Amendment of the Law

Debate between Andrew Bridgen and Adrian Bailey

Wednesday 21st March 2012 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Chancellor opened his statement by promising us that this is a Budget that “rewards work”, “backs business” and “is on the side of aspiration”. Fine words, but I remember the last Budget, which he said would

“put fuel into the tank of the British economy.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

I have an uncomfortable feeling that in one year’s time, I will be looking back on the Chancellor’s opening words today with the same scepticism and cynicism with which I look back on the words that he used to describe his previous Budget. The fact remains that this Budget is set against a background of increasing unemployment, a squeeze on living standards and flatlining economic growth. It was significant that Government Members were so enthusiastic about the revised Office for Budget Responsibility projection which showed that the economy could grow by an extra 0.1%, given the fact that the economy is performing way below the Chancellor’s original projections. I sensed a hopeless clutching of straws.

[Andrew Bridgen]

Is the hon. Gentleman aware of recent predictions that the UK economy will grow twice as fast as the German economy and three times as fast as the French economy this year?

Higher Education Policy

Debate between Andrew Bridgen and Adrian Bailey

Wednesday 27th April 2011 Commons Chamber

[Mr Bailey]

Yes, my right hon. Friend anticipates one of my later points. Both the Higher Education Policy Institute and, by implication, the Office for Budget Responsibility have recognised that issue.

Let me make it quite clear that from my personal perspective I have always believed that graduates should make a contribution to their education. There is a legitimate debate—it should have been had before these proposals were introduced—about the appropriate balance of benefit between an individual and the country’s economy and about what the appropriate obligation for payment should be between the individual and the state. That has to take place, obviously, within the constraints of affordability.

[Andrew Bridgen]

The hon. Gentleman comments on the allocation of payments and the contribution that graduates should make to their education, but was that not the entire function and purpose of the Browne report, which has been taken into account?

[Mr Bailey]

Yes, it certainly was and I was just coming to that. We should have had a White Paper, followed by a full debate, which would have enabled the Government to put forward their proposals and the Opposition and others to probe them. A range of educational institutions —there are an enormous number of them—would have been able to contribute their expertise. What we have had, however, is this seismic shift in Government funding, carried out without adequate research and debate.

I spent 10 years on the Government Benches listening to lectures from Conservative Members about the dangers of hasty legislation and the unintended consequences that almost inevitably arise from it. If ever there was a case in point, I honestly think this is it. Hasty legislation, or hasty regulation in this case, is usually bad legislation, or regulation.

The lack of research and work done highlights a number of issues. The first is the setting of the fee levels. The Minister’s hopelessly optimistic estimates, on which the financial model was predicated, have been demonstrated as completely incorrect. The repayment implications are considerable. A whole range of expert research has been done to demonstrate that the income stream on which the Government predicated their financial model will not be met. There will therefore be a long-term financial liability, possibly an expanding one, that the Government will have to meet.

Another issue that could and should have been explored far more comprehensively if we had had a White Paper is of course the role of the Office for Fair Access. When Ministers were pressed on the setting of the level of tuition fees, they seemed to ascribe to OFFA powers that were completely beyond it, as my right hon. Friend the Member for Southampton, Itchen (Mr Denham) said in his opening remarks. The fact remains that OFFA is an organisation of four people, to whom responsibility was attributed by the Deputy Prime Minister for setting the tuition fee levels of all universities. That is totally beyond their resources, and they could not do it anyway, because they do not have the legislative basis to do so. This could and would have been teased out in a full and open debate of a White Paper, but by virtue of the Government’s actions it has been precluded.

The outcome is that the figures in the financial model do not appear to stack up. I mentioned the potential long-term financial implications earlier. As the Minister has acknowledged, the options are to cut funding for universities further and to reduce student numbers. I believe that if tuition fees averaged £8,000 per annum, it would be necessary to reduce the number of students going to university by 17,000 in order to stay within the model. There is actually a third option: the Government could change graduates’ repayment conditions. I think that that would open another can of worms, and would provide the basis for further research to assess the possible outcome.