Budget Resolutions and Economic Situation

Debate between Simon Hughes and John Denham

Wednesday 20th March 2013 Commons Chamber

[Mr Denham]

No—I would like to make progress.

If the rhetoric were true, the policies pursued by the Government would have worked. If it had been true that all that needed to be done was to get the deficit down as quickly as possible because the problems were simply a matter of overspending, the strategy would have worked. The strategy did not work, because the analysis of what was wrong was fundamentally flawed.

In the first year of the Government, the rhetoric of doom and gloom shattered business and consumer confidence before the first tax increase or the first cut began to bite. It was so important to the Government politically to tell everybody how bad things were going to be that people behaved accordingly. The VAT increase and the cuts then began to bite in the real world. The pessimism deliberately spread by the Government for political reasons began to bite and have an effect—a real reduction in demand.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

The House has great respect for the right hon. Gentleman, but he must remember the situation Europe was in on the date the coalition was formed, the crisis in Greece, and the fears that we would not be in a good position. Some of us have always made it clear that a combination of the outgoing Government, the banks and the international financial situation was the cause of the crisis and warned against it for many years.

[Mr Denham]

I am tempted merely to say, “I rest my case.” Throughout the 2010 election campaign, the right hon. Gentleman and all members of the Liberal Democrats said how disastrous it would be to adopt the policies that they later supported. He makes precisely my point. He adopted a position that was absolutely factually wrong and damaging to the country for the political convenience and advantage of the Liberal Democrats—he sanctioned with his own words what happened later.

The Government’s strategy on cutting too far and too fast was bad enough—it shattered confidence and took demand out of the economy—but it was compounded by catastrophic failures in policy. Because the Government convinced themselves that the only thing that needed to be done was cutting the deficit fast, they abandoned many of the tools available to them to stimulate growth. It was interesting today to hear of a single pot for cities to bid for from the Government who, within two months of coming to office, abolished the regional development agencies and the whole development infrastructure. They recognise, three years later, that that was a disastrous mistake, as Lord Heseltine has told them, but at the time, they did not believe that getting rid of those strategies mattered.

The Government also created massive uncertainty in the wider economy. The truth is that there is no absolute shortage of money that could be used to rebuild the British economy. The cash balances of giant companies are huge, but they will not invest, because there is so little business confidence in Britain as a place for investment.

The responsibility for that goes much wider than the Government, because Conservative and Liberal Democrat Back Benchers have spent three years creating uncertainty about wind power, nuclear power, HS2 and the future of airports policy. For everywhere that business might look to invest in this country, Conservative and Liberal Democrat MPs have, for the narrowest of marginal constituency political interests, conspired to create the maximum business uncertainty. It is therefore unfair to blame all the uncertainty on the Chancellor’s misguided policies. Much of it comes from a misunderstanding by Conservatives and Liberal Democrats of what needs to be done—long-term investment and long-term certainty in Government policy to create investment.

For example, such uncertainty is why investment in renewable energy—the Chancellor mentioned green investment—halved between 2009 and 2011. That is a conscious, clear effect of chaos in Government policy and the narrow interests of Conservatives and Liberal Democrat Back Benchers. For all those reasons, unnecessary damage has been done to investment in our economy.

Higher Education Policy

Debate between Simon Hughes and John Denham

Wednesday 27th April 2011 Commons Chamber

[Mr Denham]

I am going to make a little more progress, because I am aware of Madam Deputy Speaker’s strictures about time and I need to draw to a close very quickly.

Let me complete the point I was making about the unfairness that is being introduced into the access system. Labour’s progress on social mobility must be maintained—[Laughter.] There is laughter from those on the Government Benches, but let me remind Ministers and the House that under the previous Labour Government the proportion of students from disadvantaged backgrounds going to university increased every single year after the changes we made to higher education. We will wait to see whether this Government can maintain that progress.

These Ministers have put the burden unfairly on the shoulders of hard-working squeezed middle families and the Commons Library suggests a significant risk of no overall increase in money spent on widening access because schemes such as Aimhigher have been scrapped and the widening participation premium is in doubt. That risks the worst of all worlds: middle income students and their families being asked to pick up the tab, with no increase in spending on widening access.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

First, will the shadow Secretary of State confirm that, under Labour, a widening of participation did not occur in the Russell group universities? Secondly, if he is concerned about those on middle incomes, is not the answer for him to say that universities should offer no fee waivers, because if there were none, the inequity that he suggests will follow would not happen?

[Mr Denham]

This is bizarre. The right hon. Gentleman is the Government’s access tsar, but he is asking, “Why do not we all agree that there should not be any fee waivers?” Because it is a requirement of the national scholarship programme that there should be fee waivers. That is the scheme that he has advocated, designed and developed.

The right hon. Gentleman has been as guilty as anybody of raising false hopes about what the Government’s policies are going to do. It was he who said there was going to be

“a really tough regime that does not allow any college or university to charge more than £6,000 unless it is in exceptional circumstances”.

The truth is that he is one of those who have no understanding of how the system operates. I hope that further progress is made on widening participation, including in the Russell group universities. However, nothing that Ministers have set out, and nothing that the right hon. Gentleman has said, matches the rhetoric that he has been putting all over the newspapers. He has played a role in trying to persuade the media in this country that the Government are serious about social access while doing absolutely nothing to deliver on that. He should be ashamed of the role that he has played. He knows that he should have voted against the measures in the first place but he was bought off with a title and he has done nothing to deliver on the responsibilities he has been given.

The Government have broken their promise on the level of fees. They have made claims about access they cannot deliver and they have based their arguments on savings that may never materialise. They said that they wanted to set universities free but they are planning the biggest attack on university autonomy in history, and the sad truth is that all this was not only predictable, but was predicted. From the outset, the Opposition have said that the Government’s policy was unfair, unnecessary and unsustainable. We called for a delay in the fees vote and said that the House should not vote before the Government were clear about how they would control student numbers and how private providers would be regulated. We wanted them to give details about the cost and fairness of the new loans system and to be clear about having an independent assessment of the effect of their measures on social mobility, but they ignored us and four months later they have still failed to answer those crucial questions. In January, the Minister for Universities and Science told the House:

“We are consulting students, universities and other experts and will publish a White Paper in the early part of this year.”—[Official Report, 13 January 2011; Vol. 521, c. 421.]

It is nearly May and there is no sign of this White Paper.

England’s higher education system is not perfect, but it is widely recognised as one of the best in the world. That is not just because of the quality of its world-class research institutions but because of the diversity and quality across the whole higher education system. No one should be afraid of having an honest debate about how it can be made better, but it is so important to all our futures that it needs competent Ministers who are capable of protecting all that is good about it.

Public concern about the Government’s NHS reforms has at least forced a temporary period of reflection on that policy, but no such luxury exists for students and universities, which are on a tight timetable to introduce the new system for 2012-13. The Secretary of State must act now, so will Ministers tell the House today what action will be taken to deliver the promise that fees of £9,000 will be charged only in exceptional circumstances? Will they legislate and if so how and when? Will they promise that there will be no further cuts to student numbers and no further cuts to spending on the teaching grant, research or public funding for widening participation? What will they do to deliver the wild promises of widened participation and improved access? Will they strengthen the powers of the Office for Fair Access to set fees or to impose quotas? If the measures, which are the biggest interference in university autonomy in history, are rejected, what will they do? If the Minister for Universities and Science cannot answer these questions, the House must conclude that he and the Secretary of State have lost control of the policy for which they are responsible.

Tuition Fees

Debate between Simon Hughes and John Denham

Tuesday 30th November 2010 Commons Chamber

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

The right hon. Gentleman and I might have our differences and our arguments, but will he make it clear that the policy that his Government introduced and the policy currently proposed by this Government have in common the same core issue, which is that there are no fees up front? He has not said that clearly so far, and the NUS tried to pretend that it is not the case. If we are going to have a serious debate, it must be on the basis that there is agreement that no student, full-time or part-time, will pay any fees up front. Can he be absolutely clear about that?

[Mr Denham]

I will come in a moment to the core issue that divides us. The hon. Gentleman is right to say that the fees system that we introduced has no up-front fees—[Interruption.] No, the fees system introduced by the previous Labour Government has no up-front fees. The proposals introduced by this Government do not have up-front fees, but let me explain to him what the fundamental difference is between the policy of the previous Labour Government and that of this coalition Government. We took higher education public funding of universities to record levels, and the fees that we introduced brought extra money to the universities on top of record levels of public funding. The coalition Government’s proposals are based on an 80% cut in public funding to higher education, and the fees that graduates will pay under their plans merely replace the money that has been cut from higher education; they do not generate additional money. That is a massive difference between the policy of this Government and the policy of the Labour party.