(11 years, 4 months ago)
Commons ChamberI am sorry to have to tell the hon. Gentleman that the Government are already borrowing more. We shall see the borrowing figures tomorrow, and we shall see what happens to their strategy. The deficit reduction plan has gone. It has vanished. It has totally disappeared. It is a dead plan. It is no more. It is deceased. It is incumbent on Government Members to realise that they need a different strategy for deficit reduction; they need one that will succeed.
I want to return to the first page of the Red Book, which we are asked to approve as a true reflection of the state of our economy. It states that
“the Government is committed to keeping costs down for families to help with the cost of living”.
Tell that to the typical household now being asked to pay an extra £891. People are worse off because of the measures taken since 2010—not to mention the shrinking real wages relative to rapid price rises. How about the following quote for masterly understatement? It states at the foot of the page that we are experiencing
“a more subdued and uneven recovery than expected”.
Our economy shrank in the last three months of 2012, and we will see whether we are recovering when we see the growth figures for the current quarter on Thursday. How on earth could that be viewed as a recovery? This is an exceptionally disingenuous document. Reading page 1 of the Red Book is enough to make any dispassionate observer double-take their grip on the tough realities of the world around them.
We should therefore dwell for a moment on the real-world evidence. A week is certainly a long time in the Chancellor’s political lifetime—what a week has just passed. The unemployment figures were exceptionally grim. The Bank of England’s latest release on trends in lending showed that, measured annually, the amount of lending to UK businesses from banks and building societies fell in the three months to February. The Bank of England said that lending to businesses fell by £5 billion during those three months and that the decline was broad based across all sectors. So much for funding for lending.
Way before we got to the Budget, we suggested that the Chancellor should take steps to reform the funding for lending programme, but he did not do so in the Budget. It should not take an intervention from the International Monetary Fund to prick up the Chancellor’s ears and make him realise that he needs to do something about funding for lending. Ministers will have to be far more adept and fleet of foot than that.
The Treasury Select Committee said last week that it was by no means clear that the cornerstone of the Budget—the Help to Buy housing scheme—would benefit first-time buyers and, as my hon. Friend the Member for Luton North alluded to earlier, the academic methodology underpinning the key paper written by the Chancellor’s favourite economic theorists—Carmen Reinhart and Kenneth Rogoff—was discredited when a graduate student found a fatal flaw in their excel spreadsheets that supposedly underpinned the whole extreme austerity course advocated by the Treasury.
Despite the usual diplomatic finesse employed by the IMF towards its affiliating member states, its chief economist Olivier Blanchard said that the Chancellor was “playing with fire”. A year ago, the IMF was forecasting growth of 2% this year, but it is now expecting growth of just 0.7%. It was a serious mistake for the Chancellor to ignore the IMF’s calls for a reassessment of fiscal policy in the Budget, and it is right to repeat its warnings. Even Christine Lagarde, not known for departing from the Chancellor’s opinions on these matters, said that the pace of fiscal consolidation
“has to be adjusted depending on the circumstances and given the weak growth that we have observed lately because of reduced demand addressed to the economy”
and that
“now might be the time to consider”
doing so.
We are not talking about whether this document should be submitted to the IMF; we are talking about submitting it to the EU. If we compare our growth with that of the eurozone, the EU’s own body, EUROSTAT, is forecasting that growth in the eurozone will go down by 0.3% and that ours will go up by 0.9%.
To whomever we are asked to submit this document—to the IMF, the EU, the hon. Gentleman’s constituents or his mother-in-law—I would be embarrassed, if I were the hon. Gentleman, to stand behind it as a true reflection of the state of the UK economy. To cap it all, last week, we saw another humiliating blow to a Prime Minister and Chancellor who kept saying that our triple A credit rating was the No. 1 test of their economic and political credibility.
(12 years, 1 month ago)
Commons ChamberI beg to move amendment (a), at line 15, leave out from “States” to the end and add
“notes that the UK’s ability to negotiate a satisfactory European Union budget deal has been weakened by the Prime Minister’s failure to secure allies for a more prudent settlement in this qualified majority decision; and so calls on the Government to strengthen its stance so that the 2013 Budget and the forthcoming Multi-Annual Financial Framework are reduced in real terms.”
It is always interesting to follow the Financial Secretary to the Treasury. His motion, parts of which we agree with, states that the multi-annual financial framework—a rather clumsy phrase, but essentially a seven-year spending review for EU budgets from 2014 to 2020—needs to be on a sustainable path. Of course that is true. It is also absolutely true, as the motion states, that these are times of ongoing economic fragility in Europe. However, the motion does not mention the fact that, sadly, that is more the case in the UK under this Government.
The motion mentions difficult decisions having to be taken, but falls short when it comes to the actual matters at hand. The Minister spent almost half an hour trying to throw mud and allegations at the previous Government about what happened several years ago, but said hardly a word about what he was doing about the budget settlement for 2013 and even less about the big decision on the seven-year spending review period—a decision, incidentally, on which the Government have a veto. We are coming to that critical period of time when he and the Prime Minister in particular are potentially at their most influential, with leverage over what happens with that budget, but when we tried to get a simple answer from the Minister on whether he agreed that the 2013 budget and the multi-annual financial framework should be reduced in real terms, answer came there none. He said, “Well, we’ll try our best to do the right thing.” The motion states that the proposed 6.8% increase is “unacceptable”, but that is simply too weak. Not going for the 6.8% increase is a no-brainer. Where is the Government’s backbone?
The motion was tabled only yesterday, so it is no surprise that many hon. Members may not have seen that this crucial debate is taking place.
The hon. Gentleman has to realise that the European Union was going through a totally different era of accession countries and enlargement. Now, we are in a post-financial crisis era, in which it is absolutely clear that, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, serious spending cuts are taking place in our domestic economy and budget. Many of our constituents want pro-job, pro-growth and pro-stimulus measures to be priorities here in the UK, and they feel aggrieved that some administrative budgets in the EU will continue to roll forward without the UK Government showing the restraint that they ought to show while they are at the height of their potential negotiating powers—hence the amendment that we have tabled.
Despite the Financial Secretary to the Treasury’s sudden animation when I asked him what exactly the Government are doing, the motion does not set out clearly the view, which ought to be and would be shared by all hon. Members, that the budget and the multi-annual financial framework should be reduced in real terms. It is a simple statement that would help the Government in their negotiations, and that is why the House should support the amendment.
Some of us will oppose the amendment on the basis that it, too, does not go far enough, because it talks about reducing the budget merely in real terms. The question I therefore pose is: would the hon. Gentleman be satisfied if the budget increased in cash terms?
The hon. Gentleman was perfectly free to table his own amendment, and he pitches a perfectly respectable position. I thought that it was important to draw the Government into adopting a stronger stance, and a reduction in real terms is, at the very least, the place where we need to see the Government, but we could not get them even to that point. He has seen the motion; it falls short in so many ways.
Real-terms cuts are required now to the EU administrative budget, because in the UK we are in a double-dip recession, thanks in part to the Government’s failure on economic growth. The economy shrank in the last quarter of 2011 by 0.4%, and in the first quarter of this calendar year by 0.3%. Borrowing hit £18 billion in May, up £3 billion on the same month last year, and pressures on the UK’s finances are increasing: domestic tax revenues have fallen and income tax receipts are 7.3% down on the year to May. Today the Office for Budget Responsibility, in its fiscal sustainability report, cites projections suggesting that the public finances are likely to come under pressure in the longer term, and states:
“In the absence of offsetting tax increases or spending cuts this would widen budget deficits over time and eventually put public sector net debt on an unsustainable upward trajectory.”
There is much more evidence than ever before of the need for us to strengthen the Government’s negotiating stance. That is why it is just not good enough for the Government to say, “There’s not much we can do about it. It’s a qualified majority vote this year. We’re in a terribly difficult position,” and why in our amendment we have, sadly, had to point out that the Government have failed to win alliances for a tougher position on the budget. That is where we are today.
There was the phantom veto in December last year, when nothing was actually vetoed—everything went through with the agreement of the other EU countries, and the Prime Minister succeeded simply in alienating the UK’s negotiating position. Now, when we need to make strong arguments about reducing budgets, few are listening and open to ideas because of the stance taken by the Prime Minister in those negotiations.
(12 years, 4 months ago)
Commons Chamber(Nottingham East): My hon. Friend the Member for Vauxhall (Kate Hoey) asked an extremely pertinent question, and I want to come back to it later. First, however, I commend hon. Members from both sides and all parties for spotting that this debate was so relevant. The motion, as framed, does not leap out from the Order Paper, and when hon. Members go to the Vote Office to find these convergence documents, they are met with a little mystification. Let us turn to page minus-2, so to speak, of the Budget Red Book.
Indeed, I was here this time last year making a very similar, uncannily parallel speech, but I will point it out again. Underneath where it talks about Crown copyright, the ISBN number and where it says:
“Printed on paper containing 75% recycled fibre”,
it reads:
“The Budget report, combined with the Office for Budget Responsibility’s…fiscal outlook, constitutes the Government’s assessment under section 5 of the European Communities (Amendment) Act 1993”.
That is relevant to today’s debate. It is written in very small font for those who might have difficulty reading it. It mentions the European Communities (Amendment) Act, which sounds like a very British piece of legislation, but, being eagle-eyed, hon. Members will have spotted that all that Act does is refer to the Maastricht treaty, article 2 of which states:
“The Community shall have as its task…a harmonious and balanced development of economic activities, sustainable and non-inflationary growth”.
Of course, it also relates to article 103, which talks about economic policies being a “matter of common concern” that should be co-ordinated within the Council. These are the sorts of words that some find difficult to stomach, but the article continues:
“For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy”.
In a sense, the right hon. Member for Wokingham (Mr Redwood) was right to say that this is the homework that has been set by the European Commission, and we are completing our homework today.
(12 years, 6 months ago)
Commons ChamberI beg to move amendment 1, page 1, line 22, at end insert—
‘(3A) It is the duty of the insurer to show regard to the principle that a burden or restriction which is imposed on a consumer through requests for particulars before a contract is entered into should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction.’.
If hon. Members look at line 22 of page 1, right at the foot of the Bill, they will see a simple provision that states:
“It is the duty of the consumer to take reasonable care not to make a misrepresentation to the insurer.”
It follows a provision in clause 2—one of the most important in the Bill—that refers to the “disclosure and representations” that consumers need to make to an insurer
“before a…contract is entered into or varied.”
I tabled an amendment in Committee that was specifically designed to challenge the Government in respect of the burden that might fall on consumers under the new provisions in this Bill.
I support the Bill; I think it is important. I want more clarity and disclosure, as the contractual arrangement needs to be clearer and more transparent. However, there is a small alarm going off in the back of my mind—I have a minor anxiety—that we might unwittingly create circumstances in which an individual faced with having to answer a barrage of extra questions, or fill in page after page of forms that they perhaps did not have to fill in before, may well think, “I can’t be bothered with this particular insurance cover,” especially if they feel it to be a discretionary area of cover, rather than a mandatory area, such as car insurance. Faced with that weight of administration and bureaucracy, those individuals might say, “I just don’t have the time or the inclination for these dozens and dozens of questions,” and might therefore go without insurance cover when that would be neither a prudent nor wise thing to do.
Faced with a constituent in one of our surgeries who asked, “Should I take out household insurance cover?”, “Should I take out contents and building insurance”, and so forth, most of us would say, “Absolutely you should. You don’t know what’s around the corner. There could be any number of things that fate could bring upon your shoulders. Therefore, you really ought to regard this as essential.” In the dreadful economic circumstances that the Government are presiding over, many hard-pressed families might decide that certain things will have to give, and I am sure that the cost of insurance is on many people’s minds. Adding to the consideration of cost the idea that people have to go through onerous processes and jump through hoops to get the insurance could take a certain category of person to a tipping point. Such a consideration could be the straw that breaks the camel’s back, leading them to conclude that they just cannot be bothered to fill in the forms for that insurance cover at that point. Many of us will have been there. We will have seen a particular product and made a note in the diary to investigate it, but, when faced with the hurdle of filling in the forms and getting involved in the bureaucracy, we have found that it falls down our list of priorities. That is the point that I want to test with the amendment.
In Committee, I framed the amendment incorrectly. The amendment that I tabled at that point related to circumstances in which a consumer varies a contract that they have already taken out. As the Minister will know, when she reapplies for her car insurance, the insurer will already have details of her address and driving habits on record. Renewing an insurance contract is therefore not particularly onerous, because not all the questions need to be asked afresh. She will be able to tick a box to “re-answer” them. In Committee, the Minister explained that my amendment was unnecessary as there were ways of varying contracts quite efficiently.
I have therefore tried to reframe the amendment so that it relates particularly to new insurance contracts. It is aimed at the individual who has perhaps not had car insurance or owned a house before, and who decides to start from scratch with a new insurance contract. In the amendment—I hope that hon. Members will forgive the slightly flowery legislative language that is sometimes used in such provisions—I have proposed the addition of a new subsection:
“It is the duty of the insurer to show regard to the principle that a burden or restriction which is imposed on a consumer through requests for particulars before a contract is entered into should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction.”
I know that many hon. Members have concerns about regulatory burdens, but we must be careful, because regulations are sometimes necessary for the protection of individuals and of society at large. We should always keep a watchful eye on the burdens that such regulations impose, however.
The regulatory impact assessment that accompanies the Bill shows that the costs that will fall on the consumer will not be particularly onerous, which is why I support it in general terms. In pounds, shillings and pence terms, the costs will be negligible. The assessment estimates that an additional £700,000 a year will be saved by the insurance sector as a result of the provisions in the Bill, and that if there is an extra charge to consumers, it will probably be 2p or 3p for every £100 of insurance. I am therefore not concerned about the cost as a burden. The burden that I am flagging up is the administrative burden, the non-financial burden, that might fall on the shoulders of the consumer.
Will the hon. Gentleman tell us who will be responsible for determining whether the new duty that the amendment seeks to impose is being fulfilled?
Ultimately, the courts would have to be the arbiter in relation to those arrangements. This is the kind of thing that tends to get drawn into a judicial review, although I would hope that it will not need to be tested in that way. I am simply introducing a principle that I would like insurers to have regard to when they frame the questions, the tests and the requirements that they place on the shoulders of the consumer.
So, in reality, the only way for a consumer to enforce this duty would be to take the company to court; otherwise, he would be relying on the good nature of the insurance company, would he not?
Indeed, that is the very nature of the measure, but that does not mean that, in the course of changing the disclosure requirements, we should not try to frame the duties that insurers have to abide by. I do not know whether hon. Members have visited moneysupermarket.com or confused.com recently. They are aggregator websites on which a number of insurance companies share the questions that people have to answer in order to take out an insurance contract. The websites show the range of insurance contracts that are available. Quite honestly, I think that the way the aggregator companies will deal with the Bill is another matter, but I challenge any hon. Member to say that their boredom threshold has not been reached after they have filled in 15 or 20 pages of a form. Having said that, I think that many hon. Members—especially those who are in the Chamber at the moment—must have particularly high boredom thresholds. I know that from many hours of experience in these debates. Notwithstanding that propensity to sit through long, technical discussions, however, I believe that form-filling is quite a different matter.
My point is about the administrative burden in relation to new contracts. I want us to ensure that we protect the section of society that I have been describing. I can envisage us all being visited at our surgeries in the years ahead by constituents telling us that they did not take out insurance not because of the cost but because the form-filling was just too much for them. They will tell us that they regret that, but that there were just too many questions to answer. I hope that the Minister understands why I have framed the amendment in this way. It is an important provision, and I hope that she will address it.
(12 years, 10 months ago)
Commons ChamberAs always, it is a great pleasure to follow the hon. Member for Nottingham East (Chris Leslie). I seem to recall that I was in the Chamber some months ago when his Bill was introduced by way of the ten-minute rule process, and as a consequence of that, we are here today debating its Second Reading. I am sure that he is pleased that it has reached this stage so swiftly.
In most United Kingdom universities, the MA—master’s of arts—degree is a free-standing graduate degree awarded by examination. I should say at the outset that I approach this subject entirely without any prejudgment of the case, because I did not attend either Oxford or Cambridge, or, indeed, Dublin university. I did a rather unusual thing, in many ways. I think I am probably in a minority in the House in that I obtained my bachelor of law degree by correspondence through the university of London.
It had always been my intention to try to go university after I had completed my secondary education, and most people thought that that would happen, but in those days, 30 years ago—I hardly dare say it—the number of universities and the application process was rather different from today. One had to apply to various universities and was given grades that one had to achieve in order to meet the requirements of the course that one had applied for. I had applied for law degree courses, which usually came back with quite a high requirement in terms of the grades that had to be achieved in order to attend. In the event—it is a matter of record and widely known—I did not get the grades that I needed to be able to attend such a course.
Thirty years ago, much like today, the economic situation put unemployment high on the national agenda. It seemed to me that the purpose of education was to get a job. In the summer of 1980, I was therefore faced with a dilemma: did I sit around, unemployed, and hope for something to turn up, did I take an alternative further education course, or did I look for a job? As luck would have it, I got the job that I applied for as a trainee legal executive. I accept that I am very fortunate because I have applied for only one job in my life.
I make that point not to digress, but because it leads on to what happened a few days later. I was offered the opportunity to go to Hull university, not to do a law degree, but to do a degree in economics, philosophy and sociology, or some other three-study degree. I thought long and hard, and had many sleepless nights thinking about whether I should give up the job that I had just got and do a course that I did not really want to follow at university. I was told that it might be possible to swap courses, but I decided not to go to university in the conventional way, but to stay at the small firm of solicitors that I had joined. I was forced to continue my legal education at night school, studying in the evenings and at weekends. I started at Richmond college doing the trainee legal executive exams, as they were in those days, for the Institute of Legal Executives.
It was only after I had been doing those studies for a couple of years that I realised that if ever I was to achieve my long-term ambition of becoming a solicitor, I needed to obtain a law degree. In those days, it was far less common than it is today to obtain a law degree by correspondence. In a nutshell, it meant that one had to do the same exams to the same standard as everyone who had attended the university of London as an internal student, without the benefit—although some might think it a disadvantage—of living in London and attending the lectures. It required a degree of rigour and self-denial, because at evenings and weekends it was necessary to stay in when ones friends were going out and doing the things that 18 and 19-year-olds do. Actually, I was probably in my early 20s by the time I had started the degree. I had to persevere down that route.
I am very interested in the hon. Gentleman’s personal history, but he will be aware that time is pressing and that the sitting finishes at 2.30. It would be useful to hear from the Minister and others on the specific issue of the integrity of the master’s degree. I would be grateful if the hon. Gentleman was swift with his remarks.
I hear what the hon. Gentleman says. I will address that point in detail shortly. I just wanted to make the point that I am in no way biased about the merits or otherwise of someone having an MA from Oxford, Cambridge or Dublin after their name just because I did not go down that particular route. In fact, the first time I came across the practice—I had not known that such things were possible—was not until I was at the firm of solicitors that I mentioned. One of the partners who had joined after me had been to Cambridge, and he had a law degree. Upon paying whatever the requisite fee was, he became a master of arts. It was only through chatting with him at that time that I discovered the practice. I hope the House will therefore accept that my comments are made in the light of that background, and that I am completely neutral.
I understand that the universities of Oxford, Cambridge and Dublin award BA graduates MAs without postgraduate work after an allotted period. At the university of Dublin, those who have a bachelor of arts degree may proceed to the degree of master of arts after a period of three years and payment of a fee of €637.
I accept that concerns have been raised about the practice in previous years. They were perhaps first noted in the House back in 2000, when Jackie Lawrence, the Labour MP for Preseli Pembrokeshire, tabled an early-day motion. I understand that it was signed by more than 50 right hon. and hon. Members, and that it proposed, I believe for the first time, that the Oxbridge MA be phased out. In the same year, the Quality Assurance Agency for Higher Education—the university standards watchdog, if I can call it that—reviewed the issue as part of its attempts to create a uniform system of master’s degrees for employers in the United Kingdom and the rest of the world. One can well understand the need for some form of standardisation across the universities sector, so that employers know what they are dealing with.
The practice of what might be called the ancient universities—I think that is the correct term for Oxbridge—actually dates back to mediaeval times, when study for a liberal arts degree typically took seven years and the degree was awarded in two parts. The bachelor of arts degree was awarded at the end of undergraduate studies, then the master of arts degree was undertaken, which gave the student the licence to teach. Until the 17th century, the Oxbridge student completed the study of the BA and then usually remained at the institution for a further three years. As is the case today, the student became a full member of the university after being awarded the MA degree. I understand that that is one reason why most students take up the opportunity to move from a BA to an MA. I would be interested to know whether anyone has the precise statistics on that.
By the end of the 17th century, for reasons that are not known nowadays, the system had completely changed and the MA was awarded to candidates without the need for them to continue their studies any further. I should briefly add that American universities developed the doctorate course, with the effect that the MA began to hold a place above the baccalaureate and below the doctorate. The university of London adopted that model, moving away from the mediaeval practice. Newer universities followed that lead, with the result that the practice at Oxford, Cambridge and Dublin, which might be called the Oxbridge and Dublin model, is now considered by some to be an anomaly.
At Cambridge, the MA is conferred by right on all those who have obtained a BA degree not less than six years from the end of a graduate’s first term of residence, providing that they have held their BA for at least two years. An MA degree is not available at the university of Cambridge as a postgraduate qualification.
On the other hand, the Oxford MA degree, following long-standing tradition, like at the university of Cambridge, is a mark of seniority within the university that may be conferred after a period of 21 terms—seven years—after matriculation. An MA is not available at the university of Oxford as a postgraduate qualification. Oxford’s guidance to students on the Oxford MA states that
“the Oxford MA is about reaching a new status within the University and not an upgrade of your BA or an additional qualification.”
It is perhaps worth mentioning a couple of the comments that Oxford and Cambridge made following remarks by an academic at Cambridge university’s computer laboratory in May last year. Cambridge university’s council said that the degree was valuable. It stated:
“The council believes that the (MA) degree continues to serve valuable purposes which outweigh any negative external perceptions of it. The QAA (Quality Assurance Agency) is well aware of the degree’s status and has not expressed any concerns about it.”
According to Cherwell, an independent student newspaper at the university of Oxford, a spokesman from the Oxford university press office said that the issue had been raised by an MP, and that it was therefore difficult to gauge public opinion on whether the system should be changed.
I understand that the universities have concerns about how up to date the research was on which the QAA has based its findings. Although there are concerns about the nature of Oxbridge MA degrees, they are not widespread. I have met dozens of employers over the years, and I have never heard one of them say that they are confused by the Oxbridge and Dublin system of awarding MA degrees. I am also not aware that any business has been duped or suffered any loss as a result of employing someone from Oxbridge or Dublin who has gone down the route of having their degree upgraded in that way.
In the same way, when speaking to graduates of other universities who have undertaken a course of study for their MA degree, I have never come across any ill-feeling towards Oxbridge graduates because of how they have achieved their MA award. One has to ask whether it is such a problem that it warrants the abolition of the long-standing and traditional practice of those two ancient universities. In many ways, it marks them out as special; today most people would still accept that having an Oxbridge degree is different and more special than having one from other universities.
The fact that the Oxbridge MA is awarded in replacement of, and not in addition to, the award of a bachelor’s degree is particularly noteworthy. To me, that strongly makes it clear that it is based on academic rank rather than academic merit. The four ancient universities of Scotland—St Andrew’s, Glasgow, Aberdeen and Edinburgh—award MA degrees as first degrees in certain subjects, as do Dundee and Heriot Watt universities. How Trinity College Dublin awards MA degrees is similar to how Oxford and Cambridge do.
Oxbridge MA degrees are distinct in purpose and nature. For example, they give the right to vote in elections for the chancellor of the university. The universities and the QAA make it absolutely clear that the MA degrees are not academic qualifications. The granting of master of arts degrees is, I believe, a matter for the universities themselves to consider as autonomous institutions primarily responsible for academic standards. I wonder to what extent they would welcome what one might call the intrusion into their affairs by the House.
UK universities have thrived under the existing system; recent statistics show that only the United States of America boasts more institutions than the United Kingdom in the top 200 of the Times Higher Education world university rankings for 2011-12. In the light of that evidence, there is nothing to suggest that the qualification is damaging their world-class reputations. Both Oxford and Cambridge offer a range of taught master’s degrees, none of which is called an MA. We must not lose sight of the fact that there are real inequalities of opportunity in education. In the last year for which figures are available, just 40 of the 80,000 pupils eligible for free school meals made it to Oxbridge.