The Government’s Productivity Plan

Roger Mullin Excerpts

Tuesday 28th February 2017 Commons Chamber

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I congratulate the hon. Member for Hartlepool (Mr Wright) and his Committee on their sterling work in this area. I was particularly intrigued by his opening remarks about the nature of these estimates debates and their weakness. I was reminded of my experience when I was faced with the House for the first time after being elected back in May 2015. I walked around and found all these peculiar signs, such as for the Vote Office, where the one thing we cannot do is vote. The one thing we are unable to do in estimates debates is scrutinise the estimates properly. That certainly needs to be addressed in the longer run.

I was also taken by what the hon. Member for Warwick and Leamington (Chris White) said about the importance of innovation for productivity. It reminded me of an old teacher of mine, Professor Tom Burns, who, in 1960, wrote a book along with Graham Stalker called “The Management of Innovation”. How many years ago is that? It is a long, long time ago—57 years. The lessons of back then, when Professor Burns was talking about the growth of Marconi in Scotland, are just as relevant today in respect of what is involved in innovation. He argued that two main types of skills or knowledge needed to be deployed, and therefore developed in society. The first was the ability to have what he called “analytical skills”, which we might relate to STEM subjects and other quantitative skills. We need the ability to analyse problems and weaknesses, be it in technology, social fields or whatever, but that is not enough—we all know that we can analyse problems. Everyone in this House might agree what the level of unemployment is, but we would have different recipes to deal with it. So as well as having analytical skills, he said society had to be good at developing creative skills. That might be through “simple creative thinking”, as we could call it today, but I believe he was thinking more widely about how we bring decision-making and judgment skills to enhance the capacity to meet new types of challenges.

The other thing that Professor Burns mentioned drew on what happened in Scotland in the 18th century, at the time of the Enlightenment, and the ideas produced there. His argument was that not only did we have some uniquely brilliant individuals but, for the first time, we had the effective networking of people and of ideas. We were not building false barriers between people, be it by subject or geography. We should reflect on that today as people too often get stuck in professional silos, with ideas not being shared and networked enough. The possibilities therefore do not come to fruition in the way that they might.

The final thing that Professor Burns said in this book of 57 years ago was that we needed circumstances in which people valued and encouraged the “application of novelty”—in other words, experimentation. We all know that if that is done well, it will inevitably lead to a failure rate, so risk taking, as we would call it today, has to be part of the recipe. One thing that Governments of all hues are very bad at doing is putting in place policies that recognise that although we are going to generate some things that might fail, that is worth it, because we will generate other things that are a great success.

[Michelle Thomson (Edinburgh West) (Ind)]

My hon. Friend is making an excellent speech. I concur with what he is suggesting about entrepreneurs—our wealth creators—being given both the framework to succeed and the framework to fail. Does he agree that this is about looking at not just our innovation structures, but at more systemic issues such as banking? When a small business does fail, it is often hauled over the coals and loses absolutely everything, so we fundamentally need to change some of the ways in which we do business in this country.

[Roger Mullin]

I quite agree with my hon. Friend. Today I asked a question of the Chancellor of the Exchequer, which once again attracted the typical non-answer. I asked whether, given what has happened to businesses over the past few years, with things such as the RBS “dash for cash” and the like, there was not a case for having banks accept their duty of care towards the business community, and small and medium-sized enterprises. We need to look more widely at how we create a context that will really support innovation and risk taking.

[John Redwood]

What study have the Scottish Government made of the big impact on Scottish productivity of the pronounced decline in output from the North sea as the fields mature? What can they do to offset that?

[Roger Mullin]

The best thing I can do is leave that to my hon. Friend the Member for Aberdeen South (Callum McCaig), who is an expert in these matters. He will be summing up for our party and is from that part of the country. I am aware that the Scottish Government have been undertaking considerable work on this matter. Our growth commission is under way, and part of its work deals with looking at precisely the matter the right hon. Gentleman raises. The commission is yet to report.

[Kirsty Blackman (Aberdeen North) (SNP)]

My hon. Friend would agree that the Scottish National party is doing a lot on this issue. In Aberdeen, we are holding a meeting next week with the London Stock Exchange Group so that supply chain companies can learn about alternative methods of capital financing, meaning that we can secure those industries in our city and ensure that they can continue exporting way into the future.

[Roger Mullin]

I thank my hon. Friend for that intervention.

I wish to move on to another area that has been addressed. I believe it was the hon. Member for Horsham (Jeremy Quin) who mentioned the importance in our society of universities, the production of higher levels of knowledge and our research capability, and how that was a tremendous attraction if we are to drive up levels of productivity. I agree entirely with him, but there is a problem that we must be willing to face. The universities are under a type of strain that they have never faced before: the threat to the research community created by the Government’s attitude towards EU nationals. I can take Members to universities in Scotland and show them people who are leaving, or planning to leave, the university and the research community because of the uncertainty created by this Government. If there is one thing the Government could do, either today or very soon after, to secure our research community, it would be to give these people absolute guarantees that they are welcome and will carry all their rights with them into the future.

Scotland has different productivity needs, one of which relates to our attitude towards immigration. I would argue that we need more immigration, of the right type. Many blockages to enhancing that immigration can be found in the Government’s policies, and I wish to give hon. Members one example. A few years ago, for the tier 1 investor visa, the Government increased the sum that people would have to have to bring into the economy to invest in British business to a minimum of £2 million. I would be very happy for Scotland to attract people with a wee bit less than that to invest in Scottish business, because they could still do a tremendous amount of good.

As the Minister knows—we have discussed this in the past—another tier 1 visa is the entrepreneur visa. Residents and citizens of England or Scotland do not need bags of cash to become an entrepreneur. Indeed, some of our most wonderful entrepreneurs started with very little but an idea. What do we say to people who want to come here as entrepreneurs? At the moment we are saying, “You have to produce, in advance, a detailed business plan to be assessed.” It is doubtless to be assessed by the Home Office. They have to produce a business plan of how they will start a business in the UK, even though they are not in the UK. That strikes me as a wee problem to begin with. Secondly, they need a minimum of £50,000 in their back pocket to bring in with them to invest here, along with the business plan. We would never ask that of people who live here domestically. There are therefore things that could be done to sort out a number of the supply-side blockages that prevent us from attracting some of the investors and entrepreneurs who could do so much to help to build capacity and improve productivity in our society in the longer run.

Finally I wish to touch on skills, which has also been mentioned. Many years ago—it was 1990 or 1991—in the early days of “competence-based qualifications”, we had a body called the National Council for Vocational Qualifications, which was based in London. The people there had seen me on a television programme, so they called me to ask whether I would come down to give it some advice. Because they waved a cheque in front of me, and being a Scotsman, I readily agreed. They said to me, “We have a problem with competence-based assessment. We are unsure that it is actually delivering and accrediting people for their competence.” I did a piece of work that they subsequently published, which I have never seen refuted, in which I said that the method of competence-based assessment operating in the UK would generate a vast number of false positives—that is, a large number of people who receive qualifications but are not actually competent. That might be a contributing factor to the fact there is no evidence at all that those who come into the labour market with competence-based qualifications are doing anything to enhance productivity in our society. There is therefore a long way to go, but it has been a privilege to take part in the debate.

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[Michelle Thomson]

I absolutely agree with my hon. Friend. Part of the problem could be solved by devolving those powers to Scotland so that we can protect our own higher education sector.

We have also heard this month from the chief executive of Innovate Finance, Lawrence Wintermeyer, who told the BBC that

“Brexit has had a chilling impact on investment.”

Investment is vital to industrial strategy and productivity. Wintermeyer backed up his statement with figures that show venture capital investment in FinTech firms, which is vital for my city of Edinburgh, has dropped in the UK from £970 million in 2015 to £632 million in 2016. In objective 12 of the productivity plan, the Government used Innovate Finance’s investment figures as a measure of success.

Finally, the productivity plan wanted to

“help deliver a Europe that is more dynamic and outward focused...by accelerating the integration of the single market, completing trade agreements, and improving the quality of regulation.”

[Roger Mullin]

That is a good idea.

[Michelle Thomson]

Yes, indeed. It was a sensible aim at the time and it is one that Scotland still supports. I hope that the Prime Minister takes serious note of the Scottish Government’s proposals to keep Scotland in the EU. She could then come back to us having had substantive discussions of what is contained in the paper. Obviously, we would formulate a considered response, but Scotland regards the proposals as vital. We are committed and dedicated to growing our economy, creating wealth, and increasing our productivity, but we cannot do it on our own and we need help. We are ambitious and we want Scotland to grow, and we say to the Government: do not hold us back.

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[Robert Jenrick]

The problem with higher levels of debt lies not just in passing it on to future generations, but in the consequences of that for them. It will mean higher taxes, a less competitive economy and poorer productivity for generations to come. Just because many of our competitors around the world, including the United States under President Trump, have chosen to go down that path, that does not mean that we should follow them. I for one want a Government who in the years to come tackle the debt and deficit as aggressively as they have done in the past.

I am cautious of trying to tackle the productivity gap by spending money on high-expenditure infrastructure projects that have over-optimistic claims—a result, I am afraid, of politicians being both their promoter and their scrutineer. I suspect that HS2 falls into that category.

I welcome the National Infrastructure Commission. I hope that it has teeth and that it will provide balance and ensure that we start investing in those infrastructure projects that actually improve productivity and take long-term decisions for the future of the country. Given the current scale of the national debt, borrowing for rushed, so-called shovel-ready projects will have a limited multiplier effect and will only add to the debt burden, thereby necessitating future tax increases and a less competitive economy in the years to come.

I am in favour of us investing in those infrastructure projects that promote long-term growth which do not necessarily cost the earth and have the highest productivity potential. I am also interested in supply-side reforms that cost either little or nothing at all, such as deregulation and tax simplification, or that are likely easily to pay for themselves, including the creation of a lower-tax economy that will benefit us for years to come. Let me take each of those points in turn.

In relation to creating a longer-term, higher-growth investment plan that will tackle low levels of productivity, I have some sympathy with some of the areas that have already been discussed. The congestion on our roads is a major issue. As hon. Members have mentioned, our roads are among the most congested of any country in the G7. This does not necessarily require the most expensive road investment strategies, but it does require investment in bypasses, junctions and mending potholes. My own town of Newark is one of the most congested towns in the midlands, and freeing it up would give a major boost to the economic prospects of the whole of the east midlands.

We should take some long-term decisions even though they are expensive, such as investing in Heathrow. No Government who actually believe in tackling the productivity gap or in putting us in the right position to be a global trading nation can afford to let such a decision be pushed further into the future. Less sexy decisions to do with long-term infrastructure are also important. We heard my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) talk about trying to sort out the problems of freight on our road and rail. I am sure that my friend Sir John Peace, the head of the Government’s midlands engine, will make that a priority in his forthcoming report.

Lastly, it is very important to take seriously the need to reduce energy costs for manufacturing and other parts of our economy. It is of course important to produce a sustainable energy economy and ecosystem, but we are pricing out many of our most important manufacturing businesses with expensive energy projects. I am particularly concerned about some of the Government’s decisions in recent years that have produced extremely expensive projects, for which we will have to pay for years to come. It was imprudent of us to have closed some of our power stations, such as Cottam in my constituency, which were operating perfectly well and helping to keep energy costs down for consumers and businesses.

On supply-side reforms, I think tax simplification is extremely important. Frankly, no Government since the chancellorship of Nigel Lawson have taken tax simplification seriously in this country. The former Chancellor, my right hon. Friend the Member for Tatton (Mr Osborne), took an interest in this matter—he created the Office of Tax Simplification—but, in fact, relatively little happened, and the tax code only increased in length. Tax simplification need not cost the taxpayer anything at all, but it would make a huge difference by making it easier, not harder, to employ people, to grow the economy and to get investment into this country.

On our tax competitiveness, it is extremely important that we continue the pattern created by the previous Chancellor of reducing our corporation tax to levels that are among the most competitive in the world. Clearly, there may be new challenges ahead with the United States, if indeed they materialise, but it is extremely important for us to persist. I thought the former Chancellor was right, despite some rather opportunistic criticism from the Labour party, to reduce capital gains tax. Even with the changes, capital gains tax will remain higher under the Conservative Government than it was at the end of the Gordon Brown era, so that intervention by Labour was really baffling. We need an economy that is the most tax competitive we can possibly make it.

We have already spoken about research and development. Incentives for research and development, such as the reliefs created by the coalition Government, have been extremely effective, as I know from speaking to large and small companies in my constituency, and I would like them to continue.

As we approach Brexit, it is extremely important that the Department starts to look, industry by industry, at what low-cost deregulation could be achieved that does not sacrifice workers’ rights or infringe sensible environmental protections, but may be a game changer in those industries. In the two or three industries I have worked in—the legal sector, and running an auction house —there are European regulations the repeal of which would not be offensive to most people in this country, and that would give us a small but none the less significant competitive advantage over our major competitors in other countries. I will not bore the House with the details of such regulations, but the Government, in preparation for our departure from the European Union, should now work on a sectoral or industry-by-industry basis to work out which they are.

The penultimate point I want to make is that we should give greater thought to the long-term sustainability of the British economy. I am concerned not only about the deficit, but about welfare, and the Government should look at our state retirement age. It is inevitable that with an ageing population all of us will need to work longer. This produces a number of major challenges, particularly for those who work in sectors, such as on the shop floor or in heavy industry, where the work is extremely tiring. There is no doubt that people will need to retire or change career at a later stage. It is inevitable that the Government will have to look at this and act quickly if we want to signal to the markets our continued careful stewardship of the economy.

It is extremely important now, particularly as we are leaving the European Union and setting our sights on the world beyond, that we invest more of our time and effort in creating the kind of entrepreneurial culture found in the United States that this country has never quite managed to replicate. This will mean more allowances for entrepreneurs. I would like to see entrepreneurs’ allowances preserved, if not increased. I would be interested in them being focused on longer-term investments. At the moment, most reliefs are available after, I think, only a year of holding assets. They could be focused on investments further in the future.

[Roger Mullin]

Does the hon. Gentleman agree with my point that the tier 1 visa regime is counterproductive in that respect, and that much more could be done to encourage entrepreneurs to come here?

[Robert Jenrick]

I am sympathetic to that argument. There is a lot more we can do, when we create our own immigration system after we leave the European Union, to attract the most talented people from the rest of the world, including entrepreneurs. The examples of Israel and Australia, which have different systems for attracting entrepreneurs, are good ones to look at. I urge the Minister to give some consideration to them, particularly the Israeli example which has had a lot of success at luring successful entrepreneurs back to Israel from places like silicon valley.

It is incumbent on this House to place creating an entrepreneurial culture at the heart of everything we do. That includes tax rates. I am afraid it includes having to find a reward for enterprise. It means considering the 45p rate of tax and making other difficult political choices. But if we want to inspire a generation to innovate to create businesses, we have to ensure that they feel fully rewarded here, particularly versus our competitors. Many of our competitors in the modern economy are not the competitors of five or 10 years ago. They are Dubai, Singapore and parts of the world that have no capital gains tax, limited corporation tax, if any, and where entrepreneurs are able to keep the lion’s share of the profits. I am not for a moment suggesting that we go as far as that, but I think we have to view our competitors much more widely than we do today.

I am grateful for this opportunity to speak in the debate and thank the Select Committee for its continued work on these issues.

Green Investment Bank

Roger Mullin Excerpts

Wednesday 25th January 2017 Westminster Hall

[Michelle Thomson (Edinburgh West) (Ind)]

I beg to move,

That this House has considered the sale of the Green Investment Bank.

It is a pleasure to serve under your chairmanship, Mr Owen; I have not done so previously. I have sought the debate as an independent MP—independent as to party and mind—in the light of considerable concerns raised about the proposed sale of the Green Investment Bank. I must signal my thanks to Macquarie and to the Minister for recent meetings. I look forward to another meeting with the Green Investment Bank tomorrow, and then another with the Business, Energy and Industrial Strategy Committee in the near future. Thanks are also due to the Environmental Audit Committee for the report of December 2015; to the hon. Member for Brighton, Pavilion (Caroline Lucas), who tabled an urgent question; and to members of the quality press, such as Aimee Donnellan, for ensuring that the matter gets the scrutiny it deserves.

The Green Investment Bank is one of our success stories and has supported 30 green energy infrastructure projects up to the end of 2015-16. Profits were up to £9.9 million in the last year, and the bank committed £770 million to transactions during the 12 months of 2015-16, taking the total capital committed to £2.6 billion. The imperative of a green agenda remains, and our resolve must be increased in the light of President Trump’s threat to step back from previous Paris climate change commitments. Our ambition associated with a green agenda is high, particularly within the Scottish Government, but can the Minister confirm that Macquarie is the preferred bidder, or will he continue with the ridiculous pretence that he cannot mention its name?

Why sell, and why now? I want to make it clear that given my business background I understand why privatisation can be attractive to a business in terms of access to capital and to provide certainty as to future funding. I can also see why being released from state aid rules may be perceived as a benefit. On the other hand, I was struck when a Tory Member commented to me, while the right hon. Member for Tatton (Mr Osborne) was Chancellor of the Exchequer, “If it isn’t screwed down, sell it.” I am also struck by the fact that the Green Investment Bank does not expect to need to borrow until 2018-19. The report of the Environmental Audit Committee quotes evidence from E3G that

“the Government has failed to make a compelling case explaining the rationale behind, or consequences of its decision to sell a majority share of the GIB”.

So why now?

I would like the Minister to confirm whether any financial rewards will be given to the board, executive or senior team on a successful sale of the GIB. Will the chair, Lord Smith of Kelvin, remain in his post after the sale and, if so, for how long? The model of packaging up elements of a business for sale to release capital is well understood—I regard the use of the term “asset stripping” as somewhat emotive in this case—but the real point is that the UK taxpayer has provided the funds to bring it to where it is today, but it will not be the UK taxpayer who gets the return on investment.

It is clear from other privatisations that the UK taxpayer did not receive the value they should have done; I therefore question whether that can happen with the Green Investment Bank. The New Economics Foundation in its report “We Own It” notes concerns about future profits versus short-term cash in the continued great British sell-off, whether it is a question of losses incurred as a result of the Royal Mail privatisation or Eurostar. Can the Minister confirm whether full value will be obtained for the UK taxpayer on the sale?

I move on to some more specific considerations. The headquarters is currently located in Edinburgh, but it is not just the location of the brass plaque that marks the HQ—it is the functions of governance, legal services, risk and compliance, comms, finance and business development that really determine where that crucial control lies. The jobs associated with those functions tend to be higher quality. I will be monitoring closely to see whether jobs will be maintained and also whether the number will grow and their quality is maintained. Will the Minister confirm what guarantees he has obtained that the HQ will remain in Edinburgh? What assessment has he made of any proposed new structure and any potential impact on the quality of jobs and functions retained in Edinburgh?

State aid rules—the so-called additionality considerations —disallow projects that could be funded under conventional routes. That means that the projects funded tend to carry more risk but, if successful, more reward. I am concerned about the risk appetite of the bank after sale. A business that focuses purely on the bottom line will tend to gravitate towards more vanilla projects, which are easier to package and sell for financial churn but are a loss to the sort of research and innovation that, we are told, the UK Government want to ensure more of with their new industrial strategy Green Paper. The Minister notes in answers to written questions that the market failure that the inception of the GIB sought to address has now been corrected, but market failure in all areas will not be addressed if encouraging innovation is not at the heart of what the GIB does.

Scale is also a consideration. Will a privatised GIB support smaller projects, such as the specially designed loan to finance a switch to low-energy street lighting in Glasgow? Will Macquarie back that type of small-scale investment? It is only £6.3 million, but will save more than 18,000 tonnes of greenhouse gas emissions over the next 18 years.

What considerations have the UK Government given to an altered risk appetite after sale? Have the UK Government made any assessment of the potential impact?

I would like to consider the issue of protecting the green purpose of the bank. Responding to criticism, and acknowledging that criticism, the UK Government have put in place a so-called golden share with a worthy and notable set of trustees. In theory, that should give us a level of comfort, in that the trustees must agree to any change of purpose as defined by the five green purposes—but the very purposes themselves carry risk. They are extraordinarily high-level; the question has already been asked whether fracking—yes, fracking—could be carried out while still ostensibly meeting the green purpose tests.

I would now like to briefly consider UK control. The GIB has already undertaken a number of its transactions via private equity-type funds.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

Notwithstanding some of the excellent work that the GIB has undertaken, is the hon. Lady concerned, as I am, about the use and involvement of limited liability partnerships? They are currently the subject of a review and have been involved in criminality in many parts of the world. It is not only the GIB—there are some instances where it is alleged that Macquarie has been involved in projects that have used them.

[Michelle Thomson]

I am happy to support my hon. Friend on that point. I also note the valuable work he is doing around Scottish limited partnerships. I hope he has great success in that.

The limited liability partnerships used to date by the GIB may indeed be UK-domiciled and registered for tax purposes, but the point is—we cannot forget this—that if the underlying funds or owners are controlled offshore, the UK taxpayer loses the benefit of that tax take. What level of UK control and benefit will there be after sale? What will be UK-based in the wider supply chain? To what extent will the project management and/or technical experience be based in and benefit the UK?

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[Roger Mullin]

Is the hon. Lady aware of, and as concerned as I am about, potential conflicts of interest involved in the Macquarie bid? Macquarie has used PricewaterhouseCoopers both as advisers and as auditors for many years. The senior independent director of the GIB is Tony Poulter, who at the same time is a partner at PWC and the head of PWC’s global infrastructure advisory unit. Does she agree that that is an obvious conflict of interest?

[Caroline Lucas]

I am grateful to the hon. Gentleman for that intervention. I was not aware of that, but as he has now put it on the table, I find yet another reason to be deeply concerned about the Government’s proposals. I thank him for adding that piece to the jigsaw.

There were plenty of options for the Government other than going down the route of flogging the GIB off to Macquarie. I mentioned the other bidder, but the Government could also allow citizens to buy into the Green Investment Bank through green bonds—allowing people up and down the country to own part of this important and dynamic institution. Indeed, there were press reports over the weekend, as the hon. Gentleman will know, about the possibility of an initial public offering. That would at least offer greater protection to the aims of the GIB than the Government’s current plan. Any sense that the sale is the only option on the table must be challenged. There is a range of options on the table. The overriding question has to be why the Government would choose such a damaging option when there are clearly much better ones available.

The launch of the Government’s industrial strategy on Monday gives Ministers another reason to halt the sale. This was the point made very clearly by the hon. Member for Waveney (Peter Aldous). With the UK set to miss its climate targets from the mid-2020s onwards, and renewables investment in the UK set to fall by a dramatic 95% over the next three years, the low-carbon economy should be at the heart of the industrial strategy.

The Department’s welcome new focus on battery technology, energy storage and grid technology could all be supported through finance from the Green Investment Bank. That finance is more important now than ever. We have already discussed briefly how the likely loss of access to funds from the European Investment Bank makes that an even more important role that the GIB can play.

Together, the emissions reduction plan due later this year and the Government’s more active approach to supporting the UK economy mean that it is time for Ministers to ditch the sale and embrace the Green Investment Bank as an important ally in a green industrial strategy. Ministers have rightly been applauded for passing into law the fifth carbon budget and for ratifying the Paris agreement. They would be similarly congratulated and applauded for putting an end to the flogging off of the Green Investment Bank.

Higher Education and Research Bill

Roger Mullin Excerpts

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Report stage: House of Commons
Monday 21st November 2016 Commons Chamber

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

The Minister referred to “an element”. The post-study work visa is not just the subject of “an element” of concern to universities in Scotland; it is of major concern, especially given that what the Home Office has proposed is a tiny and completely unrepresentative pilot. This is a matter of great importance to the university sector.

[Joseph Johnson]

Indeed. The Government fully agree with the hon. Gentleman that international students bring a lot to our higher education system. They bring income, valued diversity, and many other benefits to our universities. We welcome them, and we have a warm and welcoming regime to accommodate them.

Let me now deal with Government amendments 1, 12 and 13. Academic freedom and institutional autonomy are keystones of our higher education system, and the Bill introduces additional protections in that area. In his evidence to the Bill Committee, Professor Sir Leszek Borysiewicz, vice-chancellor of the University of Cambridge, said that he particularly liked the implicit and explicit recognition of autonomy in the Bill. However, I wanted to make absolutely clear how important it is for the Government to protect institutional autonomy, which is why I proposed a further group of amendments to strengthen the protections even more.

I recognise the concerns expressed in Committee and in stakeholder evidence that allowing the Secretary of State to give guidance relating to particular courses might be perceived as leaving the door open to guidance calling specifically for the opening or closing of particular courses. One of the real strengths of our higher education system is diversity and the ability of institutions to determine their own missions, either as multidisciplinary institutions or as institutions specialising in particular areas such as the performing arts or theology. To avoid any confusion, I proposed the amendments to add an additional layer of reassurance regarding the protections given to institutional autonomy. They make it clear that the Secretary of State cannot give guidance to, or impose terms and conditions or directions on, the OFS which would require it to make providers offer, or stop offering, particular courses.

Our reforms place students at the heart of higher education regulation. I agree with Labour Members that it is important to build the student perspective into the OFS. Government amendment 21 clarifies beyond doubt that at least one member of the OFS board must have experience of representing or promoting the interests of individual students or students generally.

Labour Members tabled amendments 36 and 48, which relate to higher education staff representation. We share the view that the OFS board should benefit from the experience of HE staff. However, the Bill already requires the Secretary of State to have regard to appointing board members with experience of the broad range of different types of English providers in the sector. We are therefore confident that a number of OFS board members will be, or will have been, employed by HE providers, and we do not believe that we need to make an additional requirement in legislation.

Students make significant investments in their higher education choices, and it is right for them to be aware of what would happen if their course, campus or institution were to close. That is what Government amendment 4 will achieve. We expect all providers to make contingency plans to guard against the risk that courses cannot be delivered as agreed. The requirement for providers to produce student protection plans would be a condition of regulation. I listened to points made in Committee, and have reflected on the need to strengthen the power of the OFS to ensure that there is transparency in student protection measures, and that is exactly what the amendment does. It enables the OFS to require providers not only to develop student protection plans but to publish them, and we would expect providers to bring them to students’ attention.

The Government believe in opportunity for all and through the Bill we are delivering on that. We believe that transparency is one of the best tools we have when it comes to widening participation. Universities have made progress but the transparency duty will shine a spotlight on those institutions that need to go further. That is why I am pleased to propose amendments 2 and 3, which change the language in the Bill to make it clearer that the OFS can ask HE providers to publish and share with the OFS the number of applications, offers, acceptances and completion rates for students, each broken down by ethnicity, gender and socioeconomic background.

The Bill will also give the OFS the power to operate the teaching excellence framework. Thirty years of the research excellence framework and its predecessors have made the UK’s research the envy of the world but, without an equivalent focus on excellence in teaching, the incentives on universities have become distorted.

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[Paul Blomfield]

Measuring teaching quality is difficult, but if we are going to do it, and if we are going to link fee increases to it, we should do it well rather than badly. For example, the Higher Education Funding Council for England is piloting some work on value added to determine how it can be demonstrated that good teaching has contributed to students’ learning outcomes during a particular period. That is the kind of research we should be looking at before we rush into establishing a teaching excellence framework that might end up measuring everything but teaching excellence.

[Roger Mullin]

Does the hon. Gentleman therefore agree with Professor Jack Dowie’s view that the teaching excellence framework measures what it measures but does not measure the quality of teaching excellence?

[Paul Blomfield]

The hon. Gentleman has expressed my concern exactly. This is the reason behind my amendment. There should be agreement across the House that the teaching excellence framework should measure the quality of teaching. That does not seem controversial to me, and I am therefore disappointed that the Government were unable to accept the unanimous recommendation of the BIS Committee. I want to press the Minister further today to find out his reasoning for this.

Amendment 49 raises new concerns that became clear only as the Bill progressed through Committee. It is apparently the Government’s intention—although I recognise that it might not be the Minister’s wish—to link the visa regime for international students to quality measures. There are Members present on both sides of the House who share my concern, so let me put it in context. The Minister will agree that international students are hugely beneficial to this country and to our universities. They enrich the learning environment of our campuses. In an even smaller world, in which we need to understand each other better than ever, it is a huge advantage for British students to learn in our classrooms and laboratories alongside students from around the world. International students add hugely to our universities’ research capacity, also strengthening local businesses, as I know from my experience in Sheffield.

We should add to that the huge benefits of the lasting relationships that we build with those who study here. According to the Higher Education Policy Institute, 55 world leaders from 51 countries studied here. That leads to the sort of soft power that is the envy of other countries—political influence, commercial contracts, and so on.

--- Later in debate ---

[Carol Monaghan]

Certain rogue institutions—particularly private FE colleges—have in the past not complied with visa regulations, but there is little evidence that the HE institutions in the scope of this Bill have any record of non-compliance, so I do not accept the points the right hon. Gentleman makes.

[Roger Mullin]

In last week’s Westminster Hall debate, I specifically challenged the Home Office Minister to name any institutions in Scotland that could be said to fall into the behavioural category the right hon. Member for Cities of London and Westminster (Mark Field) suggested, and he said he could not name one.

[Carol Monaghan]

The 19 higher education institutes in Scotland have a strong record in attracting international students and a strong record of compliance, so I agree 100% with my hon. Friend.

--- Later in debate ---

[Dr Blackman-Woods]

That seems a bit convoluted.

A number of universities are still raising issues. We have just heard from the University of Cambridge, which says that

“the Bill itself does not contain any specific duty on the OfS to consult with UKRI towards the award of research DAPs. We believe that this should be specifically provided for in the Bill.”

I agree. I think that we would all like the Minister to include a specific requirement for the OFS to consult the UKRI and other bodies before granting degree-awarding powers. That, we think, would be a major step towards ensuring that decisions are effective and appropriate.

Amendment 59 suggests that one way of ensuring that the OFS and UKRI work together would be to establish a joint committee consisting of representatives of both organisations and requiring them to produce an annual report on the health of the higher education sector. They would have to report on, for instance, post-graduate training, research funding, shared facilities, skills development, and the strength of the sector. The amendment is intended to obtain—even at this late stage—a bit more information from the Minister about how he envisages the two organisations working together, and, in particular, how he will ensure that there is holistic oversight. That issue arose again and again in Committee. There was widespread concern, expressed in our amendments, that the split into two organisations would lose some of what HEFCE had provided for the sector. This amendment suggests just one way in which the two could be made to work together more effectively; there are others.

The Minister has provided us—rather late in the day—with framework documents that help to establish how the Government envisage collaboration between the organisations, and I thank him for that. I found it interesting reading. I hope that the Minister appreciates that I read the document immediately. It sets out a number of things that the OFS and UKRI may do. It says, for example, that the OFS and UKRI may co-operate with one another in exercising any of their functions and that the OFS may provide information to the UKRI. I just reiterate the point—why not just say “must” or “shall” where appropriate, and then we are all absolutely clear that those two organisations have to work together in a particular way?

I want to emphasise one thing about the amendment. At the end of it, it says that the UKRI and the OFS should have to publish a report on

“measures taken to act in the public interest.”

I am not going to go through again all the things we would expect to see from two organisations working in the public interest, but it would be helpful to have some understanding from the Minister about how the UKRI and the OFS are going to comment and report on the public interest as expressed by institutions and the work that they are carrying out.

On amendment (a) to Government amendment 17, the Minister is right that clause 104 says that the social sciences should be covered by the term “sciences” and arts by the term “humanities”. I tabled amendment (a) so that I could ask why, as only a few additional words would have to be added, “social sciences” cannot be added to the provision. We will all remember that arts is covered by humanities and social sciences by sciences because we are considering the Bill, but once the list is out there will be a danger of both the arts and social sciences falling out of everyone’s memory. I make a plea to the Minister: may we have the words “arts” and “social sciences” added to the provision?

[Roger Mullin]

I hope not to detain the House for terribly long, but I would like to make several points. The Minister said in relation to our amendment 55, “The Secretary of State would not agree to the varying of money”. That strikes me as the nub of the problem. Although the Minister is someone who I know to be honourable, absolutely committed to the university sector and assiduous in his work—he has listened to us, hence the modest changes he has made, which are welcome—he will not be there forever and in future we may get someone with much less stable characteristics, like his brother, for example. Can you imagine the havoc that could be wreaked if his brother were to replace him? Therefore, we need to ensure that some of the requirements are enshrined in statute.

When we look at the needs of the different Administrations, we see that there is a great difference between the needs of the economies in Wales, in Northern Ireland and in Scotland and the needs in England, particularly the south of England. I have had the great pleasure of working in Queen’s University Belfast and Ulster University at different times, as well as in many Scottish universities and a few in England. The differences can be profound.

Take one of the universities in Scotland—the University of the Highlands and Islands, a multi-campus university that has grown out of the college sector and has research interests that are not shared by any other university in the UK. The same is true of Ulster University and, I am sure, although it is many years since I was there, Bangor University. There is a great variation is research interest. More than that, there is a profound difference economically, to which they have to respond. Their interests diverge in many ways. We only need to look at the debate about exiting the EU in Scotland, where 62% voted to stay. We and others are working hard to have as close a relationship as possible with the EU and all that that would bring. Look at the debate taking place in other parts of the UK, where precisely the opposite view is being taken. That will have profound economic consequences that need to be reflected, and they will not be unless there is proper consultation with the devolved bodies.

The Minister talked about bringing together, which I would welcome, research, innovation, the academic community and the business community and all that that involves. In the vast majority of cases, I would agree with him, but let me put in a word of caution. Some years ago, when I was chair of the joint departmental research ethics committee at the University of Stirling, we were faced with a situation where research programmes into smoking were being challenged by business, which was trying to get access through legal means to the original data that the academics had used, so that the tobacco companies could twist them for their own interests. Therefore, it is not always the case that there is a coincidence between academic and business interests. That is another reason why there needs to be much greater co-operation. The devolved Government in Scotland would have been much more sensitive to that matter than any other part of the UK.

[Ms Margaret Ritchie (South Down) (SDLP)]

Is the hon. Gentleman aware that Queen’s University Belfast—I must declare an interest; I graduated there—has a particular interest in precision medicine and has been trying to get funding from Innovate UK to pursue a particular project, but it is in direct competition with a university in Britain? However, Queen’s has a particular expertise in that area.

[Roger Mullin]

I thank the hon. Lady for that intervention. I was not aware of that, but she raises a situation where surely it would make sense for there to be co-operation and co-ordination to understand the different economic and medical interests that exist.

I appeal to the Government: it is not too late to think and to improve the Bill. I ask the Minister to think about those points again.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

As my hon. Friend has mentioned, many people working in higher education in Scotland are very worried about these reforms and I do not blame them. The Brexit mess is already causing tremendous uncertainty over future research funding and international collaboration. We need to make certain that changes to governance do not put even more blocks on the road.

As my hon. Friend the Member for Glasgow North West (Carol Monaghan) said, the Scottish Affairs Committee recently had the privilege of taking evidence from Sir Tim O’Shea, the Principal of the University of Edinburgh. He was clear about the probable damage that Brexit would do to universities in Scotland and in other parts of the UK if a deal were not reached similar to the deal that the Prime Minister floated for the City of London. The Scottish research industry secured some €217 million from Horizon 2020 up to February 2016. That is 11.6% of total UK funding. Access to that funding will be lost unless agreement is reached between the UK and the EU, and that will necessitate the UK putting the money into the research pot in the first place.

Of perhaps more direct concern for the business in front of us, however, and a major concern about these reforms in Scotland, is that research councils will be sucked up into the new UKRI along with Research England, meaning the research funding pot for the UK could be too closely entwined with England’s funding council. We need clear lines and full transparency between UKRI and Research England. Scotland’s universities currently perform very well in attracting funding from research councils for grants, studentships and fellowships; we cannot allow the system to be skewed to their disadvantage, and we certainly look forward to seeing the Government guidance on this.

We also need more than lip service to be paid to consulting devolved Administrations. The Scottish Government and the Scottish Funding Council need input into those decisions, as do the Welsh and Northern Ireland Administrations, so that their voices and priorities are not drowned out.

The Scottish research industry has different priorities from the rest of the UK, and there is a concern that this will be missed from a UK-wide research body. For example, Scottish institutions have been pioneers in research collaborations since the first research pools were formed in 2004. These are often in smaller, less research-intensive institutions, and there is a worry that the new criteria could leave such smaller pockets of excellence locked out of funding. In light of this, Government amendment 35 simply does not go far enough in assuaging the very real concerns that have been voiced long and loud by the Scottish higher education sector. To only

“have regard to the desirability of the members including at least one person with relevant experience in relation to at least one of Scotland, Wales and Northern Ireland”

is simply not good enough. That is hardly a cast-iron assurance that the new structure will not affect our research priorities or damage our research funding.

These changes will affect Scotland. We will be keeping a close eye on their effects, and we can be sure Scottish universities will take full advantage of any edges they can find.

One final point: one likely consequence of the Bill, in its current state at least, is that Scottish universities will become far clearer in their national and international branding.

Exiting the EU and Workers’ Rights

Roger Mullin Excerpts

Monday 7th November 2016 Commons Chamber

[Neil Gray]

For how long? In addition, does the Secretary of State carry the confidence of his Back Benchers? We are still to find that out. As I have said, so many of his colleagues have given us mixed messages about the so-called “burden” of EU workers’ rights on this country.

A substantial component of UK employment law is grounded in EU law, and where it exists it provides a minimum standard below which domestic employment cannot fall. Although some protections already existed in domestic law before being enhanced at an EU level, in many cases new categories of employment rights have been transposed into domestic law to comply with emerging EU obligations. Subject to the provisions of the EU withdrawal arrangement or a subsequent trade agreement, withdrawal from the EU would mean that the UK employment rights currently guaranteed by EU law would no longer be so guaranteed, which leaves us reliant on a Conservative Government to step up for workers.

A post-Brexit Government could also seek to amend or remove protections enshrined in EU law for UK workers. The House of Commons Library paper makes it clear that EU-derived employment rights that feature in primary legislation would be relatively safe from the effects of leaving the EU, but would be

“newly susceptible to the possibility of change.”

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

On 27 October, I received a reply to a question about what would be in the great repeal Bill. Part of the answer was that on exit day existing rights would be enshrined, but subsequently it would be open to the Government and this Parliament to change those rights.

[Neil Gray]

I thank my hon. Friend for his intervention, and the point he raises will fill workers up and down this land with dread, because it will be this Conservative Government who are going to be responsible for the workers’ rights that we all enjoy. The Library paper identifies the greatest risk as the uncertainty surrounding the protections in secondary legislation, which is where much employment law is contained. That is where Unison and others also see the greatest risk, with the right hon. Member for Welwyn Hatfield having been reported as seeking a five-year sunset clause to the great repeal Bill. That would mean that all protections currently the subject of EU regulation would automatically expire, wreaking intended and unintended damage to hard-fought workers’ rights and, in turn, to the economy.

BHS

Roger Mullin Excerpts

Thursday 20th October 2016 Commons Chamber

[Michelle Thomson (Edinburgh West) (Ind)]

I would like to begin my contribution to this important debate by joining others in thanking the Chairs of the combined Select Committees and pointing out that any suggestion that their report was not a robust, detailed, evidence-led inquiry can be rebutted. It ran for months and had many sessions; the session with Sir Philip Green alone lasted for six hours.

I support the view that, from its initial purchase, Sir Philip saw the dash for cash from the business as the Green family’s primary purpose. Even in the early days, there was limited evidence of a successful retailer improving turnover or market share. I am sure other Members will continue to highlight the various ways that money was redeployed to the Green family, often away from the clutches of the UK taxman, such as by the payment of dividends and the treatment of various assets. I have no doubt that they were all entirely legal, but were they irreproachable?

We have heard much already about the nature of corporate governance. Our report describes it as having a variety of roles, including balancing

“the interests of…many different stakeholders”.

We have also heard reference to the UK corporate governance code. It states that

“one of the key roles for the board includes establishing the culture, values and ethics of the company.”

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I thank my hon. Friend and all the members of both Committees. I had the pleasure of sitting in and listening to quite a lot of the interrogation and I thought it was first-class.

Despite the problems we have heard about, such as those to do with corporate architecture and regulation, does my hon. Friend agree that Adam Smith was right when he said we cannot divorce business practice from human behaviour, and that the problem here is that the human behaviour of Philip Green has undermined corporate governance and any positive culture?

[Michelle Thomson]

I thank my hon. Friend for that intervention. The code goes on to say in the sentence I was quoting:

“The directors should lead by example and ensure that good standards of behaviour permeate throughout all levels of the organisation.”

The code applies only to listed companies with a premium listing of equity shares, but that does not absolve a private owner from any responsibility. Time and again opportunities were missed to address the growing pension deficit and it cannot simply be argued that the deficit was a result of the global financial crisis and increased longevity. Sir Philip had accountability for addressing the deficit and could have chosen to do so on a number of occasions, as other schemes managed to do.

The QCs’ report cites many examples of the Green family’s legal rights as the majority shareholder, but says very little about the responsibilities to pensioners and employees that that brings. I am sorry, but Sir Philip cannot have it all his own way. It was a lack of judgment that allowed the pensions situation to continue, and a lack of judgment that progressed a sale to a wholly unsuitable third party.

The non-executive chairman was at pains to point out that the code does not apply to private companies, and the QCs’ report notes that the chair of the board has merely the same duties as the other directors. Legally that is true, but might I inquire as to what exactly the remuneration of £125,000 as chair of the board was for? I support the suggestion of the governing body for governance, the ICSA, which suggests reforming the code to include private companies. We have heard a number of calls for that today.

In terms of the general culture of organisations, there is always a key risk if a level of power is concentrated in just a few key individuals, there is weak leadership which chooses to surround itself with people who are reluctant to disagree for fear of falling out of favour, and there are cultural failings within the organisation that are common knowledge but remain unchallenged. We all have a duty to speak out in these cases, because by remaining silent we become complicit in the contract of the bully and the bullied.

In the case of BHS, the final decision on sale was made without the non-exec chair asking about the credentials of the purchasing company, why it was believed to be the best outcome for the employees and pensioners, or whether the third party had a credible turnaround plan—and, incredibly, they were not invited to the ratification meeting. There was only one non-exec director at the meeting: the son-in-law of Sir Philip Green, whose stated brief was to represent the interests of Lady Green.

I challenged some board members to name a time—any time—when they successfully challenged Sir Philip Green. Their response was muted. I could literally count the seconds ticking by as each respondent looked for an example.

Our report notes that

“absolute power, in business as in politics, is a dangerous thing”.

It was certainly absolute power that enabled Sir Philip and the Green family to run BHS as their personal fiefdom, to exclude independent directors from key decisions and to bully weak senior managers, and this contributed to the ultimate failure of BHS and to its ultimate failure in its duty of care to the pensioners and employees.

I shall finish by making a brief comment about the amendment. This UK legislature is already struggling to demonstrate its relevance to many people. It must be able to give a voice to people on the important issues of the day. The saga of BHS is being played out in the media, and not only recently. We have seen the success story, the “loadsamoney” parties, the knighthood, the record-breaking dividends, the decline and the eventual sale of the business. People watching at home have, with every justification, asked, “How can this be? How can an owner of a company act with such impunity in the matter of 11,000 jobs and 20,000 pensions?” Hindsight is a wonderful thing, and who among us does not recognise circumstances in which we would do things differently? I am sure Sir Philip Green regrets the circumstances now, but we are talking about a knight of the realm, and that position must surely require a higher bar of ethical behaviour.

Industrial Strategy

Roger Mullin Excerpts

Thursday 20th October 2016 Commons Chamber

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

What a pleasure it is to follow my hon. Friend the Member for East Lothian (George Kerevan). As he was talking, I wrote down the following: “Until I read my hon. Friend’s book, I will remain in some sympathy with the hon. Member for Bedford (Richard Fuller) and my hon. Friend the Member for Aberdeen North (Kirsty Blackman).” One problem, as I see it, with nearly every other contribution, except that of my hon. Friend the Member for Edinburgh West (Michelle Thomson) is that no one has mentioned what, to me, is critical in anything that calls itself a strategy—namely, what its purpose is.

What is the purpose of this thing we call an industrial strategy? Since we all have our own ideas to share, I am assuming that at the end of the day its purpose would be to help propel economic growth to support people’s wellbeing. That assumption might not be shared by everyone in the Chamber—I do not know whether it is shared even by my hon. Friend the Member for East Lothian—but I will frame my few remarks around it.

I enjoyed the opening remarks of the hon. Member for Warwick and Leamington (Chris White). He led the debate with a bit of a historical review of past efforts at industrial strategies. He also pleaded for us to look to the future in our new context. In that historical light, I was also interested to hear the hon. Member for Wycombe (Mr Baker) indicate that he had read the works of Adam Smith. Since my constituency, Kirkcaldy and Cowdenbeath, is the home of Adam Smith, I feel compelled to venture a few thoughts to continue the hon. Gentleman’s education.

[Mr Baker]

Adam Smith was catastrophically wrong about the labour theory of value and has much to answer for, but I look forward to hearing the hon. Gentleman’s remarks.

--- Later in debate ---

[Roger Mullin]

I wish the hon. Gentleman would not mince his words—he should say it as he really feels it.

Where Smith has some relevance is in his argument that critical to growth was the division of labour in society, with specialisation—what we might call today the importance of having the education and skills that allow us to promote innovation and change. That is what spurs longer-term growth, and on that he was absolutely correct. That important need to drive forward with new technologies and new thinking is why it is utter madness that the Government pulled out of one of the biggest world-leading research projects, the carbon capture project in the north-east of Scotland. If ever there was an indicator of their turning their mind away from what is fundamental to long-term economic growth, it is that decision.

The other thing Adam Smith said that I completely approve of is that there is a role for state intervention. In particular, it is to ensure the kind of education that supports society economically as well as socially. We cannot leave education and skills to the marketplace. We have to make sure they are taken care of.

I was interested by the way in which Members talked about the importance of technology. It strikes me that historically, one of the problems we have had with funding is that we have plenty of people in our universities and the like who are able to come up with great technological ideas and innovations, but those innovations take many years to reach the marketplace. Private sector investment seems best when it is either at or near the marketplace. The problem, very often, has been the gap between the idea and bringing it to fruition. That is where the need for the role of the Scottish Investment Bank comes in, and I think that is what my hon. Friend the Member for East Lothian was hinting at when he talked about the valuable work of the Catapult centres. They can attract different forms of funding in a competitive way for things that may take time to reach the marketplace.

I was interested in the remarks made about the challenge that we face because of Brexit. The Government’s response, chaotic as it is, is driving down confidence. My hon. Friend the Member for Edinburgh West talked about the importance of confidence. That reminded me of what Keynes argued, which was that the principal determinant of the level of private investment is not the rate of interest nor even the level of aggregate demand, but the state of business confidence.

[Kelvin Hopkins]

I am listening with great interest to the hon. Gentleman. I always enjoy his speeches, I have to say. When it comes to the EU, however, does he not accept that confidence has been driven down by those who lost the argument and the vote, who are constantly saying that it will be terribly damaging and an economic disaster? In fact, as Ashoka Mody has said, it is actually proving to be quite beneficial.

[Roger Mullin]

I would take issue with the latter part of the hon. Gentleman’s observations. We were on the opposite side of the argument, but surely he would agree that the Government’s response to the vote has been utterly chaotic? We are no further forward four months later than we were at the time as to what the Government mean by Brexit and how they are going to take us there. That is doing nothing other than driving down confidence in business.

I do not want to take up too much time, but let me come on to one further important issue that was raised, which is in the general sphere of education. That is the importance of the post-study work visa. I would add to that the tier 1 entrepreneur visa. We need to encourage people from overseas to come to this country to help us drive up business investment and innovative ideas. I read an essay by a friend of mine, Professor David Simpson, a few weeks’ ago. He pointed out that one third of successful business start-ups in California between 1980 and 2000 were by people who had come from either India or China. At a time when we need, not least in Scotland, to attract the best minds to help to drive forward the economy, setting our face against that cannot be in anyone’s interest. It certainly cannot be in the interest of anything we might call an industrial strategy.

Higher Education and Research Bill (Thirteenth sitting)

Roger Mullin Excerpts

Committee Debate: 13th sitting: House of Commons
Tuesday 18th October 2016 Public Bill Committees

[Paul Blomfield]

I thank the Minister for his assurances, which go some way towards meeting the points made in the amendment. I ask him to reflect on the opportunities to cast the net slightly wider to other Select Committees as appropriate in the way that it suggests. With the hope that he will reflect on that, and reassured by his comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I beg to move amendment 186, page 92, line 18, after “experience” insert

“in the higher education sector in England, Scotland, Wales and Northern Ireland”.

This amendment would ensure that the new research body, UKRI, would include appropriate membership from the devolved nations.

[The Chair]

With this it will be convenient to discuss amendment 187, page 92, line 38, at end insert—

“(6) UKRI must, in appointing members of each Council, have regard to the desirability of the members (between them) having experience of research in the higher education sector in England, Scotland, Wales and Northern Ireland.”

This amendment would ensure that the membership and strategy of the new research body, the UKRI, takes proper account of the policies and priorities of the devolved nations.

[Roger Mullin]

I declare that I have an interest as I remain an honorary professor at the University of Stirling.

During the earlier stages of debate on the Bill, I remained remarkably quiet for someone with my background. I have been saving myself for today because it is a vital one if there is to be proper and respectful consideration for the university sectors in Scotland, Wales and Northern Ireland. When I first read the Bill, I thought Scotland must already be independent because there was absolutely no recognition of the sector’s importance—so too, perhaps, in Wales and Northern Ireland.

The Bill was clearly not written in the spirit of the Nurse report, which stated:

“There is a need to solicit and respond to distinct research priorities and evidence requirements identified by the devolved administrations…it is essential that the Research Councils should play a strong role in…shaping research priorities and promoting the distinctive requirements of UK research, including in association with the devolved administrations.”

It is clear that when drafting the Bill the Government ignored to a great extent such an injunction. As it stands, UKRI is accountable only to the UK Government with principally English interests.

--- Later in debate ---

[Roger Mullin]

I thank the Minister for his response, although I am slightly disappointed he has not gone further in saying that he would take the recommendation more seriously. We will have to return to this matter on Report.

I say to the Minister that the way in which he describes the role the devolved Administrations might be able to play in this regard sounds slightly complacent. If it were as precise and clear as he suggested, I wonder why he thinks Universities Scotland, the University of Wales, the Royal Society of Edinburgh and many others I have cited support the amendments and do not support the Bill as it stands. With the intent of bringing this matter back on Report, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Joseph Johnson]

I beg to move amendment 247, in schedule 9, page 92, line 21, leave out “and new ideas” and insert

“, new ideas and advancements in humanities”.

This amendment provides that the Secretary of State must, in appointing members of UKRI, have regard to the desirability of them having between them experience of the development and exploitation of advancements in humanities (including the arts), as well as the development and exploitation of science, technology and new ideas. A similar amendment is made to clause 85(1)(c) in amendment 256.

Higher Education and Research Bill (Fourteenth sitting)

Roger Mullin Excerpts

Committee Debate: 14th sitting: House of Commons
Tuesday 18th October 2016 Public Bill Committees

[The Chair]

Welcome back for what I regret to inform Members will be the final sitting of the Committee. I remind Members that we finish at 5 pm precisely, which means we have to deal with any matters outstanding before then.

Clause 85

UK research and innovation functions

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I beg to move amendment 180, in clause 85, page 52, line 21, at end insert

“but must be exercised in such a way as to be for the benefit of England, Scotland, Wales and Northern Ireland.”

This amendment would place a general duty on UKRI to discharge its functions under section 85 for the benefit of the UK as a whole.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 181, in clause 88, page 54, line 4, at end insert—

“having regard to the economic policies of the UK Government, the Scottish Government the Welsh Government and the Northern Ireland Executive”

This amendment would ensure the specific duty of Innovate UK will be to have regard to the economic policies of the devolved administrations.

Amendment 326, in clause 89, page 54, line 33, after “appropriate” insert—

“including relevant bodies in the devolved administrations”

This amendment allows Research England to coordinate with its devolved counterparts.

Amendment 182, in clause 91, page 55, line 16, at end insert—

‘(4A) Before exercising his powers under subsection (4), the Secretary of State must consult the Scottish Government, the Welsh Government and the Northern Ireland Executive and have regard to their views in respect of any proposed research and innovation strategy.”

This amendment would place specific duty on the Secretary of State to consult the devolved administrations before exercising his powers in relation to a research strategy in section 91(4).

Amendment 184, in clause 94, page 56, line 24, at beginning insert “Subject to subsections (4A) and (4B),”

See explanatory statement for amendment 183.

Amendment 183, in clause 94, page 56, line 34, at end insert—

‘(4A) In giving direction to UKRI, the Secretary of State must act in the best interests of all constituent parts of the United Kingdom and, before giving such direction, must consult—

(a) the Scottish Government,

(b) the Welsh Government, and

(c) the Northern Ireland Executive

on research and innovation policies and their priorities.

(4B) Before giving any direction to UKRI under subsection (1), the Secretary of State must seek agreement to the terms of that direction from—

(a) the Scottish Government,

(b) the Welsh Government, and

(c) the Northern Ireland Administration.”

This amendment would ensure the Secretary of State takes account of the views of devolved administrations, including different research and innovation policy, before giving direction to the UKRI.

Amendment 185, in clause 96, page 57, line 14, at end insert—

‘(3) In exercising functions under this Part, the Secretary of State must act in the best interests of England, Scotland, Wales and Northern Ireland, having consulted—

(a) the Scottish Government,

(b) the Welsh Government, and

(c) the Northern Ireland Executive

before exercising these functions.”

This amendment would place a duty on the Secretary of State that in exercising their functions in relation to UKRI they must consider the needs of the entire UK and consult the Ministers of the devolved jurisdictions

[Roger Mullin]

What a pleasure it is to see you, Mr Hanson —my favourite Chair—[Hon. Members: “Ah!”]—for a Tuesday afternoon.

The Minister is such a reasonable person that I am sure he is keen to accept amendments 180 to 185. They would place a duty on the Secretary of State that in giving direction to UK Research and Innovation regarding research priorities, it is incumbent upon UKRI and the Government to ensure that the needs of the entire United Kingdom are met and to consult with Ministers in all the devolved jurisdictions.

The Scottish, Northern Irish and Welsh Governments must have a formal role in providing input to the UK Government. Too often, the needs of Scotland, Northern Ireland and Wales are forgotten. Allow me to give two examples related to the Bill—neither of which, I hasten to add, arose out of malice. My hon. Friend the Member for Glasgow North West and I noticed a few days before oral evidence sessions were due to start that every major institution in Scotland had been omitted from the list of those being called to give evidence. I know the Minister, and I know the Whip. They are reasonable people. I know they did not exclude us out of malice, but that omission demonstrated that we were an afterthought in a Bill Committee where they knew there would be representation from Scotland. For Scotland to be treated as a mere afterthought shows the need at times to put into legislation the right to be consulted. Being an afterthought is just not good enough.

Let me give another example. Later today, we will discuss an amendment relating to post-study work visas—a matter that has been raised many times by Scottish Members in this House and by the Scottish Government as it is of great concern to us and of great importance to our economy and our universities. What happened a few short weeks ago? Suddenly, the UK Government announced a pilot that involves no university in Scotland, Wales or Northern Ireland, nor any consultation with the Governments in the devolved Administrations. That is another example of us not being treated with any respect whatsoever. The amendment calls for formal recognition in the Bill that we will not be consigned to the role of a mere afterthought at the whim of this or any other Government.

The Scottish research sector has different priorities from much of the rest of the UK, and there is a concern that those priorities will be missed within the new UK-wide research body. For example, Scottish higher education institutions have been pioneers in research collaboration since the establishment of the first research pools in 2004. One of the key principles behind research pools was that they should support research excellence “wherever it is found”, which is sometimes in relatively small research groups in less research-intensive institutions. We are concerned that initiatives to encourage collaboration between mere institutions can sometimes exclude such pockets of excellence through, for instance, threshold criteria dependent on scale. Scotland’s higher education sector, as the Minister will know, is worth more than £6 billion to our economy, and we must ensure that that continues. As it stands, the Bill has the potential to harm Scotland’s world-renowned research.

The Minister and his Government need to ensure that devolved Administrations have an equal say and that their voices are heard within UKRI to ensure that this Bill will be of no detriment to any part of the United Kingdom. It is also critical to be able to take account of the different economic and social priorities of devolved Administrations. Mention was made of Brexit this morning—by the Minister, if memory serves me correctly—and it immediately brought to mind not the example of Scotland but that of Northern Ireland, where there are going to be particular challenges, not least in how cross-border trade, cross-border research collaboration and the movement of people will be handled. That presents a context in Northern Ireland that is not present in any other part of the United Kingdom. Its voice needs to be heard as well. Not to have proper input on these and other matters would potentially be not only disrespectful, but damaging. In Scotland our drive for innovation and growth and our highly distinct social agenda need to be factored in. I have no confidence that that will be possible without ensuring that a statutory duty is placed in the Bill. I beg to ask leave to move the amendment.

[Gordon Marsden (Blackpool South) (Lab)]

I wish to elaborate on my Scottish colleague’s comments, first by saying that you are my favourite Chair of all time, Mr Hanson, and not just for Tuesday—at least until someone else comes along and makes me a better offer.

Amendment 326 would allow Research England to co-ordinate with its devolved counterparts. I am very much in tune with the sentiments just expressed by the hon. Gentleman: nobody likes to be treated as an afterthought, though sometimes people are pleased just to be noticed. In these circumstances, the hon. Gentleman has put forward a powerful case. It is not a question of omission by design, we hope, but it is certainly omission by amnesia, to put it kindly. Rightly, he did not just put the case for Scotland, which he is bound to do, but referred to the situation in Northern Ireland. Those of us who can just about remember back to that steamy day of Second Reading, before the summer recess, will remember that there were representations from Northern Ireland Members on the Bill, not just about issues such as the teaching excellence framework and the future for Northern Irish students, but on some of the border issues. Since then those issues have come further to the fore.

It is a question of looking back as well as looking forward. The reality is that Research England will be inheriting, and will be challenged to perform on, the existing system. At the moment, the UK’s dual support system underpins an excellent research base. As Committee members probably know, it consists of two complementary streams: one targets specific discipline areas; the other is a block grant to institutions. Currently the former is disbursed by the seven research councils and the latter through the Higher Education Funding Council for England and its devolved counterparts, the Scottish Funding Council, the Higher Education Funding Council for Wales and the Department for the Economy in Northern Ireland.

As we heard this morning from the Minister, the proposed reforms will bring the seven research councils and the England-only research functions of HEFCE in the form of Research England—if the Committee has not been lost by this point, it will be shortly—into UKRI. The Scottish Funding Council, the Higher Education Funding Council for Wales and the Department for the Economy in Northern Ireland will remain sitting outside UKRI. Therefore, as the hon. Member for Kirkcaldy and Cowdenbeath rightly pointed out, it would be helpful to probe how UKRI will work with institutions in Scotland, Wales and Northern Ireland in providing strategic oversight of UK research.

I say gently to the Minister that the hon. Member for Kirkcaldy and Cowdenbeath has made it fairly clear—I support his view, and if I was a Member from one of the devolved Administrations, I would feel the same—that on this occasion simply rehearsing the line that we can be assured that UKRI will take such things into account is not going to be adequate, either practically or symbolically. If the Minister is in any doubt, since we have mentioned Scotland and Northern Ireland, I am now going to mention Wales and quote the written evidence that the Committee received from Universities Wales about three or four days ago. I refer to the section about UKRI governance and operation. Very much in the same spirit as the hon. Member for Kirkcaldy and Cowdenbeath, Universities Wales says:

“In the past the legislation has relied heavily on the Secretary of State and the Research Councils to act in the interests of the UK as a whole. With the increased divergence as a result of devolution, however, we question whether this will continue to be effective in appropriately reflecting devolved policy and interests. We welcome the UK Government’s proposed amendment”—

that is referred to as new clause 3, which we will come to—

“to enable joint working between relevant authorities where this is more efficient or effective. We would like the legislative framework to be strengthened, however, so that it not only facilitates joint working but ensures”—

I think there is a difference—

“that interests of devolved nations are catered for appropriately. In particular we agree with Universities Scotland that the legislation as a minimum must ensure there is appropriate representation on UKRI’s Council and on the Councils’ boards. The legislation must also include appropriate duties for UKRI and the Secretary of State not only to consult with devolved administrations but also to have due regard to devolved policy.”

That is the nub of it, and that is what we have tried to embody in amendment 326, which would give Research England the facility to co-ordinate with its devolved counterparts. That is the basis on which we have a great deal of sympathy with the amendments tabled by the hon. Member for Kirkcaldy and Cowdenbeath.

--- Later in debate ---

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

I will not join the auction of flattery, Mr Hanson; I feel that it is unnecessary, and I am sure you do not appreciate it. I am, however, glad to have the opportunity to assure Members, in particular those from Scotland, that I share their desire to ensure that the UK operates for the benefit of the whole of the United Kingdom.

Scottish and other devolved institutions are a vital part of our vibrant research base and have not been overlooked carelessly or by any other kind of omission in our preparations for these reforms or for the Committee. I know that it feels like a lifetime ago that we were sitting in Portcullis House listening to oral evidence, but I point out to the hon. Member for Kirkcaldy and Cowdenbeath that representatives of UK-wide bodies were invited to give evidence to the Committee, including Research Councils UK, Innovate UK and Universities UK. Those bodies all represent the totality of the United Kingdom, including institutions in Scotland, Wales, Northern Ireland and England.

I understand that all parties were invited to make submissions about who should give evidence before the Committee. We put forward a number of suggestions, as did the official Opposition. Relatively late in the day, Members from the Scottish nationalist party asked for additional people to be invited to give evidence, and we were delighted to accommodate Universities Scotland, the Royal Society of Edinburgh and the Scottish Funding Council to round out the evidence that we had already requested from those other representative bodies of the entirety of the United Kingdom. There was no omission. We were delighted to make time in the Committee’s proceedings to accommodate further Scottish voices, and we welcomed them, as we welcome them now.

[Roger Mullin]

I never suggested that there was any malice, but there was scope to have Scotland properly represented. The Scottish National party—I see there is still scope for education there, since the Minister does not know the name of the party that I represent—was not invited by the Government to give any suggestions about who should be invited, so I think it is fair to characterise it as an afterthought.

[Joseph Johnson]

I thank the hon. Gentleman for his further clarification. I am always happy to be educated by him in lots of ways, but on this matter we will have to disagree. We gave opportunities to the Committee to submit names to give evidence before it. As I said, we had already invited significant representations from UK-wide bodies and were delighted to accommodate the further suggestions his party made. I think we have to move on.

Turning to amendments 180 and 181, the research councils and Innovate UK, within UKRI, will continue to fund excellence wherever it is found in the UK. UKRI has the ability to work with the devolved bodies and a statutory duty to use its resources in an efficient and effective way, meaning it will look for all opportunities to collaborate. It is also important than Innovate UK can operate independently to spot opportunities and to provide the right access to finance conditions for economic growth. To improve its understanding and response to economic policies in the devolved Administrations, Innovate UK will be appointing full-time regional managers in Glasgow, Cardiff and Belfast. That means that UKRI and its councils will have to consider the whole of the UK, ensuring that the current co-operation will continue.

Turning to amendment 326, on Research England consulting relevant bodies in the devolved Administrations on grant conditions, block funding of universities for research—so-called quality-related funding—is a devolved matter. It is therefore not appropriate to require Research England to consult its devolved equivalents, just as the devolved funding bodies are not required to consult HEFCE now. Our approach mirrors that taken in the Further and Higher Education Act 1992. Of course, that does not mean HEFCE has operated in isolation—in fact, HEFCE works closely with its devolved equivalents, such as the Scottish Funding Council, on areas like the research excellence framework. A Government amendment ensures that Research England can continue that joint working in the future.

Turning to amendments 182 to 185, on the Secretary of State consulting the devolved Administrations before taking key decisions that will have an impact on UKRI, the Government work closely with the devolved Administrations now and UKRI will continue to work with them. However, we would not seek to bind UKRI into a restrictive process of consultation. Legislation must remain sufficiently flexible for the Government and for UKRI to react quickly to emerging issues, as the research councils acted earlier this year to promptly commission research into the Zika virus.

The amendments also require the Secretary of State to act in the best interest of all parts of the UK. As a UK Government Minister, I assure the Committee that that is already the case. That was recognised by the former vice-chancellor of the University of Dundee, Sir Alan Langlands, in the evidence he gave last month:

“Even given the dynamics of devolution and the fact that essentially we are dealing with four different financial systems and four different policy frameworks, the one thing that has stuck together through all this has been the UK science and research community. The research councils, HEFCE and, indeed, BIS have played a hugely important part in that.––[Official Report, Higher Education and Research Public Bill Committee, 6 September 2016; c. 26-27, Q40.]

I agree with Sir Alan. The research community functions remarkably well across the UK political landscape, not least because the UK Government and the devolved Administrations work together to make it do so. Therefore, recognising that the Government share the hon. Gentleman’s concern in ensuring that UKRI effectively serves the whole of the UK, I ask that he withdraws amendment 180.

[Roger Mullin]

I thank the Minister genuinely for his responses. I will not put the amendment to a vote, but I make two observations. I do not think establishing mere regional managers in Glasgow, Cardiff and Belfast, if I recall his statement correctly, are in any way sufficient to guarantee the type of high-level involvement that is being sought. There are examples—I gave one related to the post-study work visa pilot—of where decisions have already been taken by the UK Government without proper consultation of the devolved Administrations. I therefore beg to differ with the Minister on those two points, but I also beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Joseph Johnson]

The Government amendments in this group will ensure that, in setting the terms and conditions of grants to Research England, the Secretary of State is under the same limitations as in the Further and Higher Education Act 1992. Specifically, amendments 263 and 265 provide that directions or terms and conditions of grants can be given only if they apply to every institution, or to every institution of a specified description. In addition, the specific requirements must be met before financial support is given. Amendments 264, 266 and 267 are consequential changes required by amendments 263 and 265, and will ensure that the purpose of clauses 93 and 94 remains clear.

[Roger Mullin]

I thank the Minister for indicating earlier that he was willing to allow me to say a few words on amendment 284 before he responds to the debate.

My hon. Friend the Member for Glasgow North West and I have been contacted by many institutions in the devolved nations about amendment 284 more than any other. They are concerned about the potential that hazard will be placed in their way because of the funding structure. The amendment would ensure separate funding allocations for the research councils, Innovate UK and Research England. It is supported not only by the significant number of institutions that I mentioned earlier, but by the Scottish Funding Council. I have had extensive discussions with Dr John Kemp, who is the acting chief executive there.

We know that Scotland performs well in attracting funding—grants, studentships and fellowships—from the research councils, although it does not do quite so well in attracting funding for research institutes and research infrastructure. We of course recognise that there is always scope for flexibility in funding, but there is a difference between building flexibility into something and building in something that will create a hazard to core funding. That is what particularly concerns me about the clause: as it stands, it will allow the Secretary of State or the UK Government, if they so wish, to alter the balance of funding among the research councils.

Any grant to UKRI is ultimately research project funding, which of course should be competitively available throughout the UK. It is therefore necessary to have transparency about what goes to UKRI and what goes to Research England, given that the funds distributed for research infrastructure by the latter body will be available only to English institutions. Separate financial allocations must be introduced for Innovate UK, Research England and the different research councils collectively.

We are extremely concerned, too, that there are no provisions in the Bill to ensure that the Secretary of State and the UK Government do not give directions to UKRI to move funds in year on its own initiative between constituent parts—especially to Research England. That would definitely not be in the spirit of the Nurse report, nor would it give Scotland, Wales or Northern Ireland a fair and equal say in research allocation. If for whatever reason funds had to be moved between research councils and Research England or Innovate UK by the Secretary of State, that must surely happen only if the devolved Administrations gave their consent.

Amendment 284 would ensure that fairness and transparency were at the forefront of the reserved funding allocation to UKRI and the allocation to Research England. It would also ensure that the balanced funding principle was measured in relation to the proportion of funding allocated by the Secretary of State for reserved UK and devolved England-only funding, and that clarity was provided on when that might not be achieved. Many bodies that have talked to me are at a loss as to why the appropriate funding streams are not set out in the Bill. I am therefore particularly keen to hear the Minister’s response.

[The Chair]

Before I call the Minister, I remind colleagues that it is now 3.27 pm and the Committee finishes at 5 o’clock. Although there is potential for further debate, Members should bear that in mind if they want to debate later issues.

--- Later in debate ---

[Roger Mullin]

I dearly wish that I could believe the Minister’s explanation. I am willing not to press amendment 284 at this stage, but I intend to go back to all those who have expressed such deep concern and potentially bring the issue back on Report.

Amendment 263 agreed to.

Amendment made: 264, in clause 93, page 56, line 22, at end insert—

“( ) In this section “specified” means specified in the terms and conditions.”.—(Joseph Johnson.)

This amendment is consequential on amendment 263.

Clause 93, as amended, ordered to stand part of the Bill.

Clause 94

Grants to UKRI from the Secretary of State

--- Later in debate ---

[Gordon Marsden]

Again, I thank the Minister for using the opportunity of our probing amendment to say a little more about how he envisages the Haldane principle being enshrined in the Bill. That has been helpful. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 265, in clause 94, page 56, line 25, at end insert—

‘( ) The Secretary of State may give a direction under this section in respect of functions exercisable by Research England pursuant to arrangements under section 89, only if —

(a) it relates to requirements to be met before financial support of a specified amount or of a specified description is given by Research England in respect of activities carried on by an institution, and

(b) it relates to every institution, or every institution within a specified description, in respect of whose activities that support may be provided.”—(Joseph Johnson.)

This amendment provides that the Secretary of State can only give a direction about the allocation of grants to UKRI in respect of the functions exercisable by Research England if the direction relates to requirements to be met before the financial support is given and if it relates to all institutions or institutions of a particular description.

[Roger Mullin]

I beg to move amendment 285, in clause 94, page 56, line 25, at end insert—

‘(1A) Within six months of this Act coming into force, the Secretary of State shall give a direction to UKRI to commission an independent evaluation of the matters under subsection (1B) and shall lay the report of the evaluation before the House of Commons.

(1B) The evaluation under subsection (1A) shall consider—

(a) the effect of the absence of post study work visas for persons graduating from higher education institutions in the United Kingdom to be granted leave to remain in the UK on completion of their studies to work for up to two years for an employer on—

(i) the economy, efficiency and effectiveness of the higher education sector, and

(ii) the UK economy, and

(b) how post study work visa arrangements, applying either broadly or to classes of students, disciplines and institutions, could operate in the UK and their effect of each on—

(i) the economy, efficiency and effectiveness of the higher education sector, and

(ii) the UK economy.”

This amendment would require the Secretary of State to commission research from UKRI on the effects of the absence of arrangements for post study work visas and how such arrangements could operate in the UK and their effect on the higher education sector and the UK economy.

I could easily spend the next two hours discussing this subject [Hon. Members: “Oh no!”]—but perhaps I will not. This is a probing amendment, but it is important none the less, particularly for Scottish representatives. It would require the Secretary of State to commission research from UKRI on the effects of the absence of arrangements for post-study work visas, how such arrangements could operate in the UK and their effect on the higher education sector and the UK economy.

If ever there were an issue before this Parliament that demonstrates the completely different economic and social priorities of Scotland and the rest of the UK, this is it. Historically, Scotland’s problem has been not immigration but emigration. In my own family, both my brother and sister emigrated many years ago. My brother could not find a job after graduating in the early 1960s, but by the age of 30 was secretary of the Science Council of Canada and went on to be vice-president of the International Development and Research Corporation. He wrote the first science and technology paper for the free Government in South Africa after meeting Nelson Mandela but could not find a job in his own land. He was only one of thousands of people over many generations who had to emigrate.

--- Later in debate ---

[Joseph Johnson]

I thank the hon. Gentleman for raising this important issue. International student migration and post-study working arrangements are important issues for the HE sector and the Government. Brain gain is definitely the key to our sustained success as a knowledge economy, but I do not believe that the Bill is the appropriate vehicle for commissioning research into post-study work. The Bill is focused on creating the necessary structures that will oversee higher education and research funding for many years to come. The amendment proposes a short-term piece of research on an element of migration policy, and that is not consistent with the scope and functions of UKRI. That said, I thank the hon. Gentleman for giving me the opportunity to explain briefly the Government’s approach to student migration and to post-study working arrangements for international students.

The Government greatly value the contribution that international students make to our universities, including those in Scotland. We want our top universities to continue to attract the best students from around the world. The UK has a generous post-study work offer for overseas students who graduate in the UK. International graduates can remain in the UK to work following their studies by switching to several existing routes. For example, if they get a graduate-level job, they can switch to a tier 2 skilled worker visa. If they start a business, they can move to a tier 1 entrepreneur or graduate entrepreneur visa, or they can do work experience under a tier 5 temporary worker visa. There is no cap, as we have discussed previously, on the number of students who can switch to a tier 2 skilled worker visa and all degree students are potentially eligible to stay on for post-study work.

[Roger Mullin]

The trouble is that the requirements and criteria set for graduate-level work might well be appropriate for the south of England, but looking at the recent case of the Brain family and the amount of work needed to allow that family from Australia to get a tier 2 visa and stay and contribute in Scotland—thanks to the work of my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford)—those requirements are not as suitable for our circumstances as the Government pretend. The Minister went on to talk about tier 1 visas; over the past year, in the region of 70% of applicants for tier 1 entrepreneurship visas have been rejected. It does not seem to me that that is adequate in providing for the future.

[Joseph Johnson]

We always want to ensure that our visa system is working well and we believe, with respect to people switching from tier 4—the student route—into tier 2, that it is working well at present. Certainly, at least looking at the numbers of people switching, under our current arrangements more than 6,000 international students switched from tier 4 into tier 2 in the UK in 2015; that is an increase from around 5,500 in 2014 and 4,000 in 2013. The hon. Gentleman mentioned tier 1 and the number of rejections. That reflects an element of abuse in the old tier 1 category, which was then the post-study work category, with a published Home Office assessment undertaken in October 2010 finding that three in five of the then tier 1 migrants were in unskilled work. That is the basis on which changes were made to our system.

Until 2012 there was a dedicated post-study work route under tier 1 of the visa system, as I just mentioned, which saw a significant number of fraudulent applications and graduates who were remaining unemployed or in low-skilled work. That is why we replaced it with a more selective system, as the hon. Gentleman mentioned. This reform to post-study work has not prevented the UK from attracting international students. Since 2010, applications to UK universities have gone up by about 14% and we remain the second most popular destination in the world after the US for international students.

I am therefore unconvinced that such research would add value, given that the current visa system provides generous post-study work opportunities and the Government will, in any case, shortly be consulting on these issues. As I have explained, the Bill is in any case not the appropriate mechanism for commissioning such research. On that basis, I ask the hon. Gentleman to withdraw the amendment.

[Roger Mullin]

I am happy to say I have made my point and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 266, in clause 94, page 56, line 26, leave out “But”.

This amendment is consequential on amendment 265.

Amendment 267, in clause 94, page 56, line 34, at end insert—

“( ) In this section “specified” means specified in the direction.”.—(Joseph Johnson.)

This amendment is consequential on amendment 265.

Clause 94, as amended, ordered to stand part of the Bill.

Clause 95

Balanced funding and advice from UKRI

[Gordon Marsden]

I beg to move amendment 329, in clause 95, page 57, line 4, leave out “reasonable”.

This amendment seeks to establish what a reasonable balance between Quality Related funding and project-specific funding is and to clarify how the dual support system will be protected by this legislation.

The amendment might seem perverse, but it is a mechanism to explore with the Government what a reasonable balance is between quality-related funding and project-specific funding, and to clarify how the dual support system will be protected by the legislation. Again, as with the Haldane principle, which we just discussed, the Bill seeks to enshrine dual support in legislation for the first time. This is welcome; it has been welcomed by many people in the sector. This is a probing amendment to clarify how it will be protected by the legislation or, in other words, to invite the Minister to comment on what he, his officials and any others who he would expect to make judgments would expect a reasonable balance actually to look like.

The dual support system underpins our excellent research base, and I will not go into all the ways in which it is disbursed—we have dealt with that previously—but it would be helpful to understand what would be a reasonable balance between the two funding streams.

As the hon. Member for Kirkcaldy and Cowdenbeath has asked, how will the principle operate in Scotland, Wales and Northern Ireland? The Government’s October paper on UKRI says:

“The Bill requires the Secretary of State to consider the balance between these two funding streams ensuring that the dynamic balance that stakeholders have supported is protected and preserved.”

That is an interesting phrase, “the dynamic balance”. I am not sure what I think it means, but I know that concerns have been expressed not about the enshrining of the duty in the Bill but about precisely what teeth the enshrinement will have.

Chris Hale, the director of policy at Universities UK, wrote “The Higher Education White Paper—all you need to know” in May 2016, in which he said:

“At face value we will see for the first time dual support enshrined in a legislative arrangement (to date dual support has been largely a matter of convention), but the critical question is does this go far enough? While the Secretary of State may have to consider the balance under this new duty, this provision does not necessarily secure the health and dynamism”—

that interesting phrase again—

“of dual support. This is one to watch carefully and there may be scope to strengthen this in the Bill.”

Similarly, the Council for the Defence of British Universities has said that

“while the White Paper contained an undertaking…the requirement in clause 95 of the Bill that the Secretary of State should ‘have regard to…the balanced funding principle’ appears vague”.

The CDBU refers to my right hon. Friend the Member for Oxford East (Mr Smith)—both Oxford constituencies are getting a mention today—and his excellent speech on Second Reading, in which he aired some of the concerns of his constituents and, if memory serves, although I stand to be corrected, the University of Oxford on how the principle will be enacted.

The Minister referred to the Stern review earlier, and the CDBU says:

“An approach to strengthening the wording in the Bill is suggested by a passage in the Stern Review of the REF…which states that, in addition to competitive grant funding, the capacity of universities to sustain excellent research depends on ‘a long-term, stable block grant that allows universities to invest strategically in research in ways which foster its future development’. If all funding streams are administered through one body (i.e. UKRI), as currently proposed, this endangers the separate purposes of the two funding streams.”

The Minister may or may not wish to dissent from that view, which is put another way by the Royal Society in its commentary. It says:

“The ‘balanced funding principle’ is the principle that it is necessary to ensure that a reasonable balance, suitable for maintaining the long-term excellence and efficiency of the UK research base, and preserving the values, customs, partnerships and practices that have underpinned these, including allocation based on both retrospective and prospective assessment is achieved in the allocation of funding…However, we are not convinced that the ‘balanced funding principle’ as currently defined in the Bill includes sufficient content to fully embody the dual support system. The ‘balanced funding principle’ should be defined to make it clear that it entails substantial portions of research funding being allocated both via the block grant and via Research Councils. We would suggest the definition of the principle of balanced funding should be strengthened to make explicit reference to maintaining the values and customs of the research base, including a balance of retrospective and prospective assessments.”

Those sentiments and that terminology are not far away from the concerns that the CDBU expressed or, indeed, that my right hon. Friend the Member for Oxford East mentioned on Second Reading.

I would be grateful if the Minister could muse—if that is the right word—on the appropriateness of the word “reasonable” and on what it means, and give us a bit more chapter and verse on how he envisages the dual support being carried out in practice through legislation, as opposed to the statement of good intent, which we welcome.

--- Later in debate ---

[Roger Mullin]

I would like to say a few words in praise of the new clause. I have moved 10 amendments today. Many dozens of amendments have been tabled, but I think this is the most important one we face, because this is the one that speaks to who we are as a community and as a people. I would like to praise and thank the hon. Gentleman for his recognition of the work the Scottish Government have done in this field. I hope that any civilised society would see the need to support this measure.

[Joseph Johnson]

I also thank the hon. Member for Sheffield Central for tabling this new clause, which relates to access to support for students recognised as needing protection. I agree with the hon. Member for Kirkcaldy and Cowdenbeath and recognise his commitment to this issue. It is one that is already addressed, however, within the student support regulations.

I am pleased to say that those who come to this country and obtain international protection are already able to access student support. Our regulations have for some time included provision for those granted refugee status or humanitarian protection and their family members. In addition, we have recently amended the regulations to allow those who have been in the UK as a matter of fact for at least half their lives or at least 20 years to access student support after three years of lawful residence.

Those persons entering the UK under the Syrian vulnerable persons relocation scheme and granted humanitarian protection will be eligible, like UK nationals, to obtain student support and home fees status after only three years’ residence in the UK. Those with refugee status are uniquely allowed to access student support immediately—a privilege not afforded to UK nationals or those granted other forms of leave. There is a distinction in international law between such status and those in need of humanitarian protection.

Recently the Supreme Court upheld the Government’s policy of requiring most persons, including UK citizens, to be ordinarily lawfully resident in the UK for at least three years immediately prior to starting their course in order to be eligible for student support. That important rule establishes that generally the student has a solid connection with the UK before they are entitled to support and home fee rates. The second part of the amendment would, in effect, break that long-established policy by extending support to asylum seekers who have been granted temporary leave to remain only and who have only a recently established and potentially temporary connection to the UK. I therefore ask that the hon. Member for Sheffield Central withdraw the motion.

Higher Education and Research Bill (Ninth sitting)

Roger Mullin Excerpts

Committee Debate: 9th sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I would like to say a few words about the TEF, rather than the amendments as such. I want to put on record my concern about the way in which people are being swept along, believing that the TEF is particularly meaningful. I had a discussion a few days ago with Professor Jack Dowie, who, as some Members may know, is considered somewhat of a world expert in judgment and decision making. As he put it to me,

“Some instruments measure something that exists independently, like a tumour, and the items in the instrument, like symptoms and signs, are used to reflect the construct”,

which is doing something meaningful.

“However, some instruments claim to measure something that does not exist independently, and university quality is one such thing.”

Two Middlesex University lecturers, Dr Maeve Hosier and Ashley Hoolash, have kindly sent me for review an academic article that has not yet been published. They have just completed a study of the six major league table ranking systems, which are based on different instruments of assessment, and have quite understandably found that they all come up with completely different rankings of universities dependent upon the instruments used. This is just a caution that people should not read too much into how meaningful these types of system actually are.

[Jeff Smith (Manchester, Withington) (Lab)]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Roger Mullin]

To give one example, when I was teaching at Stirling University about 30 years ago, my feedback from one student said “Nice eyes and a gorgeous bum.” [Laughter.]

[Paul Blomfield]

Even from my position sitting in this Committee Room, I would not wish to assess that evaluation, but I understand why the hon. Gentleman might want to share that with the Committee. It highlights in a particularly graphic way how we know the NSS does not provide a satisfactory metric in that respect. However, as the Government said, these are proxies.

The amendment would ensure, as the Select Committee recommended, that the office for students has a responsibility, in overseeing the metrics, to ensure that they can confidently and accurately measure teaching quality and nothing else—not the personal features of the hon. Member for Kirkcaldy and Cowdenbeath, not employment outcomes based on family background and school connections, but teaching quality. On that we are all agreed, and I therefore hope the Government will feel able to accept the amendment.

Higher Education and Research Bill (Sixth sitting)

Roger Mullin Excerpts

Committee Debate: 6th sitting: House of Commons
Tuesday 13th September 2016 Public Bill Committees

I echo those sentiments and ask the Minister to think very carefully about them in his response. The amendment is a really important step in reminding the OFS when it comes into existence that the need to promote adult, part-time and lifelong learning is a crucial part of things. We all know the old saying, “What gets measured gets funded”. This needs to be measured and it also needs to be funded.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I hope the Committee will forgive me if I do not detain it long, but I want to make a couple of slightly different points on amendment 141. We have to recognise that all countries in the world face a particular challenge because of the changing nature of society, and that is going to impinge on educational challenges in particular. It was estimated that there were more researchers working in the last 25 years of the 20th century than in the entire prior history of the world. When that is put together with the processing power of new technology, the rate of change and the production of new ideas and research is accelerating apace. That itself feeds into real change that has been happening in the labour market. For example, it was suggested some years ago that those entering the labour market in the UK around the year 2000 could expect on average to have between eight and 10 career changes in their working life. We have therefore moved away from a world where it is only at a younger age that people are prepared for their future professional lives. There has to be better regard for lifelong learning and for how technologies and education systems will change to meet the challenge of the modern world. In that slightly wider context, I support amendment 141.

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

First, let me say that I can see the principles that hon. Members are seeking to address here. I entirely agree that it is very important that the strong reputation of the English HE sector is maintained and that there is confidence in both the sector and the awards it collectively grants. The OFS has a key role to play in that. I also agree that the OFS will need to determine and promote the interests of students, that providers should continue to collaborate and innovate, and that studying part-time and later in life brings enormous benefits for individuals, the economy and employers. However, the OFS is already required under clause 2 to have regard to the need to promote quality and greater choice and opportunity for students.

Our higher education sector is indeed world class, and one of our greatest national assets. I entirely agree that it is crucial that this strong reputation is maintained and that there is confidence in both the sector and in the awards made by its providers. We have heard the same arguments about letting in poor providers at every period of great university expansion. The expansion of the sector over the decades has been the story of widening participation and access to the benefits of higher education. The concerns that we have heard at every wave of expansion have successively proved to have been manageable and, eventually, unfounded.

There is no specific current legislative provision that places a duty on the regulator to maintain confidence in the academic awards made by HE providers. However, the OFS is already required, under clause 2, to have regard to the need to promote quality, and good quality is the key ingredient that inspires confidence. As the Quality Assurance Agency recently noted, it is the Government’s intention that,

“no higher education provider will be given DAPs”

degree-awarding powers—

“without due diligence around quality assurance and this responsibility is expected to be carried out by the designated independent quality body.”

The QAA also said that,

“the transition to a more flexible, risk-based approach to awarding DAPs and university title…will help underpin the government’s policy objectives to open the sector to new high quality providers, encourage innovation and offer more choice to students”.

In particular, the power to award degrees will remain subject to specific criteria which all prospective providers must meet. The detail of those will be subject to consultation in due course, but I do not envisage the criteria themselves differing much from the existing criteria, and certainly not in a way where quality and therefore confidence is undermined.

The criteria for degree awarding powers are currently set out in detailed guidance. That will continue to be the case under the Bill. The current criteria and guidance for degree awarding powers run to 25 pages; all the criteria go towards ensuring quality and therefore confidence. Current guidance describes in some detail what is expected of providers with regard to key aspects concerning, for example, governance and academic management, academic standards and quality assurance, scholarship and pedagogical effectiveness, and the environment supporting delivery of taught HE programmes. We intend to consult on the detail of the future guidance, but will in all circumstances seek to assure quality. That level of detail cannot be captured in primary legislation.

Through our new regulatory framework, we are giving the OFS the powers to ensure that quality and standards are maintained. That will ensure that all parties, be they students, employers or the wider public, can have confidence that an English degree remains a high-quality degree and that it will continue to be something that has real value.

Let me deal with amendment 136. For the OFS to function effectively in the student interest, students should of course be represented, and that is our intention. Student interests are at the heart of our reforms, and we will continue to engage with our partners as the implementation plans are developed. As has been seen, from the Green Paper onwards we have sought the engagement and thoughts of all involved in the sector; we have engaged directly with students and their representatives, and I have had numerous meetings over the past year with student representative bodies including the NUS and the Union of Jewish Students, as well as many meetings with individual students. We will be embedding that culture of engagement within the OFS across all its duties, not just access and participation plans.

The Committee has heard from Universities UK, GuildHE and MillionPlus, all of which agreed that the general principle of student engagement was right, but that goes further than just representation. There needs to be a variety of mechanisms to enable student engagement, rather than just prescribing in legislation how that is to be achieved. The Office for Fair Access, for example, already requires providers to include a detailed statement on how they have consulted students in developing access agreements. The director of fair access has regard to that statement when deciding whether to approve an access plan.