Domestic Gas and Electricity (Tariff Cap) Bill

Robert Halfon Excerpts

2nd reading: House of Commons
Tuesday 6th March 2018 Commons Chamber

[Robert Halfon (Harlow) (Con)]

I apologise for having to leave soon after I have spoken, but I am hosting another event elsewhere in the House of Commons.

High energy costs are felt most significantly by the vulnerable and those on lower incomes, which is why I strongly support the Bill and congratulate both the Business Secretary and the Energy Minister for what they are doing. Those who pay the most for energy are the ones who can least afford it. Eight out of 10 people on high-cost standard tariffs earn £18,000 a year. Scope, the charity for disabled people, found that households with disabled persons make up 38% of all fuel-poor households in England. More than a quarter of households with a disabled person—over 4 million households—spend more than £1,500 a year on energy bills, which is why this is a matter of social justice. The Government’s emphasis on the cost of living is incredibly important. I welcome that more than 4 million households are on prepayment meters. I also welcome the freeze in fuel duty for eight consecutive years, meaning that the average motorist has saved £850 since 2010.

The truth is that our energy market is fundamentally uncompetitive. The six largest energy providers focus on cheap introductory offers and leave loyal customers on poor-value tariffs. These standard tariffs earn the big six an average of £1.4 billion more than they would earn if the market was working well. The lack of competition means that suppliers can charge what they please. We have seen in recent weeks how increasing wholesale energy costs have had a knock-on effect on tariffs in smaller providers and those in the big six.

I urge the Minister to look at other issues hitting energy consumers. For example, those who do not pay by direct debit face an extra bill. I had an email only yesterday from someone telling me that they refuse to pay by direct debit, so they have to pay the electricity company—the Co-operative Energy—£200 a year more than if they had signed up by direct debit. We know that the vulnerable often do not pay by direct debit and sometimes do not have bank accounts. Some are paying up to £390 extra a year. This charge is unfair. I urge the Minister to look into these cases.

I also have concerns about the huge wages and the way in which profits are used by the big six bosses. Now, I am not against high wages or profits, but I do not think that these wages are linked to performance. For example, top staff in Centrica get £13.1 million a year, and the chief executive officer of E.ON UK said that his company had £235 million in profits. Although I am not against profits or high wages, wages should be linked to performance and we should ensure that those profits are ploughed back into helping the most vulnerable consumers.

We need a consumer Bill of rights to bolster the position of all energy consumers. It should be easily digestible and understood. To get cheaper tariffs, everybody should know what their energy bills should be and what rights they have. A consumer Bill of rights should ensure access to the lowest possible cost for loyal customers who decide not to switch and end up on the standard tariffs.

[Peter Kyle (Hove) (Lab)]

Will the right hon. Gentleman give way?

[Robert Halfon]

I would normally be pleased to take interventions but, if the hon. Gentleman does not mind, I will not give way because of the demands on time. There are a lot of speakers and Madam Deputy Speaker has asked us to cut down our contributions.

My next point is about injecting competition into the market that is currently dominated by the big six. We have a problem because, although this is very much about competition in the private sector, energy is actually a public good. The Government need to do much more to support not-for-profit providers. The hon. Member for Harrow West (Gareth Thomas) mentioned co-operatives, of which I am very supportive. Robin Hood Energy, launched by Nottingham City Council, is an example of a not-for-profit provider. Although we need market competition, we need to look much more at the co-operative model when we are talking about a public good. I do not believe in nationalisation, but I do think that we should have not-for-profit models in essential services, because energy is the lifeblood of our country and, without it, we would be in the dark ages. For too long, to use a well-known phrase, the market has been dominated by the few, not the many.

I very much support the Bill because it is the right thing to do symbolically. It sets the tone of what this Government are about—helping the most vulnerable. It is also the right thing to do practically. To me, this is not an argument about big government or small government; it is simply an argument about good government.

Office for Students

Robert Halfon Excerpts

Tuesday 27th February 2018 Commons Chamber

[Mr Gyimah]

The hon. Lady asked a number of questions that I will take in turn. Her first question relates to having a National Union of Students rep on the board. As she will know, in addition to having a senior representative on the board, there is also a student panel. I met the student panel within, I think, the first week of my being appointed. [Hon. Members: “Answer.”] I am giving an answer. I spoke to the student panel directly; it is doing a great job. There is an NUS representative on the student panel, but there is nothing to say that the person on the board has to be an NUS representative, given that the board has not been constructed to be the place where delegates of represented bodies congregate. The NUS can therefore influence what is happening in the Office for Students.

On the wider question of social media and social media vetting, clearly the social media vetting of Toby Young was not as extensive as it could have been, also given that there were 40,000 tweets.

With regard to the influence of special advisers, Members across this House will know that the way government works is that civil servants and advisers advise but ultimately Ministers decide. In making a decision, Ministers make a judgment call, especially in recruitment decisions. The judgment call in this case was that, having considered the advice from the advisory panel that had looked at the candidates and all the information, none of the three student representatives put forward was suitable. Therefore, because someone needed to be in place by 1 January, an interim member was appointed with a view to reopening the competition later on.

I take the hon. Lady’s point about the all-male appointment panel. I think that an attempt was made to make sure that the panel was more representative, but, for whatever reason, someone could not be available. [Interruption.] The key thing, if the hon. Lady will stop commenting from a sedentary position, is that three out of the five members who were eventually appointed were women. Sometimes, in these situations, it is as important to look at the outcomes as the process.

As we look at the process and the lessons that we have to learn, it is important that we do not forget the ground-breaking role that the Office for Students will play in empowering students and championing them—something that this Conservative Government have delivered that was never delivered by Labour.

[Robert Halfon (Harlow) (Con)]

I welcome the Minister’s comments, but may I ask him about a wider issue? What I do not understand about the board of the Office for Students is that, given what the Prime Minister and the Secretary of State have said about technical education and further education and the link to higher education, why on earth does the Office for Students not have serious individuals from the further education sector and from the apprenticeships sector, many of whom are students doing degree apprenticeships?

[Mr Gyimah]

The Chairman of the Education Committee asks a very important question. As he will be aware, however, this is a regulatory body for the higher education sector. He will also be aware that the panel that has been appointed for the higher education review includes some very strong representation from the further education sector. Baroness Wolf of Dulwich is very well known for her work in her reviews of further education, and Beverley Robinson is the principal of an FE college. However, this particular regulatory body is for the higher education sector.

Points of Order

Robert Halfon Excerpts

Tuesday 27th February 2018 Commons Chamber

[Mr Speaker]

I am grateful to the hon. Lady for her point of order. I understand her concern. The Minister in question no longer occupies this office—witness the fact that the hon. Member for East Surrey (Mr Gyimah) answered the urgent question, as he is now a Minister in the relevant Department and the hon. Member for Orpington (Joseph Johnson) now serves in another capacity. My advice to the hon. Lady is that she should repair to the Table Office, which is a short distance from here, to consult it as to the means by which questions may be capable of being put to that Minister which might elicit a reply. If that course of action proves not to be fruitful, I suggest that she approaches me again, perhaps with notice, giving me an opportunity to reflect, because certainly I believe in the importance of holding Ministers to account for present and indeed past actions.

[Robert Halfon (Harlow) (Con)]

rose—

[Toby Perkins (Chesterfield) (Lab)]

rose—

[Mr Speaker]

I will come to the hon. Member for Chesterfield (Toby Perkins)—we will save him for now. He can cook for a little longer.

[Robert Halfon]

On a point of order, Mr Speaker. In the Minister’s gracious reply to me, he said that there should not be further education representation on the board of the Office for Students because it was about higher degrees. However, further education colleges actually do higher degrees. I just want to get that point on the record.

[Mr Speaker]

The right hon. Gentleman has made his own point and it is a factual one. It is on the record and it can be shared, not only with all parliamentary colleagues, but, conceivably, with the masses in his constituency of Harlow.

Taylor Review

Robert Halfon Excerpts

1st reading: House of Commons
Wednesday 7th February 2018 Commons Chamber

[Andrew Griffiths]

I can reassure the hon. Lady that we are hugely ambitious. These proposals will help millions of workers. I pay tribute to the recommendations that her Committee and the Work and Pensions Committee made, and we are accepting all but one of the recommendations contained in that report. She will understand, as I think Matthew Taylor said when he gave evidence to the Committee, that this is hugely complicated, and we need to consult further. We are not consulting about whether we should do this; we are consulting about how we do it. I thank her for her contribution and reassure her that our ambition is strong.

[Robert Halfon (Harlow) (Con)]

I strongly welcome the measures set out by my hon. Friend. Alongside the living wage, they give the belief that we are the true workers’ party of the United Kingdom. Do the proposals also apply to apprentices, some of whom are not even paid the right apprentice wage?

[Andrew Griffiths]

I thank my right hon. Friend for his response and for the work he does to ensure that the Conservative party is the party of the worker. He is absolutely right: this Government are committed to ensuring that people get fair pay. That is why are putting a record amount—£25 million—into enforcing the living wage and the national minimum wage. As a result of that record commitment, we have seen a record £11 million of wages recovered for some of the most vulnerable and low-paid workers in our society. I assure him that all workers, including apprentices, are on our radar. We are beefing up the enforcement teams, and we are going to make sure that workers get the pay they deserve.

Office for Students: Appointment

Robert Halfon Excerpts

Monday 8th January 2018 Commons Chamber

[Joseph Johnson]

On the point of process, Mr Young’s appointment to the board of the Office for Students was made in line with the Commissioner for Public Appointments’ code of practice, and Mr Young was appointed following a fair and open competition. He was selected for interview based on the advertised criteria and interviewed by the same panel that interviewed all other board candidates. Sir Michael Barber, who is the chair of the Office for Students, was one of the panel members, along with a senior civil servant and an independent panel member from the higher education sector, and that panel found Mr Young to be appointable.

As for whether the Department for Education exaggerated Mr Young’s qualifications, it absolutely and categorically did not. Mr Young was a teaching fellow at Harvard and a teaching assistant at Cambridge, positions for which he received payment. The Department for Education never claimed that they were academic posts. As I have said, Mr Young is a Fulbright commissioner and co-founded the West London Free School, and that experience will be vital in encouraging new providers and ensuring that more universities are working effectively with schools.

[Robert Halfon (Harlow) (Con)]

The Minister will know that I am a supporter of his work and of universities, but things have gone badly wrong here. I accept that Mr Young has done great work on free schools, but so have many other people. I am not talking about the things he has done on Twitter; I am more concerned about some quite dark articles in which he talks about the disabled and the working classes. Much more significantly—I have the article here—in 2015 he talked about what he calls “progressive eugenics”, which is incredibly dark and dangerous stuff. I suggest that my hon. Friend look again at the appointment, because I do not think that it will give students confidence.

Industrial Strategy

Robert Halfon Excerpts

Monday 27th November 2017 Commons Chamber

[Greg Clark]

The hon. Gentleman makes an intriguing set of suggestions. Let me start by completely agreeing with him that it is right to establish and support a strong consensus on the long-term commitments that we need to make in this country. It seems to me that other countries around the world have benefited from having a shared commitment to policies and institutions that investors know are going to endure, and that is the approach we intend to take. That is precisely the reason why we have had such an extensive consultation, involving all parts of the country and all parts of the economy—and across parties. He is right that the best way for the strategy to endure is for it to have the commitment and involvement of people who have an interest in the future success of the United Kingdom.

This is true across Government, too. The hon. Gentleman is right to say that in times past—in decades past—the finance Ministry has regarded itself as precisely that, but I think the importance of accepting that our national prosperity requires business to succeed in all parts of the country is recognised. Anyone who looked at the Budget last week and saw the commitment made by the Chancellor to, for example, research and development, will recognise that this is a whole-Government commitment, but the hon. Gentleman is absolutely right that it also needs to embrace the whole country.

[Robert Halfon (Harlow) (Con)]

On the point made by the right hon. Member for Twickenham (Sir Vince Cable), it is worth noting and putting on the record that we have 900,000 apprentices at the moment, which is the highest ever figure in our island’s history.

I strongly welcome the industrial strategy. Does my right hon. Friend not agree that a key part of it is supporting further education and skills, including through institutes of technology? An important example is the multimillion pound investment in the new Harlow College skills academy at Stansted airport, which was visited today by my wonderful hon. Friend the Minister for Climate Change and Industry.

[Greg Clark]

I am grateful to my right hon. Friend for his comments. He worked very hard to achieve the success in the number of apprenticeships that we now have. He is right in what he says about Harlow College. That is a very good example of how working closely with a big local employer—in this case, Stansted airport—can make sure that the jobs available through the success of that airport and its associated industries can be taken up and spread among people in his and neighbouring constituencies. It is doing a fantastic job—I know my right hon. Friend was thrilled by the Minister’s visit today—and I am pleased to say that it features very strongly in the industrial strategy.

Student Loans Company

Robert Halfon Excerpts

Monday 20th November 2017 Commons Chamber

[Robert Halfon (Harlow) (Con)]

I welcome the Minister’s efforts to reform the SLC, and he will know that our Select Committee on Education is doing a value-for-money inquiry into universities. As well as looking at the management of the SLC, will the Minister use this opportunity to look at reducing the rate of interest for students, which is much higher than in many other countries in the developed world?

[Joseph Johnson]

We keep all aspects of our student finance system under review, to ensure that it is fair and effective as a system, and that it is meeting our core objectives of removing financial barriers to access, funding our university system fairly, and sharing the costs of doing so equitably between individual students and the general taxpayer. The rate of interest is heavily subsidised. This is to be compared with unsecured personal commercial borrowings. The Bank of England benchmark reference rate for unsecured personal commercial borrowing would be well over 7%, and this is a particularly unique product, which is written off entirely after 30 years with no recourse to a borrower’s other assets, and it only enters the repayment period when people are earning more than £25,000. So it is a unique product, and it is not easy to compare any element of it with loan offerings from elsewhere in the commercial sector.

Retail Energy

Robert Halfon Excerpts

Thursday 12th October 2017 Commons Chamber

[Greg Clark]

He says that he will. I hope he will give a warm welcome to the proposals in the clean growth strategy, which will include something that many of his colleagues in Scotland, from all parties, have pressed for, which is the remote islands being entitled to bid in renewables auctions. I hope he will welcome that and, indeed, our leadership in renewables, not only in deployment—we are the world’s leader in offshore wind—but in the jobs being created around the United Kingdom in the supply chain.

When it comes to the proposals in the retail market that we have set out, I can confirm that it is absolutely the Government’s intention and requirement that competition should be preserved—indeed, extended—in this market. The Competition and Markets Authority said there was not enough of it at the moment. That is why part of its panel said that interim measures were needed while that competition comes in. That is important, and the requirement of the draft Bill is that Ofgem should take steps to ensure choice and vigorous competition as part of that.

[Robert Halfon (Harlow) (Con)]

I welcome the changes that my right hon. Friend has made today. I have mentioned this to him before, but can he look seriously at the issue of energy companies charging people a lot more money for their domestic energy bills if they do not pay by direct debit and instead pay by cheque or through their bank or post office? It seems outrageous that these customers have to pay a lot more when they are doing the right thing and paying on time, but not by direct debit.

[Greg Clark]

I am grateful to my right hon. Friend, who is always a doughty champion of consumers. It is right in a competitive market that decisions should be taken by the companies, but it is clear from the proposals that we have made that we expect responsibility to be exercised and that unfair advantage should not be taken, especially not of vulnerable consumers who are not as able to switch, for example—this may apply to payment methods, in the way that he described. That is absolutely part of the duty of the regulator to look after consumers.

Perhaps I could take this opportunity to reply to the point, which I did not respond to, that the hon. Member for Kilmarnock and Loudoun (Alan Brown) raised about the other costs on consumer bills. We have commissioned a review by the energy expert Professor Dieter Helm that will be inquiring into just such things and reporting shortly.

University Vice-Chancellors: Pay

Robert Halfon Excerpts

Wednesday 11th October 2017 Commons Chamber

[Dr Murrison]

I absolutely agree with the hon. Gentleman. I will come on to some of the benefits later on in my remarks, and it will not surprise him to know—I suspect he has read the report, as I have—that the University of Bath features large in the University and College Union’s report on this subject, regrettably, as one of the arguably worst examples of what I certainly represent as excess at the top of higher education in this country, which is the matter we are seeking to resolve.

The Prime Minister is paid £152,000 a year. The Prime Minister, of course, heads the Government, and it is extraordinary therefore that the vice-chancellor of Bath University should be paid £451,000, which is pretty much three times the salary of the Prime Minister. I think most people in this country would have a general sense that that is odd, to put it mildly, and needs quite considerable justification.

[Robert Halfon (Harlow) (Con)]

I thank my hon. Friend for securing the debate and congratulate him and the hon. Member for Stroud (Dr Drew) on the principled way in which they resigned because of what I and many other people see as an outrageous amount of money. Does he agree that the pay of vice-chancellors should be clearly linked to performance measures? One performance measure must be successful job destinations, with highly skilled and highly paid jobs for students.

[Dr Murrison]

Yes, up to a point. If my right hon. Friend will allow me, I will come on to performance-related pay later in my remarks, which I have a little over two hours to make.

--- Later in debate ---

[Robert Halfon]

My hon. Friend is being incredibly generous in giving way, and that is typical of him. Does he agree that it is not just an issue of vice-chancellor pay but of senior management pay and the random way in which professors are paid from university to university, sometimes using significant amounts of funds? There is also an issue of pay disparity in senior management between men and women. There is some suggestion that BBC-type problems might be affecting our universities.

[Dr Murrison]

I am at a slight disadvantage on my right hon. Friend’s latter point, because my interest in this matter was sparked by Dame Glynis Breakwell, the vice-chancellor of the University of Bath. She is right at the top of the pay league table, so my local experience clearly does not bear his point out. I would not be surprised, however, if that was the case. The trouble is that the lack of transparency around a lot of this material in the university sector means that it is quite difficult to make that comparison. Were it to be the case—and I suspect he is right—I would clearly want the universities to address it, as it is simply not acceptable.

I was interested in my right hon. Friend’s earlier point about performance-related pay, and in preparing for the debate I did look at those universities that had significantly increased the level of vice-chancellor pay in the recent past and compared that with improvements as judged by the Complete University Guide set of metrics, which is used by most pundits and commentators to compare universities. The students certainly look at those figures very closely when deciding where to go.

I stared at the figures and compared and contrasted them for some time, and I could not see any correlation between improved pay for vice-chancellors and improved metrics. Indeed, there is some suggestion that there is an inverse correlation, which rather bears down on the point about performance-related pay. I can see very little evidence of it operating here. We need to be careful about performance-related pay, because it is set by remuneration committees and, unless its terms are available for scrutiny, the goals could be eminently achievable. That would make a mockery of the whole thing, which comes back to my central point: we must have transparency in how pay is set if we are to have any confidence in our current system.

I absolutely accept that vice-chancellor pay and benefit packages are a tiny part of a multi-billion-pound consideration in higher education. That point was made clearly by Lord Willetts when he was the universities Minister. He rightly sought to put the whole thing into perspective, but my worry is that in the remuneration of vice-chancellors and senior people in higher education we have a window into what might be going on more generally in the universities sector. If we are seeing such egregious examples of the misuse of public funds and student indebtedness, as I believe we are in this case, we wonder what is happening more generally in this sector.

Universities have charitable status. The Higher Education Funding Council governs that, with this subcontracted by the Charities Commission, which has written to me on this subject. It is important that we emphasise that charities—universities, in this case—have charitable purposes; they are meant to use their moneys for charitable purposes, to demonstrate charitable good. They should not be using money unless they can demonstrate that that expenditure in some way satisfies their charitable purposes.

The University and College Union’s report of February 2016, for which I am in its debt, sheds interesting light on this subject, because it discusses not only pay, but other benefits. Although many universities did not respond to the UCU’s request for information, and so we need to be slightly guarded about its conclusions, this report nevertheless gives us some useful data. For example, it shows that Bath’s vice-chancellor spends an average of £313 a night for hotel accommodation and that Middlesex University’s vice-chancellor spends an average of £448 a night, whereas the Independent Parliamentary Standards Authority will allow MPs £150 a night in London and £120 a night outside it. I make no comparison between MPs and vice-chancellors; what I would say is that £150 a night seems reasonable. People will not often hear a Member of Parliament being nice about IPSA, but I am nice about it; for the record, I think it does a good job in general and it has pitched that about right, because we can certainly get accommodation in London for £150 a night or outside London for £120 a night and we will not be living underneath the arches. How someone can spend £448 or £313 a night, inside or outside London, is a little beyond me—it is probably beyond my experience. That is an example of what I mean about the use of funds for charitable purposes. In what way does that expenditure advance the charitable purposes of these institutions?

It gets worse, however, because the report goes on to consider air fares. Twenty-one universities that responded to the request for information—there may well be more that decided not to respond, because they do not want to share their information, for obvious reasons—ranging from high-end Bristol to the frankly obscure, send their principals only by first-class or business-class air travel. That is a remarkable thing. The vice-chancellor of the University of Bath spent £23,000 in 2014-15 on air fares and, according to the report, flew exclusively by first or business class. Members of Parliament will know full well that IPSA will take a dim view of any Member seeking to claim for anything other than economy. The Minister may well be familiar with the ability of Ministers to fly long haul by business class if they have a meeting the next day—most Departments would allow that for Ministers, and I certainly recall it—but for short-haul flights of less than three hours most certainly that particular benefit would not be got. It seems excessive for universities—remember the point about their charitable status—to have their principals and senior staff fly first or business class habitually. In this day and age, that seems wholly excessive.

It gets worse still. Many universities provide accommodation for their vice-chancellors. The report lists accommodation occupied by vice-chancellors, and some of it looks rather attractive, particularly that in Bath. At No. 2 in the catalogue is the vice-chancellor of the University of Bath, who in 2014-15 occupied accommodation worth nearly £3 million, which I think would seem excessive to most. It would probably seem excessive to the parents who have recently delivered their children to university halls of residence, many of which are distinctly shabby.

My chief concern about all this is the lack of transparency. The University and College Union makes transparency the crux of its survey and report, and it is right to do so. In seeking the information it has sought, it has found that universities have in many cases been reluctant to engage, and we are beginning to see why. It found that 71% of those universities that responded had their vice-chancellors as members of their remuneration committees. In most walks of life, that would be considered a strange feature of a remuneration committee, even if the individual who was the subject of a particular discussion absented him or herself from the room while their issue was being discussed, because pay for an individual is not seen in isolation; it is seen against the backdrop of other senior pay within the institution and senior pay in other institutions.

I perceive a cartel operating in higher education, with vice-chancellors, and senior university staff generally, sharing each other’s remuneration processes to their mutual benefit. I am of course not in any way suggesting that there is some deliberate attempt to do that, but that seems to me to be how it might work in practice. In short, remuneration committees appear to be unsatisfactorily shadowy for organisations operating in the public or quasi-public sectors. We see instances of minutes not being published, and of redacted minutes being published. When we are dealing with public funds and student indebtedness, that is unacceptable.

My other concern is about leadership. Vice-chancellors are quintessential leaders; leading is what they do. If they are not leaders, they are nothing at all. Yet some of the most senior, such as the vice-chancellor of the University of Oxford, have been bleating about being paid less than footballers and bankers. That does not strike me as leadership. At a time of pay restraint in the university sector, as well as in others, it seems to me wholly inappropriate for the leaders of these organisations to be complicit in a system that gives them a pay rise that is way out of kilter with that being awarded to their staff. That is wholly wrong and I hope that, going forward, we will see the same sort of restraint among the senior echelons of higher education as we have seen further down the pay scale.

I shall finish by being nice about the vice-chancellor of the University of Bath, because Dame Glynis Breakwell has done a grand job, over many years, and the University of Bath is a fine institution. Dame Glynis deserves warm thanks and praise for all the hard work she has put in. I do not blame her for her extraordinarily generous remuneration package; I do blame the system that has allowed it. I am pleased that a lot of the things the Government have been talking about recently—particularly the Office for Students, which I know my hon. Friend the Minister will talk about in a moment—will help in that respect. In particular, the OfS will add transparency to the way in which senior people in higher education are paid, bearing in mind the charitable status of those institutions, and the fact that they are in receipt of large sums of public money and the proceeds of student indebtedness. If it manages to achieve that through reforming not only remuneration committees, but the general atmosphere and ethos around this, it will have done a good job and that will be an early indication that it will be a worthy successor to the Higher Education Funding Council.

The purpose of this debate was simply to discuss how we might restore some balance and confidence to this particular element of university finances. I fear that I have hardly ingratiated myself with senior university administrators. I hope very much that we will continue to remunerate appropriately these heads of our wonderful national institutions, but most can agree that pay for university vice-chancellors has become excessive and that, in the months and years ahead, we need to do something about it.

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

I congratulate my hon. Friend the Member for South West Wiltshire (Dr Murrison) on securing this important debate on university vice-chancellors’ pay. I am grateful for the opportunity to set out how the Government have prioritised value for money in the higher education sector, and to touch on our plans to address the issue of senior staff pay.

With students and taxpayers heavily invested in our world-class higher education system, the Government are determined that value for money should be a key priority. To that end, the Higher Education and Research Act 2017 introduced reforms to increase competition between providers and to promote greater choice for students.

The Act introduced a new regulator for the higher education sector, the Office for Students. Once it comes into being next year, the OfS will develop a new risk-based approach to regulation. For the first time, all registered higher education providers in England will be part of the same system. This new regulatory framework will promote diversity and innovation in the higher education sector in the interests of students. It will drive up quality and standards, incentivise better teaching and learning, and inspire the growth of sector-relevant skills to increase employability.

Under the Act, one of the duties of the OfS is to have regard to the need to promote value for money in the provision of higher education by English providers. It will ensure more transparency for students so that they can have greater confidence that their money is being well spent.

We introduced the Teaching Excellence Framework with the intention of raising the standard of teaching in higher education and giving students clear information about where they are likely to receive good teaching and to get great outcomes from their time at university. Almost 300 providers took part in the first trial year of the TEF, including all but two English universities and more than 100 colleges and private providers. Excluding those with provisional ratings, roughly 75% of entrants received either a gold or silver award.

We are making it a priority for students to know their rights and to have fair contracts that enable them to take action if the reality of their experience does not match what was advertised. With a view to ensuring students obtain value for money, the OfS will use its powers, including setting a regulatory condition for providers to create an environment in which providers fully meet their obligations to students as consumers, and students will be able to build an understanding of their corresponding rights.

If a student is not satisfied with their course or provider, they may wish to switch to a different one. That has been difficult for many students up until now. The Act places a duty on the OfS to monitor and report on arrangements for students to transfer, and empowers the OfS to facilitate, encourage and promote such arrangements.

The Department for Education will shortly be launching a consultation on behalf of the OfS. That will include a proposed condition of registration requiring providers to publish information on their student transfer arrangements.

Many universities are large and complex organisations. Highly skilled and talented individuals are needed to run these organisations effectively. In some cases, universities may be competing internationally to secure the right managerial expertise. Higher education providers are rightly private, autonomous and independent institutions—they are not in the public sector and they are not really in the quasi-public sector—and they are solely responsible for setting the salaries of their staff. Nevertheless, these providers also have a public service mission, as my hon. Friend mentioned. With public funding providing the sector’s most significant single source of income, there is a legitimate public interest in promoting the efficiency of providers. This must include senior staff pay.

There is a risk that increasing salaries diverts money away from a provider’s core mission of teaching and research. Exceptional pay can only be justified by exceptional performance. The Government have consistently used their annual grant letter to HEFCE to call on universities and their remuneration committees to exercise restraint on senior staff pay. In my most recent letter, I made it clear that efficiency must include demonstrating restraint in setting senior pay. The Department’s consultation will contain proposals reflecting my requests that the OfS introduces a new condition of registration requiring the governing bodies of providers with access to student support to publish the number of staff paid more than £100,000 a year. For staff paid more than £150,000, providers will be required to publish their justification for these salaries. In the event that a provider fails to meet the requirements of this condition of registration, the OfS will be able to use its powers, which include monetary penalties, to take action.

The OfS will also issue guidance to help providers to meet the requirements of the condition of registration, and use its power to investigate the governance of an institution through assessments of management effectiveness, economy and efficiency where there are substantiated concerns.

[Robert Halfon]

I thank my hon. Friend for his work on this. Will the consultation also look at potential gender-related pay disparities?

[Joseph Johnson]

I am grateful to my right hon. Friend for mentioning that because we do indeed plan to ensure that such issues are considered by the OfS.

Arrangements will also be made to compile and publish data on the levels of HE senior staff remuneration beyond what is required by the registration condition, with a particular focus on protected characteristics such as gender and ethnicity. Further to this, I have called on the sector to work through the Committee of University Chairs to develop and introduce its own remuneration code. Such a code should encourage greater independence of remuneration committees, the publication of the pay ratio of top to median staff pay and explanations of top pay increases that are greater than increases in average pay in an institution as a whole. I am pleased that the CUC has confirmed that it plans to take forward the development of this code.

I am confident that these actions, in addition to our wider reforms to the higher education sector as a whole, will deliver much greater transparency and accountability, as well as improved value for money for taxpayers and for students. We have legislated to facilitate greater competition within the sector and choice for students. We have successfully promoted measures such as the TEF to help to students to make better informed decisions that affect their futures and enhance teaching quality, and we have acted to address escalating senior staff pay.

Let me be absolutely clear, for the avoidance of all doubt, that I want to see the relentless upwards ratchet in senior staff pay come to a halt, and I am confident that the measures the Government have put forward through the OfS will achieve that. I hope that my hon. Friend the Member for South West Wiltshire is reassured by the Government’s strong action and, once again, I congratulate him on securing this important debate.

Question put and agreed to.

Higher Education Funding

Robert Halfon Excerpts

Wednesday 11th October 2017 Commons Chamber

[Joseph Johnson]

I will answer some of the hon. Lady’s questions—in fact, all the questions. The normal, cross-Government processes were followed in the run-up to the announcements. The Department for Education worked closely with the Prime Minister’s team to develop those announcements. We are delighted to be able to announce the changes that she set out. I set out in the ministerial statement that I published on Monday the full details that the hon. Lady has just asked for. However, to recap, the threshold will rise to £25,000 from £21,000. That will put a further £360 in the pockets of graduates. We have taken stock of the views of parents, students and Parliament itself in coming to our decision to freeze tuition fees for the coming academic year. Therefore, we are listening and, where appropriate, we are taking action to ensure that our student finance system is getting the balance of interests right between those of students and those of the general taxpayer.

That is the core principle of our student finance system, which must achieve three goals. First, it must support access for the most disadvantaged, and it is achieving that with great success. Someone from a disadvantaged background is more than 50% more likely to go to a highly selective university than when the Labour party left office, and more than 43% more likely to go to university overall. Students are less likely to drop out, whether they are from BME, disadvantaged, mature or part-time backgrounds, than they were when the Labour party left office. This system is delivering participation and access in a way that alternative student finance systems never have.

Secondly, the system is working for universities. Our universities are 25% better funded per student and per degree than they were under the old student finance system, before the 2011 reforms. That is of fundamental importance. Does the Labour party really want our universities not to have the resources they need to do excellent teaching and to deliver great research? That is what it is proposing. It is proposing a return to the system that we saw in the run-up to the Dearing report in 1998, a system that saw a real-terms decline in university funding of almost 50%. Those are the changes that the Labour party will deliver if it has a chance to get into office.

Thirdly, our system is fair to the taxpayer. We keep the balance of funding under careful review. As the Prime Minister made clear in her party conference speech and in announcements in Manchester last week, we will announce further steps in that regard in due course.

[Robert Halfon (Harlow) (Con)]

I strongly welcome the measures that my hon. Friend has set out because we have to be fair to students and fair to the taxpayer, too. In the review, will he look at the high interest rate and at lowering the interest rate for students? On a wider issue, the Government announced a big boost to degree apprenticeships. Does he agree that we should be incentivising and putting all financial incentives into degree apprenticeships because the students earn while they learn, there is no debt, they get a job at the end and such apprenticeships help to meet our country’s skills deficit?

[Joseph Johnson]

We continue to keep all aspects of our student funding system under careful review to ensure that it remains fair and effective, and that we are getting the balance right between the interests of individual students, who go on to have far higher lifetime earnings, and the interests of general taxpayers, whose voices must also be heard in this debate. The interest rate that my right hon. Friend mentioned will be among the things that we will continue to keep under careful watch in the weeks and months to come. Degree apprenticeships are a very promising way of combining the best of higher education and further education. We want them to develop and grow, and we want more providers in the system to offer them. They have huge potential.