Apprenticeships

Paul Farrelly Excerpts

Tuesday 12th March 2013 Commons Chamber

[Gavin Williamson (South Staffordshire) (Con)]

One great positive that we can take out of the debate so far is that many Members are very positive about apprenticeships. I accept that there will be disagreements, but what we can all take away from it is that we want apprenticeships to succeed and to work.

In my constituency in the past year, 1,070 apprenticeship places have been created—a vast 88% increase from 2010. That is ahead of the national average by 86%, but unfortunately it lags slightly behind the west midlands average of 91%. We should feel a great sense of pride at what has been achieved and we can do more. Apprenticeships have a vital role to play in driving down unemployment and getting young people into work.

In South Staffordshire, we are blessed not to have an exceptionally high rate of unemployment, but that is down to the fact that we are proactive in driving down unemployment. Since 2010, South Staffordshire district council has been running job clubs right across the constituency. South Staffordshire does not have a jobcentre and it is often difficult for people to access their services, so we have been running job clubs in Wombourne, Kinver, Codsall, Bilbrook, Great Wyrley and many other villages right across my constituency to help people both young and old to access employment. They are not just about guiding and encouraging people, telling them how to make their CVs better and giving them the confidence to go out and get a job; they bring employers to them. It is with great pride that, working with my district council, we will have a jobs fair at Perton civic centre on 26 April. Already, many major local employers have committed to attend, bringing jobs and employment opportunities to all in South Staffordshire. I hope it will be a great success, and I know that many Opposition Members have been doing similar things in their own constituencies.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Will the hon. Gentleman give some recognition to the efforts in north Staffordshire, where, to encourage more apprentices, on Thursday evening KMF Engineering from Newcastle-under-Lyme is hosting its young engineer of the year awards at the Britannia stadium in Stoke-on-Trent? The following day, with the national apprenticeship scheme, Newcastle borough council and Newcastle-under-Lyme college, we are launching the latest 100 in 100 campaign to recruit apprentices to local businesses.

[Gavin Williamson]

My fellow Staffordshire MP demonstrates how enthusiastic Staffordshire MPs are to encourage apprenticeships and bring employment to our constituencies regardless of our political colour. All such schemes make a genuine difference.

We have talked about public procurement. One of the biggest creators of apprenticeships in South Staffordshire is G4S, which has recently won the bid to run Oakwood prison near the village of Featherstone. As part of its winning bid, 190 offender management apprenticeship places have been created. That should be welcomed. The private sector is being highly proactive in looking at how we get more employment, more apprenticeships and how we start to give young people and older people the opportunity to get into work.

As I am sure other Members have found, far too often when we speak to local schools or colleges, either here in Parliament or in our constituencies, and ask them, “Who wants to go to university?” 90% or 95% of hands go up, but if we ask them, “Who wants to get an apprenticeship?” very few people put up their hand. We have to ensure that people understand that apprenticeships are as good, if not better than going to university.

The Engineering Employers Federation recently raised the depressing statistic that fewer than 50% of schoolteachers encourage people to go into manufacturing and engineering, and almost one quarter positively discourage them. Apprenticeships have an incredibly important role to play in encouraging and inspiring young people to enter the manufacturing sector, like I did when I left university in 1997. We need to encourage more people to enter manufacturing and engineering, not just when they leave university, but when they are at school or finishing college. That is the opportunity.

People often see an apprenticeship as second rate. I was recently looking at job adverts—not for me, I hope—and perusing the internet. Jaguar Land Rover, which is spending £500 million in my constituency building a new engine plant, will be employing more than 1,400 people and apprentices of different ages. It will be an enormous boost not just to South Staffordshire, but to the whole west midlands. I was looking at its higher apprenticeships programme and the qualifications needed: a minimum of five GCSEs at grade C or above, including in maths, English and a core science subject; an A-level at grade C or above in a mathematical subject; an A-level at grade C or above in a science, technology or an engineering-related subject.

I am afraid that most people in the Chamber would probably be precluded from applying. These are not second-rate jobs and apprenticeships are not second-rate careers; they are our future. It is all about encouraging employment in engineering and manufacturing. The Government have made massive strides, not just in South Staffordshire, but in the west midlands, where the number of apprenticeships has increased by 91%. I encourage the Minister to keep driving forward towards more advanced apprenticeships, because it will make the country grow and prosper.

Offshore Gambling Bill

Paul Farrelly Excerpts

Friday 25th January 2013 Commons Chamber

[Miss McIntosh]

I pay tribute to my hon. Friend the Member for West Suffolk for the groundwork that he has done in that regard.

One of the unintended consequences of offshore betting has been to remove this activity from the remit of the Gambling Commission. It is my understanding that that was not the intention of the House when the Gambling Act was introduced in 2005. The Gambling Commission plays a key role in protecting young people and vulnerable people from such activities, and many of my right hon. and hon. Friends will agree on the need to protect the young from parts of the internet; indeed, one of my hon. Friends has just been appointed as adviser to the Prime Minister on that matter. In my view, it was never the intention of the House that this activity should be summarily removed from the remit of the Gambling Commission, which offers an enforcement mechanism.

Regarding the levy, we have to look at the European Commission, which should allow the proposals in clause 4.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

The hon. Lady is correct to highlight the flight offshore of online gambling as an unintended consequence that the Government are now addressing. Does she acknowledge that there is a major exception—bet365, which holds a Gambling Commission licence, and is based in north Staffordshire? It is one of the biggest employers in the area that I represent.

[Miss McIntosh]

I am delighted to do so, and I shall say a little more about bet365. Not only is it a major employer but it demonstrates what can be done to keep that type of operation onshore in this country while contributing to the local and national economy and employing people in the hon. Gentleman’s constituency.

--- Later in debate ---

[Miss McIntosh]

I shall come to that point in a moment. The levy yield has gone down in the past 10 years by almost 35%, and the five-year trend shows that it has gone down by almost 21%. The current financial problems with racing revolve around betting companies having moved their businesses offshore, meaning that they are exempt from paying both tax and the levy. As soon as one company moved offshore, there was a need for others to follow, enabling more competition between those companies. My understanding is that, as the hon. Member for Newcastle-under-Lyme (Paul Farrelly) said, only one betting company, bet365, remains based in the UK for these betting operations, and it is a significant employer in his constituency.

As a result of this mass exodus offshore, the Government are losing approximately £300 million in tax each year, and the amount being paid into the levy has been reduced by between £5 million and £10 million. I repeat that the tax situation is properly a matter for the Treasury to address in the Budget. The point that I want to make for the purposes of the Bill is that the drop in levy and the drop in tax has meant that less prize money is available, making other countries such as Ireland and France more attractive for owners to buy horses there and enter them in races there.

To address the point made by my hon. Friend the Member for Bury North (Mr Nuttall), the figures that I have show that the average prize money per race over the past 10 years on flat race courses has seen a reduction of more than 16%, and for jump racing a reduction of almost 10%. Overall the reduction has been almost 14%. The five-year trend for flat racing shows a reduction of more than 3% in average prize money per race and in jump racing a reduction of almost 20%. Overall, average prize money per race has dropped by more than 9%. By comparison, the prize money available in France is approximately seven times higher than that on offer in the UK.

To give an idea of the difference between the UK and France, in 2011-12, £67.7 million on betting activity on British racing was returned to racing through the levy, but in France the PMU, the state-owned tote monopoly—I will talk more about this later—returned approximately £735 million to racing. In Australia approximately £280 million was returned to racing. British owners receive the lowest return from their investment in training fees for racehorses of any major racing nation. I think that the international statistics are powerful and show how weak British racing is in comparison because of the falling yield.

My hon. Friend the Member for Shipley serves with great distinction on the Culture, Media and Sport Committee. The Committee addressed this question in 2012 in its report, “The Gambling Act 2005: A bet worth taking?”, for which it took some compelling evidence. I will share with Members one of its conclusions:

“The failure of the Department for Culture, Media and Sport to work with the Treasury to set remote gambling taxation at a level at which online operators could remain within the UK and regulated by the Gambling Commission has led to almost every online gambling operator moving offshore whilst most are still able to advertise and operate into the UK. We therefore welcome the announcement, made in the 2012 Budget Statement, that the online industry will be taxed on a point-of-consumption rather than a point-of-supply basis. We also welcome the detailed consultation with the industry since the Budget over the design of the policy framework and look forward to the Government's response. To give certainty to online operators, and their investment plans, we urge the Government to adhere to its timetable for implementation by December, 2014 and to make plans to deal with any challenges to the proposed new system. However, the Treasury still needs to work with industry stakeholders to establish the correct level for online gambling taxation, taking into account the need to encourage companies to accept UK regulation and taxation and to discourage the formation of a grey market.”

There we have it. My hon. Friend the Member for Shipley, a distinguished member of the Committee, did not, to my certain knowledge, dissent from or disagree with that conclusion, seek to distance himself from it, express an opposing minority view or table a minority report, so I am delighted that we will no doubt enjoy his full support today. In his own Committee’s report, he has drawn two conclusions: it is for the Treasury to close that gap to ensure fairness in taxation, but it is for the House today to ask the Minister either to accept the Bill or to give an assurance on the precise date and timetable for when the Government will bring forward their proposals for the remote gambling Bill. Should the worst happen today and the Bill falls, will my right hon. Friend the Minister accept an amendment on the levy when he brings forward the remote gambling Bill? I will move on to that momentarily.

[Paul Farrelly]

Heaven forbid that the hon. Lady should suspect the hon. Member for Shipley (Philip Davies) of ever opposing a private Member’s Bill. Clearly, the timing of the legislation is not entirely in the sport Minister’s hands, because it is dependent on the Treasury. I emphasise the importance of the December 2014 deadline, because of the investment plans of operators such as bet365 and the need for certainty. I must say that the plans of companies such as bet365, which is a European operator, might have been somewhat jolted by the Government’s announcement on holding an in/out referendum by 2018.

--- Later in debate ---

[Miss McIntosh]

What we are trying to do is help racing in the UK by bringing activities that are deemed to be in the UK back here so that they fall within the remit of the Gambling Commission. That would lead to, I hope—mindful of those placing bets—a duty to behave responsibly and would provide legitimacy for licences based in the UK. I will come in a moment to why it would introduce a level playing field.

[Paul Farrelly]

Perhaps I can help with some facts. Will the hon. Lady acknowledge that it is important to compare like with like? There are examples of well-thought-out point of consumption regimes in Denmark and Spain that capture the vast majority of online gambling and bring revenue back to the Exchequer. In changing the regime here, the Government are showing every sign, I am pleased to say, of taking that very careful, considered and measured approach so that it will be effective at the end of the day.

--- Later in debate ---

[Miss McIntosh]

I have a link with Sheikh Mohammed—his horses were at stud where I live in the constituency—but I take my hon. Friend’s point.

The fact is that the problem affects the race courses that are in far more remote areas of the country, located further away from racing centres. I am not thinking particularly of my area in that regard, but of further- flung courses in Scotland and the UK, which are feeling the effects of the reduction in the levy because they have less to offer to owners and trainers. A further consideration is the price of fuel and the location of the race course in relation to the trainer’s yard. The trainers to whom I have spoken have made that point most vigorously. They take not just one horse to one course on a given day, but multiple horses to multiple race courses. That makes certain race courses far less appealing than others.

I have argued that state aid rules should not be a significant issue, but if they are, a way around them has been suggested: all betting operators could require a UK licence. However, in order to obtain that licence, they must enter into a commercial deal with the British Horseracing Authority that ensures that a percentage of their gross profit goes back into racing. That approach has already been taken up by one betting operator, to which I have referred. Pressure must be placed on others to follow. There could be a further incentive: betting operators must have a commercial deal if they want to sponsor the big races and meets.

On the so-called problem of competition law—[Interruption.] I ask for the Minister’s attention at this point, because this is the crux of my argument and the main difference between the Gambling (Licensing & Advertising) Bill, which deals with remote gambling, and the Offshore Gambling Bill. I struggle to see why the Minister, the Department or the Government should so categorically state that extending the levy to overseas operators would breach the rules on state aid. I mentioned my own background information in that regard, but I have also taken advice from a legal counsellor.

To state the obvious, the levy already exists, so its extension to overseas operators would purely be to equalise the competition conditions and ought not to generate any new state aid problem. Those arguments arose at the time of the sale of the Tote—I argued vigorously with successive Governments that there were no state aid issues. We are often fearful in this country of debating with the European Commission, and yet, in my experience, Commission officials are even more open than officials from UK Government Departments. The existing levy of the 1960s pre-dates our entry into the Common Market in 1973 and has grandfather rights, as I have said. If it is thought to raise a state aid issue—as I have explained, there are good reasons why it should not—why has the Commission waited so long to raise this point? I put it to the Minister and the House that the Commission has chosen not to do so because there is no state aid issue. I want to help the Government and my right hon. Friend the Minister in this regard. The Government might be nervous that the Commission is currently examining the state aid aspects of the parafiscal levy on online horse race betting in France. France has been notified that such a measure is, in the Commission’s view, a state aid.

The Commission has opened proceedings under article 108(2) of the treaty on the functioning of the European Union. The case that the Commission brought against France commenced in 2010 and has still not been completed some three years on. It relates to a levy to finance the public service mission of

“improvement of the equine species and the promotion of horse breeding”—

this is from official journal, which is the reason for the legalese—and

“training in the horse racing and breeding sector and rural development.”

The invitation to submit comments under the treaty on the functioning of the EU was published in January 2011.

The case against France is that the French authorities notified the Commission of a proposal for a parafiscal levy on online horse race betting in order to fund a public service mission entrusted to horse racing companies. The notified measure comes in the context of the opening up of certain online games of betting and chance under the French law of 12 May 2010. That law ends the monopoly on online horse race betting held by Pari Mutuel Urbain, commonly known as PMU, an economic interest grouping of 51 horse race companies that, however, retains the monopoly of online horse race betting through its physical network of sales outlets. The French authorities argued their case that the purpose of the levy was to fund the public service mission improvement. They subsequently submitted this to the Commission and it considers that the aid measure contains all the features constituting the concept of state aid, and published its decision inviting comments and consultation.

My question to the Minister today is: have we, as a party, joined that case? Did the Government respond to that invitation to clarify the legal situation? That would have been immensely helpful to the Minister, both in responding to the Offshore Gambling Bill today and in preparing his own remote gambling Bill. I want to strengthen the Minister’s and the Government’s arm. We have nothing to fear on this point from the European Union. We have a very strong case to put, and it appears to me that there are distinctions between it and the French case. I hope the Minister has joy and that the Government did respond to that consultation and can use it as an opportunity to clarify the difference between the French proposed parafiscal levy and our levy which has existed since the early 1960s and enjoys grandfather rights, which by no stretch of the imagination can be said of the French proposed parafiscal levy. If the Minister did not respond to that consultation, he owes the House an explanation of why the Government chose not to respond, as it would have been a unique opportunity to clarify the law in this regard.

There are distinctions between the French case and the Horserace Betting Levy Board. Most importantly, the levy in this country is not paid to economic operators in the field of horse race betting, but paid direct to the Horserace Betting Levy Board, which then distributes the proceeds of the levy for the improvement of racehorses: and breeds of horses, and for the advancement of veterinary science and education. There is no direct participation by bookmakers in the proceeds of the levy, and if any advantage is conferred on them it is only on the maintenance of the stock of good quality horses, the provision of grants to cover the costs of regulating races and to provide loans for the improvements to racehorses. It is very hard to reconstruct what contribution bookmakers might have made without the levy, but it cannot be sensibly said that the levy relieves bookmakers of the burden that they would otherwise have had to assume. Indeed, the paradox before us today is that the existing levy confers an advantage on overseas operators, since they derive, albeit indirectly, the benefit from a healthy horse stock and well-provisioned race courses without having to make the contribution that their domestic competitors have to make. That must surely distort competition.

We are not proposing state aid. In no way would the Government, were it to agree to clause 4, be proposing state aid. Clause 4 seeks to equalise unfairness and to remove the distortion to competition between bet365 and others who place their bets in the UK, and those offshore operators who place their bets in Gibraltar and in other offshore territories. It may be that I have to concede that the levy is provided from state resources, because it is a statutory levy. However, there seem to be powerful arguments that its extension to overseas operators would tend to equalise the conclusions of competition, not distort it.

I therefore put it to the Minister that today is his opportunity to explain his views, his Department’s views and the Government’s views on state aid once and for all. We have never had the opportunity in the House to discuss this—this is a unique opportunity to do so. It is incumbent on the Minister to explain why, if he did not, he did not respond to the consultation’s points in the official journal called by the European Commission to the French-proposed parafiscal levy. I ask the Minister to explain his views on state aid, and explain why they are at such variance from mine and those of the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk who is sat next to him on the Front Bench. We believe that this does not constitute state aid but merely seeks to close the gap and remove the existing distortion from competition.

[Paul Farrelly]

The hon. Lady will probably be aware that there have been challenges to point of consumption legislation in Europe from operators affected. On that point, does she think that it may be better to deal with the levy separately from the rest of the legislation backing point of consumption, so that there is less opportunity for challenges to the change of the framework, which may just delay the Exchequer getting more money and the levelling of competition across the board in general, not with specific reference to horse racing?

[Miss McIntosh]

I see where the hon. Gentleman is coming from, but I think that would be unacceptable to the racing industry. The message that I want to go out from the House today is that the House cares about the racing industry, recognises the contribution the industry makes to the micro-economy in rural north Yorkshire—Thirsk, Malton and Filey—and to the greater economy of the United Kingdom. Racing has been cheated for months and years ever since these offshore operators have been operating out of Gibraltar, the Isle of Man and other such unacceptable points of establishment.

This is a unique opportunity to take the challenges facing racing in the round. I fully accept that we cannot deal with questions of taxation today—that has to be the remit of the Treasury. I am sure that my right hon. Friend the Chancellor of the Exchequer will address that point, giving those affected sufficient time to prepare for this tax. Some of the betting companies are alarmed about this, but I think unnecessarily so. That is a separate argument, however. Clause 4 and the matter of the horse racing levy is an integral part of the whole problem of racing being cheated out of the money. The consequences of licensing and advertising offshore and not paying towards the levy onshore need to be addressed together. We seek to improve competition and equalise the market. I notice that my right hon. Friend the Minister is shaking his head. He must be bold. He has nothing to fear. He has the whole of the House and the industry behind his not inconsiderable stature. I therefore hope that the Minister will march forth today and take on those companies, which want to do the right thing—one of them is already doing so. They should join in line and make the Minister’s life easier and the racing industry’s future much more certain.

The Bill aims to remedy the current flaws in the system to ensure that all betting companies pay the correct amount of tax and contribute to the future of racing by paying the levy. I accept that the levy in its current form is no longer fit for purpose and must change. The industry has some time to do so—it has been invited to do so by the Government, which I welcome. The purpose of today’s Bill is to equalise the competitive situation, as in France, to ensure that everybody pays the tax and the levy and that everybody knows and can see that they are doing so. The Bill is not anti-competitive; quite the reverse. It seeks to encourage competition by removing the current distortion in the market. Without this Bill, racing will continue to lose out on much-needed funding.

I recognise that costs are increasing—the costs of trainers, feed, bedding, fuel and travel—and prize money has gone down. I fully accept that racing has long been considered the sport of kings. In north Yorkshire it is also recognised as bringing tremendous enjoyment to local participants and tremendous returns—on a good day or a in a good year—to the trainers, stable boys and lasses, jockeys and owners, and also the local economy. It gives me great pleasure—it is also an honour—to take over the Bill today from my hon. Friend the Member for West Suffolk. I hope that the House will give it a fair hearing. We wait with great anticipation to hear the Minister’s response, to ensure that racing can proceed on a much firmer footing than in the recent past.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

I, too, start with a double congratulation to the hon. Member for West Suffolk (Matthew Hancock)—or perhaps the honourable Member for Newmarket, as he might more appropriately be known today—first, on securing this private Member’s Bill in the ballot and, secondly, on his promotion to Under-Secretary of State for Skills at both the Department for Education and the Department for Business, Innovation and Skills. He has certainly got a lot on his plate, so it is kind of the hon. Member for racing at Thirsk, if not Malton (Miss McIntosh) to take the Bill on so ably for him.

At this point I was going to say that I will make a short contribution, because I realised that the Bill’s promoters were not seeking to take it forward in its current form, but the hon. Lady’s lengthy speech has left me in some confusion about that. If she wants to intervene on me, I would be grateful for some clarity.

[Miss McIntosh]

What we are seeking is a number of assurances from the Minister, as I set out in my speech.

[Paul Farrelly]

It seems clear from that intervention that the Bill will not go forward in its current form, because the Government have just published their draft Gambling (Licensing & Advertising) Bill and, with the exception of the racing parts, today’s Bill covers the same ground. In fact, we will be scrutinising that draft Bill in the Select Committee on Culture, Media and Sport on Tuesday, so perhaps the promoters and sponsors of today’s Bill will want to make a detailed written submission to the Committee—or, indeed, send the Hansard report of this debate—as we perform that scrutiny. That draft Bill is the DCMS/regulatory end of what the Government propose as a major reform of the taxation regime—the move to point of consumption as the basis for taxation of remote online gambling. The business end of that change—the Treasury part—is at the detailed policy design stage, which has been the subject of extensive consultation by the Government.

We are still awaiting a response to that consultation, but the Government have just published their response to our report from last July, “The Gambling Act 2005: A bet worth taking?”, in which, as we heard from the hon. Lady, we unanimously welcomed the change of emphasis towards taxing remote gambling on a point-of-consumption basis, for three very good reasons. It may well encourage online operators to rebase themselves here, following a flight overseas—in particular, to Gibraltar. Changing the emphasis would level the playing field for operators such as bet365 that have chosen to remain here and pay tax in this country, and it would raise tax for the hard-pressed Treasury.

For certainty’s sake, we also recommended that the Government adhere to their timetable of December 2014 for implementing the new regime, bearing in mind the possibility of a challenge in Europe if the tax level in particular is not right or acceptable to the operators, which might wish to challenge it, as they have challenged other moves in the EU. Such a challenge might be a vexatious challenge at the last moment, simply to delay things as far as possible. That would have major repercussions for operators such as bet365 or others that might wish to return to the UK, as well as for some expensive investment plans, particularly in IT and servers, and in sales.

In their response to our report, the Government have said that they are still analysing the responses to the detailed policy design to make the system effective. I recognise that the Minister today is from the Department for Culture, Media and Sport, not the Treasury, but it might be useful in his summing up if he could give some guidance on when that response will be published, because we are all interested to see it. Indeed, the representations that the Government have received may well cover the same ground as the representations that our Committee has received for our scrutiny, because they will be from all the members of the Remote Gambling Association.

The RGA has much to commend it, not least the way it goes about promoting the industry in other jurisdictions—in particular, the other 26 members of the European Union—and making the case for sensible market reforms that are workable. The RGA is led well, works well and is respected as a body for the case it makes. However, the reality is that, in the UK, the RGA is a lobbying organisation with a strong vested interest, because the vast majority of its members are already based offshore and will therefore by definition oppose a point of consumption basis for taxation.

[Miss McIntosh]

As the hon. Gentleman has mentioned bet365 in his constituency and the RGA’s lobbying power, does he not accept that—with Malton as the main centre of training in my constituency, but with a few trainers in Thirsk as well—the trainers and, indeed, the whole racing industry are perhaps not as cohesive, but instead fragmented, which means that their views are not heard as clearly as those of a focused lobbying organisation such as the RGA?

[Paul Farrelly]

I take the hon. Lady’s point, but I think she is rather doing herself down, because the case made in this Bill and the fact that the horse racing levy exists at all show the power of the industry and the representations made on behalf of racing.

On the thrust towards a point of consumption basis, the vast majority of the RGA’s members are based offshore, where they pay very little tax. Therefore, although I respect the RGA in many respects, we have to take its arguments against the thrust of the change to the regime with a pinch of salt. The big exception among its members is bet365, which in 10 years has become the biggest employer in north Staffordshire. It is largely UK-based—all its sports betting has always been UK-based—because the founding Coates family believe in creating employment locally and paying their fair share of tax. Their commitment to our local area and sport in general is shown in their ownership of Stoke City football club, as the hon. Member for Shipley (Philip Davies) will very well know. Indeed, unless someone is a very wealthy racehorse owner—I am looking to Manchester—owning a premier league football club is going to make a big dent in their pocket. The commitment of the Coates family is demonstrated and well regarded.

We do not see it in the RGA’s representations, although it appears in its previous submissions to the Select Committee, but bet365 wholly welcomes the Government’s change to a point of consumption basis for taxation. By virtue of that, it is important to recognise that the RGA does not speak for all its members on that matter or, because of the success of bet365, for a big slice of the UK online market.

[James Duddridge]

It is interesting to hear what bet365 has done, for good reasons, within its community. Has the hon. Gentleman learned from his discussions with the company whether it has managed to persuade any other organisations to start thinking in a similar way and to come back onshore on a voluntary basis, or are those organisations so far removed from bet365 that it will remain an isolated case?

[Paul Farrelly]

I do not want to get involved in the internal politics of the RGA. All its members are reputable, and the vast majority—the likes of William Hill, Coral and bwin.party—will of course accept a licence if we move to the new regime. They will not want to be unlicensed operators. That is not how they do business and they would not make money in a big market such as the UK as comfortably as they do at the moment.

Cutting through the bluster, we can see that tax is the fundamental factor. It is important to recognise that, for those operators, this is about getting the tax right. The other arguments are incidental, and those operators will be able to live with the changes. Some will have different experiences because of their distance from the UK market, but they will all be able to live with the changes as long as they are comfortable with the tax arrangements. That very point was highlighted in William Hill’s submission to the Select Committee for our scrutiny of the Government’s draft Bill. Having made all its arguments, the RGA has effectively suggested that it could live with all the changes if the gross profits tax were reduced from, say, 15% to 5%. That is the crux of the argument. We will test all those objections in our scrutiny Committee on Tuesday. As the hon. Member for Thirsk and Malton said, our report called on the Treasury to establish what should be the current level of tax for online gambling, taking into account the need to bring everyone on board and not to encourage an unlicensed grey market.

The continued presence and success of bet365 in sports activities is rather inconvenient for the rest of the industry, because it shows that the doomsday arguments do not have any substance. Bet365’s success proves that it is fully able to compete here, and there is no reason why the other big names should not do so as well.

Let me set out some of the facts for the House. In the year ending March 2012, bet365 took £12 billion in wagers, which was 45% up on the previous year. It made pre-tax profits of £116 million, which was up 22%. That is a record that most UK businesses can only envy in the current economic environment. Its total contribution to the UK Exchequer, including betting duty, VAT and £20 million corporation tax, was £130 million; and, importantly for our area in these difficult times, it recruited another 500 staff.

Bet365’s record is exemplary, and if it can be so successful there is no reason why the likes of William Hill, Coral or Ladbrokes—all the names, old and new, that we know so well—cannot be successful here too and contribute to the UK Exchequer. This is all about tax, and for the Government it is all about revenue. It would be helpful for us, and for the industry, if the Minister shed some light on any conversations that he has had with the Treasury on how its modelling of the tax take has progressed and on the discussions it has had with the industry on tax levels.

If tax is the nub of the argument for the industry, the core issue in the Bill is, as the hon. Lady has made clear, a special plea for the horse racing industry. I do not have the opportunity to indulge myself in racing as much as the hon. Member for Shipley does, but I enjoy the odd visit to the races and the odd flutter. We have Uttoxeter nearby in Staffordshire, and Chester races are just across the border.

I am not intrinsically against a special deal for the racing industry, because it is a reality that the racing levy is part of the landscape—the hon. Lady talked about grandfather rights—and it is a national lottery for the horse racing industry. However, I do not believe that she made the point as strongly as she might have done for Ministers to back the case for the racing industry and not to cave in to special pleading for, say, a football levy to help struggling clubs. An example of such a club is Port Vale, which is at the opposite end of the city from Stoke City FC—owned by bet365—and recently went into administration. If the hon. Lady would like to intervene on me, I would be interested to hear why she thinks the Minister should not listen to special pleading from other sports.

[Miss McIntosh]

It is for the simple reason that the levy was set up to help the racing industry but is now being circumvented in a very obvious way. Also, as I have said, at least 50% of the bets placed online—it is probably more in betting shops, but for the purposes of the debate we are concentrating on online betting—are attracted because of racing.

[Paul Farrelly]

I thank the hon. Lady for that response. As the day goes on, she will probably have to listen to the argument from the gambling industry that racing owes its success in large part to the ease of having a flutter at the races. The industry will argue that it already does enough. Similar arguments will be made about how racing has become less important because of the development of online gambling and of in-game betting alongside result betting. Those are arguments that she and the sponsors of the Bill will have to take on. I am sure that they will be presented again and again as the Government’s Bill proceeds and as the hon. Lady and others table amendments to it.

I conclude by returning to a point that I made in an intervention on the hon. Lady, and on which I hope the Minister will be able to comment. There is great merit in keeping this Bill simple and in dealing with racing separately. The Bill is the regulatory end of the changes to the taxation regime that will benefit everyone in the country through increased contributions to the Treasury coffers, and that will benefit operators who have remained here and face competition from organisations overseas that do not pay tax. The real danger is that a vexatious complaint could be made, causing delays because of the European Union angle. The Government’s approach has much to commend it, if they proceed with careful thought and simplicity, and if the racing element is dealt with separately.

--- Later in debate ---

[James Duddridge]

I am not sure whether I might not still be on my feet at 1 o’clock, but perhaps if I rush through my comments I will find time to place a bet on behalf of myself and my hon. Friend.

Although the majority of operators currently targeting British consumers are subject to established and effective regulatory regimes, not all of them are, so we are suffering from those problems now. For example, some online operators have begun to target British consumers and very little is known about the level of their regulation or, indeed, consumer protection. There is concern about that issue and others when it comes to European operators and, in particular, operators beyond Europe without sufficient regulatory oversight. There has been some debate about light-touch regulation and what is sufficient, but there needs to be a level playing field. I will not go into details of my particular view on the level of regulation—that would be wrong and I do not think that it applies to this Bill.

Even where operators are subject to appropriate levels of overseas regulation, there are different regulatory standards and approaches. This lack of parity inevitably leads to British consumers receiving different levels of protection depending on which operator they use. I recall discussing case work with another Member of Parliament in the Tea Room. A constituent of his had lost £25,000, by which I mean that their online betting account, which had been very successful and had a balance of more than £25,000, was hacked into, a losing bet was made and that money was lost. They maintain that it was not they who made the bet and I am not sure—I was not privileged to sit in on the relevant debate—whether that online gambler was subject to online regulations.

We wander around and make decisions in the United Kingdom under the security of British law. Although there are exceptions when there are problems, largely we are very well protected as UK citizens when making purchases. It is clear that that is not always the case in the gambling arena and that the 2005 Act has not allowed for it. I welcome the exploration of how we can solve some of those problems, whether through the Offshore Gambling Bill or the draft Gambling (Licensing & Advertising) Bill.

My hon. Friend the Member for Thirsk and Malton referred initially to the remote gambling Bill. Perhaps that was the working title of the Government Bill. My hon. Friend nods in assent, for which I am grateful. I was somewhat confused when preparing for this debate, because I thought there was a third Bill in play, so I am grateful to find that that is not the case. It is difficult enough to deal with two Bills at one time.

Without specific requirements imposed by overseas jurisdictions, operators may not be compelled to report certain information, such as suspicious betting activity, to the Gambling Commission or relevant sports bodies, even when such an activity may involve a British sportsperson and/or British consumers. As such, there is a potential risk of match fixing. The hon. Member for Newcastle-under-Lyme used the term “in-match betting”, I think, which I was not familiar with, but I suspect it covers things such as how many times a bowler will stray away from the wicket during the course of one over. I understand from press reports that that is an increasingly popular sign of betting.

[Paul Farrelly]

The hon. Gentleman is right, but the not very technical term is “in-game betting”, as I understand it.

[James Duddridge]

I am grateful for that correction. One of the things emerging from this debate is that I need to spend some more time betting in order to be able to contribute more fully to debates such as this.

There is a potential risk of match fixing and suspicious betting practices taking place on overseas-licensed sites, including those that may have an impact on sports in Britain. The British authorities may not be notified, thereby placing individuals at much greater risk.

Some offshore operators do share information with the Gambling Commission, in addition to their home regulator, and they do so on a voluntary basis. I would be interested to hear more examples and details from the Minister. It is all very well to say that they share some information, but is it sufficient? I suspect there may be some smoke and mirrors regarding what is and what is not shared.

The detail is often insufficient for it to be used in an investigation. In fact, I cannot find many examples of investigations taking place. That limits the Gambling Commission’s ability to conduct thorough investigations when it does not have powers of jurisdiction. There have been instances when the commission has not received the relevant information and has been unable to obtain information from its overseas licensed operators or regulators. That is clearly not in anybody’s interest or in that of the market to work effectively. Let us face it: if the market is not robust, people simply will not place a bet. Why would they place a bet with an organisation—be it online or offline, onshore or offshore—if they thought that it would wriggle out of the contract? It is important to look at the benefits of bringing all this back to the UK for the sustainability of the industry.

In some cases, the Gambling Commission is told that the refusal to provide information is down to overseas data protection requirements. I would be interested to hear whether the Minister thinks that that is a legitimate concern or just a veil that these organisations are using. There is currently no way of ensuring that the protections of the gambling regulations framework, particularly those afforded to licence condition 15—for those who do not know, that is about the reporting requirements on restrictions of betting activity—are applied on a consistent basis to operators who transact with British consumers or are allowed to bet on British events.

With technological advancement, it is becoming increasingly difficult to identify the level of regulatory oversight of gambling service provision and where the key equipment is, which is important in relation to the legislation.

Industrial Policy and Manufacturing

Paul Farrelly Excerpts

Thursday 22nd November 2012 Commons Chamber

[Kelvin Hopkins (Luton North) (Lab)]

May I first congratulate my new hon. Friend the Member for Corby (Andrew Sawford) on his absolutely splendid maiden speech? I have some connection with him in a sense, because I come from the east midlands, my grandfather worked in the boot and shoe industry, and at this moment I am wearing a pair of English leather shoes that were probably made in his constituency—and splendid shoes they are, too. It really was an excellent speech, and I am pleased that my hon. Friend’s father is here to hear it, because he was a very good personal friend and comrade in this place. I am delighted that my hon. Friend is following in his father’s footsteps and I welcome him to the House of Commons.

I want to mention Bedford trucks as well, because the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) mentioned them. They were made just outside my constituency in Dunstable and are all over Pakistan—thousands of them can be seen there today. Many people think it was a great mistake to stop manufacturing the basic truck, which is so rugged and can work in any conditions—and no doubt is infinitely superior to the Chinese competition.

I want to talk about Britain’s experience of manufacturing. Britain has suffered from savage deindustrialisation, brought about by utterly misguided economic policies enacted over a long period. We have had many figures quoted to us today. We have only to look at, say, the comparable 2006 figures for Germany and Britain, to see that manufacturing comprised 12.4% of our economy in Britain and 23.2% of Germany’s economy—almost twice as much. Germany is indeed the economic powerhouse of Europe, and one can see why. During the period 2000 to 2010, the UK share of world trade fell by 28%, whereas Germany’s fell by a mere 3%. Why are our countries so different? Governments in Britain have made persistent attempts to sustain an overvalued exchange rate. This goes right back even to the 1931 crisis, which sadly destroyed the Labour Government, because they did not realise that they could come off the gold standard and devalue, which is what they should have done and what happened immediately after they lost office.

Then we had the 1949 devaluation—very sensible—and in 1967, again after resisting devaluation for a long time, we eventually devalued, following which the economy of course bounced a bit. But then in 1979 we had the Thatcher Government, who immediately introduced policies that saw a massive appreciation of the pound. In two years we saw a fifth of manufacturing industry disappear and unemployment rise to 3 million, simply because of the massive appreciation of the pound and the collapse in demand for manufacturing. Between ’82 and ’88, in the Nigel Lawson period, we saw a pretty savage depreciation of the pound—by some 35% from peak to trough—and a great recovery because of that depreciation.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

One of the industries hardest hit has been ceramics. One of the things that we have wanted for years in the ceramics industry is accurate country-of-origin marking and an end to bogus back-stamping. If something says “Made in England”, it should be made in England. Other countries in Europe want that in the ceramics industry, but the UK has always stood in the way. Does my hon. Friend agree that it is time we had a more open mind to such measures to ensure accurate consumer information, to counter counterfeiting and to give our industries a fighting chance?

[Kelvin Hopkins]

I absolutely agree with my hon. Friend. Indeed, I have a wonderful set of Wedgwood china, which we use on special occasions, that no doubt comes from his constituency.

Then we had the 1990 to 1992 exchange rate mechanism disaster—again, an attempt to pinion our currency, in essence against the Deutschmark. We recovered from that after we devalued substantially—golden Wednesday—and the economy started to strengthen again. Indeed, if that economic strengthening had continued for three or four years longer, Labour might not have won the 1997 election, because we won on the basis of the terrible mistake made by the Conservative Government by going into the ERM. Those are key factors—the key factor, I think—in our economic weakness. But Germany kept its Deutschmark at a low parity for a prolonged period, and was allowed to do so because West Germany had to be, inevitably, the showcase for western capitalism against the east, and everything was done to ensure that Germany succeeded. It was permitted; it was allowed by the rest of the western world to keep its currency low as a necessary condition for economic success. Other factors, of course, were used to ensure that the Germans were successful, including a very strong interventionist industrial policy, which we forgot and left behind when we abandoned, for example, the National Economic Development Council, abolished by the Tory Government.

--- Later in debate ---

[Jeremy Lefroy (Stafford) (Con)]

I refer Members to my entry in the Register of Members’ Financial Interests. I congratulate the hon. Member for Corby (Andrew Sawford) on his excellent maiden speech. I also congratulate the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) and my hon. Friend the Member for Warwick and Leamington (Chris White) on securing this important debate.

I firmly believe that the United Kingdom needs a long-term industrial policy, but it must be rooted in growth. There is no point in focusing on economic sectors that will not create jobs and wealth for the UK in the future. We have fought shy of introducing an industrial policy in the UK for many years, because we believe that Governments should not be in the business of picking winners. It is true that a Government should not select one company over another, but we will be failing our country and future generations if we do not look ahead to see which economic sectors are likely to prosper and which are likely to fade away.

Suspicious as we have been about industrial policies, we have nevertheless had them over the years. In the midlands, in and around my constituency, I can see the positive results of at least three of them. Rolls-Royce aero-engine manufacturing was saved—perhaps fortuitously, and not as a result of a deliberate policy—by a Conservative Government intervention in 1971 after the company overreached itself with the development of the RB211 engine. Rolls-Royce employs tens of thousands of highly-skilled staff, contributes greatly to UK manufacturing exports—I entirely agree with the hon. Member for Luton North (Kelvin Hopkins) on the need for rebalancing—and is one of the best-known British products on earth.

Alstom, the largest private sector employer in my constituency, was assisted by a French Government intervention in 2003. Since then, it has consolidated its world-leading role in developing high-voltage direct current transmission as well as being the only remaining manufacturer of large transformers in the UK. It, too, makes a significant contribution to the UK balance of payments.

Jaguar Land Rover is investing heavily in south Staffordshire, as the hon. Member for West Bromwich West (Mr Bailey) said earlier. My hon. Friend the Member for South Staffordshire (Gavin Williamson) and other neighbouring MPs have worked hard to secure that investment, alongside the strong support of both Staffordshire county council and Wolverhampton city council. In recent years, the UK Government have made a determined effort to attract automotive investment, and this is one of the many fruits of their and the local councils’ efforts.

So industrial policy can work, but only that last one could be said to be the result of a determined effort by the UK to establish a proper policy that is consistent, long term and based on a competitive advantage. That is happening in the automotive industry. Another industry that needs a long-term policy is energy, in regard not only to the consumers of energy but to the manufacturers of the equipment used in the industry. Such manufacturers in my own constituency and many others across the country are world leaders.

What are the building blocks of a successful industrial policy that will stand our country in good stead for the 21st century? I shall make a few suggestions. First, we need a clear understanding of what we will concentrate on. The Netherlands, as so often, provides a good example, as has been set out in Lord Heseltine’s excellent report. The report sets out the nine top sectors in which it believes the Netherlands has a competitive advantage and on which it wishes to concentrate. They include agro-food, horticulture and water—all of which the Netherlands has a lot of—as well as manufacturing and service industries such as chemicals and logistics. The report identifies a “golden triangle” involving links between businesses, research institutions such as universities, and the Government.

Secondly, we need to ensure that we not only make the end products but control as much of the supply chain as possible. That is particularly the case in the aerospace and automotive industries, which are making efforts in that regard. The supply chain has been relatively hollow in those industries until recently. It has become clear that the UK’s manufacturing base has become increasingly reliant on imported components.

Thirdly, we have to ensure that our education and training system is more closely integrated with the needs of the sectors on which we are concentrating. It has been said in this Chamber more times than I can remember that we face a critical shortage of engineers. That is why, this week in Stafford, we are looking into forming a local engineering partnership between universities, colleges, schools and industry. Science and research are an easy target for cuts in both public and private sector budgets because the results are further down the road, whereas the benefits of the cost reduction are felt straight away. But that investment must be maintained. I welcome the Government’s action in protecting the science budget in cash terms in the last spending review, and I urge them to do the same and more in the next one.

[Paul Farrelly]

The hon. Gentleman is also a great friend of the ceramics industry in north Staffordshire. Does he agree that a laissez-faire approach often translates in government to a “faire rien” approach—doing nothing. I mentioned country-of-origin marking a few moments ago. A measure such as that, we agreed, is not protectionist, but it would afford some support to our industry and is much needed.

[Jeremy Lefroy]

I totally agree. I have supported country-of-origin marking for many years to ensure that people know that they are getting the best of British and not some foreign substitute or import. It is vital to maintain the quality of our products around the world.

An industrial policy must set out quite clearly how much we as a nation value research and back up warm words with action. Here, I mention research and development capital allowances. Capital allowances are vital for encouraging companies to invest the cash they have on their balance sheets—some £70 billion at the last count—into productive plant, equipment and other capital investments.

Finally, I turn to finance. It is naive to think that all good projects will attract commercial finance in the UK. If that were the case, we would be the home of many more of the largest companies in the world because the technologies were invented here. The first large computer was built on the work of people such as Alan Turing, and the plasma screen was invented in Malvern by what is now QinetiQ but was then the Royal Signals and Radar Establishment. Then there is the work on the human genome, which my hon. Friend the Member for Mid Norfolk (George Freeman) mentioned. We should have more of these large companies, but we lack them because the finance was not available.

That is why I think the Government’s business bank proposal is a good start, but it needs to be the source of long-term patient capital. Lord Heseltine’s reminder in his report of the work that the Industrial and Commercial Finance Corporation did after the war is welcome, and I urge the Government to consider his suggestion of providing more such long-term capital through the business bank.

In conclusion, an industrial policy is not a panacea, but it is a structure that provides the inventiveness and entrepreneurship of the people of the United Kingdom with the best possible chance to thrive in a competitive world.

Higher Education Policy

Paul Farrelly Excerpts

Wednesday 27th April 2011 Commons Chamber

[Andrew Bridgen]

My hon. Friend makes an excellent point. The Opposition are split on the matter for obvious reasons. A graduate tax is not the solution. A considerable number of graduates would pay substantially more than the cost of their course. In addition, there would be a large funding gap in the short term. The Browne review estimates that if all new students from 2012 paid a 3% graduate tax which would start at £8,000, not £21,0000, the tax would not provide sufficient revenue to fund higher education until 2041-42.

With the reckless spending habits displayed by the previous Government, universities would have much to fear if they had to rely on a graduate tax, which would inevitably fail to raise sufficient money, in contrast to the up-front and stable tuition fee income, which will allow universities to spend money as they see fit, rather than being subjected to constant Government interference.

The policies of the previous Government discouraged part-time students from studying, as they are expected to pay tuition fees up front and had no access to student loans. The fact that part-time students will have equal access to student loans will give more opportunity to those who may wish to study later in life, and will give universities a more balanced age range of students. Hon. Members should be aware that more than 250,000 students are studying at the Open university, and they will all be better off under the present Government’s policies. Given the need to retrain in a rapidly changing world, I welcome this.

The changes being bought in by the coalition Government will result in a higher standard of teaching being maintained, a higher completion rate of degree courses as a result of an informed and considered decision-making process, and students from poorer backgrounds being given a better opportunity to make the right decisions. This can only help universities by having students on the right courses.

We should also consider what the Opposition would call the ideological argument—whether universities should be dependent on the Government for their finance. The Browne review argues that a graduate tax would weaken the independence of universities, which would become entirely dependent on the Government for their funding. It argues that its own proposals would force universities to improve standards to compete for students. Under the coalition policies, the relationship of universities with students would rightly become more important than their relationship with Government.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

I fought against a market system under our last Government. We agreed a reasonable compromise, but not without a fight. On the Opposition Benches there was no fight. We knew where the Liberals used to stand. Can the hon. Gentleman tell the House where his party’s manifesto mentioned a trebling of tuition fees and an 80% cut to teaching grants to universities?

[Andrew Bridgen]

The policies are fair. There is increased fairness, increased opportunity and stability of income, and it is my firm belief that the coalition’s policies will allow our universities to prosper.

I am a graduate, and I had a full grant in my day, but in those days 4% of the school-leaving population went to university; last year, the figure was 43%. That is a considerably different proposition, and I remind the hon. Gentleman that in my constituency 84% of people are not graduates. An average graduate will over his lifetime earn in excess of £100,000 more than a non-graduate, so, if we are talking about fairness, is it fair that my non-graduate taxpayers should subsidise the earnings of those who have had the benefit of a university education? They will have that benefit not for the 30 years that they might pay back their student fees, but for all their working life, and I hope the hon. Gentleman remembers that.

To those who say that the system will not work, I say “Look at America”, where for decades the fees system has resulted in the country having eight of the world’s top 10 universities. If Oxford and Cambridge universities are to remain in the top 10 and other UK universities are to have any chance of breaking into the top 10, we need that stability of funding.

The increased tuition fees will create an expectation and demand for quality teaching among students, and with the proposed changes to A-level marking, which I support, students will apply with actual rather than predicted grades, helping state students to go to the best universities, reducing the drop-out rate and ensuring better results for students all round.

Fairness, opportunity, quality and stability are the hallmarks of this coalition policy on higher education funding, and these tough long-term decisions will secure the future of our nation’s universities, our graduates and our undergraduates.

--- Later in debate ---

[Lorely Burt (Solihull) (LD)]

I have been listening carefully to the debate so far, and the remarks made by Opposition colleagues make me feel as though I have been transported into some sort of alternative reality. This is a reality where the Labour Government did not introduce up-front tuition fees in the first place, one year after Tony Blair had promised not to in 1997; where they did not introduce top-up fees two years after they had promised not to in the 2001 Labour manifesto; where they did not go into the last election having commissioned the Browne review; and where Lord Mandelson did not say, this very March, that had Labour still been in government it would have needed to double tuition fees, at least. So we will not be taking any lessons from Labour Members this afternoon.

Now I have got that off my chest, it is fair to say that the motion poses some important questions, and it is fair that they should be properly addressed. Let me start with the £9,000-a-year exceptional student tuition fees. At the moment, universities are publishing their maximum fee, not their average fee. Institutions with a “sticker” price of £9,000 will have a significantly lower average fee because of fee waivers. At Oxford, for example, some first-year students will pay only £3,500—about the same as now. At Cambridge, all students from households earning under £25,000 will pay £6,000. At Warwick, students whose family income falls below £25,000 will receive a package of up to £4,500, and their two-plus-two degrees and part-time degrees will have a fee of £6,000, which may be further reduced by an additional fee waiver.

[Paul Farrelly]

I do not want to make party political points about broken promises, and I shall not, even when those promises were being written while people were planning to break them, because that amounts to hypocrisy and the Deputy Speaker would rule me out of order. However, I have one question. If the Government’s policy is to allow universities to charge the top amount of fees only in exceptional circumstances, is it not incumbent on the Government, the Business Secretary, the leader of the Liberal Democrats and the deputy leader of the Liberal Democrats to define, in percentage terms, what counts as exceptional and therefore what percentage of applications charged the £9,000 fee will be refused?

[Lorely Burt]

I was trying to be helpful to the hon. Gentleman by explaining some of the examples of how average fees will be lower than that figure.

The motion tries to commit the Government to guaranteeing that there will be no fall in the number of university places. This is another bit of collective amnesia. Labour Members cut places; they promised additional places and then cut the numbers. In 2009, the shadow Secretary of State, who was then Secretary of State for Innovation, Universities and Skills, put a 10,000 cap on the expansion of places, leaving 140,000 A-level students chasing just 10,000 unfilled places at the UK’s universities. That is 14 anxious students for every unfilled place available through clearing and 130,000 willing and able students without a place. They encouraged thousands of hopeful students to apply for university and then slammed the door in their face when they got there. In 2010, they did it again, leaving 150,000 people without a university place, some of whom had six A-levels at grade A. In 2009, they cut the budget of the Department for Business, Innovation and Skills by £1.9 billion, and in 2010, they cut the universities budget by £500 million.

If I may, I will read a quotation from a debate in the other place:

“The Government have made it clear that higher education needs to shoulder its fair share of the burden of reductions in public spending”.—[Official Report, House of Lords, 21 January 2010; Vol. 716, c. 1101.]

Those were the words of Lord Mandelson in January 2010, when he was Secretary of State for Business, Innovation and Skills. In the same debate, he said that student numbers should be dictated by what is affordable with the resources available. The numbers should not be dictated by a central Government diktat, which says that 50% of young people should go to university. Labour set that target, but quickly realised that it did not know how to pay for it. It was left with a financial black hole and was forced to slash student places to fill it, leaving thousands of students in the lurch. Surely the right number is the number at which every student who has the desire and capability to benefit from university can go. Despite the previous Government’s undoubtedly strenuous efforts, the number of students from poorer backgrounds did not increase proportionately. That is Labour’s legacy on universities.

It is no secret that had the Liberal Democrats won the general election, we would have done things differently. However, I am proud of the coalition agreement, which incorporated two thirds of our manifesto pledges. Sadly, our tuition fees policy fell into the group of manifesto pledges that remain unfulfilled. Working in coalition has its challenges, believe me, but it also has its rewards. One of the rewards was negotiating with Conservative colleagues to make the system that we have ended up with more progressive than the Labour system we inherited. That is not only my view, but that of the Institute for Fiscal Studies. There are no up-front fees for students, graduates will start to pay only when they can afford to, and there will be lower lifetime contributions for the poorest quarter of students compared with the system that Labour left behind. There will also be more support for the Cinderellas of the HE and FE systems, part-time students, who had previously been shunned by a system geared towards full-time students.

In conclusion, it is hard to predict what will happen, given that universities are yet to announce many of the measures such as bursaries and waivers. I have concerns about the number of places and their uptake. As the Minister said earlier, that will be reviewed in autumn 2011 and I greatly hope that the steps we have taken will be vindicated.

--- Later in debate ---

[Mr Marcus Jones (Nuneaton) (Con)]

It is always an honour to follow the hon. Member for Stoke-on-Trent Central (Tristram Hunt), even though his arithmetic and his assessment of inflation seem like those of the Labour party of the late 1970s.

Quite often during Opposition day debates, purely partisan posturing overtakes thoughtful and reasoned debate. People put partisan politics before making decisions for the right reasons, even if such decisions have to be taken with a heavy heart. I would not say that I am disappointed by the level of party politics that we have heard, particularly from the Opposition Benches, but I am more than disappointed by the way in which the Opposition have put their points.

Once again, the Opposition have given us no ideas and shown no vision on higher education. They have not acknowledged that Labour introduced tuition fees and increased them on more than one occasion when it was in government. They have also not acknowledged that they instigated the Browne review. Lord Mandelson, the former Business Secretary, now says that when the previous Government instigated the review in 2009, he assumed, as the Treasury did, that the outcome would have to include a significant further increase in tuition fees. Whether that was Labour party policy at the time, you have to acknowledge that the Labour party gave the Browne review its terms of reference—[Hon. Members: “You?”] Sorry, Mr Speaker.

The Labour party no longer acknowledges that it flirted with the graduate tax—Labour Members seem to be in denial. Only one thing is clear: they have no plan for higher education.

[Paul Farrelly]

Will the hon. Gentleman give way?

[Mr Jones]

I will not because I want to give other hon. Members an opportunity.

The motion makes important points about fees and how they will be implemented, and I hope the Minister comments on the timetable and on how quickly students and their parents can find out what the true level of fees will be. That is important because a small number of parents and students go to their constituency MPs to ask for that information so that they can plan for the future. I understand why the Government want to get things right, but the uncertainty does not help.

However, Labour’s constant politics of fear helps no one. Rather than supporting our young people by engaging in the debate and trying to get things right, Labour Members maintain the party line—a misleading line that fills our young people with fear and dread, putting them on the back foot before they even learn the facts, crushing and stifling aspiration, and certainly not encouraging it.

Aspiration is important, but it needs to be realistic. The most capable, regardless of their background, should have the opportunity to attend university. Under the new system, the Government will help to achieve that for young people. There will be lower repayments for student debts than under the current system, and most of those from underprivileged backgrounds will have the opportunity to get into higher education.

Warwick university—one of my local universities—says that all students whose parents have an income of £25,000 or less will receive a package of up to £4,500 a year to assist with their studies. We must also acknowledge that the Government’s policy involves no up-front fees, and that students will not start paying until they are graduates earning £21,000 a year, rather than the £15,000 a year under the current system. As Labour Members know, monthly payments will also be lower.

That is not to say that the current system or the system that the Government propose are ideal. Young people will leave university with debt, and nobody in the House would wish that on a young person. However, we must be realistic. For many young people, taking on that debt is the path to a career—a good and proper career in which they make a substantial living. We know that young people who go to university earn on average £100,000 more over their career than young people who do not.

That is not to say that university is a success for all. It is not, and many come out of our universities unable to gain employment for many years. Many certainly do not enjoy the glittering careers that they thought they would have when they initially went to university. I know that because I used to work for a firm of lawyers that received hundreds of thousands of applications for training contracts every year—applications for jobs that just did not exist. That is not acknowledged by the Labour party.

To sum up, the proposed new system is not perfect or ideal, but it is a move in the right direction. Social mobility stalled under Labour, but it will begin to improve once again with the measures put in place by this coalition Government.

--- Later in debate ---

[Mr Thomas]

My hon. Friend is absolutely right that our students or would-be students face huge uncertainty about the fees that they will incur. Perhaps if the Government had published the White Paper that they promised to publish even early this year, her constituents might have had just a little bit of certainty. Is not the truth that Ministers in the Department for Business, Innovation and Skills have failed to stop other parts of Government creating huge uncertainty for Britain’s universities, thereby creating incentives for fees to be higher rather than lower?

[Paul Farrelly]

When the Government say that universities will be allowed to charge fees of £9,000 only in exceptional circumstances, is it not incumbent on them not only to say what control they will exert to turn down the 40% to 50% that will want to charge £9,000 anyway, but to tell the House how they will square the circle and make up the funding that universities will otherwise lose?

[Mr Thomas]

You would think that it was indeed incumbent on Ministers to do that, Mr Speaker, but so far they have not done so. Ministers need to publish the White Paper to give us some certainty. Thus far, it does not look as though they intend to do that any time soon.

There is also continuing uncertainty about how the remaining teaching grant will be allocated, if indeed some universities get any at all. As Opposition Members have made clear, it is the huge cut to university teaching funds and to capital that continues to drive fees higher. Surrey university’s vice-chancellor, Professor Christopher Snowden, has said that his university’s plans to charge £9,000 reflected the financial uncertainties for English universities and the substantial cuts that the Government have made to grants for teaching and building refurbishment. The university of Sheffield Hallam, which the Deputy Prime Minister may know something about, has said:

“The new fee will compensate for the government’s 80% cut in our teaching grant and the significant cuts in capital funding.”

The Government based their financial plans on average fees of £7,500. In the face of such uncertainty, it should come as no surprise that many expect average fees to be somewhat higher. Indeed, as I made clear in my interventions, the Secretary of State has confirmed that the Government are considering either a cut in student numbers or an even greater cut in the teaching grant as tools to plug the funding gap. Either he was scaremongering or the threat was real. Because the Government have lost control of higher education policy, if we take the Secretary of State at his word, then on top of an almost 80% cut in university teaching funds and a 20,000 cut in student places already, we face the prospect of our universities being starved of even more income, or more of the brightest and best of the next generation being denied the chance to better themselves through a place at university.

Frankly, watching Ministers on tuition fees has become increasingly like watching a bad episode of “Only Fools and Horses”, with Front Benchers desperately trying to sell any old line on tuition fees to people whom they clearly think are gullible punters. The right hon. Member for Havant (Mr Willetts)? The Department’s very own Rodney Trotter. Grumpy old Uncle Albert, with his best years behind him? Who else but the Secretary of State? And Derek “Del Boy” Trotter? It has to be the Deputy Prime Minister: never selling the real McCoy, never telling the whole truth—inadvertently, of course—a dodgy promise here, there and everywhere, and all his best deals done down the Nag’s Head with Boycie the spiv. Talking of whom, where is the Prime Minister for this debate?

“I’m sorry, we rushed into this and we got it wrong”—I paraphrase the Secretary of State for forests. “We’re going to have a pause, listen to people’s concerns and make changes”—the Secretary of State for Health, never mind the fact that his mea culpa is just an advertising gimmick. Either his lines or those of the right hon. Member for Meriden (Mrs Spelman) would have been a more appropriate starting point for the Minister this afternoon. He should have said, “I’m sorry, better access to university looks unlikely, despite our great promises.” He should have said, “I’m sorry, we thought OFFA could control fee levels. We were wrong.” And he certainly should have said, “I’m sorry that we were so spectacularly wrong when we claimed that only a few universities would charge the full £9,000.”

This is a policy in need of a radical overhaul. Trebling tuition fees was never fair. It was not necessary and neither is it sustainable. I commend our motion to the House.

--- Later in debate ---

[Sheila Gilmore]

rose—

[Paul Farrelly]

rose—

[Mr Hayes]

I will not give way again, as time is short.

The previous Government defended both the extra independence variable fees gives institutions and the principle that universities should justify the fees they charge. That is why this debate on the future of higher education is, above all, about three things. First, it is about securing a settlement to fund higher education that is sustainable. The right hon. Member for Tottenham (Mr Lammy) is right: the deficit was not the context when Browne began, but it certainly was the context when Browne reported. The previous Government recognised that we had strategically to rethink university funding to give them sufficient funds to compete with the best. That was acknowledged by the right hon. Gentleman when was the Minister and it is acknowledged by Conservative Members.

I think it would serve the Labour party if that was acknowledged once again. It was hesitatingly and falteringly acknowledged by the shadow Secretary of State, but he has to answer this question: if the reduction in BIS spending on higher education had been of the order he suggested—around 8% to 10%—where would the cuts have fallen? Would basic skills have taken the hit; would it have been adult and community learning; would it have been apprenticeships; or would it have been further education? Let us face it, we cannot have it all ways—yet too often the shadow Secretary of State tries to do just that.

Department for Business, Innovation and Skills (Performance)

Paul Farrelly Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Vince Cable]

The hon. Gentleman is absolutely right: that is the core point. It is a strange irony, because many Labour Members came from industrial Britain and had built their movement on it. In that decade, however, manufacturing industry was substantially devastated, and we are living with the legacy of it now. What we must emphasise—this is the core of our growth strategy, which the hon. Member for Nottingham East (Chris Leslie) asked about—is that manufacturing matters, and we will do everything we can to support it.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

rose—

[Mr Watts]

rose—

[Vince Cable]

I will take one more intervention before moving on.

[Paul Farrelly]

The right hon. Gentleman is a respected economist and will know full well that an expansion of exports is to be expected following the decline of sterling. That is not a growth strategy; it is a consequence of the previous economic policy that he used to agree with. Before he gets too carried away in making accusations about amnesia, may I ask him whether he recognises these words, written in 2009 and reprinted this year:

“I have taken the view that in the current circumstances it is on balance right to attempt a fiscal stimulus, recognizing, however, the risks. The alternative—prolonged and deepening slump—would be worse”?

Education Maintenance Allowance

Paul Farrelly Excerpts

Wednesday 19th January 2011 Commons Chamber

[Andy Burnham]

We did plenty of things to improve the quality of teaching, including through Teach First. I spoke about giving all young people the chance to get into the best sixth-form colleges in the country, so that they can access good teaching. Would the hon. Lady care to explain how, under her party’s plans, those young people will carry on being able to benefit from the very best teaching and get the best opportunities in life? I do not think she can do so.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

EMA was being piloted when my right hon. Friend and I joined the House, and it has been a real achievement in the 10 years since. Some 1,700 students at Newcastle-under-Lyme college benefit from it, and it has raised staying-on rates. Where is the fairness in removing that income from those students and their households? Is it not the case that the impact of that will be felt not in the likes of Surrey Heath but in Bermondsey, Sheffield, Leigh, Manchester, Newcastle-under-Lyme and Stoke-on-Trent?

[Andy Burnham]

It will be felt keenly in such places. Combined with the trebling of tuition fees, my worry is that it will have a depressing effect on the aspirations of young people in the former industrial and inner-city communities that we worked so hard to lift during our time in government. That is why today’s debate goes to the heart of why I and many of my hon. Friends came into politics. We care passionately about people’s opportunities in those areas, and we are not prepared to see the ladder kicked away from under young people in the way that the Government propose.

The evidence that I have given on the educational benefits of EMA demolishes the claim that it has no benefit to society beyond persuading 10% of students to stay on. Until recently, I was at a loss to understand how Ministers could make that one-sided argument and use such selective facts to back up their decision, but maybe I have stumbled on the answer. Last week, I came across a parliamentary question answered by the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton), asking how many further education and sixth-form colleges the Secretary of State had visited since he was appointed in May. I shall share with the House the revealing answer:

“The Secretary of State has made no such visits since this date.”—[Official Report, 12 January 2011; Vol. 521, c. 342W.]

The Secretary of State was quick to get to his feet a little earlier, and I trust that he will rise again now to correct what surely must have been an inaccurate answer.

--- Later in debate ---

[Michael Gove]

In a few seconds.

This is not just about improving vocational education. Like the right hon. Gentleman, I believe in aspiration. I believe that other young people born into circumstances similar to our own, whose parents never went to university, should have the chance to go to university. That is why we are putting in place policies to improve academic education. Again, however, we do not know whether the right hon. Gentleman supports or opposes the investment we are putting in to improve it. Does he support or oppose our reading check at the age of six, to make sure every child is decoding fluently, and will be literate by the time they leave primary school? Is he in favour of that, or against? Does he oppose or support our position on GCSEs? Does he believe it is right or wrong to get rid of modules in order to make them more rigorous? Does he back or oppose the English baccalaureate? Does he believe it is right to encourage more students—[Interruption.] There is only one answer that he and some—some, I stress—Opposition Members have to the question of how to increase aspiration, and it is represented by three letters: EMA. It is important that we remove barriers and that we have the right support, but in respect of social mobility it is also important that we have a coherent and inclusive widespread education policy. From the Opposition, on all these areas we have either mulish silence or reactionary opposition.

Is the right hon. Gentleman for or against our drive to ensure that more students get good GCSEs in English, mathematics, sciences, languages, modern history and geography? I could not tell last week. At the beginning of last week he was against, in the middle of last week he was almost in favour, and towards the end of last week Labour MPs were telling me that it was now their party’s position to support our English baccalaureate.

[Paul Farrelly]

rose—

[Michael Gove]

Perhaps the hon. Gentleman can tell me which of these policies he supports or opposes.

[Paul Farrelly]

The one thing that I can tell the Secretary of State is that 1,700 students in Newcastle-under-Lyme will be affected by the withdrawal of EMA. This is his policy, so can he tell the House how many students in Surrey Heath will be affected?

[Michael Gove]

Overall, 45% of students are eligible for EMA. The proportion is smaller in Surrey Heath than in Newcastle-under-Lyme, but of course the number of students who will receive enhanced support depends on the new improved provision that we hope to bring in.

--- Later in debate ---

[Derek Twigg (Halton) (Lab)]

I am grateful for the opportunity to speak in the debate. I wish that the Secretary of State would stop the nonsense of talking about deficit denial. We know that the bankers caused the crisis. We invested in the economy to ensure that we could keep people in work and in their homes, and so that we could fund education—that is the difference between us and the Government.

We are considering not only cuts to EMA, but the Government’s wholesale betrayal of balancing their cuts towards young people. EMA has been a lifeline for young people, especially those from less well-off backgrounds, of whom there are many in my constituency. However, the cut must be considered in the context of what has happened to the likes of Halton under this Government. In addition to the cut in EMA, we have faced a massive £180 million cut in Building Schools for the Future. The tuition fees policy will have a particular effect on my constituents, and we experienced a £1.2 million education cut last year, although Tory-controlled Cheshire West and Cheshire East councils had a cut of only £600,000. We must not forget that the Government have made a deliberate ideological attempt to make cuts in Labour authorities and areas.

EMA has been an important tool to support young people in education and to encourage them to stay on, succeed and realise their aspirations. It also supports choice because it allows young people to choose the institution that is best for them, not just the nearest one. Ending the payment stacks the odds even more against those who have least but want to get on in life.

Halton benefited from being one of the original pilot areas for EMA. There was a 55% increase in EMA recipients between 2004 and 2010, with last year’s numbers exceeding 2,000 recipients. From talking to young people, I know how important EMA has been to them, so its withdrawal will lead to students dropping out and becoming NEETs—those not in employment, education or training—which will have a significant economic and social impact in deprived areas such as Halton. That would go against the so-called coalition’s policy of reducing the number of NEETs, and it would also reverse the marvellous progress that has been made in Halton to reduce its proportion of NEETs from 8.3% in 2007 to 4.5% last year.

The Association of Colleges reports that the National Foundation for Educational Research estimates that 12% of young people who received EMA believed that they would not have participated in their courses if they had not received it. In some colleges, half the students surveyed said that they felt that they would not be able to continue their course following the withdrawal of EMA, while a further third thought that they would need to weigh up the pros and cons of staying on at college.

Mike Sheehan is the widely respected principal of my constituency’s Riverside college—the college I attended. He has turned round a number of failing colleges and is achieving great things at Riverside college. He says that the withdrawal of EMA on new year’s eve has adversely affected recruitment to the college’s January programme. The figures are down by almost three quarters—just 25 students compared with 106 last January. He is worried about the students who enrolled on two-year courses in full expectation of receiving EMA throughout their course. It is unfair that EMA is being withdrawn partway through courses, and the Association of Colleges says that that will affect 300,000 young people throughout the country. Mr Sheehan says:

“Attendance, retention and achievement have risen drastically at Riverside College in recent years. We are absolutely convinced that EMA has played a significant part in bringing about these improvements. It has provided a real incentive for young people to attend fully and to stay at college.”

Some surveys have pointed to higher attendance and take-up rates for courses among young males from disadvantaged backgrounds who receive EMA. That is especially important in deprived areas such as Halton, and that is to say nothing about the higher earning potential of better-qualified students who complete college and the contribution to the economy that they can therefore make. According to this month’s Commons Library statistics on EMA and the Government’s research figures, that contribution more than offsets the costs of the EMA programme.

Both the Secretary of State and his shadow spokesman touched on a fundamental aspect of EMA for students from poorer backgrounds: the ability to pay for meals, books and educational equipment. One of the main uses of EMA, however, is the funding of transport. In December 2010, the Association of Colleges commissioned a survey to detail the accessibility of transport to people aged 16 to 19 attending college. It found that 94% of colleges believe that the abolition of EMA will affect students’ ability to travel to and from college. The support given by local authorities is extremely varied. Some 29% of authorities provide transport while 20% give financial support. Around 18% provide both, but 27% provide neither. Existing local authority transport provision is extremely patchy, and local authorities cannot be expected to pick up the tab for the withdrawal of EMA.

The Secretary of State might wish to examine Halton’s case. We had £30 million taken out of a £130 million budget as a result of the local government settlement, in-year cuts and other changes to programmes. If he thinks that any council, let alone a small one such as Halton, can bear such a cut without services being affected, he is in a different world. Councils cannot find additional funding to fill that sort of gap.

[Paul Farrelly]

Does my hon. Friend agree that, as with the rest of the cuts agenda, the Secretary of State’s debt argument is simply a spurious decoy? Estimates of the debt position improved following the election, so the position was better after the election than when the Secretary of State promised that he would not abolish EMA.

Higher Education

Paul Farrelly Excerpts

Wednesday 3rd November 2010 Westminster Hall

[Mr Lammy]

I have no recollection of the proportion of funding for Aimhigher being reduced. The Aimhigher programme sat alongside the funding that we gave universities to both widen participation and increase retention. As I said, that overall pot was about £580 million. That is a significant amount of money, and it made a huge difference. I do not recognise what the hon. Gentleman said.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Does my right hon. Friend agree that the student support that we put in place was important as well? As the Browne report said:

“The evidence suggests that improvements to the support for living costs helped to ensure that the changes in fees in 2006 did not have a negative impact on participation.”

Some progress has been made, but not enough. However, does the shadow Minister agree that we are now in unknown territory? The balance is getting out of hand, and the tripling of fees will have a deterrent effect on people from poorer backgrounds, who will feel obliged to choose cheaper courses at different universities.

[Mr Lammy]

That is, indeed, the fact. I want to emphasise that the increase in young people going into higher education in my constituency in the past 10 years is not just 5% or 10%; there has been a 100% increase in participation in higher education. That is, of course, to do with the support and the grants that were available, but it is also because of programmes such as Aimhigher Associates. Through such programmes, we encouraged young people, who were often from poorer backgrounds, to leave university for half a day a week and go back into schools to encourage others to go to university. That takes money, funding and priority. Making this issue a priority is in the national interest because of what has been said about growth.

--- Later in debate ---

[Mrs Hodgson]

That is an important part of the debate, but it has not been discussed yet, and I certainly hope that the Minister will refer to it in his closing remarks. Even during my time as an MP, I have seen a change among the people who have applied to work for me as a researcher, with those who apply now having chosen not to do postgraduate qualifications for the reason that my hon. Friend sets out. Degree-level qualifications will therefore probably be the maximum attainment for some children from working-class backgrounds.

I want now to touch on the education maintenance allowance. At the same time as the current changes are being made, the Government are planning to overhaul the EMA system, which has been instrumental in ensuring that talented young people from less well-off backgrounds get the necessary qualifications to apply to university in the first place. There was a debate on this subject in Westminster Hall yesterday, which was secured by my hon. Friend the Member for Glasgow North West (John Robertson). He is a great advocate of the EMA, and I see from Hansard that he put the case for its retention impeccably, so I will not repeat it.

My hon. Friend has plenty of evidence to back up his case. The evaluation of the roll-out of EMA showed that it reduced the level of those not in education, employment or training and encouraged those receiving it to work harder. Indeed, Institute for Fiscal Studies research showed that attainment among recipients has increased by 5% since the introduction of the EMA. If the Government remove something that encourages less well-off children to stay in further education and to aim higher, and they couple that with huge disincentives to apply for higher education, applications from that group will almost certainly drop significantly, particularly to the better universities.

[Paul Farrelly]

In his intervention, the Minister talked about the importance of encouraging further applications. When I was growing up, I was one of those people whose family encouraged them to go out to work at 16. The EMA, which I argued for in my maiden speech in 2001, has been really important in changing that, but the Government gave us no indication of the implications of scrapping it when they announced the changed regime today.

[Mrs Hodgson]

My hon. Friend makes a good point. I always tell people that the EMA would have been the one extra thing that would have given me the confidence to resist the push to go out to work, because I would have had just that little bit of money that was mine.

I note from Hansard that the Minister who answered yesterday’s debate tried to shift the blame for the decision to remove the EMA on to the previous Labour Government, much as I expect the Minister, unfortunately, to do today. The fact is that there are alternatives to those choices that have been made—ones that would have put more of the burden on the people who caused the situation that we are in, rather than on a generation that has had nothing to do with it.

The Minister for Universities and Science is not representing the Government here today, but he is apparently the author of an interesting book called “The Pinch”. I regret to say that I have not had time to read it yet, although perhaps a friend will be watching the debate and get me a copy for Christmas—if they do, I will be sure to pop along to the office of the Universities Minister to request an autograph. In his book, he argues that his generation—it is not quite my generation, because I am not that old—has benefitted from all the things that it is now unwilling to fund for the current generation and the next generation, including subsidised higher education. Does he not think that the Government’s reforms enforce that attitude, which he clearly sees—or saw—as hugely detrimental to young people?

I have a copy of today’s statement by the Universities Minister; he spoke of introducing a progressive system. The only progress that I can see between when he wrote his book and his speech today is a kind of backwards progress, which is, I believe, an oxymoron—a bit like his claim that the Government’s changes are progressive.

--- Later in debate ---

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

It a pleasure to speak in this debate, Mr Betts, and I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing it. I acknowledge that we both care deeply about this subject, and we have debated it over many years. It was especially fortuitous of him to secure the debate for today. He applied for it and secured it before he knew about the statement that would be made—a remarkable achievement.

I have always listened to the right hon. Gentleman with interest. His journey from Tottenham to this place is one that we all believe more people should be able to take. Like many other hon. Members who have spoken, I was the first person in my family to go to university and, as the right hon. Gentleman knows, I want that opportunity for more people from working-class backgrounds. Like the hon. Member for City of Durham (Roberta Blackman-Woods), I believe in what she described as the transformative power of learning, and the way that learning changes lives by changing life chances.

However, let us be frank during the course of our affairs this afternoon. The previous Government knew, just as this Government know, that we have to think again about how we fund such opportunities. That is precisely why the previous Government commissioned the Browne review. I have a series of quotes from Lord Mandelson and others. It would be tedious to read them out, but they state that we need to think afresh about the way that we fund universities and think carefully about the contribution made by graduates. That was why we needed to commission a review that looked at such matters. The terms of reference of the Browne review could hardly have been agreed on had it not been anticipated that the outcome would address such subjects. That is precisely what Lord Browne did.

We have heard from a number of hon. Members about the problem of the disincentive effect of higher fees. We heard about that issue from the hon. Members for Sheffield Central (Paul Blomfield) and for Liverpool, Wavertree (Luciana Berger), and the hon. Member for Harrow West (Mr Thomas) mentioned it in his summing up. That stands in contrast to the simultaneous and accurate claims made by hon. Members that since fees were introduced, things have improved in terms of widening access. Rather than being a disincentive, there is little evidence to suggest that people have been put off by fees. As we heard, more people from less-advantaged backgrounds have been going to university since the introduction of fees.

[Paul Farrelly]

Will the Minister give way?

[Mr Hayes]

I will happily give way, but I am not going to give way too much because of the time. I want to cover all the points that have been raised.

[Paul Farrelly]

My hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) and I were veterans of the bloody battles that were fought in the Labour party over a market in higher education. The Conservative party and the Liberal Democrats agreed with us. The key achievement all those years ago was to stop the variability, which would have led to people from poorer backgrounds choosing cheaper universities.

While I am on my feet, I would like to make another point—

[Mr Clive Betts (in the Chair)]

Order. Interventions are supposed to be brief.

[Paul Farrelly]

This will be very brief, Mr Betts. The price paid for a degree sends a market signal to employers that the higher the price, the more a degree is worth. Therefore, more universities will charge higher fees simply because of the signals that that will send to employers. There will be many effects that have not been researched.

Academies Bill [Lords]

Paul Farrelly Excerpts

Monday 19th July 2010 Commons Chamber

[Mr Buckland]

First and foremost, I think that the governing body must always have that responsibility. We already have examples of previous practice in foundation schools, which were the creation of the previous Labour Government in the School Standards and Framework Act 1998. The hon. Gentleman will probably agree that there have been a number of cases where governing bodies, for whatever reason, have not had the wherewithal to respond to a parental complaint about a lack of provision. It has been very difficult for parents to know precisely where to go to get that help. The answer must be clear, and I am confident that in the course of the debate in Committee we can address that issue.

What about children who do not have full statements but who are perhaps under the provisions of school action or school action plus? Their position is somewhat more difficult because they do not enjoy the advantage of statutory protection or statutory force when it comes to the implementation of their school plan. When a school is breaching the SEN code of practice in relation to those children, where will those parents go for redress? The governing body, as I said in response to the intervention made by the hon. Member for Dunfermline and West Fife (Thomas Docherty) a moment ago, would be the first port of call but, again, I would welcome some clarity on that point. The basis of accountability comes in the form of the contract that will exist between academies and the LEA, but, as I have said, that point needs some clarification.

Further clarity is required should there be a dispute over the admission of a child with SEN or a child on school action or school action plus. The new model funding agreement for admissions to academies is clear and I welcome it, but I would go further and suggest that we will need some more detail on the time frame within which admission disputes between parents and schools should be resolved.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

If more and more schools are to be encouraged to opt out of local education authority control, would it be his preference that in due course they should eventually gain control of their own admissions procedures?

[Mr Buckland]

As I have said, I think that the principle of selection has not been part of the argument when it comes to academies. It is not about selection, and that is why I made my earlier observations about the hon. Member for Bolton South East. This is all about excellence, and the Bill strikes the right balance on admissions and the criteria for admissions procedures.

--- Later in debate ---

[Stephen Lloyd]

I thank the hon. Gentleman; I appreciate that information. In that case, I am particularly glad that I complimented the right hon. Member for Tottenham on his speech, which I thought was strong.

I should also like to compliment the Labour party. Any fair-minded person would accept that in the past 13 years, considerable investment went into education, and there were improvements to schools in my constituency, for which I am grateful. That, in a sense, is the positive side to what happened over the past 13 years under the Labour party. I am disappointed that a lot of what I have heard today from Labour Members is indignation about the coalition Government’s plans for academies. To be perfectly frank, at the election, it was clear from the Conservative manifesto what the plan was. Given the coalition Government’s position, there cannot be any surprise at the idea that they will deliver what they promised, so I am a little puzzled.

[Paul Farrelly]

Before the hon. Gentleman gets to the substance of his speech, I point out that I voted against plenty of Labour programme motions in the past two Parliaments when I thought that Bills needed more consideration. Funnily enough, I always found the No Lobby heaving with Liberal Democrats. Does he agree that any Liberal Democrats who tonight vote for the programme motion have, in very short order, given up on the basic principles of proper scrutiny, and have in effect become mere nodding dogs on the Tory bandwagon?

[Stephen Lloyd]

No, I do not agree at all. In a sense, the hon. Gentleman’s intervention backs up my point about what I see as the flipside of the Labour party. On the one hand, it brought about a lot of good things in education when it was in government. On the flipside, there also came a lot of nonsensical things. It was an absolute disgrace that six months before the general election, the former Secretary of State went around promising that billions of pounds, or certainly a multimillion-pound sum, would be spent on schools, when he knew that the money was not in the kitty.

I particularly want to talk about the coalition Government’s commitment to a pupil premium. Last week, I had the privilege of attending a year 6 production at Shinewater school in my constituency. It serves an area with a large number of disadvantaged families and students. Despite that, the school has tremendous esprit de corps. I believe that it has been told that it has got an “outstanding” from Ofsted. The school is a perfect example of what will happen with the pupil premium, to which I know that the Secretary of State is committed. It will result in further tens of thousands of pounds being invested in schools such as Shinewater. That is the sort of money that will make the difference for people and youngsters in my constituency—the difference that the right hon. Member for Tottenham described so powerfully when talking about his constituency.

I received a commitment from the Secretary of State for Education three weeks or so ago. He said that he was absolutely committed to putting £2.3 billion or £2.5 billion into the pupil premium. I look forward to the coalition Government and the Secretary of State delivering on that promise; I am confident that he will. I am very aware that education is the silver bullet. Education is the route out of poverty, and that is why so many of us feel so passionately about the matter.

--- Later in debate ---

[Owen Smith]

I thank the hon. Gentleman for his intervention and completely agree. This is a very familiar and, indeed, old debate, because from Government Members we have heard the warmed-up arguments of Thatcherism: effectively, the privatisation by stealth of our schools and education, and, coming up later in the year no doubt, a wholesale attack on welfare. The debate is familiar and ideological, and the hon. Gentleman is absolutely right: my opposition is ideological, too, because I sincerely believe that we need local authorities—the state, in its benign form—to offer some control over our schools, so that we have equitable provision as opposed to the free-for-all that Government Members clearly think would be of benefit.

[Paul Farrelly]

On my hon. Friend’s point about politics and practicalities, is it his understanding that, in Wales as well as in England, the Liberal Democrats’ policy is to support local education authorities, not to contribute to their dismantling and demise?

[Owen Smith]

There is a deep irony in that. On the contortions that the Liberal Democrats are having to perform between Wales and Westminster, I understand that they are actively considering what they would do in the unlikely event of their winning greater power in Wales—as in, thinking about whether they could afford to be in coalition in London with the Tories and in Wales with the Labour party. Seemingly, their opportunism knows no bounds.

However, as I said, we have two levels of deep concern. The first is immediate and practical, including the question of whether that greater degree of autonomy—that laissez-faire attitude to education as well as to economics—will result in a worse outcome for all our children, with few children being cared for as fully as they should be. The hon. Member for South Swindon (Mr Buckland) eloquently raised some of his concerns about special educational needs, and I, too, have a child with such needs, so I am very worried about this legislation and whether free academies, free from local control, will be able to provide that care adequately.