Competitiveness Pre-Council Statement

Chris Skidmore Excerpts

Monday 11th February 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

My noble Friend the Parliamentary Under-Secretary for State for the Department of Business, Energy and Industrial Strategy (Lord Henley) has made the following statement:

The Internal Market and Industry Day of the Competitiveness Council will take place on 18 February 2019 where the right hon. Lord Henley, Parliamentary Under-Secretary of State, will represent the UK; and the Research and Space Day on 19 February 2019 where Chris Skidmore MP, Minister of State for Universities, Science, Research and Innovation, will represent the UK.

Day one—internal market and industry

The internal market and industry day will consider a number of non-legislative items including, a competitiveness check-up focusing on the impact of EU value chain integration on competitiveness. Ministers will be asked to exchange views on the impact of artificial intelligence on EU industry and to adopt conclusions on the EU’s co-ordinated plan on artificial intelligence.

They will take part in a policy debate on ‘Clean Planet for all’, the EU’s strategic long-term vison for a climate-neutral economy. The non-legislative part of the agenda will finish with a European semester policy debate on how to deliver key reforms to make the European economy more competitive and resilient in the face of global uncertainty.

Under any other business, there will be updates on the following current legislative proposals: the company law package including a directive on digital tools and processes and a directive on the cross-border conversions, mergers and divisions; the regulation on enforcement of union harmonisation legislation on products; and the regulation on promoting fairness and transparency for business users of online intermediation services.

Day two—research and space

The research and space day will begin with a session on the Horizon Europe package during which the Council will review the progress report and exchange views on the specific programme implementing Horizon Europe—framework programme for research and innovation for 2021- 2027.

Under any other business, the presidency will provide information on the state of play of the Horizon Europe package, covering the framework programme and its rules for participation and dissemination. The presidency will then conclude the Council by providing information on the ITER and Euratom programmes.

[HCWS1320]

Universities: Financial Sustainability

Chris Skidmore Excerpts

Monday 11th February 2019 Commons Chamber

[Angela Rayner (Ashton-under-Lyne) (Lab) (Urgent Question)]

To ask the Secretary of State for Education if he will make a statement on the financial sustainability of universities in England.

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I thank the hon. Lady for the opportunity to discuss the higher education sector today in what is my first urgent question.

This Government recognise the importance of the higher education sector and the massive contribution that it makes to this country. We recognise the multiple challenges that the sector is facing and that these will require institutions to adapt to a more competitive and uncertain environment. It is true that the current context presents significant challenges to institutional management, efficiency and financial planning in the HE sector, but it is wrong to characterise the HE provider sector as teetering on the brink of financial collapse. In its final annual report on the financial health of the sector published in March last year, the Higher Education Funding Council for England—the Office for Students’ predecessor—concluded that the HE sector continues to be in a sound position financially.

The new regulatory framework under the Office for Students brings a risk-based approach to monitoring financial viability and sustainability in order to protect students’ interests. Financial sustainability is a condition of registration. This means that the OfS, as regulator, will pay greater attention—and, importantly, require more specific action—where there is greater institutional vulnerability. Where the OfS identifies particular risks to a provider’s financial sustainability, it will indeed take action. This may include enhancing its monitoring or imposing a specific condition of registration on a provider to improve its financial performance. It may also require a provider to strengthen its student protection plan. This will enable action to be taken before a provider faces major financial difficulties.

The Department for Education is also working closely with the OfS to understand the sector’s wider financial risk in worst-case scenarios. We are working with the OfS, other Departments and other relevant national partners to develop full contingency plans to deal with unforeseen and/or major HE provider failure. This will set out roles, responsibilities, triggers and actions to be associated with instances where HE provider market exit falls outside the normal business-as-usual approach of the OfS in implementing its regulatory framework and requires Government action. But ultimately, as autonomous bodies, the financial viability of universities is a matter for the leadership of the HE providers themselves.

The terms of reference of the post-18 review that has been led by Sir Philip Augar include a focus on ensuring choice and competition across a joined-up post-18 education and training sector. The review will look at how it can support a more dynamic market in provision while maintaining the financial sustainability of a world-class higher education and research sector. We have been clear that the review recognises the need to preserve and protect the existing strengths in the system, and the stability of providers is key to a strong system.

The HE sector does face challenges, but we are confident that universities will rise to these challenges and continue to be providers of world-class higher education.

[Angela Rayner]

Thank you for granting this urgent question, Mr Speaker. I want to take this opportunity to wish my comrade, my hon. Friend the Member for Bolsover (Mr Skinner), a happy birthday.

Serious concerns were revealed this weekend about the financial situation of Reading University and there are reports of at least three more universities facing a significant risk of insolvency. I hope that the Minister will tell us in a little more detail what steps he is taking to address the situation at Reading, as well as across the sector, because the consequences of such a failure would be disastrous for students, staff and entire local communities and economies. Can the Minister reassure us that it is the Government’s policy to prevent such a disaster? I do not feel reassured from his response that he has a grip of this.

The Minister said that he is working with the Office for Students towards establishing student protection plans. Can he clarify how many universities do not have plans in place? When will he ensure that they all do? What will it mean in practice? Will students be left with a refund but no qualification after years of study? HEFCE had a list of universities of financial concern. Can the Minister tell us whether the new regulator has such a list and how many providers are currently of concern? Last year, it granted at least one £1 million emergency loan. Can he tell the House how many others have been issued? The new regulator has now said:

“The OfS will not bail out providers in financial difficulty.”

Is that Government policy and from when does it apply?

Can the Minister confirm that his Government have also handed universities a £200 million pensions bill but no new funding to meet those costs? Is he lobbying the Treasury to change that? The Office for National Statistics has demanded that the Government end the “fiscal illusion” of pretending that all loans for fees are repaid. When will the Government follow that ruling? Given the uncertainty that universities now face, can he tell the House whether the Augar review will be published this year? Will he guarantee that any proposals on tuition fees will not lead to cutting universities’ funding?

This crisis is a direct result of the Government’s failing free market experiment. Is it not time they faced the fundamental fact that education is best provided as a public service for the public good? If this Government will not change, it is time for a new Government.

[Chris Skidmore]

I will respond to several of those points, but I do not think it is appropriate for the Government or the OfS to comment on the position of individual providers.

In terms of the role of the Office for Students in HE financial sustainability, as I have stated, the new regulatory framework that has been created brings a risk-based approach to monitoring financial viability and sustainability, in order above all to protect student interests. The reforms have provided for that framework, and it means that the OfS, as regulator, can pay greater attention and require more specific action if there is institutional vulnerability.

Ultimately, these are autonomous bodies and leaders of HE providers are responsible for ensuring their institutions’ financial viability. They are not part of the public sector; they are autonomous institutions. During the passage of the Higher Education and Research Act 2017, a key point voted on by Labour Members was that universities would remain independent and autonomous. The OfS will therefore work closely with providers in financial difficulty, but neither the OfS nor the Department for Education will prop up failing providers. The OfS may enhance its monitoring or impose a specific condition of registration, requiring a provider to improve its financial performance, but we need providers at risk of any financial difficulties to come forward, so that we and the OfS can work with them on improving those registration conditions, which may require a provider to strengthen its student protection plan.

I turn to the issue of HE provider failure. The aim of the new HE regulatory approach is that the Office for Students will be able to act in anticipation of developments such as course closure or market exit, rather than in reaction to them. As I have said, under the new regulatory framework, providers must meet a set of registration conditions aimed at ensuring that they are financially viable, sustainable and well-managed organisations. The new HE regulatory framework has been designed to promote diversity, innovation and choice in HE, in the interests of students, and achieving that does not equate to propping up any particular failing HE provider.

In a competitive market, providers that fail to meet quality standards for students’ expectations may see their financial position come under even greater pressure. There is an expectation that providers may, in a small number of cases, exit the market altogether as a result of strong competition. However, the OfS’s primary interest is ensuring that any such closures do not adversely affect students and their ability to conclude their studies and obtain a degree. Students are making a considerable investment when they commit to a programme of study—investing their time, energy and money—and it is important that they should be able to complete those studies.

On protecting students and student protection plans, the OfS has the powers to ensure that all registered HE providers have these plans in place to safeguard students’ interests against the risk of financial failure. It is a registration condition that they have such a student protection plan in place. Student protection plans will set out what students can expect to happen in the event of a course, campus or department closure or if an institution exits the market. The plans must address the specific risks faced by the provider, and may include measures such as the transfer of students to another provider or financial compensation. In addition, the new regulatory framework sets out that all providers must have a refund policy.

On the pensions issue that the hon. Lady mentioned, the Government’s consultation on the teachers’ pension scheme changes closes this Wednesday—13 February. I encourage all providers to participate in that consultation, which is an important one. It is right that this live consultation should seek views on the impact of the proposal on higher education institutions, and we will finalise funding decisions once the consultation has concluded.

The hon. Lady mentioned the post-18 review being led by Philip Augar, which is still ongoing. More information on the review will be available in due course, and it will be published in due course. I will not speculate on what recommendations the independent panel will make on HE tuition fees, or on what the final conclusions will be. However, the post-18 review terms of reference include a focus on ensuring choice and competition across the joined-up post-18 education and training sector. The review will look at how to support a more dynamic market in provision while maintaining the financial sustainability of a world-class higher education and research sector. I look forward to the review being published in due course.

When it comes to the hon. Lady’s own position on the financial sustainability of the HE sector, I have to say that of all the universities I have visited and all the vice-chancellors I have spoken to, not one supports Labour’s position of removing tuition fees and completely crippling the HE sector’s financial position. The removal of fees completely would ensure that instability returned and student number caps returned. When it comes to access and participation plans, the money spent on them has risen from £430 million to £860 million in recent years, and that money would end up being capped. Labour does not have any answer on what it would do to ensure that the finance of our universities is protected for the longer term.

[Joseph Johnson (Orpington) (Con)]

May I congratulate my hon. Friend on the excellent start he is making on what is the best job in government? Universities’ financial sustainability and our soft power as a country depend on our ability to compete successfully for international students around the world. Does my hon. Friend agree with me that we should put in place a competitive offer for international students by restoring the two-year post-study work visa that we mistakenly abolished in 2012?

[Chris Skidmore]

I thank my hon. Friend for the work he put in as one of my predecessors as Universities Minister. The establishment of the Office for Students was very much down to his hard work. I remember the Higher Education and Research Act as the most amended piece of legislation in the history of this place, and he did a sterling job in making sure that we have the regulatory framework in place to ensure that we protect against financial failure in the market.

When it comes to international students, the Government are absolutely determined to press forward and look internationally at what we can do. Our universities are world-class and world-leading organisations. We have had roughly 460,000 applications from the EU and internationally this year—the highest level of applications ever seen. We will be publishing an international education strategy in the spring. We are clear that we have removed the cap on international student numbers, and we want to do more to ensure that we can increase our ability to compete not just nationally but internationally with other countries that also recognise the value of higher education at the international level.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

The University of Reading is an example of the recent trend of universities running into financial difficulties. It has got a short-term loan, but it is very unclear what this Government intend to do, as the Office for Students said last year that it would not bail out universities any more. Is it or is it not the Government’s position to offer financial aid to universities with cash-flow issues?

Universities UK is extremely concerned about all the issues that universities are facing, such as pensions and the Brexit strategy being pursued by the present Government. Will the UK Government look at universities—the place they hold in society across the UK and the amount of cash they generate for the UK economy—and help them to get through this real and immediate crisis?

[Chris Skidmore]

I made it clear in my opening remarks that the Government do not intend to bail out any independent, autonomous institutions, which is what HE providers are. What we have done is provide the regulatory framework by which the OfS can step in to help universities by signposting and working with them in advance to ensure that market failure does not occur. I have to say that our ability to provide record levels of investment in universities has been the result of increased tuition fees, which we have not seen in Scotland. As a result, some of the poorest students are able to access universities in a way that does not happen north of the border.

[Vicky Ford (Chelmsford) (Con)]

Just before I ask my question, will the Minister join me in congratulating Trinity College, Cambridge on appointing its first ever woman master, Dame Sally Davies?

Students are right now thinking about which courses to accept for next year and what university to go to. Can the Minister confirm that the regulator, the Office for Students, has given all registered institutions the bill of health that means they are financially secure for at least the next three years?

[Chris Skidmore]

The Office for Students is currently undergoing a registration process for all HE institutions, including FE providers. I understand that around 250 institutions have now been registered and, having spoken to the OfS, I am confident that it will finish the process over the course of this year. I of course congratulate Dame Sally Davies on her appointment. We need more women in leadership positions in higher education—the more, the merrier—so I offer many congratulations.

[Matt Rodda (Reading East) (Lab)]

Reading University is an outstanding, research-intensive university with high-quality teaching, as I am sure the Minister is aware, as it scores excellent marks in the Government’s own teaching excellence framework. It also provides thousands of high-quality jobs in Reading and the wider Thames valley region. Will he reassure students, the university and the many local people who rely on it that he is willing to help, and will he meet me and the university’s vice chancellor to discuss the issues involved?

[Chris Skidmore]

I am happy to meet the hon. Gentleman, as a constituency Member of Parliament, at his request. However, the Government’s position is not to comment on the financial sustainability of individual institutions. I will arrange the meeting, but I urge him and Reading University to contact the OfS to begin discussions on any concerns they might have. The OfS is there to provide early signposting and pick up on issues, rather than to react to late decisions or financial circumstances.

[Kevin Foster (Torbay) (Con)]

The Minister will have seen the growth in the universities sector over the past few years, particularly as the student caps have been removed, and he will be aware that Torbay hopes at some point to have an institution of university status. Will he reassure me that we will not return to the era of caps, which would make that impossible?

[Chris Skidmore]

I entirely agree. I am proud to be a member of the Government who reduced the student number cap between 2012 and 2015, and eventually abolished it in 2016, allowing a record number of students to access higher education. We know that, going into the 2020s, we will need a knowledge-based economy, so it is right that we allow more people the opportunity to succeed in their ambition to achieve a degree. Abolishing student finance by looking at fee levels would simply give away a fee freeze to the children of millionaires while capping the number of students who could attend university.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

The Minister has said that the Government will not bail out universities in financial difficulties, yet virtually his first act as Universities Minister was to take through Parliament a 20% increase in tuition fees, albeit just for accelerated degrees at this stage. Can he reassure the House that he has no plans to allow other degrees to see a 20% hike in tuition fees as a result of the financial problems currently facing universities?

[Chris Skidmore]

I welcome the measures we are putting in place to increase course innovation and flexibility within the HE sector. I passionately believe that that is the future and where we need to go. People may need to train and retrain across the course of their lives, so we will need course provision that allows people to access the HE market at every stage of their lives, right the way through their 20s and 30s. Two-year degrees are not a silver bullet—in fact, they were put forward in a Labour party amendment to the Higher Education and Research Act—but we have tried to ensure that they open up the market and we have encouraged more HE providers to take up two-year degrees. At the moment, they have been capped by the financial ability or the lack of financial ability to do so. Ultimately, it is £22,000 for a degree as opposed to £27,000. It is not necessarily an increase in fees; it provides people with an opportunity to study at a time of their choosing.

[Sir Desmond Swayne (New Forest West) (Con)]

What would make universities less financially sustainable than making them entirely dependent on Government finance, particularly if it is a Labour Government?

[Chris Skidmore]

Absolutely. If we began to return to a stage where universities are financed entirely by taxation it would not only put an increased burden of £12 billion on the taxpayer—an increase of about 2p to 3p on income tax rates—but mean that HE would have to compete with Government funding priorities on the NHS and welfare. Ultimately, we would return to student number caps and the situation we see in publicly funded universities in other countries where people struggle to find seats in lecture theatres. It is right that we have a sustainable financial system that protects students’ futures.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The Government still put billions of pounds into the higher education sector through research grants. If the Minister is not going to bail out institutions that are struggling financially, will he indicate to the House what action he is taking to safeguard the taxpayer pound being spent by institutions on research?

[Chris Skidmore]

I entirely agree with the hon. Gentleman on the value of research and development in the HE sector. The Government are committed to spending 2.4% of GDP on R&D. Some university grants relate to Horizon 2020 and the Government have made an underwrite guarantee extension to protect all currently allocated grants. We want to work with the sector to look at how we can increase money for R&D. The return on investment is fantastic. In the space sector, for every pound spent on R&D £10 is returned, so I could not agree more that we do need to do more as a Government. We have not done more in the past to bring ourselves up to the OECD average. Universities will be at the front and centre of that.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does the Minister recall that in 2010 the system we inherited for funding higher education was completely unsustainable? Does he agree that that was demonstrated by the fact that it was the previous Labour Government who commissioned the Browne review?

[Chris Skidmore]

My hon. Friend is absolutely right. Our inheritance from the previous Government meant that we had a cap on student numbers, low numbers of people from disadvantaged backgrounds going to university, and low numbers of women entering science and mathematics degrees. All those trends have been reversed by investing in access and participation plans, investment to ensure that universities can expand geographically and—[Interruption.] The hon. Member for Blackpool South (Gordon Marsden) is chuntering from a sedentary position. [Interruption.] I do apologise. The hon. Member for Ashton-under-Lyne (Angela Rayner) is chuntering from a sedentary position. I say again that turning back the clock to taxpayer-funded degrees would simply be a fee cut for the children of millionaires and I simply do not agree with that.

[Paul Blomfield (Sheffield Central) (Lab)]

The Minister will know that, whatever HEFCE said a year ago about the financial stability of the sector, a perfect storm is gathering with the potential drop in EU student numbers, EU research income and the Augar review. Does he agree that one way of mitigating the risks would be to take advantage of available sources of income? Does he accept that it would be a positive thing for him to embrace the recommendation of the all-party group on international students for an ambitious target for international student recruitment?

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[Chris Skidmore]

I recently had a meeting with the Higher Education Commission, led by an all-party group in Parliament. I was keen to receive that report, and as I said, our international education strategy will be published in the spring. I look forward to that and to receiving all views while we consider what our policy proposals will be.

[Mr Philip Hollobone (Kettering) (Con)]

At a time when Her Majesty’s Opposition are expressing concern about the stability and viability of university finances, does the Minister share my outrage at the sky-high salaries and rocketing salary increases of some of these vice-chancellors and other senior university officials, which are far beyond anything that they are worth and are particularly insensitive to students, who always have to manage on a tight budget?

[Chris Skidmore]

Universities receive significant amounts of public funding, so it is right that their senior staff pay arrangements both command public confidence and deliver value for money both to students and taxpayers. We want to see senior staff pay in universities that is fair and justifiable, and the process for setting pay must be transparent. We have asked the OfS to pay close attention to the elements of the regulatory framework that will deliver value for money, as well as conditions of registration relating to senior staff pay, which will improve transparency in this area. I note that tomorrow, the OfS is publishing the first of its new annual reports on provider senior staff pay.

[Mr Jim Cunningham (Coventry South) (Lab)]

I have two universities in my constituency. Looking back—given some of the remarks that have been made by Government Members—I can remember that when the Major Government were in trouble, the proportion of students was only about 20%. Under a Labour Government, it was 47%, so we always find that under a Tory Government, universities have problems. However, my more serious question of the Minister is this: has he looked at the impact that Brexit will have on the number of students and exchanges, and the skills that are required from abroad to help research and development?

[Chris Skidmore]

It is important to say, going back historically, that the hon. Gentleman is talking about the 1992 era. I was 11 at the time, and we need to move forward to the 21st century and have a unity of purpose that means we should ultimately want to do what is in the best interests of students. We should celebrate the fact that the a record level of students are now going to university—around 39%—but we also have to make sure that we get post-18 education right, so that we do not allow students to drop out if that course is not appropriate for them. I am delighted that the Minister with responsibility for further education—the Minister for Apprenticeships and Skills, my right hon. Friend the Member for Guildford (Anne Milton) —is sitting here today. We work closely together to make sure that we have a unified position that will benefit all students. When it comes to Brexit and the issue of student numbers, recent figures show that the number of EU students applying to universities has not fallen. It has risen—figures were published last week—and I welcome the fact that we need to highlight the opportunities that will be available in our world-leading universities.

[Luke Hall (Thornbury and Yate) (Con)]

Does the Minister agree that Labour’s policy to scrap tuition fees, even for the wealthiest people in our society, would put the whole sector in mortal peril and risk tens of thousands of students not being able to go to university at all?

[Chris Skidmore]

My hon. Friend is absolutely right. What I have seen, going around to universities, is institutions that have been able to develop scholarship opportunities and help some of the poorest students in society to access higher education in a way that they would only have dreamed of a decade ago, at the same time as investing in capital, buildings, research and making sure, above all, that they improve the student experience by ensuring that the buildings, facilities and accommodation are really top-quality. The investment that has gone in, as a direct result of making sure that we have the finance and capital available for universities, has been spent well by them, in contrast to returning to a dark-ages position of our simply having no ability for students to pay fees. This would mean that we would return to the bad old days of student-number caps.

[Layla Moran (Oxford West and Abingdon) (LD)]

I was delighted to hear that the number of EU students has gone up, but one has to wonder whether it would have gone up even more had they had clarity about fees earlier. I used to help to run university admissions when I was a teacher. I can tell the Minister that the conversations we were having were in the year before the year of final exams, and July is too late. When are we going to get the clarity needed for the 2020 intake?

[Chris Skidmore]

We have set out clearly in the Government guarantee, when it comes to EU students studying at UK institutions, that we want to put financial provision in place for those students up to 2020. There is obviously a separate issue, which I am working on, about exchanges when it comes to the Erasmus scheme. Ultimately, I say to Members that a lot of the exchanges that take place and a lot of the ability to create educational partnerships rely on a deal with the European Union. The Prime Minister’s deal set out clearly the opportunity to protect those education partnerships. If anyone has any concerns about making sure that those can continue, I urge them to vote for the deal.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Staff at the universities in Leeds talk to me constantly about the twin threats they face: first, financial sustainability; and secondly, Brexit, including the issues of Erasmus, Horizon 2020 and the £30,000 threshold the Government want to apply to EU migrants. What assessment has the Minister made of universities’ ability to recruit and retain staff?

[Chris Skidmore]

The hon. Gentleman is absolutely right. This is not just about the financial numbers; it is about ensuring we have the human capital and that we are a welcoming place for higher education leaders and academics to come and continue their research. On the immigration White Paper, there is a consultation period, so we are consulting on the £30,000 cap, and I am keen to ensure that all HE institutions can feed into that consultation, both through the Home Office and by writing to me. I have also commissioned the Government Office for Science to model the potential impact on the scientific and research communities. So I am attuned to his concerns. We need to ensure that in leaving the EU we do not leave behind our European partnerships in academia, but we must also reach out much more widely and adopt a more international outlook.

Race Disparity Audit

Chris Skidmore Excerpts

Monday 4th February 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I am pleased to make this statement jointly with the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, my right hon. Friend the Member for Aylesbury (Mr. Lidington).

At the launch of the Race Disparity Audit in October 2017, the Government committed to “explain or change” the ethnic disparities on the audit’s website Ethnicity facts and figures.

Since October 2017 the Government have taken action in education, employment, health, criminal justice, including most recently in October 2018, taking action to see employers adopting fair employment practices which ensure all staff, particularly those from an ethnic minority background, do as well as they are able in terms of recruitment and progression in the workforce.

The audit’s website Ethnicity facts and figures has been continually updated and extended to allow the public to see if ethnic disparities are improving or not across over 160 important areas of public life. This has included the publication of data on undergraduate degree results and entrants at different higher education providers with high, medium and low entry tariffs.

On Friday, the Government announced action to tackle disparities in access to, and successful participation in, higher education for ethnic minority students; and disparities in recruitment and progression for ethnic minority academics. Friday’s announcement aims to tackle challenges that we know are particularly acute for ethnic minority students in higher education, such as their levels of non-continuation, the degree class they achieve compared to their peers, and their progression on to good quality employment.

In addition to the steps already taken to address this, including establishing the Office for Students and legislating for greater transparency and scrutiny through the Higher Education and Research Act, these actions will include:

Asking the Office for Students to ensure higher education providers demonstrate how they are tackling differences in access and successful participation for students from ethnic minorities—the Office for Students will be expected to hold providers to account, in particular through access and participation plans, which set out how higher education providers will improve equality of opportunity for under-represented groups, to access, succeed in and progress from higher education. The Office for Students will be expected to use its new powers to challenge providers failing to make progress.

Asking league table compilers to consider performance on tackling inequalities between ethnic groups in university rankings—working with a wide range of experts, stakeholders and league table compilers.

Encouraging higher education providers to eliminate ethnic disparities in their workforce—using tools such as the race at work charter and race equality charter.

Supporting student choice through better information, advice and guidance—by reforming the Unistats website using evidence from research with students from disadvantaged and underrepresented groups.

Building the evidence base on ‘what works’ for improving ethnic minority access and successful participation—encouraging the winning bidder of the newly established Evidence and Impact Exchange to make improving the evidence around addressing ethnic disparities a priority.

These actions will be supported by the Office for Students in its role as the regulator, Advance HE which will launch a review of its race equality charter, and UKRI which will signal its support for reducing ethnic disparities in research and innovation funding.

[HCWS1297]

Draft Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018

Chris Skidmore Excerpts

Monday 21st January 2019 General Committees

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I beg to move,

That the Committee has considered the draft Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018.

It is a pleasure to serve under your chairship, Mrs Moon. The draft regulations, which were laid before the House on 27 November 2018, ensure that the UK domestic rules for the exhaustion of intellectual property rights will continue to function in a predictable manner in a no-deal scenario.

UK businesses are very reliant on IP rights, with IP-intensive industries generating more than one quarter of UK employment and 43% of UK GDP in 2013. The UK is recognised for its strong IP regime. It was ranked No. 3 in the world by Taylor Wessing’s global intellectual property index for 2016, with the enforcement regime specifically ranked No. 1 by the US Chamber of Commerce in 2017.

The IP framework is designed to provide a balance. It should reward creators of IP and encourage innovation while balancing the needs of other businesses and consumers by managing the scope and duration of and exceptions to existing IP rights.

What is exhaustion of IP rights? The intellectual property framework provides rights holders with the right to control distribution of a protected product. However, once a product has been placed on the market within a specified territory by, or with the permission of the rights holder, the IP rights cannot be used to prevent the further distribution or resale of that product—the IP rights are considered to be exhausted.

The UK is currently part of a regional European economic area exhaustion regime, meaning that IP rights are considered to be exhausted once the products that they protect have been put on the market anywhere in the EEA with the rights holder’s permission. That facilitates the free movement of IP-protected goods across borders within the EEA.

The UK laws that currently provide for that regional exhaustion regime need to be amended to ensure that they continue to function appropriately after exit. Doing nothing is not a desirable option in this instance, as the legal uncertainty that would ensue would expose business to the risk of mitigation and the development of legal principles that could constrain future policy making in this area.

The draft instrument provides a solution. The rules relating to exhaustion for UK businesses and others importing goods into the UK will remain the same until such time as a future decision is made on what exhaustion regime is best for the UK in the future, for which the Government are considering options. Although extensive research is under way, I stress that such an important decision should not be rushed. We will ensure that we have a robust evidence base and that we have consulted fully with stakeholders before any decision is made.

While that evidence is gathered, the continuity provided by the statutory instrument will be welcomed by stakeholders, who are very much in favour of maintaining the status quo of the regional EEA regime. The SI ensures that there will be no change to the position on the exhaustion of rights in relation to the parallel importation of goods from the EEA into the UK. There may, however, be restrictions on what can be exported from the UK to the EEA on the same parallel basis, but that is a matter for the European Union legal system and not something that the Committee can control.

The practical effect of the no-deal SI is that traders based in the UK can continue existing parallel trade into the UK from other EEA states. That is important across several sectors, including medicines and food. Beneficiaries include the NHS, which will continue to have the ability to maintain security and diversity of the supply of medicines from the EEA. By sourcing medicines at the best price from within the EEA under the regional exhaustion regime, the NHS currently saves about £100 million a year.

The draft instrument is therefore extremely important to support the movement of goods and the supply of central commodities such as medicines. It provides clarity and legal certainty for businesses and consumers by preserving the status quo as far as possible. This is a necessary technical fix for UK laws to prepare for our exit from the EU, and I commend the draft regulations to the Committee.

--- Later in debate ---

[Chris Skidmore]

I thank the hon. Member for Sefton Central for the points that he has raised. I will endeavour to respond to some of the points that are specific to the statutory instrument.

The draft SI is clear that it will maintain the status quo. Regulation 2 ensures that the domestic exhaustion framework is the same after exit as it was before exit. The provision delivers, as far as possible, a continuation of the current regional exhaustion regime. This approach simply ensures that what happens currently will continue after exit day, and allows for IP-protected goods in the secondary markets to continue to be imported from the EU. We are not rushing to any alternative international exhaustion system; the draft regulations simply maintain the current regional exhaustion regime. This will ensure continued consumer choice and resilience in the supply of goods into the UK. As this will be a continuation of the current system, there is no reason to anticipate any increase in parallel-traded goods after exit. Indeed, this will ensure that the NHS continues to save £100 million a year as a result of being part of the regional exhaustion regime.

The hon. Gentleman asked about pharmaceutical innovation. The Government have done a lot of work to promote innovation in their creative industries, which represent the backbone of our business community. They give great emphasis to promoting businesses that create value. Our industrial strategy and sector deals are a great example of that, but of course the Government pursue a balanced economy that also promotes trade and the movement of goods. This plays an important part in developing a balanced economy for all types of business across the UK.

I want to turn to the Silhouette ruling from the Court of Justice of the European Union and the requirement to implement a regional exhaustion regime. It is clear that EU case law before exit will continue to apply in relation to the interpretation of EU-derived domestic law after exit under the withdrawal Act. EU case law before exit relating to the effects of this law will continue to apply under section 6(3) of the withdrawal Act, and this draft SI should provide legal clarity for businesses. For the purposes of the Committee, I note that an article was published on 14 January by the law firm Bird & Bird LLP on the Government’s draft SI stating that Silhouette

“will be ‘retained under EU case law” under section 6 of the European Union (Withdrawal) Act 2018. As a consequence, the principles laid down in these cases will continue to apply after exit day unless and until the Supreme Court or Parliament decides otherwise”.

It adds:

“The Government have done what can be done to preserve the status quo in the draft SI.”

[Bill Esterson]

The legal opinion demonstrates exactly what the problem is. The Minister said, “until the Supreme Court or Parliament decides otherwise”. Perhaps he will acknowledge that he has confirmed that this can be challenged or changed, and that we cannot just rely on retained EU case law. Perhaps he could comment on the request by one of the Lords for a sunset clause to time-limit the period during which he and his colleagues develop alternatives.

[Chris Skidmore]

I will speak about alternatives later, but I have already made the point that there is no rush to develop alternatives. As Bird & Bird made clear, there will be no change to international exhaustion or aversion to a concept of implied licence, or some of the fears that the hon. Gentleman has raised—[Interruption.] No, because this Government will look at all alternatives—I will turn to those in a moment—but this SI is intended to preserve and protect the current regime, not to change it. He mentioned the impact on business, and that is what this SI is for: to protect and preserve the current business regime.

The hon. Gentleman made an extensive contribution on impact assessments in other countries. The impact assessments that we follow in this Parliament are intended to look only at the impact of the legal instruments to which they are attached. This SI maintains the status quo within the UK, and hence there is no anticipated impact on business. The impact assessment for this SI followed the better regulation framework and is in line with Her Majesty’s Treasury’s Green Book guidance. The impact was assessed and compared with the static acquis baseline—that is, by reference to existing EU regulations and directives. The SI simply fixes deficiencies in law that will be retained under the European Union (Withdrawal) Act 2018, allowing current systems or regulatory provisions to continue to operate in a no-deal scenario. The impact analysis therefore focuses on the direct impact of the relevant SI alone. Analysis of the wider impact of the UK’s exit from the EU has previously been published, in the form of the long-term economic analysis published in November 2018.

The hon. Gentleman also asked about the cost to export. Clearly, no data is available on the potential impact on parallel exports from the UK to EEA countries, and any loss to UK businesses is hypothetical. It will depend on how rights holders wish to assert their rights in relation to parallel goods crossing from the UK to the EEA. All I can say is that this SI obviously provides the maximum possible certainty in maintaining our relationship across exhaustion rights in a regional sphere. Failure to pass this SI would therefore create significant difficulties.

The hon. Member for Cardiff South and Penarth mentioned the technical notices and the impact on small businesses. The technical notices are part of the support that we are providing to businesses. Given that this is a complex area of law, we are also encouraging businesses that engage in parallel trade, especially those that export, to seek legal advice on the actions they should take following the UK’s exit from the EU.

[Stephen Doughty]

Does the Minister appreciate that there are genuine concerns, particularly among self-employed musicians—I draw attention to my entry in the Register of Members’ Financial Interests—and small creative companies and games companies? They are deeply concerned not only about the impact of Brexit, but about what this chaos will cost them, whether or not there is a deal, in getting such legal advice, which those in what are often low-pay industries could do without.

[Chris Skidmore]

Passing this SI today will provide the maximum possible certainty by creating the national exhaustion regime, allowing companies and creators to have that security by keeping the status quo. That is what this SI is about. We are not having a wider debate about Brexit today; this is about ensuring that, when it comes to changing this technical apparatus in law, the regime continues as it has done previously. The SI simply ensures that we can continue to tick on as we have done in the past. Its implementation is essential to ensuring that the current arrangements continue. Failing to pass this legislation before we exit would leave a period of legal uncertainty, during which businesses could incur significant litigation risks. The SI maintains arrangements that continue to support the movement of goods to the UK. For example, this could help with NHS resilience in the supply of medicines at a cheaper cost.

The hon. Member for Sefton Central also talked about the potential consequences of an international exhaustion regime. I have already stated that this is about extending the legal framework to ensure that we protect the current regional exhaustion regime. When it comes to any further alternatives, the legal and economic arguments for various options are complex, which is why the Government are conducting research on the best exhaustion regime for the UK. Were there to be a change, the Government would introduce it only following evidence gathering and analysis, alongside engagement with a wide cross-section of stakeholders. The Government are conducting a feasibility study that will look into the levels of parallel trade between the UK and the EU. That study is ongoing and the evidence from the report will form part of the next steps in the Government’s decision-making process. I believe it will be published by Ernst and Young in 2019. Obviously, the response to the report and any further policy measures will take time. There is no compelling reason to rush to an alternative system until we have seen the evidence and listened to businesses and consumers.

The hon. Gentleman mentioned public consultation. Since the referendum result, the Intellectual Property Office has engaged with businesses in several sectors about the implications of exit. I visited the IPO’s offices in Newport on Friday and found an excellent organisation whose workforce have high morale and are determined to deliver maximum possible certainty as we approach the EU withdrawal day of 29 March. I have seen the charts and I reassure the hon. Gentleman that the IPO is doing all it can to engage with stakeholders.

The usual wide engagement with businesses and individuals was not possible on a draft no-deal instrument when the Government were in the middle of sensitive negotiations on the withdrawal agreement. Public consultation on no deal would also have risked prejudicing the ongoing discussion with the EU about our future membership. However, as I said, the IPO engaged with stakeholders across a wide range of sectors, including rights holders. That was consistent with the approach to no-deal legislation across Government, as I mentioned last week in our previous discussion on statutory instruments.

[Bill Esterson]

The Minister has read out a comprehensive note. From reading Lords Hansard, it appears to me that the only person who had spoken to the IPO was a member of the Grand Committee. The feedback I have had suggests that there has been engagement only when people have taken the initiative and called the IPO. The Minister made the extraordinary comment that there should not be public consultation on the SIs because of sensitivities—that is what I heard him say. However, without proper consultation, how can the SI be accurate? How could it have been drawn up in a way that ensures that the draft regulations do the job they need to do? Perhaps that explains why the problem of EU-retained case law is so prominent and has been criticised so much in the Lords and in the correspondence that I have received.

[Chris Skidmore]

The consultations that have taken place at IPO level are clear that the overwhelming number of stakeholders believe that the preservation of the status quo is in the best interests of all the sectors at the moment. If the hon. Gentleman decides to vote down the SI, he will send a clear message to those sectors that, with 60 or 70 days to go, he wants to ensure maximum possible instability. I ask him to think carefully as we go through these no-deal SIs. He has described the industries in the creative sector as vital to the UK economy and our global brand, and I entirely agree with him about that. I urge him not to vote down an SI that simply provides certainty, stability and the maximum possible opportunity for those businesses to carry on their day-to-day operations without any change.

The hon. Gentleman mentioned the Lords debate. The Government have written to Lords who participated in it and I am happy to provide him with a copy of the letter. It gives a clear response to their queries, which the hon. Gentleman mentioned. He can also see the evidence of the letter with regard to the points that he made about the sunset clause and the consultation.

I hope that I have satisfactorily addressed the points that have been made. To summarise, the Government are preparing for all scenarios and the SI is essential in preparing the UK for the possibility of leaving the EU without a deal. The draft regulations ensure a continuation of current systems as far as possible, delivering the status quo for imports into the UK. Many stakeholders have endorsed that approach.

The draft regulations aim to ensure as much continuity and certainty as possible in the immediate period after no deal. A long-term decision on the exhaustion regime will need to be informed by careful assessment of the balance of interests, and the Government will undertake a comprehensive programme of economic analysis and consultation to achieve that. For now, it is important that the draft regulations are in place to ensure that there is a clear, predictable and legally defined exhaustion regime in the UK in the event of no deal, and to maintain a regime that continues to protect IP holders’ rights while giving choice to consumers in the UK across a range of goods, including essential commodities such as food and medicines.

In addition, the draft regulations provide certainty in the immediate term for businesses and consumers, and limit friction in the trade of goods between the UK and the EEA. I hope that the Committee will support the draft regulations.

Question put.

Draft Patents (Amendment) (EU Exit) Regulations 2018 Draft trade marks (Amendment Etc.) (EU Exit) Regulations 2018

Chris Skidmore Excerpts

Thursday 17th January 2019 General Committees

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I beg to move,

That the Committee has considered the draft Patents (Amendment) (EU Exit) Regulations 2018.

[The Chair]

With this it will be convenient to consider the draft Trade Marks (Amendment etc.) (EU Exit) Regulations 2018.

[Chris Skidmore]

It is a pleasure to serve under your chairmanship, Sir Henry. Intellectual property is a vital part of the UK’s knowledge economy. The Government’s ambition, as part of our industrial strategy, is for the UK to be the most innovative country in the world, with a regulatory environment that supports that goal and encourages business to develop new ideas and technologies. The UK is renowned for having one of the best IP regimes in the world, and that will continue to be the case after our departure from the European Union. We will continue to deliver high-quality rights-granting services, lead best practice in enforcing IP rights, and retain our central involvement in international discussions on the development of a global IP system.

The Intellectual Property Office, which I am looking forward to visiting in Newport tomorrow morning, has been preparing for a range of outcomes to our negotiations with the EU. It is working to ensure that the IP system in the UK continues to function effectively once we have left the EU. The regulations, which were laid before the House on 28 November, form part of that preparation. They are necessary to ensure that the patent and trademark systems continue to function properly if no deal is agreed. In doing so, they give as much certainty and clarity for businesses as possible. The draft instruments use the powers granted by the European Union (Withdrawal) Act 2018 to address deficiencies in retained law that would arise upon exit.

On the Patents (Amendment) (EU Exit) Regulations 2018, the majority of UK patent law is domestic in origin or derives from various international agreements. Only a few specific areas are governed by EU legislation, and it is those that this instrument addresses. It focuses on supplementary protection certificates, which are a special type of IP right that applies to patented pharmaceuticals or agro-chemicals, which have to be authorised before they can be sold on the market. Because extensive testing is required to show that those products are safe for use, the authorisation process can prevent the full term of protection given by the patent from being exploited. SPCs are intended to offset that loss of time by giving an authorised product up to five and a half years’ additional protection after the expiry of the patent. They are provided by EU regulations that will be retained under the withdrawal Act.

SPCs take effect at a national level, so it will not be necessary to convert or replace existing rights on exit, as UK SPCs will continue to be enforced. However, it is still important to ensure that the current system remains functionally the same, so that users have certainty about the scope of their rights and the conditions in which those rights operate. The instrument therefore makes changes to the retained law, so that the SPC system can continue to operate effectively.

[Richard Graham (Gloucester) (Con)]

I have received a letter from the chief patent counsel of Lilly UK, outlining their concerns about the potential erosion of critical intellectual property protection. The life science industry is worried that patients might not be able to continue to access new and innovative medicines. Will the Minister confirm that the UK will remain a hub for world-leading research in the life sciences?

[Chris Skidmore]

Absolutely. That is why these regulations are so important in the event of a no-deal exit. Obviously, under the EU withdrawal deal and the framework for agreeing a deal with the EU, those rights will automatically be protected. Pharmaceutical companies with significant research and development industries—companies such as GlaxoSmithKline, AstraZeneca and Pfizer—use the SPC regime. In 2016, nearly £4 billion was invested in research and development through the pharmaceutical industry.

I want to mention some of the individual drugs that have benefited from an SPC regime being in place. The blockbuster anti-cancer drug Humira was initially developed by Cambridge Antibody Technology in the UK. Cervarix from GSK, a vaccine that protects against cervical cancer, had global sales of £123 million in GSK’s last quarterly statement. My hon. Friend makes an incredibly valid point. We need certainty and stability to ensure that companies are able to continue to develop future products through R&D. Having this stability will ensure that future products can benefit from coming to market, and from the additional five and a half years’ protection that the SPC guarantees.

In particular, the draft instrument confirms that authorisations granted in the UK can continue to be used as the basis for an SPC application, and to determine the duration of an SPC. It also ensures that courts and tribunals competent to decide legal challenges to SPCs in the UK retain that jurisdiction. Other technical adjustments ensure that the SPC system is legally sound immediately after exit, and avoid discontinuity.

This approach of maintaining systems that users are familiar with also applies to other areas of patent law dealt with in this instrument, including the interaction of plant variety rights and the granting of compulsory licences for manufacturing a patented medicine for export to a country with a public health need.

The second statutory instrument before the Committee deals with European trademarks and their continued protection after our exit from the EU. It is currently possible to obtain trademark protection in the UK under the Trade Marks Act 1994, and in the European Union under the European trade mark regulation. The two systems run in parallel, so protection covering the UK may be obtained under either. There is also a great degree of harmonisation between the systems, so the protection provided is essentially the same.

Around 1.3 million EU trademarks are currently enforced, and around 10% are owned by UK businesses. After our exit from the EU, trademarks registered under EU regulation would no longer cover the United Kingdom, as it would cease to be a member state. To avoid any loss of rights, the Government have committed to the continued protection of EU trademark rights in the UK.

This instrument provides those replacement domestic rights on exit day. These created UK rights will be fully independent UK trademarks, which can be challenged, signed, licensed or renewed separately from the original EU trademark. This instrument also provides that these rights retain their original EU filing date and any other relevant dates relating to the original application.

[Richard Graham]

This is very important for three of the greatest trademarks in the United Kingdom: single Gloucester cheese, double Gloucester cheese and the Gloucestershire Old Spot pig. Could the Minister confirm that these trademarks will be protected regardless of whether we leave the European Union with a deal?

[Chris Skidmore]

Absolutely. Trademark protections that are currently in force will continue to be in force, as a result of these regulations. The specific brand names that my hon. Friend talked about are actually what are called agricultural geographical indications—GIs. They fall within the remit of the Department for Environment, Food and Rural Affairs, but we recognise the close relationship between trademarks and GIs, and officials continue to work closely to provide a robust framework across all forms of intellectual property.

The policy on non-agricultural GIs is handled by the Intellectual Property Office. They are protected by the trademark system and therefore will continue to be protected in the UK in the same manner as outlined for trademarks. My hon. Friend, as the MP for Gloucester, cares passionately about protecting the origins of his cheese; having been on this Committee, he can go back to his constituents and tell them that he is doing all he can to protect the trademarking system in the UK, and to ensure stability and continuity for the cheese-making industry—and particularly for his constituents, and for employers in the locality.

The instrument also sets out how applications for EU trademarks that are pending on exit day, of which there are an estimated 85,000, will be handled. Those with pending applications will be able to file a new application with the Intellectual Property Office, claiming the earlier filing date of the EU application, within nine months of exit.

In conclusion, these regulations are a vital part of ensuring the intellectual property system continues to function if the no-deal outcome arises. They are essential for safeguarding rights and to provide maximum certainty and clarity. I commend them to the Committee.

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Henry. I think this is the first time I have had that pleasure. I look forward to the rest of the deliberations. I think this is the first time that the Minister and I have faced each other as Front Benchers, although we have occasionally crossed swords, if that is not overstating it, on—

[Chris Skidmore]

The Education Committee.

[Bill Esterson]

Indeed. The Minister referred to the importance of the intellectual property regime in the United Kingdom. He was absolutely right to state in the terms he used the high regard in which it is held throughout the world. There are key questions for us about maintaining those high standards and that high reputation. In the digital era, that is perhaps more vital for businesses than it has ever been.

The operation of the patent and trademark system after exit day will play a key part in delivering business confidence. I fully welcome the Chancellor’s commitment to the business community to ruling out any prospect of no deal; that is most welcome to Opposition Members. I look forward to the Prime Minister’s making exactly the same commitment, in order to deliver the certainty for our economy that is so needed and desired by businesses, workers and consumers.

Of course, if we avoid no deal, the regulations before us become less of a challenge, but given that we have to prepare for every eventuality, we need to consider them, as the Minister says. Currently, patent law functions through domestic legislation, while EU law sets out legal provisions on the patenting of biotechnical inventions. That includes exceptions from patenting, the scope of any protection, and a compulsory licensing regime between overlapping patents and plant variety rights.

EU law also provides processes for a compulsory licence to be granted for UK manufacture of a patented medicine for export to a country with a public health need, and sets out an exception under which certain studies, trials and tests can be carried out using a patented pharmaceutical product without infringing the patent. Those provisions are being transposed under these regulations, but in these areas, questions arise to do with patented pharmaceutical products and agro-chemicals, where the EU provides for an additional period of protection after a patent has run out. I ask the Minister to address that.

In the no-deal notice, the Government advised:

“Supplementary protection certificate holders, applicants for supplementary protection certificates, and third parties may wish to familiarise themselves with any changes to the related regulatory processes (human and veterinary medicines and chemicals).”

What measure have the Government undertaken to promote those among stakeholders, and what progress has been made on certainty regarding the unified patent court? My understanding is that that is an EU-wide agreement, unlike the non-EU European Patent Office, which covers much of what is referred to in this statutory instrument.

As with all the recent SIs relating to no-deal planning, no impact assessment has been carried out of the regulations before us, and only informal consultation has taken place. That is something we have debated a number of times with the Minister’s colleague, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Rochester and Strood (Kelly Tolhurst); perhaps the Minister can add this occasion to the list. One concern we have raised before, and which I know has been raised in written questions, is the cumulative impact of all these SIs. I draw to the Minister’s attention to the fact that there is concern about that within the business community, even if the Government do not see the need for individual impact assessments on specific regulations.

I also ask the Minister to confirm that separate UK and EU registration will be required for applications for intellectual property. Can he confirm what, if anything, is changing in that regard, given that, from my understanding, at present it is a non-EU body that manages EU-wide registration? Perhaps he can clarify exactly what will change in respect of patent applications, given that they are not an EU responsibility.

In relation to EU trademark applications pending on exit day, applicants may file a new UK trademark application within a period of nine months from exit day, maintaining the filing date, priority date, or seniority date. Can the Minister confirm what will happen after that nine-month period, and whether my understanding of the nine-period is indeed right? The draft regulations do not make reference to international trademark registrations or applications. What progress has been made with the World Intellectual Property Organisation to protect existing international registrations? This area is incredibly important, and the protection of IP is of immense value to businesses in the digital era. Getting it right is crucial.

I thank the Minister for his opening remarks, but there are significant questions still to answer about what he seems to think are relatively minor changes. Even minor changes need to be addressed to make sure we get this right. I hope that we will not need these regulations, and I hope that he hopes the same, but we need to get them right in case we do.

--- Later in debate ---

[Chris Skidmore]

Let me address the points made in response to my opening speech. I welcome the continuing support from the hon. Member for Sefton Central for the compulsory licensing regime. He made points about what will change, and about whether the UK’s departure from the EU means leaving the European Patent Office and the European patent convention. Obviously, that international agreement is open to both EU and non-EU countries, and the UK is a founding member in its own right. Similarly, the European Patent Office was established by the convention and is not an EU institution. The UK will continue to participate in the EPO as at present, including as a member of the organisation’s administrative council. European patents granted by the EPO that have effect in the UK will continue to be granted following our exit from the EU.

The hon. Member for Glasgow Central made a point about trade deals. The UK’s intellectual property regime is consistently rated as one of the best in the world. One of our priorities will be to ensure that future trade agreement negotiations do not have a negative impact on the standards and balance of the UK’s regime, or on its ability to promote trade in intellectual property. As we leave the European Union, the Government will continue to maintain our high level of protection of intellectual property, in line with our World Trade Organisation commitments. Any future trade deal negotiated by the UK will seek to be consistent with the UK’s membership of the international property conventions to which we are party.

The hon. Lady also mentioned the erosion of IP rights. We understand that innovators are concerned that the SI could mean a shorter effective period of protection in future, were they to bring their product to the UK market later than to the European economic area. The goal, however, is to minimise disruption; introducing a new way of calculating SPC would not provide the certainty and continuity that businesses tell us that they need, and could have unforeseen consequences. It would not be appropriate to make such a change without a full analysis of possible options and their effects. Above all, businesses tell us how important the current SP regime is to them.

The hon. Member for Sefton Central mentioned the pharmaceutical industry. It is important to reflect that the BioIndustry Association and the Association of the British Pharmaceutical Industry have both said that SPC protection as it stands is

“key to incentivising the lengthy, risky and expensive process of pharmaceutical and biotech innovation. European benefits from a high standard of IP incentives in the form of SPCs.”

I gave examples earlier of some of the drugs for which SPC protection has been critical.

On the points made about consultation, the IPO conducted a confidential technical review of the draft legislation in the summer, to which it invited individual experts who had previously interacted with the IPO as part of their roles with relevant representative organisations or bodies. The IPO received useful feedback on the drafting, and on wider matters that were raised and fully discussed. That process helped to make the draft legislation better, and we appreciate the time and effort that those individuals put into it.

That is consistent with the approach being taken with respect to no-deal legislation across Government. The Government’s consultation principles are clear: consultations must have a clear purpose. The statutory instruments only make corrections to retained EU law, and are necessary to give the UK a functional statute book in the event of a no-deal exit. Consultation on wider policy changes would not have been meaningful or appropriate at this point in time, as that is not what the instruments do. As I have said, life sciences stakeholders, including the BioIndustry Association, have taken a number of opportunities to present their position to Government, and we are certainly aware of their views.

The SIs’ impact on businesses, which the hon. Member for Sefton Central mentioned, was assessed using the Better Regulation framework and in line with Her Majesty’s Treasury’s Green Book guidance. The impact was assessed against the static acquis baseline—existing EU regulations and directives—and the instruments simply fix deficiencies in law that will be retained under the European Union (Withdrawal) Act 2018. They will allow current systems on regular provisions to continue to operate in a no-deal scenario. The impact analysis therefore focused on the direct impact of the relevant SI alone. Analysis of the wider impacts of the UK’s exit from the EU has been published in the form of the long-term economic analysis in November 2018.

With respect to the guidance that the Government intend to publish to let businesses know about the changes, technical notices were published in September. They gave an overview of how the patents and trademark system will operate in the event of no deal, and the instruments provide the legal detail behind that overview. We expect to publish guidance for businesses on the changes the instruments make that affect them, once Parliament has approved the instruments. In addition, on trademarks, the IPO will publish a notice in every language of the EU, so that right-holders in every member state will be able to access all the necessary information on how to administer their rights.

The hon. Member for Sefton Central mentioned trademarks and international trademarks, and the draft instrument does not include provisions on designs or international systems for trademark design protection. It focuses specifically on EU trademarks and domestic trademark law derived from EU legislation. An instrument setting out our intention to continue the protection of registered community designs, unregistered community designs and international trademark and design rights will be laid before Parliament and debated in due course. This draft instrument will ensure that registered rights are not lost. It will convert current EU trademark legislation into UK-equivalent rights, ensuring that rights protected before exit will continue to have protection in the UK after we leave the EU.

The hon. Gentleman mentioned business certainty. The relevant draft instrument provides for an additional nine months for those who need to register for a UK application. He also mentioned what will happen after those nine months. Failure to file a UK application within nine months from exit day will result in the applicant’s losing the right to claim an earlier EU date. This is an additional provision and protection that has been put in place.

Above all, the draft regulations are about ensuring certainty and control as we go forward. It is important to ensure that we have a workable system in place in the event of no deal. Of course, I do not wish to be in a no-deal scenario. If Members had voted differently a few days ago, we may have been in a place where we could begin to introduce and implement the provisions of the European Union (Withdrawal) Act 2018. However, I am confident that, by passing the draft regulations to ensure that we have that insurance mechanism in place, we can have the maximum possible stability in the event of no deal. I commend the draft regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Patents (Amendment) (EU Exit) Regulations 2018.

draft Trade Marks (Amendment etc.) (EU Exit) Regulations 2018

Resolved,

That the Committee has considered the draft Trade Marks (Amendment Etc.) (EU Exit) Regulations 2018.—(Chris Skidmore.)

Draft Higher Education (Fee Limits for Accelerated Courses) (England) Regulations 2018

Chris Skidmore Excerpts

Monday 14th January 2019 General Committees

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I beg to move,

That the Committee has considered the draft Higher Education (Fee Limits for Accelerated Courses) (England) Regulations 2018.

It is a pleasure to serve under your chairmanship, Mr Robertson.

The draft regulations were laid before Parliament on 29 November 2018. They should be read alongside the wider fee limits regulations which set tuition fee limits to apply to all standard or non-accelerated degree courses from August 2019 and were approved by Parliament last summer.

The Higher Education and Research Act 2017 provided that regulations may be made to set different fee limits specifically for accelerated courses. The draft regulations set out various fee limits in respect of accelerated degree courses starting from August 2019. The limits cover both full-time study years and permutations matching those of standard degrees, for example where a student takes an accelerated course that incorporates a sandwich year. All accelerated degree annual fee caps at public providers of degrees are set as a multiple of 1.2 times the annual standard degree equivalents.

An accelerated degree is the equivalent of a standard degree in every sense but one: it is completed one year sooner than the same degree studied at the widely established pace of three years of 30 weeks’ study and 22 weeks’ vacation each year. By studying for more weeks each year—about 45 weeks for the year—and taking shorter breaks between terms, accelerated students can complete exactly the same teaching content of, for example, that typical three-year degree, but graduate in two years.

Accelerated degrees are not new. About 20 public universities and 11 private providers already offer accelerated degree courses, although the range of subjects and the number of providers of accelerated degrees have remained small in the context of all undergraduate enrolments. We estimate that fewer than 1,000 students are enrolled on accelerated degree courses at public universities, with about a further 3,000 studying with private university providers.

Good examples of providers successfully offering accelerated degree courses include the University of Buckingham, which has delivered two-year degree courses for about 40 years. Its students regularly give excellent feedback on the quality of teaching and on their study experiences. Staffordshire University has offered accelerated degree courses for more than a decade, with a high proportion of mature and commuter students among its cohorts.

I have only been Universities Minister for about a month, but I have visited two institutions that celebrate their accelerated degree course provision. It was fascinating to discuss with students at St Mary’s University in Twickenham the theatre-production technical course that they were taking. It used to be offered as a three-year degree, but it has now become a two-year degree, because many students were simply finding work after two years and not completing their three-year course. As a result, St Mary’s decided to institute a two-year degree programme to help students not only to enter work but to achieve their qualification.

This morning, I visited Middlesex University London, where I had another fantastic discussion with students. They were on the business administration two-year accelerated degree course. All the students mentioned that, while such courses were not for everyone, they meant something not only to those people who wanted to get on in life, ensuring that that they would enter the world of work earlier, but perhaps to students who started a foundation course and wanted to go on to further study with a shorter time limit.

I can see the benefits of such courses being offered at universities around the country. The problem is that the existing limits on the annual fees that public universities can charge have made it hard for most public providers to offer accelerated degrees. The tuition fee cap applies to all public universities on an annual rather than a per-course basis. That reflects the length of the total period of study, but not the substantive volume or cost of teaching delivered in each study year.

Condensing three years’ teaching into two, by reducing the number of weeks of vacation downtime throughout the course, has generally not been seen as financially justifiable under the existing arrangements. Public providers of accelerated degrees, however, attest to the wider benefits that make accelerated provision worth while, which include highly motivated undergraduates; a more intense and engaged teaching experience; and the incentive to shake up established teaching and working practices and to innovate in tuition delivery.

For students to complete their degree one year sooner than a standard degree means that they accelerate their graduation and have one year less of living costs, crucially, alongside lower total tuition fees.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

The Minister said that St Mary’s University in Twickenham already offered accelerated degrees, but he then said that the financial circumstances of other universities meant that they were not willing to provide accelerated degrees. Why does he think financially St Mary’s can offer two-year accelerated degrees, but other universities cannot?

[Chris Skidmore]

That is a good point. As I have said, Buckingham has had accelerated degrees for 40 years, and I have a list of publicly funded HEs that I could share with the Committee, but uptake has been limited due to the restriction on the ability financially to provide those courses—the difference between an £18,000-a-year degree course and a £27,000-a-year one. St Mary’s in Twickenham has a course that runs for two years, but for a very limited number of students; it is not able to expand that course. Having talked to providers who currently run two-year courses, we have learned that they, too, have a limited ability to extend the programme to meet current and possible future demand. That is why this provision is in the regulations that have been introduced on the Floor the House, to make sure that we can benefit not only institutions that are yet to take up accelerated degrees, but institutions that may want to create new courses with accelerated programmes. I stress again that accelerated programmes are not a silver bullet; we are not assuming that every student will take up a two-year degree instead of a three-year or four-year course. However, they provide flexibility and innovation, and crucially allow for the greater student choice that I hope the regulations will provide.

As a result of students being able to take an accelerated degree over two years, they will start full-time work one year sooner than their peers; they will potentially benefit from an average annual salary of £19,000 straight away. Customer surveys conducted by the Student Loans Company in summer 2018 show that both accelerated and standard degree students regard the year of time saved as the most valuable benefit of accelerated degree study. As I have said, accelerated degrees are not for everyone, but for some—mature students, for example, or young people with a keen appetite for learning who want to study more and take fewer breaks to secure a faster entry or return to the workforce—they are exactly the right choice, or the only possible choice. Some employers also like accelerated degrees, as they offer an early opportunity to recruit demonstrably ambitious, focused and motivated graduates.

Following a commitment that the Department for Education gave in late 2017 during the passage of the 2017 Act, we consulted on a proposed 20% uplift in the annual tuition fee for accelerated degrees. That uplift aimed to ease the financial barrier inhibiting the wider provision of accelerated degree courses while still offering students a saving of roughly £5,550 on their total tuition fees, compared with a three-year degree course. On top of that, we must add the savings on living costs—roughly £7,500 a year—and also take into account a possible extra year of earned income as a result of starting work early. That is effectively going to benefit those who embark on a two-year accelerated degree course; it will be a saving for students.

Last year, we published our response to that consultation. It set out our intention to proceed with the regulations, to enable a specific new annual tuition fee for accelerated degrees at 1.2 times the standard equivalent. We consider that this fee will better reflect the actual weight of teaching and support delivered in the accelerated degree year; with it, more universities will be able to expand their range of courses and offer students greater choice, with more flexible modes of study. Wider provision will in turn offer many more students the choice of applying for an accelerated course in their preferred subject at their preferred university, and even with the increased annual fee cap, accelerated degrees offer big overall savings for students. As I have said, the total cost of tuition will be 20% lower, alongside no final year living costs and the unique opportunity to graduate and begin full-time work a year earlier.

The UK is widely envied for the quality and vigour of its higher education system. Our universities regularly rank among the best in the world. Their doors are open to anyone with the potential to succeed, including more disadvantaged students than ever before.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Would the Minister explain how the quality and academic rigour of these courses will be evaluated? Has there been an opportunity for pilot programmes? I know some concern has been expressed in various sectors about that.

[Chris Skidmore]

To take the hon. Lady’s point about quality and rigour, we would never want an accelerated degree course to be seen as a poor man’s degree— as somehow less rigorous and less beneficial. The standards that need to be maintained for those degrees must absolutely be the same as for full-time degrees. If we look at some of the institutions that have been offering accelerated degrees for a long time, they stand by their commitment that the teaching time and teaching intensity of those courses should remain exactly the same. Instead of about 30 weeks of study there are 45, and the number of tutors is the same. The point of the draft regulations is to provide for the extra investment in tuition staff that is needed to deliver an extended course across 45 weeks of the year. On the hon. Lady’s point about the teaching framework, I was at Middlesex earlier today talking to the vice-chancellor, Dr Tim Blackman, and he was absolutely insistent that this is still 360 credits of study. Whether over two or three years, 360 credits still need to happen.

[Debbie Abrahams]

Where these courses have been offered, has there been any change in access, for different socioeconomic groups in particular?

[Chris Skidmore]

When it comes to access and participation, one of the Government’s key commitments is to ensure that, regardless of their background, people are able to go to university, if they wish to take that route. The two-year accelerated degree course provides people with the opportunity to see a destination, to not have to cover an extra year of living costs, and to then go into work.

One of the two students I spoke to at Middlesex today was a girl who had started out on a higher apprenticeship at the City of London Corporation, without the qualifications to get her into a position to take a degree. She realised she had hit a wall, and that if she wanted to go further in her profession she would need to reach degree level, but, effectively, she had already begun work. What I am keen to expound to the Committee is that the two-year degree is not a silver-bullet solution; it is part of a menu of options that enables us to break down the artificial wall between further and higher education for students who may not have had the best start in life, those who are not from the most advantaged backgrounds and who may not have achieved the qualifications they have the potential to achieve.

I am keen to explore how students may take a foundation year and then an accelerated degree course on top, accessing higher education in a way in which they may not initially have been able to. We need to take this under the whole umbrella of future qualifications that will allow for the increased participation of disadvantaged students.

[Gareth Thomas]

Further to the intervention by my hon. Friend the Member for Oldham East and Saddleworth, a number of years after the Government decided to put tuition fees up to £9,000, mature students were one of the groups in which significant numbers had been deterred from going to university. What discussions have the Minister and his Department had to check that the measure would not be a further discouragement to mature students?

[Chris Skidmore]

As the new Universities Minister, I am keen to be seen not just as a Minister for students. I am Minister for everyone in the HE sphere, and that covers mature students as well. It is crucial that we look at the decline in mature learners.

On mature learner provision, I hope that the expansion of the accelerated degree course will allow someone who has entered the world of work, or has a mortgage or other financial commitments, and who looks at a three or four-year degree course and thinks, “Maybe that’s just a bit too much of a time commitment”, to find that a degree of about two years, at an accelerated learning pace, will suit them. It is crucial that we look at things and outcomes through the eyes of the student, whether an 18-year-old or a mature learner. It is crucial that they have this option. We are not forcing two-year degrees on anyone; we are allowing an expansion to take place so that people can look at institutions and choose a course that will be tailored to their individual learning needs.

[Gareth Thomas]

If the Minister wants to be the Minister for students, presumably he has talked to student representative bodies. What is their assessment of the proposed 20% fees hike?

[Chris Skidmore]

I have been the Minister for a month, and I have been to about eight HE institutions so far. I have an ambition to reach them all. Whether I will be able to do that as a new year’s resolution I am not quite sure, but I am determined to get out and listen to the student voice and to concerns.

When I speak to students, I also want to ensure that they are getting the student experience and having the opportunity to build friendships as part of an HE community. What was really interesting in going to Middlesex was talking to some of the students who are doing the business administration course. They felt they had twice as much access to the student community because they got to meet different groups, including the peer group in the year above them, as a result of their accelerated course. They felt it was an advantage to be able to talk to both sets of peer groups in the course structure.

An evaluation was carried out before I became Universities Minister. It showed 92% support among students who take accelerated degree courses, but it raised the issue of public understanding of accelerated degrees—55% of students did not know they existed. There is a question about how we ensure that universities that want to investigate offering accelerated degree courses have the opportunity to do so, and the draft regulations will allow that expansion to take place.

[Jess Phillips (Birmingham, Yardley) (Lab)]

rose—

[Gareth Thomas]

rose—

[Chris Skidmore]

I am coming to the end of my speech, but I will take one more intervention. I have been quite generous to the hon. Gentleman, and I am sure he will be able to come in again later, so I give way to the hon. Lady.

[Jess Phillips]

The Minister has been incredibly generous. I would have quite liked to do my degree in two years. I am not sure it would have taken that long, actually—if I added up the hours of tuition, I could probably have done it in about five months. The Minister is presenting quite a good picture of access for mature students, people from different socioeconomic backgrounds and people who started through the apprenticeship route, but I fear there these measures may create a two-tier system. We can pretend that the university someone went to or the sort of degree they did does not matter, but we all live in reality, so are Oxford and Cambridge investigating offering two-year degrees?

[Chris Skidmore]

The hon. Lady makes an incredibly important point. When we look at the groups in our HE system, we have the Russell Group universities and groups such as GuildHE. I met representatives of GuildHE last week to discuss provision, and it supports accelerated degrees. I hope, by taking a bottom-up approach to allowing institutions to expand provision, we can ensure that no one is snobby about two-year degrees. I declare an interest: I went to Oxford University. A lot of my friends decided to study law, so they did a law conversion course and then the Bar vocational training to become a barrister or a solicitor. In effect, that is a two-year degree in law.

When we look at the reality, it is important that we champion accelerated degrees and make the case that they are an important provision. If the draft regulations pass, as I hope they will, one of the challenges I will have is going out and making it a key part of my mission as Universities Minister to say that we still need innovation in the HE sector. The Augar review will report shortly, but we must also level the playing field—I am sorry to use a horrible cliché—to ensure that FE routes and HE routes are synonymous and that no one can say going to an FE college, which may offer degrees or accelerated courses, is for other people’s children.

We need to raise standards across FE and to ensure that there is the ability for a crossover, almost like an education passport. There is also the question of people who start degrees being able to finish them at a time of their choosing. However, to start with, this measure passed into legislation through HERA 2017, and it will be incredibly advantageous if we can begin work to demonstrate how new course provision will help expand the market and increase student choice.

All our students deserve high quality and good value from their university education. As I said, the draft regulations are a key part of our wider work to make that an accessible reality for everyone. They align with the Government’s ambitions for a diverse and flexible post-18 education, which is currently being developed, and I hope that the Committee approves them.

--- Later in debate ---

[Chris Skidmore]

I thank the Committee for taking time to consider the regulations.

I will turn to points made by the shadow Minister in what was a rather wide-ranging speech. Turning to some of the broader issues around the Augar review, I am sure he will understand that it is an independently led review that will report in due course in 2019. I, as much as anyone else in this House, look forward to studying its conclusions carefully.

We agree on the importance of creating greater flexibility in post-18 provision. Putting party political hats aside, we all understand that we need to work harder on ensuring that those who are able to go to university have the opportunity to do so. The Government have put access and participation for the most disadvantaged communities right at the heart of our vision, and we have seen an increase of 52% in the most disadvantaged students going to university since 2009. We all know that more must be done to ensure that we open up the vocational and technical route for those students who deserve better, and for our economy and our industrial strategy, ensuring that we can increase productivity and develop a dynamic and modern economy.

It is in light of that that we have introduced the regulations. This is the beginning of what I hope will be a far greater flexible provision in post-18 education—[Interruption.] Would the hon. Member for Harrow West like to intervene?

[Gareth Thomas]

No—I was heckling.

[Chris Skidmore]

I will come to the hon. Gentleman’s heckle in a moment. I wanted to start on a point of agreement, which is that Members on both sides of the Committee share the ambition that we can and must do more for post-18 education. As for the regulations—the point on which the hon. Gentleman heckled—increasing the cost of fees by 20% must be seen in the round: this is a saving of £5,500 for a two-year degree as opposed to fees for a three-year degree. It is a saving of one year, or £7,500, on living costs and, crucially, potentially a gain of up to £19,000 of annual earnings if that student is able to access the workplace early. I stress that this is not a silver bullet. It is not the only part of a strategy that must deliver for students in higher education; it is opening up a menu of options that we hope to develop.

The shadow Minister talked about access for disadvantaged students. The Government want to ensure that the most disadvantaged students are able to access this provision. Our consultation on accelerated degree proposals asked higher education providers specifically about access arrangements, and 74% responded that they wanted accelerated degrees to be treated the same as any other higher course fees for the purpose of access. We have seen a revolution in the amount of funds spent on access and participation over the past four or five years, from £440 million to £860 million. We must look at how we can invest to ensure that we open those routes for the most disadvantaged students.

[Gordon Marsden]

I appreciate that I spoke at some length. Access and participation are absolutely crucial, but one question is whether the money is spent well in the first place. I am sure the Minister will look at that. He also talks about the financial details and all the rest of it. The truth of the matter is that many people, particularly adult students, for perfectly good reasons will not sit down with a three-year prospectus but will ask themselves what they can afford that year. That is the crux of it, and that is why we are concerned that this 20% increase will nudge people away from participating, rather than nudging them towards it.

[Chris Skidmore]

I politely disagree with the hon. Gentleman on discouraging access. The figures demonstrate that, when students have been asked about potential two-year degree routes—in the context of saving over an envelope of two years instead of three—60% responded that they would have considered it had it been on offer. It is important that we allow an opportunity for this course provision to be established. We are not forcing universities or HE providers to offer accelerated degrees as an option. We are just ensuring that we can incentivise it for the future.

[Jess Phillips]

I thank the Minister again for his generosity in giving way. Will any review process be put in place, and what targets and standards will be used? We need to make sure that lots of people who go through these accelerated courses do not come out without demonstrably higher earnings, a better education or better options while still paying more money each year. How will we assess and make sure that people who do these courses end up with the same prospects as people who do a three-year course? We do not want to create a two-tier system for people who it is harder for—single mums and so on—and essentially charge them more per year.

[Chris Skidmore]

On the point around charging per year versus the overall charging mechanism across three years, they will still be charged £22,000 instead of £27,000.

[Jess Phillips]

I am sure they will be thrilled with that reduction—£22,000.

--- Later in debate ---

[The Chair]

Order.

[Chris Skidmore]

The hon. Lady’s point about a review mechanism is welcome, and I entirely agree with her that it is important. We have the ability to analyse data to a greater extent than in the past. The longitudinal educational outcomes—LEO—data has been tracking students, which I think began in 2008 under the previous Labour Government. That is now coming to fruition and provides a context in which we can weigh up value for money and return on investment.

With that data comes other issues around social value and making sure that we do not lose sight of courses such as nursing, for instance. That may be perceived to provide low value for money or return on investment, but we absolutely need more nurses and routes into nursing. The two-year degree provision allows for an extension route into nursing through nurse support workers, who may reach a certain level of qualification and may want to access a nursing degree. This is about breaking down those barriers. It is a social justice argument, saying to somebody who perhaps did not get the qualifications to access higher education when they were 18 that they can return to a degree and get that qualification. By having that degree, they are able to access that level of nursing that they may have wished to access. It is about fulfilling people’s dreams across a wide range of access measures, not only at the access points at 18.

An important point that I want to put on the record is that we will undertake to assess the effectiveness of accelerated degree funding and expenditure on access measures compared with their standard equivalents in the accelerated degree review, to be undertaken three years after the implementation of the draft regulations. I will take away the points made by the hon. Member for Birmingham, Yardley on the context of that review and what it will cover in its evaluation.

On the workload of university staff, as I have said, the provision of accelerated degrees is not mandatory. I put that point to Middlesex University staff today, and they felt that there was no diminution of teaching time. I asked the teaching professionals—the academics—directly whether it would compromise their ability to research, and the answer was no. They said that they had managed to structure a course that did not increase individual teaching time; the teaching time is spread across a range of individuals throughout the year. There is a learning opportunity, and I am keen for institutions that have successfully implemented two-year degrees to spread best practice about how courses might be structured so that academics do not lose their research potential across the year.

[Debbie Abrahams]

I worked for 10 years at the University of Liverpool, and I spent my summers prepping new courses, reading and writing articles. We were compelled to do that to make sure we had the appropriate ranking—it was the research assessment exercise at the time. It would have been absolutely impossible to do the stuff we did during the summer and prepare for a truncated course.

[Chris Skidmore]

What Middlesex and other institutions have done is to say that those who are working in the summer months have the opportunity to find their research time elsewhere in the year. They have been successful in ensuring that there is no diminution in the ability to conduct research; it just takes place at a different time. We have seen flexibility in academic research. Not everyone decides to book off the summer. Some people work in the summer but have what is effectively a mini-sabbatical elsewhere in the year, with other people taking up their teaching time.

Some universities provide accelerated degrees, which ensure that they have more study weeks per annum than the mainstream 30 weeks a year. They have managed to budget effectively, innovatively and flexibly with their academic and administrative staff to deliver more demanding in-year courses, including accelerated courses.

In summary, these regulations will encourage and enable existing providers to expand their accelerated offers, and new providers to offer accelerated degrees and discover the realities, challenges and benefits for the students and themselves. I commend the regulations to the Committee.

Question put.

Outer Space Act: (Isle of Man)

Chris Skidmore Excerpts

Thursday 10th January 2019 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

The Government intend to extend, to the Isle of Man, the provision for a limit to be set on an operator’s liability to indemnify the Government against claims brought for loss or damage arising from regulated space activity.

Under the Outer Space Act 1986 (the OSA), operators are required to indemnify the UK Government for any claims brought to the Government for damage or loss arising from activities regulated under the OSA.

Before 2015, this indemnity had no limit, meaning that operators were fully liable for any damages their activities caused. This unlimited liability was seen by industry as a commercial disadvantage and a provision was included in the Deregulation Act 2015 to amend the OSA, introducing a limit to the operator’s indemnity.

Extending the provision for a limit to be set to the Isle of Man, would have the effect of creating a contingent liability for the UK Government for amounts above the indemnity limit in respect of licences issued under the OSA as extended to the Isle of Man by way of the Outer Space Act 1986 (Isle of Man) Order 1990.

The OSA was applied to the Isle of Man in 1990 and the Government of the Isle of Man has requested that the indemnity limit in the amended OSA is extended to them, so that operators based on the Isle of Man will not be at a disadvantage in comparison with their UK counterparts.

The Government have agreed to extend the indemnity limit to the Isle of Man on the basis that the current letters of agreement that are in place with the Government of the Isle of Man are to be updated and formally exchanged following Parliament’s approval of this contingent liability. The updated letters will set out that the Isle of Man Government will meet any liability incurred as a result of Isle of Man space activity, above any indemnity limit set in a licence, that is not covered by insurance. However, the letters maintain the assurance that a request for any contribution from the Isle of Man Government will not be for a sum large enough to destabilise the Isle of Man economy.

When a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, it is required practice for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency.

As a matter of record, I will be laying a departmental minute today.

[HCWS1242]

Oral Answers to Questions

Chris Skidmore Excerpts

Tuesday 8th January 2019 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

6. What steps he is taking to support the UK space industry.

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

The UK plays a leading role in space science and exploration, and our commercial sector is globally competitive, underpinned by Government support of up to £370 million a year. We have further committed £92 million to develop options for a possible UK global navigation satellite system to maintain the UK’s security capabilities, and £31.5 million to kick-start small satellite launch from the UK as part of our modern industrial strategy.

[Mark Garnier]

I can tell from that answer that my hon. Friend recognises the increasing importance of the space sector in our everyday lives, particularly for communications and broadband. Does he therefore agree that elements of the space sector should be designated and treated as part of the UK’s critical national infrastructure, thus receiving the extra support and potential financing that such designation would provide?

[Chris Skidmore]

My hon. Friend is right that space capabilities are fundamental to UK prosperity and security. Every day, we rely on telecommunications, earth observation, position navigation and timing services from space. Many of the parts of the UK’s critical infrastructure—from telecommunications to transport—also depend on services from space to operate effectively, and that is why the space sector is designated as a critical national infrastructure sector, with efforts focused on improving the security of our critical assets.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Minister not understand that the aerospace industry is crucial to the future of our country? A company that operates in my constituency made components for the Mars probe, and such firms, which are at the leading edge of technology, are terrified by the chaos of the possible no-deal Brexit that the Government are leading. The supply chains are so complex that the company in my constituency faces ruin, as does the country’s whole aerospace industry under this Government’s watch.

[Chris Skidmore]

I congratulate the company in the hon. Gentleman’s constituency on its success with the Mars landing. I recently went to Imperial College to congratulate the team that created the sensors that detected the first sounds on Mars. It is crucial to say that our commitment to the European Space Agency is independent of our relationship with the EU. We put in support of £370 million a year that allows us access to a market worth £6 billion. When it comes to ensuring that we have stability and security for the company in the hon. Gentleman’s constituency, I look forward to seeing him in the Lobby next week supporting the Government’s deal.

[Vicky Ford (Chelmsford) (Con)]

Last week, while the Chinese were exploring the dark side of the moon, NASA was 6.5 billion km away on the far side of Neptune taking photos of Ultima Thule, and the sensors that took those images were made in Chelmsford. Will the Minister therefore join me in giving a massive shout-out to everyone at Teledyne e2v and congratulating them on this world-first achievement?

[Chris Skidmore]

Absolutely. I join my hon. Friend in congratulating Teledyne e2v on its involvement in NASA’s New Horizons mission. The stunning image of that distant world showcases UK technology at the leading edge of space exploration. As I said, we have already detected the first sounds from Mars through a project led by Imperial College and the University of Oxford, and Surrey Satellite Technology will unveil tomorrow its completed build platform for the Eutelsat Quantum—the first geostationary telecommunications satellite that will be fully reconfigurable in orbit—which highlights the UK Space Agency’s continual successes.

[Mr Speaker]

Thank you. We are now considerably better informed.

[Jim Shannon (Strangford) (DUP)]

Will the Minister outline how many new jobs have been created to meet the need for 30,000 new employees that was highlighted in last May’s “Prosperity from Space” report?

[Chris Skidmore]

The sector currently employs around 38,500 people and has grown significantly since 1999-2000, when 14,651 were working in the sector—that represents an annual growth rate of 6.7%. The UK has committed to ensuring that we grow our share of the global space market to 10% by 2030. That offers huge potential for increasing not just our share of the market, but the UK’s prosperity and productivity. I hope that the “Prosperity from Space” report, which was published by the space sector and my predecessor, my hon. Friend the Member for East Surrey (Mr Gyimah), whom I thank, will lead to a deal for the space sector and, potentially, to investigation of a national space programme—

[Mr Speaker]

Order. I do apologise, but progress is not just too slow; it is too slow.

--- Later in debate ---

[Henry Smith (Crawley) (Con)]

17. What steps his Department has taken to promote youth entrepreneurship.

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

A total of 390,000 18 to 24-year olds are involved in starting businesses in the UK, and the British Business Bank has provided £52 million in start-up loans to young people since 2012. In December we launched a youth engagement programme, including a celebration of UK science, technology, engineering and maths projects and an industrial strategy competition to inspire 13 to 19-year-olds.

[Jeremy Lefroy]

I welcome that and I welcome the start-up loans scheme, which has helped a lot of young entrepreneurs, but will the Minister talk with his counterparts in the Department for Education to see how we can embed entrepreneurship and life skills in business into the school curriculum?

[Chris Skidmore]

Absolutely. Indeed, as a Minister also in the Department for Education, I work with that Department and understand the importance of ensuring that young people develop entrepreneurial skills. Our careers strategy launched in 2017 places a strong emphasis on our interaction with entrepreneurs. We have connected more than 2,000 schools and colleges with enterprise advisers, launched a £2.5 million investment fund to support employer encounters, and created 20 new career hubs.

[Henry Smith]

Sam’s Kitchen was set up by a young entrepreneur in Crawley several years ago. On meeting him recently, he reported a large number of frequent and, it seems, unnecessary inspections. How can we make sure that we get the balance right between necessary regulation and not imposing too much of a burden on young, growing businesses?

[Chris Skidmore]

I understand that Sam French is a young entrepreneur selling homemade gingerbread men and women. I congratulate him on his success. Perhaps he may like to send some to you to sample, Mr Speaker. I am pleased that he shares his experience with other young entrepreneurs. It is important, however, that inspections in the food industry are based on a national code of practice and are intended to give the necessary reassurances to business and consumers so that they can buy products with absolute confidence.

[Mr Speaker]

I might want it, but I probably should not have it.

[Vernon Coaker (Gedling) (Lab)]

Is not part of the problem of encouraging youth entrepreneurship that vocational education is seen as second rate? How will we change that?

[Chris Skidmore]

The hon. Gentleman raises a very important point, which is why the Government have commissioned the Augur review to look at post-18 education. In addition, we are developing a full range of T-levels that will soon be operational. It is absolutely important that we level the playing field and ensure that the 50% of people who are not going to university have that opportunity to develop their skills going forward, particularly around technical education.

[Alison Thewliss (Glasgow Central) (SNP)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Tom Pursglove (Corby) (Con)]

What role does the Minister see for the push on technical skills in boosting youth entrepreneurship?

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

As I have stated before, technical skills are absolutely important when it comes to boosting youth entrepreneurship. I take this opportunity to mention to my hon. Friend the launch of the new year-long youth industrial strategy competition at the industrial strategy fair that will be held in March this year, with prizes being awarded at the Big Bang fair in March 2020.

[Martin Docherty-Hughes (West Dunbarton- shire) (SNP)]

T8. The Scottish Government’s draft 2018-19 budget means that 90% of firms will pay lower rates than those based anywhere else in the UK. So, for the second time, why will the Secretary of State and his Government not support Scottish industry and back the call from the SNP and the Institute of Directors for a £750 million SME Brexit advice service?

Competitiveness Council

Chris Skidmore Excerpts

Wednesday 12th December 2018 Written Statements

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

My noble Friend the Parliamentary Under-Secretary for State for the Department of Business, Energy and Industrial Strategy (Lord Henley) has made the following statement:

The Competitiveness Council took place on 29 and 30 November. The UK was represented by the right hon. Lord Henley, Parliamentary Under-Secretary of State, on day 1 (internal market and industry); and by Katrina Williams, deputy permanent representative to the EU, on day 2 (research and space).

Day 1 (Internal Market and Industry)

The Council agreed a general approach on the platform-to-business regulation and to entering into inter-institutional negotiations with the European Parliament; these are anticipated to begin later this month. The UK welcomed the evidence-based approach taken by the Council; we consider that the compromise text meets the demand from business users for transparency without stifling development and innovation of online platforms. Others indicated that they could support the general approach but had hoped for more ambition for further regulation. Other member states urged the presidency to uphold the Commission’s light-touch approach in talks with the Parliament, with some underlining that it was too soon to consider stricter rules. The UK joined the Czech Republic, Estonia, Finland, Latvia and Poland in signing a joint statement to the minutes expressing reservations about new provisions for public enforcement.

The Council adopted a partial general approach on the single market programme. The UK noted that, while it generally supported the programme’s aims, it retained a parliamentary scrutiny reserve over this dossier and therefore abstained. The Council also adopted a general approach on the general safety of vehicles regulation.

The Council adopted conclusions on “A Future EU Industrial Policy Strategy”. The Commission highlighted the link to its long-term strategy on climate, published on 28 November.

Commission Vice-President Katainen presented the Commission’s recent communication on the future of the single market. He urged member states to adopt outstanding legislation in the remaining months of this legislature. Some member states noted a recently published report on trade in services as evidence of the persistent barriers in this area. Member states also noted the potential of digitalisation and cross-border data flows to boost the competitiveness of EU services and manufacturing. The UK noted the important economic links that would continue between the UK and EU after the UK’s exit, and the shared challenges we face, particularly around digitalisation. Other member states highlighted the role of social, environmental, regional and transport policy in the functioning of the single market.

Ministers received information on the recently agreed changes to the state aid enabling regulation, and on the negotiations on supplementary protection certificates for medicinal products where the UK advocated maintaining the scope of the original Commission proposal. The Council noted the annual report of the SME envoy network and received information from the incoming Romanian presidency about its priorities.

Day 2 (Research and Space)

The Council began with a progress report and an exchange of views on the regulation establishing the space programme of the Union. The discussion focused on governance, and in particular on the importance of clearly defined roles and responsibilities for all actors involved in delivering the programme. Access to space and how to maximise the competitiveness of the European space sector were also discussed.

The Council agreed on the conclusions on the governance of the European research area. The Council then discussed the Horizon Europe package—the framework programme for research and innovation 2021-27. The debate centred on four outstanding issues: the overall structure of the programme; return grants for Skłodowska-Curie actions; capping for partnership budgets; and the European Innovation Council. The Austrian presidency redrafted the regulation text following member states’ interventions and the UK was content with the final version. The Council then agreed a partial general approach for the framework programme and its rules for participation and dissemination. The Austrian presidency also presented a progress report on the specific programme implementing Horizon Europe.

During any other business the Austrian presidency provided information on the conference “Evolution of Europe’s space activities: Long-term perspective” held in Graz, 5 and 6 November 2018. The Romanian delegation then concluded the Council by outlining the work programme of the incoming presidency.

[HCWS1171]

Leaving the EU: State Aid, Public Ownership and Workers’ Rights

Chris Skidmore Excerpts

Tuesday 11th December 2018 Westminster Hall

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Crewe and Nantwich (Laura Smith) for securing this important debate. There were passionate and learned contributions from the hon. Members for Glasgow East (David Linden) and for Barnsley East (Stephanie Peacock), from my hon. Friend the Member for Henley (John Howell) and the hon. Member for Glasgow South—

[Chris Stephens]

South West.

[Chris Skidmore]

Apologies—the hon. Member for Glasgow South West (Chris Stephens). I was deeply impressed by the hon. Gentleman’s ability to speak through his vocal impairment; he was cutting quite loudly through it by the end of his speech. We also heard from the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) and, last but not least, the hon. Member for Stroud (Dr Drew), whom I thank for his generous congratulations on my fifth day in my new role.

[Chi Onwurah]

I regret that I did not take the opportunity to welcome the Minister to his new role and I wish him every success for the period he occupies it.

[Chris Skidmore]

I am deeply grateful for those kind words. I am getting stuck into the job by appearing at this debate, but I am here to represent the views of my Department as a replacement Minister. My hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), the Minister for Small Business, Consumers and Corporate Responsibility, sends her profuse apologises that she has been unable to attend. She is representing the Department in the debate on the Accounts and Reports (Amendment) (EU Exit) Regulations 2018 in Committee corridor. I am here in her place to represent the Department’s views.

Let me start with what state aid rules are and why they exist, what is and is not state aid, and when it is allowed. Put simply, state aid is Government support or subsidy of an economic operator that gives it an advantage it could not get on the open market and distorts competition in the single market. The EU has tough rules governing the way subsidies can be given, to stop companies from getting an unfair advantage over their competitors and to ensure that countries with deep pockets do not subsidise their companies to the detriment of companies in other member states. However, where there are good policy justifications for state aid—where the benefit from giving aid outweighs the potential harm of a subsidy—the rules enable aid to be given.

Not all Government spending is aid. In fact, less than 1% of UK Government spending meets the technical definition of state aid. The state aid rules are about supporting fair and open competition, and the UK has long been a vocal proponent of them. The rules exist to stop countries from subsidising their industries unfairly, which would put businesses out of business and workers out of work.

A second misconception is that state aid rules prevent nationalisation. As long as the Government do not pay more than the market price for any assets acquired, the rules do not prevent that. However, the rules oblige the state to act as a normal market investor. That is good, because it prevents public authorities from unfairly distorting markets. State aid rules are neutral on public ownership and on the detail of spending decisions.

State aid rules are also fundamental to any free trade agreement. The political declaration on the framework for the future relationship between the EU and the UK recognises that. Free and fair trade is not possible if one party is able to subsidise without restraint. In a single customs territory that allowed the free trade of goods, as provided for in the draft withdrawal agreement, neither the EU nor the UK would be able to apply tariffs as measures against unfair subsidies by the other party. To ensure fair and open competition, it is absolutely necessary for the same state aid rules to apply consistently within the single customs territory, not to be frozen or disapplied for one bit of it.

I turn to workers’ rights, which have been the predominant topic of discussion. It is important to be clear that we are not making a choice between protecting state aid rules and protecting workers’ rights. As a responsible Government, we will work both to prevent unfair subsidies and to protect the rights of workers. The UK—we had several history lessons through some of the learned contributions to the debate—has a long-standing record of ensuring that workers’ rights are protected. Those include employment and equality rights, and protections for health and safety at work.

The decision to leave the European Union does not change that. This Government have made a firm commitment to protect workers’ rights and to maintain the protections covered in the Equality Acts.

[Chris Stephens]

Can the Minister tell us when the Government plan to publish their proposals in response to the Taylor review?

[Chris Skidmore]

In terms of the Government’s commitment and the commitments I am giving today, I reflect that the Prime Minister said recently in the House that

“we already go further than EU minimum standards, including on annual leave, paid maternity leave, flexible leave, paternity leave and pay, and parental leave, because we know that the first responsibility for protecting those rights sits with…Parliament. As we take back control of our laws, we will not only honour that responsibility, but go further still…by implementing the recommendations of the Taylor review. So we will not just protect workers’ rights: we will enhance them.”—[Official Report, 4 December 2018; Vol. 650, c. 760.]

The Government have been clear that they will take the recommendations of the Taylor review forward.

[Stephanie Peacock]

Further to the intervention by the hon. Member for Glasgow South West (Chris Stephens), the Minister has not given the House a date. If he is that committed to the response, can he tell us when it will be?

[Chris Skidmore]

I appreciate the hon. Members’ request for a specific date. I will have to fall back on a position of ensuring that my hon. Friend the Member for Rochester and Strood, the responsible Minister in this policy area, will write to both the hon. Lady and the hon. Member for Glasgow South West setting out clearly the next stages and the time frame for them.

Given our record in comparison to the EU standards in many areas, it is not surprising that Eurofound, the EU agency for work-related policy, ranks the UK as the second best country in the EU for workplace wellbeing, behind only Sweden, and the best country for workplace performance.

There has been some discussion about the EU withdrawal agreement. That will ensure that workers’ rights enjoyed under EU law will continue to be available in UK law after we have left the EU. That includes rights derived from EU law, such as the working time directive and the agency workers’ directive. Specifically within the withdrawal agreement, the UK is seeking a stringent and legally binding agreement with the EU not to roll back on employment standards. A joint committee would ensure that the UK was keeping to the agreement at a political level. There will be no roll-back of rights, including collective bargaining rights, when we leave the EU.

[John Howell]

I remind my hon. Friend of the European Social Charter, which we signed up to in 1961. Of the rights guaranteed by that charter, there are the

“the right to work, the right to organise”—

that is to be part of a trade union—

“the right to bargain collectively, the right to social security, the right to social and medical assistance, the right to the social, legal and economic protection of the family,”

and so on. Those are just some of the rights protected by this Council of Europe treaty that we signed up to in 1961 and it stands completely outside whatever is agreed in the withdrawal agreement.

[Chris Skidmore]

I thank my hon. Friend for putting that on the record. I listened to his speech on the Council of Europe and know he is a dedicated member of it. I pay tribute to his work, which often goes unheralded in this place. We know that there are many colleagues from across all parties who do a great deal of work on behalf of the United Kingdom at the Council of Europe, and it is right that that is recognised in this debate.

I hope the Government’s commitment, in both the withdrawal agreement and statements that we have made, will give certainty and continuity to employees and employers alike, creating stability in which the UK can grow and thrive. The political declaration on our future relationship makes it clear that we will build on this for the future deal with the EU. We want to ensure that the future economic partnership of the EU is underpinned by measures that ensure fair and open competition. Obviously, a rigorous approach to state aid is a critical component of that and provides a foundation for ensuring smooth trade and a partnership based on high market access. That is reflected in the political declaration, which establishes state aid as a crucial part of the level playing field commitments. The text makes clear that the precise nature of these commitments will depend on the scope and depth of the future relationship and the negotiations to take place.

There is no choice between taking the state aid rules or protecting workers’ rights; the Government recognise the fundamental importance of both.

[Stephanie Peacock]

The Minister talked about state aid and workers’ rights. Can he explain why the rules on state aid are both tougher and clearly more enforceable, in contrast to those on workers’ rights?

[Chris Skidmore]

I am not going to pre-judge what is taking place as we move towards a clear, definable free trade agreement with the European Union and the discussions that will happen after the political declaration. We have made that commitment, but actually we want to make sure that the United Kingdom has the ability to ensure that UK rights are clear, definable and stronger. They are already stronger than those in many European countries. We will continue to ensure that we have the reputation I mentioned: being the second best country in the EU for workplace wellbeing, behind only Sweden. It is important for our global reputation that we maintain that.

On the point about the EU workers council, if the EU withdrawal agreement is not approved we will still unilaterally protect workers’ rights in relation to European workers councils, as far as we can. However, to protect them fully, we require a deal with the EU, which sets the rules governing the establishment of a new European workers council. That is why I believe that the withdrawal agreement is so important to ensuring that we have no reduction in workers’ rights.

We will go further than the minimum labour market standards guaranteed in a withdrawal agreement. The Government will protect workers’ rights to ensure that they keep pace with changing labour markets. I hope the hon. Member for Crewe and Nantwich agrees that our approach on these vital issues will help secure the best possible deal for the UK as we leave the European Union.