Ayrshire. What are the Government doing to support the coal industry?
Mr Willetts
Earlier this week we produced our energy strategy, which involves ensuring not just a fair deal for consumers, but sustaining investment in energy in Britain.
Mr Speaker
Order. I do not want the Minister to lose his handkerchief. It is about to fall out, but I am sure he can rescue it.
Sheila Gilmore (Edinburgh East) (Lab)
From today’s answers about regulation, it appears that, in the Government’s eyes, progress has already been made. Why, then, has growth slowed so far that we are now back in recession? Does that not show that all this deregulation is not working and that we need measures to increase demand?
Mr Willetts
Growth has slowed because of the problems in the eurozone driven partly by levels of regulation much greater than those in Britain.
Oral Answers to Questions
Lord Willetts Excerpts(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Thomas Docherty (Dunfermline and West Fife) (Lab)
14. What steps his Department is taking to promote business growth.
The Minister for Universities and Science (Mr David Willetts)
The plan for growth commits the coalition to creating the most competitive tax system in the G20. We will make the UK the best place in Europe to start, finance and grow a business and we will create a more educated work force who will be the most flexible in Europe.
Thomas Docherty
I am most grateful for that answer. Given the vital role of exports in trying to grow our economy and yesterday’s disastrous news about Typhoon not being take up by the Indians, will the Minister meet me and other BAE Systems MPs to find out what his Department can do to get behind BAE Systems?
Mr Willetts
Let us be absolutely clear that the Prime Minister, the Secretary of State and I have all been on trade missions to India because we recognise its importance as an export market. British exports are growing by 10% and we will continue to argue the case for Typhoon as an excellent and cost-effective deal for the Indian Government. Of course, Ministers would be very happy to meet employees.
Laura Sandys (South Thanet) (Con)
Economic growth has been greatly enhanced in east Kent by the huge amount of work done by BIS for the enterprise zone and the regional growth fund. What more can be done through UK Trade & Investment to promote life sciences internationally and to get inward investment into east Kent?
Mr Willetts
My hon. Friend is absolutely right. Of course, this week is the first anniversary of the announcement by Pfizer that it was planning to close completely its facility at Sandwich. That will now be transformed into a research and business park, not least thanks to the excellent efforts of my hon. Friend. Indeed, Pfizer will be an anchor tenant employing, we believe, 750 Pfizer staff. That shows we can fight back and we can maintain life sciences activity in this country. Through the proposals we set out in December, we aim to increase that.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
If we are to get business growth in our country, we must provide finance. Does not the report that the Minister has just made on the green bank show the truth that we want that sort of bank in each region, particularly in Yorkshire and the Humber? We want a bank for every region that knows the local circumstances and will invest in our regions.
Mr Willetts
I have a lot of sympathy with the argument that overall we need to see much greater diversity in British banking. Indeed, one reason why the Government are implementing the proposals from the Vickers commission is precisely to make it possible to have once more local banks that understand the needs of the local business community and local individuals, but our position on the green investment bank has been made clear by the Secretary of State.
Heidi Alexander (Lewisham East) (Lab)
15. What recent assessment he has made of the strength of the construction industry.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
16. What assessment he has made of the effect of higher tuition fees on the level of university admissions in the next academic year.
The Minister for Universities and Science (Mr David Willetts)
UCAS published figures on 30 January 2012 covering applications to higher education institutions by its main deadline. That independent information shows that the proportion of English school leavers applying to university is the second-highest on record and is higher than in any year under the previous Labour Government. It is also encouraging that applications from people from some of the most disadvantaged backgrounds remain strong. We will continue to monitor closely the data on applications.
Tristram Hunt
I thank the Minister for his answer and draw attention to my interest in this matter, as set out in the Register of Members’ Financial Interests. Since this Government’s punitive and regressive £27,000 tuition fees have been introduced, university applications for design are down more than 16%, applications for history are down more than 7%, applications for classics are down more than 8% and applications for non-European languages are down more than 21%. Britain has long had a world-class reputation for the humanities; why are this Government so determined to kill it off?
Mr Willetts
I am amazed that the hon. Gentleman could refer to an arrangement under which graduates pay for their higher education only if they are earning more than £21,000 a year as a regressive policy. It is a progressive and fair way of maintaining higher education. Because, unlike him, young people across the country understand that, we have had a very healthy level of applications to universities this year—down only 1% on last year’s peak.
Mr Rob Wilson (Reading East) (Con)
What assessment has my right hon. Friend undertaken of the impact on admissions of university access agreements supervised, and indeed enforced, by the Office for Fair Access?
Mr Willetts
It is very encouraging that when we look behind the 1% fall in applications overall, it looks as though the fall in applications from prospective students in the most disadvantaged areas is actually only 0.2%. That tells us that the message is getting across, and I pay particular tribute to the efforts of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) and the advice we have had from him, and to the work done by OFFA to get that crucial message across.
Pat Glass (North West Durham) (Lab)
Higher education applications have collapsed. In teaching, we have a simple way of measuring whether children are learning by rote or are actually learning and understanding: we ask them what would happen next. When the Minister tripled tuition fees and abolished education maintenance allowances, what did he think was going to happen next?
Mr Willetts
I thank the hon. Lady for the advance notice of her question. Contrary to the stories of collapse and disaster, we believe that the fact that applications have fallen only by 1% is evidence that the message that students do not have to pay is getting across, and this summer I shall once more sadly be in the position of having to explain why young people applying to go to university do not have a place. In other words, we have succeeded in explaining the truth about our proposals, contrary to the misleading allegations of the Opposition.
Mr Speaker
I know that the Minister will not be suggesting that any Opposition Member has misled the House. I am sure he is referring to activity outside the House.
Mr Speaker
I am extremely grateful for that ministerial head-nod, if I can put it that way.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Will my right hon. Friend the Minister join me in reassuring my constituents that, unlike the views of the Opposition, under our scheme a top-quality university degree will actually cost them only £30 a month when they are earning £25,000 a year?
Mr Willetts
I entirely agree. Indeed, that figure on earnings of £25,000 a year contrasts with payments of £75 a month under the arrangements we inherited from the Labour Government.
Gregg McClymont
A moment ago, the Minister for Universities and Science referred to student loan repayments, which the right hon. Gentleman will know are deducted at source, which is more than can be said for the extraordinary contract awarded to Mr Ed Lester of the Student Loans Company. Will the Minister explain why he signed off those extraordinary tax avoidance arrangements?
The Minister for Universities and Science (Mr David Willetts)
Let me be absolutely clear that this arrangement is set out very clearly in the Student Loans Company annual accounts. If Labour Members had cared to study the report, they would have seen on page 42 a completely transparent account of the arrangements for Mr Ed Lester’s reimbursement. It is set out very clearly there. The payments are to the recruitment consultancy company that found him, and he was appointed on an interim basis to tackle a disaster in the SLC that we inherited from the Labour Government. We of course recognise the importance of ensuring that proper arrangements are in place and will continue to monitor the situation, but I can inform the House that we have agreed that, for the remainder of the chief executive’s contract, the SLC will account for PAYE and national insurance at source.
Mr Peter Bone (Wellingborough) (Con)
T3. Last Sunday I attended Indian republic day at the Wellingborough Hindu Association, yet the same week we learn that a £20 billion fighter contract has been lost to, of all people, the French. We now know that the lead bidder was not the British Prime Minister or the British Government, but the Germans. What on earth do they know about cricket and curries? Why was the British Government not leading on that? How did the Secretary of State allow such a cock-up?
Mr Willetts
Our proposals for launching the catapult centres are proceeding. We have already announced five technology and innovation centres across the country and will announce the remaining two soon.
Ian Lavery (Wansbeck) (Lab)
T2. The Secretary of State is aware of the imminent closure of the Rio Tinto Alcan plant in my constituency. Rio Tinto Alcan said recently that it puts the blame firmly on the Government because of the lack of investment. The £250 million for energy-intensive industries is too little, too late, and there are also the green taxes. Would he care to comment on those allegations?
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
T5. Somethin’ Else is a design and creation company on Silicon roundabout in my constituency. It employs 65 people and recently produced a film that was shown at the Conservative party conference. Recently, it has been battling with Her Majesty’s Revenue and Customs over disproportionate fines for the alleged late payment of tax. That has led to a fine of more than £25,000. Given HMRC’s deals with large corporations and the Government’s professed support for small businesses, which the Secretary of State has reiterated today, what discussions is the Department having with HMRC and the Treasury to ensure that businesses are aware that it is on their side and that the Government are acting in a joined-up fashion so that punitive tax attacks are not made on small businesses?
Mr Willetts
That is, of course, a matter for the Treasury. The Department is on the side of small businesses. I have visited that business in Tech City and was very impressed with what it does. Tech City, which had about 100 small businesses when the coalition came to office, now has more than 600 small businesses because of our commitment to the area.
George Freeman (Mid Norfolk) (Con)
T8. May I, on the eve of national apprenticeship week, congratulate the Minister and the Government on the steps they are taking to increase the number of apprenticeships? I invite him to support the Norfolk Way project, which is giving youngsters work experience and entrepreneurial mentoring. I also invite him to agree with the wonderful words of Galileo Galilei, “We cannot teach people things; we can only help them discover it within themselves.”
Emma Reynolds (Wolverhampton North East) (Lab)
British Aerospace has a 17% global share, and as such is No. 1 in Europe, but its future depends on not only exports but on investment in research and development. Given that many other Governments in Europe and around the world give more support to research and development than we do, what more can the Government do to help in that vital area?
Mr Willetts
That is why the Government have provided cash protection and ring-fenced the science and research budget, and why in the autumn statement we were able to announce significant increases in funding for the Technology Strategy Board.
Richard Fuller (Bedford) (Con)
With no pressure from the Secretary of State for a cut in the jobs tax, no meaningful roll-back of job-destroying red tape, no pressure from him for a cut in enterprise-sapping tax rates and his lauding as a good example the pillorying of people for fulfilling their Government contract, can he advise me of what he is doing to encourage enterprise rather than to discourage it?
Oral Answers to Questions
Lord Willetts Excerpts(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Graham Evans (Weaver Vale) (Con)
14. When he plans to publish his innovation and research strategy.
The Minister for Universities and Science (Mr David Willetts)
With permission, Mr Speaker, I propose to answer this question with question 13—
Mr Speaker
I am reluctant to argue with Two Brains, but I think the link is with question 14.
Mr Willetts
Thank you, Mr Speaker.
I am pleased to announce that the Government have today published our innovation and research strategy for growth.
Dr Huppert
I thank the Minister for publishing that statement. In 2004 I was awarded a DTI Smart award for innovation. That excellent scheme supported small companies in developing risky innovative products, but over the years the financial support available was watered down and success rates fell. Will his strategy reverse that and support SMEs that have not been supported by the Technology Strategy Board?
Mr Willetts
Indeed, and I believe that my hon. Friend’s proposal was for a biotech company that collected virgin female fruit flies, which I am sure was an excellent example of curiosity-driven research. I can confirm that we are bringing back the Smart awards scheme on a nationwide basis, properly financed.
Graham Evans
Fostering research and innovation is absolutely essential to growth and to rebalancing our economy, and I am proud that the Government are doing so much to support Daresbury science innovation campus in my constituency, including the announcement of a new enterprise zone. Can the Minister outline what support will be provided for small and medium-sized businesses in this area?
Mr Willetts
I recognise the strong support that my hon. Friend gives Daresbury, which I visited with him only a couple of months ago. Indeed, we will put more funding into Daresbury because of its excellent role in national computing infrastructure, and we will support small businesses in particular through the infrastructure and innovation plan that we have launched today.
Mr David Lammy (Tottenham) (Lab)
Does the Minister accept that we can have no research and innovation without UK postgraduates? His strategy says nothing about the decline in taught postgraduate courses or the implications of fees at postgraduate level in the UK.
Mr Willetts
We are committed to postgraduate education in the UK, and of course we will continue to review the implications for it as our higher education reforms come through, but at the moment we are seeing an increase in the number of postgraduate students in the UK—a record of which we can be proud.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Eighteen months into a Government supposedly focused on growth, we finally have a paper focused on innovation—the engine of growth. We welcome it and will consider it carefully. However, we have seen that this Government’s fine words are not matched by action. The director of the CBI recently described their action on solar panels as the
“third smack about the head”
for investors in renewables. In China, the US, India, Germany and Finland Governments are taking action to create large-scale technological and market opportunities in renewables, ICT, pharma and nanotechnology. What real action will the Government take as a result of the report?
Mr Willetts
The report that we are publishing today is a list of the actions that we have already taken and the further actions that we are proposing to take. That includes technology innovation centres, including specific provision for renewables. It also includes the reintroduction of the Smart awards, which were run into the sand under the previous Government, and a research and development tax credit that will be worth more than £1 billion to companies large and small.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
4. What steps his Department is taking to help small and medium-sized businesses to access export markets.
Margot James (Stourbridge) (Con)
5. What steps his Department is taking to support the commercialisation of new discoveries in life sciences.
The Minister for Universities and Science (Mr David Willetts)
The UK life sciences sector employs 170,000 people with a turnover of £50 billion, but it is facing enormous challenges, which is why the Prime Minister launched an ambitious new life sciences strategy on Monday. That includes a £180 million catalyst fund to aid commercialisation of new discoveries. We have also improved the regime for clinical trials in the interests of patients and opened up the NHS to innovation.
Margot James
I very much welcome the life sciences strategy published by the Government earlier this week. What plans does my right hon. Friend now have to support the development of geographic clusters that will foster collaboration between industry, the NHS and academia?
Mr Willetts
My hon. Friend has absolutely described what a cluster is; I congratulate her. We support them. They are important for innovation and growth. Indeed, in the proposals published today, we are talking about making it easier for groups of institutions to come together to bid for funding from research councils, and also our enlightened Treasury has agreed that in future there will not be VAT on cost-sharing arrangements in which groups of institutions come together to share services in the interests of efficiency.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister will know that in life sciences and many other areas of innovation there are lots of small companies, often in partnership with universities. Will he comment on the fact that many of those partnerships tell me that with the demise of the regional development agencies they have no access to a large amount of money held in Europe, essentially for innovation? There are billions of pounds that they cannot access.
Mr Willetts
The catalyst fund that I referred to in my previous answer is aimed specifically at getting financial support to new start-ups, and will help finance them through the so-called “valley of death” before they can get commercial funding. At the Competitiveness Council in Brussels on Tuesday, I argued that European research funding should be more easily accessible for small and medium-sized enterprises. The best way to achieve that is by cutting bureaucracy and the complexity in the current arrangements for accessing European funding. That is what I urged on the Commission.
Keith Vaz (Leicester East) (Lab)
6. What recent steps he has taken to ensure that the liquidation of Bank of Credit and Commerce International is complete.
George Freeman (Mid Norfolk) (Con)
9. How he proposes that his Department’s investment in graphene will be spent. [R]
The Minister for Universities and Science (Mr David Willetts)
Graphene is the thinnest, lightest, strongest and most conductive material known to man. Its discovery in Manchester in 2001 is testament to our strong science base and opens up a wide range of possibilities. That is why we have committed £50 million to create a new UK graphene hub to focus on its commercialisation. The Engineering and Physical Sciences Research Council and the Technology Strategy Board are now developing a detailed business case, which will be submitted to the Government shortly. We expect funding to start next year.
George Freeman
I welcome that announcement. Does the Minister agree that the investment of £50 million in a world-class hub is testament to the Government’s serious commitment to a rebalanced economy and a regional growth strategy? Will he agree to place a sample of graphene—like this—in the Library for the edification of us all?
Mr Speaker
The use of such props is on the whole discouraged, but we will let the hon. Gentleman off on this occasion.
Mr Willetts
I do not think that that is quite life science—nor is it supposed to be life-size, because it is one atom. I have some graphene in my office, and I would be very happy to show it to people who want to know what has been discovered. I absolutely agree with my hon. Friend. As a result of the Chancellor’s announcement, we are now able to invest in labs that will ensure that researchers can develop and research the applications of this important material.
Mr Speaker
May I appeal to Members not to pass that rather unglamorous specimen around the Chamber? The hon. Member for Mid Norfolk (George Freeman), to whom I have been generous, should secrete his graphene away, and behave with the tact and discretion for which he was previously renowned.
Graham Stringer (Blackley and Broughton) (Lab)
I beg to disagree, Mr Speaker. Graphene is very glamorous, and it is a fantastic discovery, made in Manchester. The Minister will be aware from his appearances before the Science and Technology Committee that there is a huge imbalance between the public investment in science in the golden triangle between Oxford, Cambridge and London, and investment in the rest of the country. Is this not a great opportunity to invest the vast bulk of that £50 million in Manchester, where the two Nobel laureates discovered graphene?
Mr Willetts
The hon. Gentleman makes a clear case. Of course, the issue is now being investigated by the EPSRC and the TSB, but we recognise the crucial role that Manchester played in the discovery, and I am sure that its role will continue.
Mr Speaker
Of course I readily concede that something unglamorous can also be very important. I call Penny Mordaunt. [Laughter.] Order. I am delighted that the House is in such a good mood.
The Minister for Universities and Science (Mr David Willetts)
Yes, we have made an assessment of the benefits to business of investing in low-cost radar satellites. This is an important investment of £21 million, which we hope will enable business investment to follow on, including possibly in my hon. Friend’s constituency.
Mr Speaker
I was referring to the item, not to a human being. I call Penny Mordaunt.
Penny Mordaunt
Thank you, Mr Speaker.
Earth observation satellites are critical in helping developing countries manage humanitarian and environmental crises. Does my right hon. Friend see merit in giving such countries British technology or satellite time—provided it is the best for the job, and it usually is—rather than having ring-fenced funding to purchase such services from a third country?
Mr Willetts
That is a very interesting idea. It is absolutely right that British satellite technology plays a greater role than is recognised in ensuring that we have information about the sites of disasters. Earlier this year we chaired the disaster monitoring committee, which ensured that satellite images were immediately available after the tsunami in Japan and after disasters elsewhere in the world. There are certainly imaginative ideas through which this role could be enhanced.
Sajid Javid (Bromsgrove) (Con)
11. What steps he is taking to promote adult and community learning.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
It is exactly one year on from the Government’s trebling of tuition fees to £9,000, and we can clearly see the disastrous impact of that decision. UCAS applications are down by 15%, and the Government have had to introduce the chaotic core and margin model to make up for the fact that they got their sums wrong. Is the Minister for Universities and Science aware that he has created a perfect storm for our world-class higher education sector, and why is he prepared to put our world-leading reputation at risk?
The Minister for Universities and Science (Mr David Willetts)
Our reforms will ensure that universities are well financed, and that there is more funding available for access than ever before. Perhaps the hon. Lady would explain to the House why she proposes to double fees and, at the same time, reduce the funding available for scholarships and access money.
Simon Hughes (Bermondsey and Old Southwark) (LD)
T2. It is clear to me that the more young people and adults hear the actual facts about the funding for universities, the more likely they are to apply. Given that there are five weeks left before the conventional cut-off date for applications, will the Minister tell the House what the Government propose to do to make sure that young people and adults, whether full or part-time students, understand the benefits of applying to university.
Mr Willetts
I thank my right hon. Friend for the excellent work that he has done on this important subject. I can report to the House that 90% of schools and colleges have been visited by graduates explaining the facts of the system. In addition, they are reaching out to parents evenings. Every hon. Member has received a copy of the DVD that has gone to every school with the information that shows that no student has to pay up front to go to university.
Mr Dennis Skinner (Bolsover) (Lab)
T4. When the Secretary of State was talking about the running down of British industry, he failed to mention that, in the 1980s, the Thatcher Government employed MacGregor to come over here and close large parts of the steel industry, and he almost destroyed the whole mining industry. Does the Secretary of State not realise that, surrounded by all those Tories, he is a mini-MacGregor of his day, carrying out the dirty work of the Tories and overseeing the demise of the rest of British industry? He does it not for the money that MacGregor got but for a ministerial car and a red box.
David Rutley (Macclesfield) (Con)
T3. Returning to 2011, what steps is my right hon. Friend taking to create the conditions for the pharmaceutical and life sciences sectors in the United Kingdom, including AstraZeneca in Macclesfield, to be able to compete more strongly in the global marketplace?
Mr Willetts
The life sciences strategy we produced earlier this week aims to rise to the challenge my hon. Friend identifies. In particular, there is an imaginative proposal under which 20 compounds that have been identified by AstraZeneca but are not currently being commercialised will be open to research by others, with a view to using them to create the medicines of the future.
Julie Hilling (Bolton West) (Lab)
T5. Bolton university is excellent at recruiting and retaining large numbers of students from disadvantaged backgrounds. It is worried, however, about the future of the widening participation premium, which makes up 6.7% of its teaching grant. Can the Minister reassure them that that premium will be fully funded in 2012, 2013 and beyond?
Mr Willetts
We have to look at the Higher Education Funding Council for England teaching grant year by year, so no assurances can be given about the total teaching grant at this stage. That has never been possible under any Government. What I can tell the House is that the total amount of money going into access funding has increased significantly because of the increase in fees. It is now running at a higher level—£200 million higher—than ever before.
Stephen Phillips (Sleaford and North Hykeham) (Con)
T6. I am sure that my hon. Friend the Minister for Further Education, Skills and Lifelong Learning will agree with me not only about his own irrepressibility but also about the importance for economic growth of our meeting the training needs of businesses. What measures is he taking to reduce red tape and excessive micro-management in respect of further education colleges —a trend that so characterised the last Government—in order that they can respond to our economic needs?
Oral Answers to Questions
Lord Willetts Excerpts(13 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Phil Wilson (Sedgefield) (Lab)
3. What recent assessment he has made of the level of science funding over the comprehensive spending review period.
The Minister for Universities and Science (Mr David Willetts)
Funding for science and research programmes has been protected with a flat cash ring-fenced settlement of £4.6 billion for each of the next four years. We can be proud of our scientific research, and that is why the coalition is backing it.
Phil Wilson
Although I welcome the investment in the technology and innovation centres, one of which is in my constituency, will the Minister explain to the House why the Government have continued to cut the science budget by 12% overall when Germany, one of our main competitors, has increased its budget by 8%?
Mr Willetts
No party at the last election promised complete protection for the BIS budget. In fact, in its last economic statement in December 2009, the hon. Gentleman’s party committed itself to cutting £600 million from the higher education and science and research budgets. We, by contrast, are offering complete cash protection for that budget.
Dr Julian Huppert (Cambridge) (LD)
The scientists to whom I speak are concerned not only about the amount of money available now but about the levels of capital funding and the long-term security of funding running many years into the future. While I welcome the announcement of funding for companies such as Babraham, what assurances can the Minister provide that he will try to get more capital funding from the Treasury and to ensure good, long-term security so that scientists will know how much funding there will be for the next decade?
Mr Willetts
Of course, we have been able in the past year to fund six of the eight capital projects that the science community identified as the most important. We think that that has been a considerable achievement in tough times, and we will continue to try to secure financing for other capital programmes in the future.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Secretary of State recently said that all long-term economic growth was linked to innovation, yet one year after he claimed to have protected the science budget, the independent Campaign for Science and Engineering has revealed that its budget has been slashed by 12%, as my hon. Friend the Member for Sedgefield (Phil Wilson) mentioned. The Minister’s own Department says that cuts to science will damage our world-leading position, yet businesses up and down the country are being denied the innovation support that they need, and the shambles in university funding makes it harder for universities to provide science places. If innovation is the engine of growth, why is the Secretary of State doing so much damage to it?
Mr Willetts
We in the coalition are absolutely committed to the importance of science and research, and we are strengthening the links between science and research and the business community. We are also offering cash protection for the science budget across all main current expenditure, which the hon. Lady’s party never did in government. The very source that she has just cited, the Campaign for Science and Engineering, only a fortnight ago
“welcomed Chancellor George Osborne’s announcement that £195m of new investment will be spent on science and engineering.”
Pauline Latham (Mid Derbyshire) (Con)
4. What steps he is taking to promote British exports.
Graham Stringer (Blackley and Broughton) (Lab)
9. What steps he plans to take to protect stem cell research in the UK following the decision of the European Court of Justice to prohibit the patenting of inventions based on human stem cells; and if he will make a statement.
The Minister for Universities and Science (Mr David Willetts)
We are—[Interruption.] We are carefully considering the impact of the ruling—[Interruption.]
Mr Speaker
Order. I think we have had enough references to animals. Let us now experience the product of one of the brains of the Minister.
Mr Willetts
I will do my best, Mr Speaker.
As I was saying, we are carefully considering the impact of the ruling on current UK patent practice. The Technology Strategy Board currently funds 15 studies involving human stem cells, two of which use human embryonic stem cells. The TSB and the research councils will continue to support and fund research on stem cells from all sources, including embryonic.
Graham Stringer
That was an interesting reply, because leading scientists in the field have called the decision everything from “devastating” to “appalling”. They believe this work will move to South Korea and Canada, and that potential cures for people suffering from degenerative diseases will be developed later, if they are developed at all. I simply do not understand the Minister’s answer, and I would like more details on how he is going to stop this work going abroad.
Mr Willetts
I agree with the hon. Gentleman that this research is very important in tackling fundamental human illnesses such as Parkinson’s, and that is why we will continue to support it. We are assessing the implications of the ECJ ruling. It is important that stem cells can be derived in a variety of ways, and embryonic stem cells are only one source of stem cells. That is why we need more time to assess the implications of this judgment.
George Freeman (Mid Norfolk) (Con)
I am sure the Minister agrees that stem cell science is one of Britain’s great strengths. The feeling within the industry is that this Government are putting their money where their mouth is. In contrast to the accusations and nonsense coming from Opposition Members that we are not investing in science, the recent £195 million investment in graphene and supercomputing and the protection of the science budget amounts to a real growth strategy.
Mr Willetts
We are totally committed to investing in life sciences in Britain, and let me give a practical example of how we can cut the burden of regulation to bring this industry forward: we have committed to reducing the time it takes to start a clinical trial from over 600 days—the period we inherited from the previous Government—to 70 days in future under us.
Dame Anne Begg (Aberdeen South) (Lab)
My understanding is that the Court’s judgment does not stop research into embryonic stem cells, but that it does mean that scientists will not be able to patent anything worth while, and that therefore the intellectual property is likely to go abroad, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said. What are the Government going to do to stop that happening, because this research is vital for people with degenerative diseases?
Mr Willetts
The hon. Lady is right: this is vital research. The crucial points, however, are that the research is taking place using stem cells from a range of sources, not just embryonic stem cells, and we are continuing to assess how much of the research and development that currently takes place in Britain would be affected by this judgment.
Stephen Lloyd (Eastbourne) (LD)
10. What steps he is taking to encourage entrepreneurship.
Jane Ellison (Battersea) (Con)
12. How much capital expenditure for scientific research his Department has allocated in 2011-12 to date.
The Minister for Universities and Science (Mr David Willetts)
I have recently announced that the Department will be investing an additional £145 million in high-performance computing. That brings the Department’s total capital spend in science and research to £793 million for 2011-12.
Jane Ellison
I thank the Minister for that reply. Britain has always been great at discovering and inventing things, but we need to address how to commercialise some of that cutting-edge research. Will he therefore comment on what the Government are doing to ensure that we bring that research, and those discoveries and inventions, to market in the future?
Mr Willetts
My hon. Friend is absolutely right, and that is why we are setting up the network of six technology and innovation centres. It is why we are particularly backing the campuses in Norwich, Babraham, Harwell and Daresbury, which bring together scientific research and business applications. It was also the reason for the investment of £50 million in the application of graphene to business purposes, which was announced only a few weeks ago.
Paul Blomfield (Sheffield Central) (Lab)
Does the Minister recognise the deep concern in our universities at the cutting back of their capital programme, in contrast with what is happening in other countries, which will put us at a significant competitive disadvantage?
Mr Willetts
The figure that I just gave the House for capital spending on science and research is comparable with the figures for capital spending under the ring-fenced science budget under the previous Government. So, even in tough times, we are absolutely maintaining our commitment to investing in science.
Charlie Elphicke (Dover) (Con)
16. If he will consider changing the MPharm qualification from level 6 to level 7.
The Minister for Universities and Science (Mr David Willetts)
The Government do not determine the academic levels of higher education qualifications. The Higher Education Funding Council funds the MPharm as an undergraduate master's degree, to the benefit of 10,000 students a year who are entitled to teaching grants and student support.
Charlie Elphicke
I thank the Minister for that answer. My constituent Louis Leir has done an undergraduate degree and wants to do a MPharm, but unfortunately it is classified as an undergraduate-level degree. He is therefore caught by the equivalent or lower qualifications —ELQ—policy and is unable to get help with tuition fees. Will Ministers give further considerations to the issues relating to master's level qualifications? The MPharm truly is one of those, as most of the House probably recognises.
Mr Willetts
I congratulate my hon. Friend on his ingenuity in pursuing that constituency case, about which we have corresponded. Just as he was with the Pfizer case at Sandwich, he is a persistent hon. Member and I congratulate him on that. However, we believe that if we were to take the ingenious approach he proposes, it might mean that the 10,000 undergraduates currently benefiting from financial support lose it.
Mr Graham Stuart (Beverley and Holderness) (Con)
18. What assessment he has made of the difficulties faced by apprentices aged 19 and over in obtaining adequate funding for level 3 qualifications.
Margot James (Stourbridge) (Con)
T6. My right hon. Friend will be aware of the Wilson review on the collaboration between industry and universities. I am currently working on a project in the west midlands with local business leaders and universities. Will he meet industrialists and me when the report is competed next year?
The Minister for Universities and Science (Mr David Willetts)
I would be happy to meet my hon. Friend, because she is absolutely right that one of our priorities is to ensure that the strength of our research base is fed through into stronger support for business and greater business investment, and we look forward to Sir Tim Wilson’s report.
Valerie Vaz (Walsall South) (Lab)
Having withdrawn funding from the UK Resource Centre for Women in Science, Engineering and Technology, will the Secretary of State tell us which women’s organisations he has contacted to encourage women back into those under-represented areas?
Mr Willetts
It is important that women are properly represented in engineering and science, and I discuss that issue with a range of groups, so I hope the hon. Lady will be encouraged by the fact that we have 26,000 STEMNET ambassadors. Already, we have 40% who are female, but obviously we need to be better.
Duncan Hames (Chippenham) (LD)
Next month should at last see meaningfully democratic elections in Egypt, but a new democratic Egypt faces a future hamstrung by debts from the Mubarak era. Will my right hon. Friend ask his officials to conduct an audit of the £100 million owed by Egypt to the Export Credits Guarantee Department?
Oral Answers to Questions
Lord Willetts Excerpts(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kate Green (Stretford and Urmston) (Lab)
19. By how much on average he expects fees for part-time university courses to change between 2011-12 and 2012-13.
The Minister for Universities and Science (Mr David Willetts)
The majority of institutions have not yet set their fees for part-time courses for 2012-13, so it is too early to tell what average fees will be. From September 2012, eligible new part-time students will have access to loans to cover the cost of their tuition—extra support for part-time students that has been widely welcomed.
Kate Green
I welcome the introduction of loans for part-time students, but for lone parents that often means the loss of income support as a result. Moreover, they will be required to begin repaying those loans before they have completed their academic studies. Will the Minister look again at the proposals, to ensure that no lone parent is financially disadvantaged and put in the position of being unable to complete their course?
Mr Willetts
Our proposal has been widely welcomed. We believe that the number of people who will benefit from support while they are engaged in part-time study will increase from 60,000 to 175,000. Of course, people will repay their loans only when they are earning more than £21,000 a year.
Mr Rob Wilson (Reading East) (Con)
Can my right hon. Friend tell the House whether the Office for Fair Access has the power to block fee levels set by universities if they do not agree to access targets?
Mr Willetts
The Office for Fair Access has the power to refuse to permit fees higher than £6,000 if it believes that a university is not doing everything possible to broaden access and if it is not satisfied with its access agreement.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Fees for part-time students are set to rise significantly, and there is growing concern that the quality of higher education in our universities will suffer as Government cuts begin to bite. The Public Accounts Committee has confirmed this week that the Government’s sums no longer add up, and a considerable number of would-be students are likely to be turned away from university this summer because of Government cuts in student places. The Government are chaotic, incoherent and incompetent. Are we not now watching “Fawlty Towers” in Whitehall, with the Minister and his boss the Basil and Manuel of the Government?
Mr Willetts
Let us be clear: the previous Government were planning cuts in higher education support. Under our plans, there will be extra cash going into universities by the end of the public spending period, compared with the amount going in now, and it will be going into the universities based on the choices of students and the courses that they wish to study. That is the right way for money to reach the universities. The hon. Gentleman should recognise the importance of a vision of universities that provides extra cash and respects student choice and the autonomy of the universities.
Jack Dromey (Birmingham, Erdington) (Lab)
T1. If he will make a statement on his departmental responsibilities.
Sarah Newton (Truro and Falmouth) (Con)
T2. The Minister will be aware of the outstanding Truro and Penwith college, which is based in my constituency. In recognising the new opportunities to expand its provision of higher education, he will also be aware of the constraints on the ability of further education colleges to award degrees. At the moment, they need a university partner. What support can he offer to excellent FE colleges to enable them to award high-quality degrees?
The Minister for Universities and Science (Mr David Willetts)
I support the excellent work of FE colleges in providing higher education in Cornwall and elsewhere. I am concerned, as is the Secretary of State, by reports that some universities might be threatening to end their partnerships with FE colleges without good reason, but I reassure my hon. Friend that FE colleges are indeed eligible to apply for their own degree-awarding powers. In addition, our White Paper will propose making it easier for FE colleges to access a wider range of external degrees.
Mr John Denham (Southampton, Itchen) (Lab)
I welcome the good news from Nissan and BMW, which, despite the Secretary of State’s curmudgeonly response, built on Labour’s support for those companies’ investment in the UK. In 2006, he was very clear when he said:
“The DTI, and its army of Sir Humphreys, should be scrapped.”
Then he was offered the job of running it, and said that it would be the Department for growth. How is the Department for growth getting on?
Mr Willetts
I will undertake to discuss the matter with my right hon. Friend the Secretary of State for Education, because my hon. Friend is absolutely right. We do wish to encourage young people to study science at school, college and university.
Mr Ronnie Campbell (Blyth Valley) (Lab)
Growth, which was mentioned earlier, does not seem to be happening in the north-east of England. Workers at the H A Interiors factory in my constituency have not been paid for nine weeks— although I understand that they were paid their April wages yesterday; I will have to check that. Can the Minister help the company in any way? At least under Labour the workers got their pay.
Duncan Hames (Chippenham) (LD)
I noted the Business Secretary’s earlier answer citing the STEMNET project. I hope he is also aware of the work of I’mascientist.org.uk, whose events reach over 10,000 students, with funding of less than £9 per student drawn from charitable and business sponsors. Will he learn from the success of this initiative as a model for the online engagement of students with the futures they could realise through science, technology, engineering and maths?
Mr Willetts
That is a very imaginative suggestion which I certainly undertake to pursue—and will, perhaps, discuss at the Cheltenham science festival this weekend.
Alison McGovern (Wirral South) (Lab)
One in 10 people in the north-west of England works in manufacturing, whereas just 3% in London work in manufacturing. The sharp fall in the purchasing managers index last month showed that all may not be well with UK manufacturing. Will the Secretary of State or the Minister therefore confirm that UK Trade & Investment will publish annually the regional impact of its work, so that we can be sure that Government policy works for all economies in Britain?
Higher Education Policy
Lord Willetts Excerpts(13 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Universities and Science (Mr David Willetts)
I welcome this opportunity for us to set before the House the Government’s approach to higher education and to clear away the farrago of confusion, misplaced speculation and plain old-fashioned errors that we have just heard from the shadow Secretary of State.
I congratulate the right hon. Gentleman on one thing: his sheer audacity in standing in the Chamber and denouncing cuts and financial black holes, when he was in the Cabinet of a previous Government who got our finances into the crisis that the coalition inherited. So yes, we are having to take some tough and difficult measures, but that is because, as always, Labour left behind a mess and then denounced us for clearing it up.
Sheila Gilmore (Edinburgh East) (Lab)
Some months ago the Minister indicated in the House, in response to a question from me, that his proposals were not to do with the deficit, but were to do with a new way of providing for the financing of higher education, yet he introduces his speech by referring to the deficit.
Mr Willetts
I will turn to that point as I develop my argument. I hope the hon. Lady will accept that the Government whom she supported left behind a fiscal crisis. We were borrowing £120 million a day and were heading for the largest budget deficit in the G20. In fact, the position was so bad that the previous Chancellor had set out proposals for bringing down the deficit by reducing public spending. It is an irony that the Opposition called this debate in the very month when the previous Government’s spending cuts would have started to take effect—£14 billion of cuts planned for this financial year by the previous Chancellor, £16 billion of cuts that we are implementing.
As the shadow Secretary of State knows because he was in the Government at the time, it is clear from the pre-Budget report of December 2009 that there was a commitment to £600 million of cuts from the higher education and science and research budget. It was never explained what those were to be. As we know from the work done by the Institute for Fiscal Studies when it tried to assess Labour’s plans when the previous Government left office, there were to be reductions in public expenditure that the IFS estimated as a 25% reduction in the budget of the Department where the Secretary of State and I serve. So we inherited a mess that we have to sort out.
Hugh Bayley (York Central) (Lab)
The question is not whether the deficit needs to be reduced, but whether the decision to impose cuts of 80% on universities is the right way to do it. How will students benefit when they pay three times as much in fees but get less spent on the quality of their education in our universities?
Mr Willetts
Let us turn to that. Given that we face a crisis in the public finances, and given that even the previous Government had planned £14 billion of saving, how does one best deliver those in a departmental budget which I do not think any of the three parties represented in the House said could be exempted from reductions? Fortunately, the previous Government set in train an exercise that helped tackle precisely that problem. In November 2009 they commissioned Lord Browne to review the financing of higher education, and they made perfectly clear the wide range of options that they wanted him to look at.
Mr Willetts
I will give way in a moment to the right hon. Gentleman, not least because of his role as a Minister in the previous Government, but I hope he will accept that Lord Browne’s report was commissioned precisely so that when public expenditure had to be saved, the finances of higher education would be examined.
Mr Willetts
It was made perfectly clear—[Interruption.] Let me quote from the very first sentence of the terms of reference of Lord Browne’s report. It was to
“analyse the challenges and opportunities facing higher education and their implications for student financing and support. It will examine the balance of contributions to higher education funding by taxpayers, students, graduates and employers.”
So, the previous Government left us a deficit, recognised that they needed to make £14 billion of savings and set up an inquiry under Lord Browne to look at how universities should be financed in those circumstances—almost in the same month, incidentally, that we had the plan from the right hon. Member for Edinburgh South West (Mr Darling) for large reductions in public spending.
After considering Lord Browne’s report, which took him a year to produce and in which time he took a large amount of evidence, the coalition has adopted a strategy that, although not in every respect his strategy—[Hon. Members: “Ah!”] I do not know why Opposition Members react with such glee; in many ways, we have improved on the strategy that Lord Browne put forward. The fundamental proposal in the report that the previous Government commissioned is the one that we are now implementing in order to put the finances of higher education on a stable footing.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Will the right hon. Gentleman give way?
Mr Willetts
Let me just develop this point, because crucially the best way to save money is not to go for reductions in the teaching grant per student, as that simply means a lower-quality experience for students in our universities; instead, the aim is to provide universities, as the teaching grant is reduced, with an alternative source of income from fees and loans which does not involve students paying any money up front.
Mr Willetts
I am just going to carry on explaining the basic finances of the measure, because they are so important and the Opposition clearly do not understand them. The point is about lending students money to pay fees. For example, if we lend them £1,000, we can reasonably expect, on the basis of outside forecasts, about £700 of that to be repaid, so we account for the £300 of the loan that is written off—that will not be repaid—but know that we will get approximately £700 back. That is the financing model in Lord Browne’s report, which the Labour party commissioned, and that is what enables this coalition to save money for the Exchequer, to continue with high levels of finances and to ensure that students do not have to pay any money up front. That is an excellent combination of policies at a time when money is tight.
Tristram Hunt
I am grateful to the Minister for giving way as he digs himself ever deeper and reveals the fallacy of the sums involved. The whole point of the Browne review was that it would introduce a market in higher education, but, if we strip away the teaching grant and everyone charges £9,000, we do not have a market. That is why the policy is such a car crash.
Mr Willetts
I will move on to that stage of the argument in a moment, but let me just explain to the hon. Gentleman why this measure, which is not mine but that of the report commissioned by the Government whom he supported, is very straightforward, simple and absolutely the right way to tackle the challenge of financing higher education at a time of fiscal crisis. It enables us to save money for the Exchequer, because the money that goes into universities is lent to students and is not a grant, and at the same time we ensure that universities are well financed.
The shadow Secretary of State sounded as if he was willing to contemplate large reductions in the amount of resource going to universities, but that would affect the quality of students’ education. On our estimates, the cash going to universities rises from about £9.2 billion in 2010-11 to £10 billion in 2014-15, so we save money, there is more resource going into universities and, crucially, at the same time the money is accompanied by reform.
Mr Willetts
I give way to my hon. Friend the Member for Beverley and Holderness (Mr Stuart).
Mr Graham Stuart
Will my right hon. Friend nail the misinformation, peddled not least by Opposition Front Benchers, about the increase in fees putting people from lower-income backgrounds off going to university? The truth is that the payments per month will be lower under the new system, that those who earn lower amounts will pay less, that the new system is more progressive and that Opposition Front Benchers, who cry crocodile tears for caring about those from the lowest incomes having access to a university, are scaremongering and providing misinformation. Will he please put them right?
Mr Willetts
That was an excellent intervention. After this debate, I hope that Members on both sides will agree to commit ourselves to visit, between now and the summer, the secondary schools and colleges in our constituencies and explain to them that not a single young person is going to have to pay up front for their higher education. They will repay only if they are earning more than £21,000 a year and that means that their monthly repayments under our proposals will be lower than under the system we inherited from the previous Government.
Mr Willetts
I will accept the hon. Lady’s intervention, especially if she makes that commitment.
Dr Whiteford
Last month, the BBC published figures from the accountants Baker Tilly. They suggested that a student who borrowed £39,000 to complete their higher education would end up paying back something in the region of £83,000. What does the right hon. Gentleman make of those figures?
Mr Willetts
I am afraid that I do not recognise those specific figures. We are talking about a system whose powerful logic is simple—no student pays up front, a point that my hon. Friend the Member for Beverley and Holderness correctly made.
Mr Willetts
I need to make some progress because this is not simply a matter of finances, important though they are. It is essential that the measures be accompanied by reform. Above all, that means a focus on the quality of the teaching experience for students. Many students, and their parents, come away from university not convinced that they had the teaching that they needed during their time in higher education. The third challenge, therefore—as well as saving money for the public finances and ensuring that proper financing gets into our universities—is to focus on improving the quality of the teaching experience. We do not achieve that by—
Angela Smith (Penistone and Stocksbridge) (Lab)
Will the Minister give way?
Mr Willetts
I am responding to the point made by the hon. Member for Stoke-on-Trent Central (Tristram Hunt); it is an important stage in the argument. The money must be accompanied by reform that puts teaching up front and enables students, for the first time, to choose the course and university that they believe will best meet their needs. That is why the Secretary of State and I are absolutely committed to ensuring that it is easier for universities to escape from the shackles of the detailed quotas and restrictions set, university by university, in the system that we inherited from the previous Government. One of our highest priorities is to ensure that our reforms also improve the quality of the student experience. That will be at the heart of our White Paper.
Graham Stringer
Will the Minister explain how the quality of education will improve? Due to his miscalculations about the number of universities charging £9,000 and the structure of the students who will be going, there will be a huge deficit. That will lead to cuts in universities or in the number of students going to universities.
Mr Willetts
Let me deal briefly with that point. A fortnight ago, the Labour party was claiming that there was a £1 billion shortfall; last week, apparently, the shortfall was £450 million. We simply do not recognise those figures. We will see in autumn next year exactly what students are paying and how much they choose to borrow; they do not necessarily even need to borrow the full amount of fees that they face. That will be a decision for them. At that point, we will assess the financial situation that we face, but we see no reason to amend the broad estimate that we put before the House last autumn.
Angela Smith
Given what the Minister has just said, will he guarantee that there will be no cuts in quality or numbers in higher education?
Mr Willetts
We have a set of proposals that ensures that increasing resources will go to our universities, so, absolutely, I see no reason why quality should suffer. Indeed, I believe that as we liberalise the system in the way that the Secretary of State and I wish to, we will see improvements in the quality of the student experience. I do not see any need for a reduction in student numbers; on the figures that we have in front of us, I do not believe that that will be necessary.
I want to deal with another point made by Labour Members. There is so much confusion and misapprehension on their part that there is a large amount to sweep away.
Mr Willetts
I wanted to move on to the improvements that we have made to the Browne plan, but of course I give way to the shadow Minister.
Mr Willetts
We will obviously have to keep a very close eye on the situation. When one looks behind the headline figure of the £9,000 fee, there are so many waivers and special arrangements that the average fee will be significantly lower than that. Given the evidence that has so far come through, we do not recognise the so-called figures for fiscal black holes that are being perpetrated by Labour Members. I suggest that they calm down and wait until the autumn of 2012 when we see what students are actually paying in fees when they arrive at their universities.
Mr Thomas
The right hon. Gentleman was asked a very straight question—does he, or does he not, agree with his Secretary of State, who clearly threatened universities at the HEFCE conference with either further cuts in teaching grant or further cuts in student numbers? Does he agree with him—yes or no?
Mr Willetts
I am always in agreement with the Secretary of State. The position that he was describing related to options that would be necessary if the financial position was very different from the one that we estimated last autumn. On the basis of the evidence that we have, we do not believe that that will be the case.
Margot James
Does my right hon. Friend agree that university costs should be looked at very closely, just as with every other kind of public sector institution? Lord Browne found that the average fee was £6,000 if one took into account efficiencies that universities could make in relation to what would be the break-even point compared with what they currently enjoy in terms of funding.
Mr Willetts
My hon. Friend is absolutely right. We look forward to the report that Ian Diamond is preparing on precisely how we can improve efficiency in our universities.
Mr Willetts
No, I am going to make some progress because Members in all parts of the House wish to speak and I have a lot more ground to cover.
We have not only taken on Lord Browne’s proposals in the report commissioned by the previous Government as their way of reforming the finances of our education system, but tried to improve on those proposals. The crucial way in which we have done that is by improving the repayment terms for graduates. A very important feature of the new system is that instead of the repayment threshold of £15,000 that was left to us by the previous Government, we propose a threshold of £21,000. The only way in which people pay for higher education is as graduates repaying their loans, so the level of threshold and the amount of the repayment that they make is crucial. Under our scheme, a care worker graduating in 2016 with a £20,000 starting salary would repay nothing. Under Labour’s £15,000 repayment threshold, that care worker would have been repaying £37.50 a month. Under our scheme, an accountant graduating in 2016 with a £25,000 starting salary would repay £30 a month. If the repayment threshold had remained at £15,000, that accountant would have been repaying £75 a month.
The crucial figure that matters for young people thinking about the cost of their higher education is how much they will have to repay. Under our scheme, their monthly repayments will be significantly lower. That is why the Secretary of State and I are confident that these reforms are the right way forward and are genuinely progressive. We are discharging our obligation to future generations in exactly the way the shadow Secretary of State set out at the beginning of his speech. That is the crucial challenge and we believe that our reforms rise to it.
That is not just my view or that of the Secretary of State, but the view of bodies that have scrutinised our financing proposals. The Institute for Fiscal Studies said that
“the Government’s proposals are more progressive than the current system or that proposed by Lord Browne.”
The OECD endorsed the coalition’s policy:
“The increase in the tuition fee ceiling is reasonable and should pave the way for higher participation in tertiary education”.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Can the Minister quote any vice-chancellor of any reputable higher education institution in this country who has said that the Government’s record in their first year of office has been good for higher education in this country?
Mr Willetts
I have been at many events with university vice-chancellors at which they have all accepted that, given the circumstances that we inherited and faced with the policy options of reducing teaching grant, reducing student numbers or implementing Lord Browne’s proposed changes in student finance, we took the right decision. I am confident that we have improved on Lord Browne’s proposals by making the repayment threshold more progressive.
Let me quote someone who is not a vice-chancellor, but who is perhaps still treated with a degree of respect by some Opposition Members, namely Lord Mandelson. The new postscript to his excellent memoirs, which I commend to Opposition Members, states:
“When the university fee debate came up before the Lords, for example, there was a large part of me that felt I should weigh in.”
I am sure that there was. It goes on:
“It was I, after all, who had set up the Browne Review”—
the Labour party seems to have forgotten that—
“into what future changes were necessary to ensure proper funding for universities in the best and fairest way, for both them and their students. When I did so in November 2009 I assumed, as the Treasury did, that the outcome would have to include a significant increase in tuition fees. I felt that they would certainly have to double in order to offset the deficit-reduction measures that we too would have implemented had we won the election. The alternative would be a disastrous contraction of higher education.”
Those are the words of the previous Secretary of State, and I take them as an accurate account of what was in the minds of Labour Ministers when they set up the Browne review.
Andrew Bridgen
I remind the Minister of the words of Professor Steve Smith, the president of Universities UK, who said that the coalition Government’s higher education policies
“will bring in the resource needed to allow students to go to university regardless of their financial circumstances, provide financial sustainability for universities, and ensure that we can maintain the UK’s international competitiveness in terms of undergraduate education.”
Mr Willetts
Absolutely. That is the view of Universities UK, and, as I have explained to the House, it holds that view because in the difficult circumstances that we inherited from the previous Government, we have taken the correct strategic decisions.
I have set out our approach to higher education. What was striking in the speech of the shadow Secretary of State was the complete absence of how he believes higher education should be financed in tough times. What was particularly noticeable was the absence of any reference to what we understand to be the preferred policy of his party leader, namely a graduate tax. We are still waiting to see the move to the graduate tax, which we understand is now the view of the shadow Secretary of State. Of course, the last Labour Government produced a helpful document on the subject entitled, “Why not a Pure Graduate Tax?”, which sets out clearly some of the issues surrounding a graduate tax. We are still waiting to hear whether the shadow Secretary of State advocates it.
Of course, our proposals involve a capped graduate tax, which has a threshold of £21,000 and a rate of 9%, is linked to the university that one went to, and is extinguished when one has discharged the cost of one’s higher education. That is the right way of delivering a graduate tax to pay for higher education. I would be very interested to hear from the shadow Secretary of State whether he believes that that system should be improved in some way. Does he prefer a model of graduate tax with, perhaps, a lower threshold and a lower rate?
Lilian Greenwood (Nottingham South) (Lab)
Will the right hon. Gentleman give way?
Mr Willetts
No, I am going to make some progress on this important point.
Would the shadow Secretary of State prefer a model with a 3% tax for graduates? That is one possibility, but of course it would bring low earners into the burden of graduate tax, whereas they will be exempt from it under our proposals. It would have another significant defect, because whereas we can collect student fees from people across Europe, there is no way in which a graduate tax could be collected from a graduate who has been educated in Britain and then goes to live abroad.
Once again, the memoirs of Peter Mandelson are very clear on this point, and we now know where the Labour party’s policy comes from. He writes:
“To be fair to Ed”—
he is referring to the current Labour leader”—
“from his days in the Treasury when we were first introducing the top-up-fees scheme in government, he shared Gordon’s preference for an alternative graduate tax”.
So it was Gordon who wanted a graduate tax—that is where this bold, new Labour idea comes from. The memoirs continue that the current Labour leader held that view
“even when our research concluded that it was simply unworkable.”
That is what Peter Mandelson says. Labour’s research showed the defects of a graduate tax, and we are still waiting to hear from the shadow Secretary of State what his policy is on such a tax.
The position is clear: the Government have a plan for financing higher education in tough times. We are financing it in a way that continues healthy support for our universities and enables us to save funding for the Exchequer at the same time. We are doing that without any cuts to student numbers or to the teaching resources going to universities, without any burden on students when they are at university and while improving the regime for graduate repayments after they have left university. That is why our plan is realistic, sober, reformist and progressive. We believe it is the right way forward, and in the absence of any constructive proposals from the Labour party, we remain convinced that ours is the correct strategy.
Mr Wilson
Indeed I do agree with that. There are some fabulous FE colleges that could easily deliver high quality higher education degrees.
Thirdly, if we are to have a Treasury-imposed affordability limit on student numbers, we need to think more creatively about how we tease the best out of a more limited market system. As I have said, we need to encourage the best high-quality, sought-after courses that students actually want to take. We have to design a system that allows good universities with good courses to expand, and poorly performing universities with poor quality courses to decline, or at least take action to improve their offering.
Mr Willetts
My hon. Friend is focusing on the crucial issues of how we get more competition and choice into the system. I assure him that these are absolutely the issues that we will focus on in the White Paper.
Mr Wilson
I am grateful to my right hon. Friend for that reassurance.
Let me turn quickly to my other point about the Office for Fair Access. As Professor Eastwood rightly argued, more higher education places should mean more social mobility. Although I welcome any constructive suggestion to increase social mobility and opportunities in this country, I am concerned that a heavy-handed attempt to do so would risk another cornerstone of our university system, which is academic freedom.
In a commendable feature of the Higher Education Act 2004, OFFA was given a legal duty
“to protect academic freedom including, in particular, the freedom of institutions…to determine the criteria for the admission of students and apply those criteria in particular cases.”
The first guidance letter issued by the Labour Secretary of State in October 2004 confirmed that the Government’s priority was financial support for the poorest students, and noted that
“institutions that generally attract a narrower range of students may want to put more money into outreach activity to raise aspirations”.
The guidance also made it clear that institutions’ admissions policies and procedures were outside OFFA’s remit.
This Government’s new guidance to the director of fair access is much more aggressive, and I believe that it has clear and serious implications for universities’ admissions policies. It instructs OFFA that it
“will want to ensure that each institution is making sustained and meaningful progress towards a more balanced and representative student body, reflected year on year in its own benchmarks, measures and targets.”
Under the February 2011 guidance letter, if an institution is deemed to have seriously or wilfully breached its access agreement, OFFA can decide not to approve or renew the agreement. That would remove the institution’s right to charge its students above a basic fee level. I understand that a fine of up to £500,000 is also available.
The message to universities, via OFFA, appears to be that unless they make progress each year towards achieving a “more balanced and representative” student body, they can expect OFFA to set much more onerous obligations and require them to devote more of their resources to outreach and financial support. In addition, they could be fined. So, while the Opposition call for new powers for OFFA, will the Minister confirm that the Government remain committed to protecting the academic freedom of universities, and that they have no plans to interfere with university admissions policies through access agreements?
Mr Willetts
I can give that assurance. We have no plans to change the legal framework guaranteeing the freedom of universities to run their own admissions procedures.
Mr Wilson
I thank my right hon. Friend for that assurance, but the legal framework is slightly different from the access agreement. I do not have time to go into that now, however.
I agree with the Russell group when it argues that too few poorer pupils are getting the right grades and that the achievement gap according to socio-economic background is getting even wider. It also argues that the most effective way to get low income students into the best universities is to help them to improve their academic performance at an early stage. It is in the schools that we should be looking to change things, not in the universities. As I have said, I am passionately committed to raising aspirations and spreading opportunities more widely in our society, but it would be far better to tackle the real cause of unfair access to higher education—too few poorer children achieving the right grades at school—than to bring the Government into conflict with the legal duty to protect university independence and academic freedom.