(6 years, 12 months ago)
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I accept in principle that there should be a societal contribution and an individual contribution, which I think the hon. Member for Wirral West (Margaret Greenwood) was querying. My argument—the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) was absolutely correct about this—is that when an individual gains the most, they should be expected to contribute the most. We can have a party political debate about where to draw those lines, and I would probably take a different view from the Labour Members in the Chamber and from the Leader of the Opposition. In principle, somebody pays, and the question is whether that comes from general taxation or, at least, a contribution from the individual. My view is that it should be a contribution from the individual, and I understand, accept and support the direction of travel on tuition fees in recent years.
The motion that we are debating is about reducing fees to £3,000. In preparing for the debate, I looked at some economic bases on which the current system works. In my understanding, if we reduced fees to that amount, it would blow a significant multi-billion-pound hole in the national finances. I would not support that, but if it happened, the proponents of the measure would need to explain where the additional money would come from. It would be likely to reopen the debate about whether we should cap student numbers, which raises a question about supporting aspiration. It would probably also reopen the debate about the amount of money spent on supporting students through waivers, outreach programmes, measures to increase retention, combination discounts and hardship funds, with which nearly £0.4 billion is associated for the coming year. I would be interested to hear from those proponents where the alternatives would come from or what would be stopped if the proposed tuition fee reduction went through.
I am listening carefully to the hon. Gentleman. Does he not accept that there can be workforce issues with particular professions, such as nursing and midwifery, which we have at the University of West London in my constituency? Professor Peter John, the vice-chancellor, has contacted me, saying that he is worried about the 20% decrease in applications since the nurse bursary was cut. It feels as if student fees are adding insult to injury. The hon. Gentleman has pointed out that £3,000 is a bit of an anachronism because no one has suggested going back to that, but that profession has particularly suffered, with applications down 60% on the normal cycle for the February intake. Given that there has been a steep fall in EU nurses, frozen pay and NHS cuts, it feels like that profession is being battered by this measure as well as everything else.
I thank the hon. Lady for that point, but I am not au fait with the specific subject and area that she outlined. However, if we accept the principle, which started in the late ’90s and was extended in subsequent periods, of trying to engender choice in this area and accept some element of market-based principles—I know that is controversial with some in the Chamber—then when there are demand, challenge or supply problems, the market mechanisms should have the opportunity to work.
I do not want to be totally critical of today’s debate, because I recognise that there is a genuine issue and that the petitioner began the petition because of genuine concern about where we had ended up as a country. I accept that the system as a whole has some issues, which is why I welcome the Government’s full review of tuition fees and the education system in general. I recognise that there has been inflation in the system in recent years and discussions about vice-chancellor pay in the past few months. I accept that initially, when the larger fee came in, not all institutions were expected to go to the top amount, so the review is timely and important. The argument is not about whether the system works perfectly now, because it does not—no system ever works perfectly, but this one obviously has challenges—and it is not about whether areas can be improved. Specific, obvious issues with the system have been highlighted in recent months, and I accept all that.
Ultimately, we come back to the principle that somebody pays: the taxpayer or the individual, or the individual makes a contribution. I think it is entirely legitimate that the individual makes a contribution. I support the system as it stands, pending the fuller review of the detail. For me, this is ultimately a question of a quasi-hypothecation or no hypothecation. Somehow the money will be spent and it will be paid back. The question is: who pays it back? Is the money associated with the people who get the greatest benefit? In my view, the people who benefit the greatest should contribute the most.
It is a pleasure to see you in the Chair today, Sir David. Thank you for calling me earlier than I had anticipated. You have explained why and, fortunately, colleagues will not have to wait too long for their turn, as I will not detain them for long.
I am grateful to the Petitions Committee and my hon. Friend the Member for Hartlepool (Mike Hill) for the opportunity to participate briefly in the debate. I am pleased to follow the hon. Member for North East Derbyshire (Lee Rowley), who made a thoughtful contribution, outlining the pressures on the further and higher education system and the pros and cons of different elements. It was a fair presentation and I look forward to hearing the Minister respond to his comments, and to everybody else’s, including those of the Scottish National party spokesperson, the hon. Member for Glasgow North West (Carol Monaghan), and of my hon. Friend the Member for Blackpool South (Gordon Marsden). I suspect that my hon. Friend and I were the only two people in the Chamber today who were in the Commons when tuition fees were introduced in 1998, so I look forward to his wisdom prevailing in the debate from the Labour Front Bench.
I confess that I only realised the debate was taking place when the communications hub alerted me that my constituents had contributed the 10th-highest number of signatures to the petition—12,089. I tried to work out why that might be the case, but I have not arrived at a conclusion. I have not seen email traffic from my constituents to support the level of concern that the numbers suggest, but the petition has obviously attracted them and I am pleased to make a contribution.
I am grateful to the House of Commons Library for its background paper. Reading it brought back memories of our debates in 1998 on introducing tuition fees at £1,000 and then, in 2004, on raising them to £3,000. Our discussions were along the lines that the hon. Member for North East Derbyshire indicated—about the cap on student numbers and releasing it to allow more young people to go into further and higher education, which would require some assistance and contribution through tuition fees. That argument clearly won the day.
In 1998, I was ambivalent about the £1,000 level, mainly because the conditions attached meant that most young people and families in my constituency would not be expected to pay since the majority of my young constituents came from below the household income threshold at which it would be required. Tuition fees would not have added to the pressures that they experienced simply because of the size of household incomes in Poplar and Canning Town, as it was in those days. I assume that I supported the proposal—I have no recollection of not doing so.
However, the sister policy of abolishing maintenance grants, which the hon. Gentleman also mentioned and which the Library briefing paper focused on, concerned me. Whereas fees and their introduction would have had minimal effect, the proposed abolition of maintenance grants would have had—and did have—a profound impact. I voted against it, and that was my first—and probably only—vote against a three-line Whip in our 11 years in government. I knew that many families locally would not have been able to support their children into further or higher education without the grants. The briefing paper makes just that point by quoting the National Union of Students president, who said in her evidence to the House of Lords Economic Affairs Committee that simply abolishing fees would not help students, and that
“just scrapping tuition fees will not solve the problem. It is about maintenance support. Scotland is a prime example. It has no tuition fees, and students are still struggling. It is important to reinstate maintenance grants.”
Sir David, I am sorry I did not include you in our little gang of survivors from 1998, because you are non-political when in the Chair, but you were there, and you will remember, as will my hon. Friend the Member for Blackpool South, that, interestingly, the Labour Government restored maintenance grants four years later, recognising that they were an important policy. That was welcome.
My hon. Friend is making an excellent speech on his rebel past and what fees were like before they turned into the monster that they have become. In those days, did he foresee cases like that of Siobhan Hallett of Acton? She makes £27,000 and her repayments are £58 a month, but if she works any overtime, her repayments rise to £115. She says:
“I feel like I am being robbed every time I try to better myself in society.”
She wants to get on the housing ladder, but she is being penalised by rising loan repayments. The Student Loans Company is taking what she earns.
My hon. Friend makes an important point about repayments—when they start, how much is repaid and at what interest rate. To be fair, the hon. Member for North East Derbyshire raised those points as well. I am sure that the Government are trying to weigh up all the different elements, because they all affect each other and the system is clearly unfair. I am sure that when my hon. Friend gets a chance to make her own contribution, she will focus on that; I might intervene to support her points, because they are emphatic and critical to young people’s quality of life during their time at university.
(7 years ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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I think we can all agree that my hon. Friend is a good advertisement for the student loans system—he is a good outcome from his particular institution. The OFS will not have a direct role in the appointment of the new SLC chief executive. That will be a matter for its board, and of course it is a ministerial appointment as well.
The incompetence of the Student Loans Company is seen in things ranging from its scaremongering fake debt collection letters, to the predicament of my constituent Sibhoz Hallet of Acton, who is perversely barred from working any overtime as her debt would double—that is not an anomaly, but the norm. Is it not apparent that by exposing the SLC as a mess, with 50% of calls mishandled at peak times, Steve Lamey was dismissed for telling the truth?
Mr Lamey did not live up to the standards the SLC board felt were required for his role, so it took action to dismiss him, and the Department for Education followed on by removing his function as accounting officer. We want the SLC to continue to be a high-performing organisation, and we should remember that overall it is a successful organisation, with just 0.1% of its customers complaining every year. Many private sector organisations would envy such a record.
(7 years, 1 month ago)
Commons ChamberI thank you, Mr Deputy Speaker, for selecting this debate, and I thank the Minister for her attendance. I also thank the people who have helped me to prepare for this debate, particularly at The Guardian, Bellingcat, Transparency International and Global Witness.
We in Britain pride ourselves on our integrity, respectability and trustworthiness. We tell ourselves that this is a country that believes in high ethical standards of behaviour in the way we conduct ourselves as individuals, run our businesses and function as professionals. We preach to developing countries about how to stamp out corruption. We sell Britain to foreign investors by telling them that they can trust us, our laws, and our corporate rules and institutions.
Yet last month yet another bundle of leaked documents from yet another brave whistleblower, this time about Azerbaijan, revealed—yet again—that our self-belief is flawed. Many of the revelations and the allegations of corruption associated with the Azerbaijani ruling elite, as well as much of the evidence of money laundering, organised crime, tax evasion and bribery, come back to and are made possible by how the UK and our overseas territories choose to operate our corporate structures. Our persistent lack of transparency and our appallingly lax regulatory framework have made us the country of choice for every kleptocrat, crook and despot in the world. We have become the safe haven for dirty money. We are allowing money laundering and tax avoidance to take place on an industrial scale.
Two years ago, the then Prime Minister declared that London was not
“a place to stash dodgy cash”.
A year ago, in front of 40 Governments from around the world, the UK committed to a public register of foreign companies owning UK property to prevent those who are corrupt from being able
“to move, launder and hide illicit funds through London’s property market”.
Yet we have seen zero progress on all that. Does my right hon. Friend agree that this is a disgrace, and that with all that has happened since, the need for a public register is stronger than ever?
I do, and I will come to that later in my speech.
Our corporate rules and our weak regulatory framework are a gift to villains. Far from being proud, we should be ashamed. Today, I want to try to convince the Minister and the Government to act urgently to destroy the opportunities we are allowing, which are exploited by criminals and make us complicit in their crimes. We can stop this, but at the moment we are choosing not to do so.
Azerbaijan is well-known as a corrupt kleptocracy. It comes 123rd out of the 176 countries assessed on Transparency International’s index of corruption. Heydar Aliyev, the father of the current President, was head of the KGB in Azerbaijan in 1967, when Azerbaijan was part of the Soviet Union, and he became a full member of the Soviet Politburo in 1982. When Russia broke up, he moved seamlessly to become Azerbaijan’s ruling President in 1993, and he cracked down viciously on all opposition voices. He passed the presidency on to his son 10 years later, and Ilham Aliyev then pushed through constitutional changes to abolish the limit on the number of times one person could stand for office and to extend each term of office to seven years.
I completely agree with that important point.
Money came out of Azerbaijan—nearly half from an account held at the International Bank of Azerbaijan through a shell company linked to the Aliyev family. That bank recently filed for bankruptcy. The other main contributors were two offshore companies with direct connections to a regime insider. It is hard to believe that the money was held legitimately in Azerbaijan.
The money was transferred to a small Estonian branch of Denmark’s largest bank, which is where Britain comes in. The money went into the bank accounts in Estonia of four shell companies, all of which were incorporated here in the UK. Our laws that allow such companies to be established were at the heart of this nefarious scheme. Much of the money then went into the pockets of European politicians, journalists, prominent individuals in international organisations and powerful political Azerbaijani families.
The leaked data show, for instance, that Luca Volontè, an Italian politician who led the European People’s Party group in the Council of Europe, received over €2 million. We know that he was instrumental in lobbying to ensure that a report criticising Azerbaijan’s human rights record was rejected by the Council of Europe in 2013. Several months after the country achieved that veneer of respectability from the Council of Europe, the European Commission announced the construction of the controversial gas pipeline from Azerbaijan to Europe. Volontè is now facing charges of corruption and money laundering in Italy.
Eduard Lintner, a former German MP, founded the Society for the Promotion of German-Azerbaijani Relations. That organisation received €819,000 over the two years covered, and Lintner got a €61,000 cash payment two weeks after returning from observing the elections in Azerbaijan and praising them for being up to German standards. The Council of Europe said the elections marked a
“step forward taken by the Republic of Azerbaijan towards free, fair and democratic elections”.
The reality was that the opposition alliance boycotted the elections, there was voter intimidation and the press was gagged. Lintner has denied any wrongdoing.
Kalin Mitrev, a Bulgarian who lives in London, received €390,000 for so-called consultancy for Azerbaijan. He now sits on the board of the European Bank for Reconstruction and Development that only yesterday agreed a loan to the Azerbaijan Government for €500 million to build a gas pipeline. While he recused himself from the decision and has denied any wrongdoing, his presence as a board member having received money from Azerbaijan makes it very murky and uncomfortable. He is being investigated by the Bulgarian authorities. At the same time, his wife, Irina Bokova, is Director-General of UNESCO. She bestowed one of UNESCO’s highest honours, the Mozart medal, on Azerbaijan’s first lady, the wife of the President, for:
“merits in strengthening the intercultural dialogue.”
I suppose that is an innovative way of describing the use of bribes to stifle criticism and secure international support.
Those people were paid from companies incorporated in the UK: Polux Management LP, Hilux Services LP, Metastar Invest LLP and LCM Alliance LLP. All were registered at Companies House. They are shell companies, sometimes incorporated through our tax haven overseas territories, that are deliberately used to disguise the origin of the money they receive. They are set up by shady and unregulated formation agents. They can engage in transactions while hiding the identity of the real beneficial owners of the company, yet because they have the UK stamp on them they command a respectable status. Our lax controls allow them to prosper and our corporate system allows money to be moved around and used without any questions being asked. That is simply shameful and it is taking place right here, right now in our country.
I am particularly concerned by the trend for unscrupulous people to use Scottish Limited Partnerships—SLPs—to launder money, and to evade and avoid tax. SLPs were invented to help agricultural tenancies in Scotland. Creating an SLP allows the partnership to hold property and enter into contracts, because it gives them a legal personality. But SLPs do not need to name any “natural person”—an actual person—as partners. They can just name companies. They have limited reporting requirements —for instance, they do not need to file accounts at Companies House unless one of the partners is a UK limited company, and while they are supposed to file returns with HMRC, they do not need to pay UK tax and they do not need to have a UK bank account. Of course, HMRC does not check whether accounts are filed.
Our laws allow a secret vehicle to be created to smuggle unexplained wealth into the system, money that is then used for a variety of illegitimate as well as legitimate purposes. SLPs have become a byword for corruption, tax evasion and organised crime. Just look at the facts. There was a 430% increase in the creation of SLPs between 2007 and 2016. In 2016 alone—in that one year—more SLPs were registered than had been registered throughout the 100 years after they were introduced. Bellingcat has looked in detail at the 5,214 SLPs registered in 2016. Ninety four per cent. were controlled by corporate partners, not individuals, and 71% of those corporate partners were based in tax havens. Seventy per cent. were registered to just 10 mailbox addresses in Scotland. They are anonymous and untraceable obscured structures linked to corrupt jurisdictions.
Does my right hon. Friend share my concern that since the flourish of the anti-corruption summit—and David Cameron has completely left the crime scene—this seems to have been put in the too-difficult-to-think-about box? If the Government really want a global Britain, they should table the necessary legislation as soon as possible and not use the excuse of Brexit to kick this into the long grass.
I agree entirely with my hon. Friend.
The Government recently required SLPs to file statements about the persons with significant control associated with them. Only 23% of those registered in 2016—1,176 SLPs—have done so, and of those 1,176 only 28 are British nationals. In the two SLPs associated with the Azerbaijan story, the records state that the bank accounts and the shareholders were opened by the same man, Maharram Ahmadov. He transferred more than $1.7 billion from those accounts, yet the journalists found that he was a working-class driver living in a modest house in the outskirts of Baku. The companies were registered from the British Virgin Islands.
Money laundered through these structures is being spent here in the UK. We know that $50 million was paid to individuals. For instance, the documents reveal 200 of the payments made to the UK paid for education. Queen Ethelburga’s College, a private school in York, received £89,800. A tuition college, Bellerbys College, and the International School in London also received payments.
Azerbaijan money is also being used to buy property in the UK. Anar Mammadov, the son of Azerbaijan’s Minister for Transport, was just 20 when he bought a £2.75 million mansion in The Bishops Avenue, a house now valued at £7 million. Yunis Abasov, the son of Azerbaijan’s Deputy Prime Minister, was just 21 when he bought a £1.4 million penthouse flat in the Docklands. That is now valued at £3.3 million. In 2012, on reaching the mature age of 27, he bought an even grander property in Kingston upon Thames for £5 million, and he has also been granted British citizenship.
Leyla and Arzu Ilyeva, the daughters of the President of Azerbaijan, used a British Virgin Islands company to buy UK property. Leyla owns a £17 million mansion in Hampstead Lane. The property transaction was undertaken by Child & Child solicitors. It failed to declare that the buyers were politically exposed individuals but has not faced any action, despite having flouted our laws.
In the short time available, I have outlined just a few examples to show how the UK is at the heart of international money laundering, bribery and corruption, tax avoidance and tax evasion. I have described a part of the Azerbaijan story, but the same story could be told from the Panama papers, the Falciani papers, the Moldovan bank robbery and the Russian laundromat. These stories will keep on coming as more and more whistleblowers leak other scandals. The issues will not go away.
I feel deep shame and embarrassment that we in the UK are not just complicit but central to the success of these despicable practices. We seem somehow to believe that dirty money is good for the British economy, but if homes are being bought with laundered money, it just fuels house prices and adds to our housing crisis. In accepting corrupt money, we accept the lawlessness that goes with it. Ministers must act to ensure much greater transparency and to clean up the UK’s corporate structures.
I ask the Minister to address these points. The Government promised us a register of beneficial ownership of property in the UK. We want to know who owns our houses. Consultation on this ended in May and nothing has happened. When will the Minister act to create the register? The Government have yet to commence the legislation on unexplained wealth orders. Why the delay? The Government continue to refuse to use their powers to insist on public registers of beneficial ownership in all our overseas territories, many of them tax havens. Why not act? The Government should properly staff Companies House. At the moment, six individuals are tasked with investigating breaches of company law in a register of 3.5 million corporate structures. Such under-resourcing makes a farce of our commitment to good regulation.
The Government should properly investigate the allegations made publicly in The Guardian and by Transparency International and the others, some of which I have outlined today. If allegations have been made, they must be investigated by the relevant authorities. The Government have a duty to make sure that this happens on our behalf, but it is just not happening.
The Minister should reform our corporate structures to create a more robust and transparent system. Why not ban corporate partners from LLPs and SLPs in all but exceptional circumstances? Why not insist that corporate partners must be UK-based? Why not insist that SLPs must have a natural person? Why not require that the documents of incorporation and the “person with significant control” declarations include the address, date of birth and passport or other identity details of named individuals so that we can trace them? Why not introduce a unique identifier for directors and partners of SLPs? Why not insist that partnerships incorporated in the UK should have a bank account in the UK? Why not set proper standards for the advisers and regulators, so that we can get rid of shady formation agents and reform the anti-money laundering supervisory system to ensure high and consistent standards?
All that is possible if the will to clean up our act on corporate structures is there. At present it seems that Brexit has made us incapable of tackling any wrongdoing for fear of offending some other country in some other part of the world, but Britain will never get rich on dirty money. Allowing it to roam freely will simply infect our institutions, our people and our economy. It is plain wrong that we have allowed ourselves to become the leading facilitator of money-laundering, organised crime and tax evasion. The Government can act to stop this abuse, and they must do so.
I must confess that I am not entirely aware of what my powers are in that respect, but if I am so empowered, I will certainly do as the hon. Gentleman suggests.
We want the United Kingdom to be a trusted place in which to do business, and the best place in the world in which to set up and grow a business. The UK has high standards of business behaviour and corporate governance. The overwhelming majority of its 3.9 million companies contribute productively to the economy, abide by the law, and make a valuable contribution to society. In discussing what action to take in response to the minority who abuse the system, we must not undermine its strengths or impose more burdens on the law-abiding majority without very careful consideration.
The Government are active in taking action to tackle misuse. Since 2015, we have implemented a series of reforms to increase the transparency of UK incorporated legal persons and arrangements in order to prevent their misuse for illicit purposes. The reforms include, but are not limited to: the introduction of the publicly accessible register of people with significant control, which the right hon. Member for Barking mentioned; the abolition of bearer shares; the introduction of unexplained wealth orders; and the introduction of the combined register of trust and company service providers supervised by professional bodies, as well as HMRC.
I have a lot amount of material to cover. I will give way a little later if I have time.
It is too early to measure the impact of many of those reforms, but we expect them to make a significant difference in helping to prevent the misuse of companies and other entities, and in assisting law enforcement agencies with their investigations when misuse does occur.
The right hon. Lady mentioned Companies House. It carries out checks on all information that is received to ensue that it is valid, complete, correctly formatted and in compliance with company law filing requirements. The obligation to ensure the information is accurate lies with the company and its directors. The validation checks serve to help companies to get things right. A company commits an offence if it fails to maintain its registers and keep them up to date.
The UK has a robust system of publicly accessible data. The Government favour an approach that encourages transparency of information, followed by the scrutiny of company information over its lifetime. I appreciate that—
(7 years, 7 months ago)
Commons ChamberI thank the hon. Lady for raising that point, which enables me to discuss the amendment that the Government have tabled precisely to address those concerns.
I am pleased to present to the House a series of amendments that demonstrate our continued commitment to developing the teaching excellence framework iteratively and carefully. We have consulted widely on the TEF, and we want to continue drawing on the best expertise as we develop this important scheme. That is why I am pleased to have tabled amendment (c) in lieu of Lords amendment 23, as it requires the Secretary of State to commission an independent review of the TEF within one year of the TEF clause being commenced. Crucially, the amendment requires the Secretary of State to lay the report before Parliament, ensuring parliamentary accountability for the framework as it moves forward.
The report must cover many aspects that have concerned Members of this House and the other place, including whether the metrics used are fit for use in the TEF; whether the names of the ratings, to which the hon. Lady alluded, are appropriate for use in the TEF; the impact of the TEF on the ability of providers to carry out their research, teaching and other functions; and an assessment of whether the scheme is, all things considered, in the public interest. I am happy to confirm that the Secretary of State will take account of the review and, if he or she considers it appropriate, will provide guidance to the OFS accordingly, including on any changes to the scheme that the review suggests might be needed, whether in relation to the metrics or any of the other items the review will look at.
We have also heard concerns about the impact of the link between TEF and fees. We recognise the important role of Parliament in setting fee caps. That is why I am also pleased to propose amendments (a) to (g) in lieu of amendments 12, 209 and 210, which amend the parliamentary procedure required to alter fee limit amounts, to ensure that any regulations that would raise fees would be subject, as a minimum, to the affirmative procedure. That provides a greater level of parliamentary oversight on fees than the measures originally put in place under the Labour Government in 2004. I have also today brought forward a further motion to disagree with Lords amendments 183 to 185, which are no longer required as a consequence of these amendments. That is a purely technical change as a result of the wider set of amendments regarding fee amounts.
Furthermore, today’s amendments demonstrate our commitment to a considered roll-out of differentiated fees. Amendments in lieu (c ) and (d) will delay the link between differentiated TEF ratings and tuition fee caps, so that this will not come in for more than three years, with the first year of differentiated fees as a result of TEF ratings being no earlier than the academic year beginning autumn 2020.
If I have understood it correctly, the linking of the TEF and the fee level is just being postponed, and these things are not being completely decoupled. I wonder whether the Minister might be able to provide reassurance to the University of West London in my constituency, which has 17,000 students who are worried about this. They like Lords amendment 156, which relates to international students, and fear that they are going to go completely bankrupt if things are not kept as they are in the Lords amendment.
I can reassure the hon. Lady that we are committed to ensuring that universities are able to increase their fees in line with inflation, provided they can demonstrate that they are delivering high-quality outcomes through the TEF. We are going to be introducing this scheme gradually and we are not going to be differentiating according to the fee uplift that institutions are able to get before the academic year starting August 2020; until that point there will be no differentiation of fee uplift based on performance in the TEF.
This means that differentiated fees will not be introduced until after the independent review has reported to the Secretary of State and to Parliament. Until that point all English providers participating in the TEF will receive the full inflationary uplift. It will be up to devolved Administrations, as before, to determine whether they are content for their institutions to participate in the TEF and what impact participation may have on their fees. I can confirm today that the ratings awarded under the TEF this year will not be used to determine differentiated fees, unless a provider actively chooses not to re-enter the TEF after the independent review. In practice, this means that this year’s ratings will only count towards differentiated fees if, after the review, a provider does not ask for a fresh assessment before their next one is due—that is an opportunity that will be open to all participants.
Before moving on to our other amendments, I would like to reiterate our commitment that the TEF will evolve to assess the quality of teaching at subject level, as well as institutional level. We recognise that subject-level assessments are more challenging, which is why I have already announced an extension to the roll-out of subject-level TEF pilots, with an additional year of piloting. This follows the best practice demonstrated in the research excellence framework, and means the first subject-level assessments will not take place until spring 2020.
(7 years, 8 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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I totally agree with my hon. Friend. It is about time we stopped social engineering with education. We are getting to a point where we want some sort of commission established. I hope the Minister will announce that when he responds to the debate.
Will the personal details of students be secure? How will repayment work for European Union students? How will Welsh students be affected? The National Union of Students has consistently expressed concerns that such a sale is not in the interests of students, graduates or taxpayers. What implications will the sale have for students?
I have the University of West London in my constituency. I do not have as many universities as my hon. Friend, but has he received emails, as I have, from students who are concerned that the indecent haste to sell off the family silver will mean that students who thought they were taking out debt that could go back to the state to fund public services will now be lining the pockets of private companies? It makes no financial sense, as the Financial Times has pointed out.
My hon. Friend has put her finger on it. The Government are clearly taking an ideological approach, rather than a logical approach.
Can the Minister tell us whether there will be protection from adverse terms and conditions? In the future, we may find ourselves in a situation where the terms and conditions of student loans are designed with future buyers in mind, rather than the interests of students. The sale will not protect post-2012 students from further retrospective changes to repayment terms. That is a source of anxiety for many students and may have an impact on people’s decision to go to university. Students are questioning who is really benefiting from their education.
Selling student loans represents a dangerous precedent. It paves the way for future privatisation of the education sector—I hope my colleagues will note that. The NUS is strongly opposed to the idea that profit is made from student debt. Privatising public assets should not be done for short-term profit.
Finally, the Government never learn any lessons. The sale will do nothing to ease the burden of debt piled on students who have faced trebled tuition fees and the scrapping of maintenance grants and bursaries. The Government have already changed the terms of post-2012 loans. How will the sale instil any confidence that more changes will not be made that are detrimental to students?
I have just given exactly those assurances. After the sale of this part of the student loan book, terms and conditions will not change as a result of any actions by the investors who go on to own them.
The sale process we have launched covers loans issued under the previous system, which operated before 2012. Specifically, the loans in scope are those issued by English local authorities only, and which entered repayment between 2002 and 2006. A loan enters repayment the April after the student leaves his or her course, so most of the loans in the scope of the sale were taken out between 1998 and 2002. Some loans taken out after that date might also be in scope if they entered repayment in 2006. Loans issued by the devolved Administrations are not in scope, and nor are loans to EU borrowers, who became eligible to apply for a student loan from an English local authority only in 2006.
Has the Minister has seen the Financial Times article from 8 February, which says that the Government are in a unique position to be the lender because they are able to monitor graduates’ earnings? How will private companies do that? The article’s headline is, “Selling off student loans makes no sense”. Does the Minister have any comments on that? That was not the Socialist Worker, but the Financial Times.
I cannot be held accountable for the views of the FT. The Government have made it clear that we will proceed with a sale only if it represents value for money. There will be a rigorous assessment, and, as per the Sale of Student Loans Act 2008 passed by the last Labour Government, the Government will be obliged to produce a report to Parliament within three months of the sale explaining the whole process. Parliament will have an opportunity to assess that point in great detail.
The sale will comprise the future repayments on the outstanding balances on a selection of these loans, which have a total face value of about £4 billion. The retention value to the Government is lower and is calculated using the standard Treasury Green Book methodology that was developed for asset sales. It also accounts for Government subsidy of the student loan system. The loans that are being sold have already been in repayment for 10 years or more, and therefore much of their original value has already been paid back to the Government.
A securitisation structure will be used for the sale to enable the Government to maximise value for money for the taxpayer. Under that structure, the loans will be sold to a new independent English-domiciled company known as the issuer, whose sole purpose is to own the loans on behalf of investors. Investors will purchase notes issued by the issuer, and the issuer will make payments on the notes using the repayments made on the underlying loans. The sale is a competitive process open to all eligible investors. Market testing reassures us that the different tranches of notes are expected to be attractive to a range of potential investors, thereby promoting an efficient market and optimal pricing.
I emphasise that the sale will not affect the position of graduates or students. Her Majesty’s Revenue and Customs and the Student Loans Company will continue to service loans in the scope of the sale on the same basis as equivalent unsold loans. As I said earlier, investors have no right to change any of the current loan arrangements or directly to contact people with student loans, including those in the scope of a sale.
(8 years ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I beg to move,
That this House has considered the effect of exiting the EU on higher education.
It is a pleasure to serve under your chairmanship, Mr Davies. My delight at securing this debate is slightly tempered with disappointment, because I originally submitted it to the Brexit Department but it was passed over to the Department for Education. Much as I like and respect the Universities Minister, especially since he campaigned on the same side as most of my hon. Friends and me in the EU referendum, I wish that the people responsible for this mess were answering these questions. But never mind; we are where we are.
For a matter of such crucial importance, the future of universities barely featured in the debates before 23 June; it was completely absent from the notorious leaflet, it was not on the side of any bus and it was not in any of the TV debates. However, it seems that some catching up is under way. The other day I opened my alumni magazine from its polythene wrap to find a long essay about it from the vice-chancellor of Cambridge University —or should I say a long lament? A Prime Minister’s question and a parliamentary question were asked on the subject last week, and I recently turned on the TV and found that the House of Lords was debating it. In her answer to the PMQ, the Prime Minister affirmed the need to continue to attract the brightest and best, but I am afraid that many in the sector fear that the opposite could happen because of the decision to leave. The damage must be limited now.
Brexit in general raises all sorts of questions of uncertainty and unpredictability, from macro stuff, such as the freedom of movement and the single market, to micro issues that people can get their heads around, such as the size of a Toblerone or the price of Marmite. Universities too have macro and micro issues, all refracted through the academic prism; this debate is almost a microcosm of all such debates. I will raise some of those issues before seeking some assurances and listing some asks of the Minister.
In the Times Higher Education’s ranking of 800 universities according to a range of indicators, UK institutions were three of the top 10. We should all be proud of that, but it is now imperilled. I see a parallel with how the leave campaigners kept saying, “We are the fifth largest economy; we’ll be okay”, but now, soon afterwards, it looks as if we are slipping down to sixth place. Most of the rest of those 10 universities are in the United States, so we should be under no illusions: our placing is a result of the all-important English language, but it is also buttressed by our access to European networks and by our intellectual climate. We need to do all we can to indemnify our universities now.
On macro issues, it is arguably the role of a university to be about global reach and collaboration. Many speakers in the Lords debate spoke about soft power. Other people like the phrase “bridges, not walls”—although the chief advocate for building literal walls has found that the reputation of his own university, Trump University, has not fared that well recently, given the court case that was settled on Friday. Leaving that aside, concrete examples of research projects that have benefited from EU funds include the hadron collider space research that captivated the world.
EU students on campuses have also benefited. I taught in universities for many years before I came to this place in May 2015, and I know that many of our courses are populated by EU students—particularly STEM subjects and business studies, which are less popular with home students. When I talk to my friends in the sector, they say that a lot of masters courses would completely collapse without those students. We need some assurances on the fee code that will apply to them; we know that there are assurances up to 2018-19, but what will happen after that?
We also know that the Treasury will underwrite research funds obtained while we are in the EU, but such research streams often go hand in hand with EU structural funds—I think Portsmouth has had a medical campus out of it. Structural funds related to EU funding fluctuate yearly but can be between £50 million and £100 million.
I congratulate my hon. Friend on securing this important debate. Does she agree that universities and their research and spin-offs have a crucial role post-Brexit, but that to make the most of it they need to be assured that lost EU funding will be totally reinstated, that collaborative research with researchers and institutions in the EU will be enabled to continue and that restrictions on overseas students’ post-study opportunities must be relaxed?
As always, my right hon. Friend makes an excellent point. He has anticipated my speech very well, because EU students and their migration totals are on my list of asks, which I am coming to.
The Prime Minister’s much quoted Downing Street speech advocated
“an economy that works for everyone”.
Universities are often the biggest employers in their cities. There are lots of figures on this; in 2014-15, 125,000 EU students generated some £4 billion for the UK economy, and there is off-campus spending as well. We must not ignore all that. We need to bust the myth that universities are merely insular communities up an ivory tower with their heads in a book and provide no wider public benefit. In addition, there is the £836 million of research funds—15% of the total. Universities provide good economic value.
Universities are also changing. My constituency is home to the University of West London, but also to a distance learning and blended learning institution, Arden University. People felt that there were already pressures on the sector, but Brexit is exacerbating everything.
As well as statistics, we should also consider a wider set of philosophies. In my alumni magazine, the vice-chancellor of Cambridge wrote that
“the University has a duty of leadership that it will not forsake…Our commitment to Europe…is…to a shared cultural and intellectual heritage”.
In the ’90s, as a twentysomething, I did a stint at Strasbourg II, one of Strasbourg’s many universities. I want others to have the same opportunities. After I finished my degrees, I worked as a university staffer; the Russell Group, where I was employed early in my career, has had to lay on hotlines to provide not only emotional counselling but legal help for its institutions to get indefinite leave to remain for academics who are completely traumatised by what has happened.
I know from friends in the research community that British researchers are already being snubbed for Horizon 2020 funding or are being told, “You can’t be the lead partner institution any more because you will be gone soon”, and we have not even left the EU yet.
The hon. Lady makes some valid arguments. I was on the other side of the Brexit campaign from her, but I know how important universities are. European research funding makes up 11% of the research budget for York University in my constituency. She has hit a key note. We really need to know whether Britain will be part of a wider collaboration with the EU and involved in the future beyond Horizon 2020, whatever it may be. We do not know what that future will be, but we need to make certain that UK universities play a leading role in it.
I completely agree with the hon. Gentleman. There are many unknown unknowns in this debate. A former employer of mine, Professor Martin McQuillan from Kingston University, where I was last employed, has written an article about the post-1992 sector. York is a Russell Group university, as is Cambridge, and Manchester, where I used to work, but at the other end of the spectrum we have the new universities that John Major equalised—the ex-polys, which felt precariously perched anyway. In his article, he outlines some of the pressures—we discussed some of them on Report on the Higher Education and Research Bill on Monday—including rocketing class sizes without commensurate resource, reforms to the research excellent framework, and the new teaching excellence framework.
My old boss says that to some extent EU funding used to level the playing field, but if that is gone, it will tip things even more unequally towards the older universities. He highlights the shocking Higher Education Funding Council for England prediction that between 2015 and 2019, the funding gap between the best and worst-performing institutions will widen, with the spread running from plus 21.5%—some will be in surplus by that much—to the worst performing at minus 28.6%. That is quite a disparity, and it is set to grow; hardly an economy that works for all.
I would rather we had remained in the EU to shape the criteria. One of the arguments was that we might be like Norway, having to do all the same stuff but not making the decisions at the top table. But we are where we are. I shall now go through the list of asks, or—I do not know—demands; or should I be collegiate and friendly and call them the suggestions that we might like to build into a future strategy?
Yes. Many academics, and not just them but the ancillary staff and all those other people, such as the technicians, are part of the 48%. If we are going to jump off a cliff, it is a good idea to have some idea of where we are going to land, preferably with a parachute to soften the descent.
Here come the assurances I am seeking. First, I urge the Government to heed the warning of MillionPlus, which is the pressure group for the post-1992 sector, equivalent to the Russell Group. It says that any moves to create a more “hostile environment” for EU or international students in order to drive down immigration is “problematic”, so we should remove students from the immigration targets. All the polling shows that people see them not as immigrants but as temporary stayers, and they are welcome here and valued by the population at large.
Secondly, we all do surgeries and we all deal with the Home Office. Home Office procedures and the vexatious visa requirements should be speeded up. The tier 2 visa threshold is now at £35,000; it was £18,000. I have spoken about it previously in relation to curry chefs, but the principle also applies to people such as lab technicians, who are highly skilled but who in universities might not be earning £35,000, which is quite high on the spinal scale. The threshold should therefore be looked at again.
Thirdly, I mentioned my experience with the Erasmus programme; access to Erasmus+ should be guaranteed for UK students. Even if it requires funding, the money should be found from somewhere, because we want to be a forward-thinking trading nation that keeps engaging with the world. Fourthly, we have had short-term assurances on Horizon 2020 and fees until 2018, but longer-term stability is needed for forward planning as we voyage into uncharted waters. The business model cannot continue as “business as usual”.
Fifthly, we are substantial net beneficiaries of our universities’ European dealings, so we somehow need to retain as much as possible in a new way, which is why I would like to see higher education represented at the top table in Brexit negotiations. I hope that the Minister will be there, given all his expertise and all the multifaceted aspects. Will we be like Norway, with access but no influence? Will we be a sort of pay-as-you-go country? Or will there be some third way that I have not thought of?
Sixthly, since this debate was announced I have received loads of suggestions from institutions all over the country —far wider than Ealing Central and Acton. My old union, the University and College Union, has produced a charter that urges the Government to enshrine human rights, and has also said that there should be an urgent inquiry. If that inquiry, or any other, goes ahead, it should consider campus hate crime. Anecdotally, we have heard of a worrying upsurge now that people feel disinhibited in voicing what was previously not politically correct, or was politically incorrect. We had already heard about Islamophobia and anti-Semitism rearing their ugly heads on campuses. The climate at a university should be that of a safe space for all, so all intolerance should be stamped on.
Seventhly, of all the different quotes I have seen in preparing for this debate, my favourite is this one, which I think the Minister may recognise:
“European research funding offers a good example of how the EU can get things right…EU countries are among our most crucial partners…Free movement of people makes it easier for our universities to attract the best talent.”
Those words were of course said by the Minister, the hon. Member for Orpington (Joseph Johnson). They are as true now as when he said them. I know that we have lost that argument, but we still need to do everything we can to ensure that the Prime Minister dispels all doubts that EU nationals in the UK, and their dependents, will ever be bargaining chips in some kind of negotiating game. The Minister must also set out robust reciprocal arrangements for our academics who go elsewhere.
I could go on. I have spent a lifetime in universities: from 1990, when I started my undergraduate degree, to May 2015. That is quite a long time, and I have never really got out—I am always in the Library upstairs. In my experience, Westminster Hall debates sometimes have meaningless responses from Ministers, but I am optimistic that this Minister, whom I like, trust and respect, will come up with something better for us today, and I am keen to hear the contributions from right hon. and hon. Members from both the Government and Opposition Benches.
We have had our fair share of bad news this year. I could go on and on listing so many international atrocities, the result the other week and the referendum result. Before all that there was our friend and colleague, Jo Cox, whom we lost in June; that is still very difficult for many of us to process. We have had so much bad news that I am hoping for some good news from the Minister when he responds.
As ever, it is a pleasure to serve under your chairmanship, Mr Davies.
I thank my hon. Friend the Member for Ealing Central and Acton (Dr Huq) for securing this important debate. I know this subject is very close to her heart, given her work as a university lecturer before her election to serve her constituents here in the House. This subject is also very close to my heart. As an NHS scientist before I came to this place, I worked in a field that thrived on collaboration and recognised no boundaries.
Our universities are rightly held in high esteem worldwide. We have 18 of the top 100 universities in the world, including four in the top eight. Globally, Britain represents only 0.9% of the world’s population, but we have 3.2% of global research and development expenditure and 4.1% of the world’s leading researchers, producing more than 15% of pioneering research papers.
It is well known that British science punches above its weight in the international university league tables and does so mainly thanks to EU grants. British science is not awash with funding; in fact, Britain has the lowest per capita spending on research of any G7 country. Sadly, Brexit and the Government’s handling of the referendum outcome have shown their inability to lead and to quash uncertainty over what Brexit will actually mean for the higher education sector. Brexit just adds more uncertainty, and uncertainty breeds insecurity.
There are two aspects of the human and intellectual cost of Brexit for universities. The first is the brain drain and the second is the potential restrictions on overseas research students. The brain drain is nothing new. Many senior figures in British universities remember the lack of support from the Thatcher Government in the 1980s and the exodus of scientists abroad. It is ironic that the four recent British Nobel prize-winners—Duncan Haldane, David Thouless, Michael Kosterlitz and Sir Fraser Stoddart—are all based in the US, having been forced out of Britain during the 1980s brain drain. British research scientists are worried that the Prime Minister’s mantra that “Brexit means Brexit” will lead to a lack of funding and grants for British science, and has the potential to create a modern-day brain drain.
I neglected to say something in my own speech. As a scientist, is my hon. Friend aware of the Science and Technology Committee’s report last week that says that the future of EU researchers and scientists in this country should be guaranteed, because otherwise we would imperil our science research base here?
I thank my hon. Friend for that intervention, and yes I am. I was briefly a member of the Science and Technology Committee and I try to keep on top of the work that it produces. I fully support its call for EU funding to be replaced in some way by this Government, and I hope that we might get a response from the Minister today on that subject.
(8 years ago)
Commons ChamberIndeed. 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.
The Minister mentioned the TEF and the REF. Does he agree that the REF took several years to bed down and to become a measure of research, and that a lot of institutions feel that the TEF is being rushed through, particularly the link between teaching excellence and fees? I have been emailed by the University of West London, which has asked me strongly to oppose that. The TEF will be done on an institution-by-institution basis, not, like the REF, by department. Courses can vary widely in quality. Will he think again in relation to those points?
The TEF is not being rushed; it is being piloted for the first two years. Awards will not be differentiated until 2019-20, with effect from the 2019-20 academic year. That is a significant period for the reforms to bed in. The university sector has welcomed the link to fees. Universities UK has recognised that there is a need for such a link and that we need to fund on the basis of quality as well as quantity. There is no attempt by the sector to separate the link.
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.
I am loth to interrupt my hon. Friend because he is in full flow and making a powerful point, but does he agree that the Bill was conceived before Brexit and that the world has changed since then? I am holding a Westminster Hall debate on this subject on Wednesday and have received emails from academics and students from all over the country saying that this entire thing should be scrapped because the context is so different and everything has changed for higher education since the decision on 23 June.
I look forward to joining my hon. Friend in Westminster Hall on Wednesday, because she makes a valid point—one that a number of us made in Committee. This pre-Brexit vision should have been parked and rethought as a result of the decision on 23 June because the challenge facing our universities is fundamentally different and of enormous proportions. We need to reconsider the proposals.