Ban on Fracking for Shale Gas Bill

Tim Loughton Excerpts

Wednesday 19th October 2022 Commons Chamber

[Edward Miliband]

We can have a debate about North sea oil and gas, but fracking is a wholly different category. It is dangerous, it is expensive and it is not supported by the public.

[Tim Loughton (East Worthing and Shoreham) (Con)]

The right hon. Gentleman knows that I, like many of my colleagues, am not in favour of fracking and would like us to maintain our manifesto commitment. But he also knows that because he is playing party political games this afternoon, there is no way that we could vote for his motion. Is he more interested in genuinely opposing fracking or in playing party political games and trying to score points on this issue of great importance to our constituents?

[Edward Miliband]

I am glad we have a Conservative Member who wants to uphold their manifesto commitments. It is a refreshing change, I have to say. But here’s the thing: he should be directing his point to the Secretary of State. The Secretary of State was explicitly asked on the radio last week whether he would give the House a binding vote on this issue—I think the case for that is massively strengthened by the fact that the Conservative party is breaking its manifesto promise—and he said no. We are forcing this debate because it is the only way we can give the House a binding vote on this issue.

I want to talk about price. I know he is not exactly flavour of the month, but the recently departed Chancellor of the Exchequer said in February that

“even if we lifted the fracking moratorium tomorrow…no amount of shale gas from hundreds of wells dotted across rural England would be enough to lower the European price…private companies are not going to sell the shale gas they produce to UK consumers below the market price. They are not charities, after all.”

The Climate Change Committee says the same. Even the founder of Cuadrilla, Chris Cornelius, says:

“Even if the UK were to generate significant gas, we are not likely to see lower gas prices—any more than living next to a farm would mean paying less for milk.”

The reason is that prices are set in the European market, and the best evidence from the British geological survey is that fracking can meet less than 1% of European gas demand, and even that in a number of years’ time. Hence it will make no difference to price, and no amount of hand waving from the Secretary of State will change that fact.

Oral Answers to Questions

Tim Loughton Excerpts

Tuesday 22nd February 2022 Commons Chamber

[Jane Hunt (Loughborough) (Con)]

4. What steps he is taking to support the growth of the hydrogen sector in the UK.

[Tim Loughton (East Worthing and Shoreham) (Con)]

21. What steps he is taking to support the growth of the hydrogen sector in the UK

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

We are delivering on the hydrogen strategy that was published last August and will soon launch our £240 million net zero hydrogen fund and the first £100 million allocation round for electrolytic hydrogen projects and publish our sector development action plan.

Oil and Gas Producers: Windfall Tax

Tim Loughton Excerpts

Tuesday 1st February 2022 Commons Chamber

[Edward Miliband]

The right hon. Gentleman and I differ somewhat on this. The real problem is that we have not gone far enough or fast enough on the green transition. The more we are subject to the volatility of fossil fuels—the prices are set internationally—the more we are at risk of the kind of crisis we are seeing at the moment.

If there is one principle that should get us through these tough times, it is that those with the broadest shoulders should bear the greatest burden. Britain’s families and businesses are facing the toughest times, but that is not true of everyone. For the oil and gas sector, the price spike has been a bonanza—a trebling of prices today compared with a year ago. Let us be clear about the effect that is having on oil and gas company profits.

Listen to Bernard Looney, the chief executive of BP. He says this: the rise in prices is a “cash machine” for his company. Those were his words—a “cash machine”. Let those words ring in the ears of right hon. and hon. Members in this House. Let us be clear about who is on the other side of the cash machine: the British people. In other words, it is an ATM from which the oil and gas companies collect billions and into which the British people pay—people like the man in Devon who could only afford to heat one room. He is one of the millions paying into the cash machine for BP.

Once the companies are withdrawing the cash from the cash machine, where is the unexpected windfall going? Let us not fall for the argument that may be made in this debate—that it is somehow going into investment or workers in the oil and gas sector. [Interruption.] The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) says from a sedentary position that it is. Let me tell him that he is wrong. All the evidence is that the companies are so flush with cash that billions are being used to inflate the share price in buybacks from shareholders. BP did a share buyback of over £1 billion in August, but it was so overwhelmed with cash that it did another worth nearly £1 billion in November. Shell has done the same, with a £1.1 billion share buyback in December. But that is not enough: it says it will do another one, worth £4 billion, at pace, in 2022.

This is simply a redistribution of wealth from the energy bills of the British people—those who can least afford it—to the shareholders of those companies. The question before us, then, is one that has confronted previous Governments: should we do something about the situation or say that it is wrong to take account of the windfall in the tax decisions that we make? I say that it is not wrong to take account of it—it is fair and it is right and it is principled.

[Tim Loughton (East Worthing and Shoreham) (Con)]

The right hon. Gentleman is setting out the problem, but the trouble is that his solutions do not add up. Does he acknowledge that last year Shell and BP, the two largest oil and gas producers, posted a £26.9 billion and £22.5 billion loss respectively? How much would his windfall tax get from those situations? Does he also acknowledge that the biggest investments in renewable energy—not least hydrogen, into which hundreds of billions are being invested—come from companies such as BP and Shell, which we need to continue investing in alternative non-fossil fuels?

[Edward Miliband]

I will answer all the hon. Gentleman’s points. We would raise £1.2 billion from the windfall tax. I will come to this later in my speech, but the tax position is incredibly generous for companies, including Shell and BP. He says that their money is going into renewables, but I am afraid that he is not correct. Shell’s near-term plans involve investment of just £2 billion to £3 billion in low carbon activities and £8 billion on upstream fossil fuel production. It is just greenwash to say that these companies have somehow moved out of fossil fuels and into renewables. The truth is that when profits have risen by billions and billions and when billions are being paid out in share buybacks, it is not credible that somehow a one-off tax rise, taking just a small proportion of the windfall profits that these companies did not expect, will somehow lead to a collapse in investment.

There is a clear consensus that a windfall tax is the right thing to do. An overwhelming majority of people support it—including, I might point out to Government Members, three quarters of Conservative voters. I do not know what Conservative Members are waiting for: they should support a windfall tax because some of the people who vote for them—or used to vote for them, anyway—also support it. Leading charities have endorsed it and some Conservative Members, including the right hon. Member for Harlow (Robert Halfon) and the former business Minister the right hon. Member for Kingswood (Chris Skidmore), have supported it too.

Of course the oil and gas companies do not want the windfall tax to happen. Let us take their arguments head on. As I have said, the argument that the tax will lead to a collapse in investment is not credible given what the companies are doing with this windfall, and it also misunderstands the long-term basis of these companies’ investment plans. I should also point out that the companies would keep a significant proportion of the windfall, even under our proposals. It is an unexpected, unearned windfall, half of which they would keep.

Secondly, as I said to the hon. Member for East Worthing and Shoreham (Tim Loughton), the proposal comes against a backdrop of the incredibly generous tax position in the UK, which meant that BP and Shell actually paid no net tax at all between 2018 and 2020.

Thirdly, there is a wider context. [Interruption.] The hon. Member for East Worthing and Shoreham is muttering, from a sedentary position, that those companies are not making profits. Actually, they are forecast to make near-record profits this year, as the hon. Gentleman will see if he looks at what outside analysts are saying.

As I was saying, there is a wider context. The oil and gas sector provides important employment for our country and communities. We need a phased transition, but, as I said to the hon. Gentleman, the long-term answer to this crisis is not more reliance on fossil fuels. Indeed, the Business Secretary himself has said:

“the UK is still too reliant on fossil fuels.”—[Official Report, 20 September 2021; Vol. 701, c. 95.]

The answer must be instead to go further and faster on renewables, nuclear and other zero-carbon alternatives, but that is not what the fossil fuel companies are doing with their profits.

--- Later in debate ---

[Tim Loughton]

My hon. Friend is being far too gentle on the Labour party. Is what we have heard from it not completely disingenuous? It has suggested a cut in VAT, which of course we can only do because we are out of the EU, which it voted against leaving. That cut would bring in a 5% reduction against what will possibly be a 50% rise in energy prices, so it would be a drop in the ocean. In addition, we have just heard that the windfall tax on profits—profits that do not exist at the moment—would bring in £1.2 billion, another drop in the ocean of the problem that we need to address. The Labour party is trying to con us into thinking that that is the answer to the problem that we will have. It is not.

[Lee Rowley]

My hon. Friend makes a number of hugely important and powerful points.

National Security and Investment Bill

Tim Loughton Excerpts

2nd reading & 2nd reading: House of Commons
Tuesday 17th November 2020 Commons Chamber

[Bob Stewart]

I am always a culprit on the word “you”. I have now lost my place, thanks to your intervention, Madam Deputy Speaker!

The report produced by the ISC in 2013 contained a requirement for legislation, and we are now getting that legislation seven years later, which is rather a long delay. I am delighted that the Bill protects British industry and puts safeguards on it, but it puts particular safeguards on our national security. In future, investors will have no choice but to notify the Government if the ownership of certain businesses is to change hands—thank goodness for that. However, I note that the Secretary of State will also have the power to call in other businesses if he or she has concerns about national security. That is why I am slightly against a narrow definition of national security; I would prefer it to be a bit more fluid.

The decision to call in an investment will be based on three factors: the nature of the target of acquisition; the type and level of control being acquired and how that could be used in practice; and the extent to which the acquirer raises national security concerns. The list of sectors to be covered is under consultation. I will not use a mnemonic, which until today I thought was some sort of drill, but that list includes advanced robotics, artificial intelligence, cryptographic authentication, whatever that is, quantum technologies—I do know what that is—and satellite and space technologies, in which we are world leaders. It is very important that those sectors are guarded against being infiltrated, because that is what it is—infiltration to take away intellectual property.

At the moment, the UK is almost unique among major western economies in not having stand-alone foreign investment legislation, and this Bill will sort that out. It will give Ministers the power to look at transactions overall and to review them. The Government’s impact assessment estimates that it will result in well over 1,000 transactions a year—possibly up to 1,800, as some Members have suggested. That is a lot, and it means a lot of work for a specific department of BEIS. There will only be 100 people to do that work, which is slightly worrying.

I will finish, because I was told to be short—and I have been, in six minutes—and because I had your naughty finger pointed at me, Madam Deputy Speaker.

[Tim Loughton (East Worthing and Shoreham) (Con)]

Get on with it!

[Bob Stewart]

I am getting on with it! I am trying to finish. This is a good Bill. I hope the House will support it. I will not finish my last paragraph, because my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) has stolen my thunder. This is a good Bill, and we need it.

--- Later in debate ---

[Tim Loughton (East Worthing and Shoreham) (Con)]

It is a pleasure to follow my hon. Friend the Member for Isle of Wight (Bob Seely), who has great experience in these matters. As he said, this has been a very thoughtful debate. I welcome the Bill, which, as many hon. Members have said, is long overdue. Much of our law on industrial security and business transactions is governed by the Enterprise Act 2002 and our very narrow and often inadequate competition and markets laws.

A lot has happened in the past 20 years. Major global corporations have exercised huge powers in mining data, monitoring and tracking populations and controlling technology in every aspect of our everyday lives. In most cases, they have done so without the need for a close physical presence. Of course, the huge issue of cyber-security and cyber-crime has become the weaponry of the 21st century. It is therefore right that we bring our laws into the 21st technological century, which would also bring us into line with some of our major allies.

This is also an investment Bill. As a global free-trading nation, we need to get the balance right and ensure that UK plc is open for business in the eyes of the international investment community and international markets. My constituency neighbour and hon. Friend the Member for Arundel and South Downs (Andrew Griffith), mentioned the great inflow of investment and jobs that that has created. The Bill needs to be targeted and proportionate so that we continue to attract safe investment, while deterring unsafe and questionable investment.

I am pleased to welcome the new systems and procedures in the Bill, including the transparent call-in notices based on trigger events, a clear and swift timetable to make decisions on call-ins, clear timelines, a single point of decision in BEIS, the interaction with the Competition and Markets Authority and the sanctions and legal challenge process. It is good to bring that in line with our Five Eyes allies. As the Minister said, it is estimated that the Bill will affect less than 1% of all mergers and acquisitions and asset transactions in this country.

My concern, like that of other right hon. and hon. Members, is whether the Bill goes far enough. Does it cover enough sectors and appropriate interests? How should the Government define national security, which is absent from the Bill? Should there not be a greater independent and external screening mechanism? Is not too much power still concentrated in a Secretary of State who, as was indicated by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), can still be swayed by political considerations that sometimes—just sometimes—might trump national interests?

Where is the parliamentary scrutiny role in all this? Where is the appeal mechanism if no call-in is triggered? This is a point that not many other Members have mentioned, but does the Bill leave too many of our early-phase innovation companies exposed to being gobbled up by foreign super-giants that can take advantage of almost unlimited capital and currency swings in their favour? I remember the old days in the City when the Government had golden shares in companies such as Cable & Wireless, British Aerospace and Plessey. People had to make a foreign ownership declaration to own shares in Peninsular and Oriental, and they were only able to own deferred stock. The Government still have special shares in British Airways and Rolls-Royce, for example, but it is hard to think of the last time the UK Government blocked a takeover or major asset acquisition of a company in which they held a golden share. Are they actually that golden?

The Minister stated that he is nation agnostic and that there will be no white list of nations, but we all know—this debate has brought this out very clearly again—that China remains the biggest threat and the single most important reason why such legislation is required. I have been a lone voice on China’s human rights abuses in Tibet for many years, as chair of the all-party parliamentary group for Tibet, and it is good at last to be in company, partly sparked by the outrage that is going on against the Uyghurs, what has been going on in Hong Kong and the suppression of the indigenous Mongolian population. However, it is what we do not see that is so much more dangerous, and the row over Huawei and 5G earlier this year brought that to light.

The ownership of Huawei is quite clear: it is 99% owned by the Huawei Investment & Holding Company trade union committee. Under Chinese law, trade union committees are ultimately administered by and answerable to the All-China Federation of Trade Unions, which is according to its constitution under the control of the Chinese Communist party. It is a very clear ownership: Huawei is under state control.

Huawei is involved with at least 11 United Kingdom universities as well as six London colleges, and I have great concerns—I have raised them on many occasions in this House—about the influence of the Confucius institutes on our campuses around the country. The US has raised concerns as well. The US-China Economic and Security Review Commission last year said:

“China is using broad research relations with universities and other entities to try to fill in any technological gaps they have as well as in certain areas to try to advance Chinese standards so that Huawei and other Chinese-produced equipment will be the equipment of choice as networks get built out.”

That is a threat to national security, and we need to take account of it.

We have heard a warning just today about Scotland and Scottish universities: Scotland has the highest number of Confucius institutes per capita of any country in the world.

We all know that ultimately the CCP has a claim on any data held by Chinese companies, where it does not need to go to the inconvenience of hacking into a foreign company’s database, as happens all too often. That includes TikTok, as we have heard from many hon. Members—in particular, my hon. Friend the Member for Wealden (Ms Ghani), who has made a specialisation of this. The spread of social media is a hugely powerful tool in extending control over populations, particularly young populations. China’s national intelligence law requires all Chinese firms, not just Huawei, to assist in state intelligence work, and Huawei’s equipment is used in monitoring the population in Xinjiang province. And of course it has great form in stealing IP from countries around the world.

All the contributions in this debate so far have focused on technology and communications, but why is pharmaceuticals and biotechnology not on the list in the Bill? It has been included on the list of the equivalent legislation in France. We know from Wuhan the global reach that biotechnology can have when it goes wrong. What checks are there on Chinese laboratories operating on UK soil in dangerous materials that could compromise our security? China, as we have heard, has been taking over pharmaceutical firms, including human blood plasma firm Bio Products, originally part of the NHS and taken over in 2016 by the Creat Group. That company would not have been covered by the mandatory notification under the proposals in the Bill.

There are many other areas of Chinese ownership that cause concern, too. The China General Nuclear Power Group holds a third of Hinkley Point nuclear plant and 20% of Sizewell C, and Beijing-controlled companies control about 25% of nuclear and wind energy demand in the United Kingdom. As my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) mentioned, it is the cumulative effect of their influence and their ownership that we need to be aware of. The largest operator in the North sea is the China National Offshore Oil Corporation, accounting for 25% of UK oil production and 10% of the country’s energy needs—helped by billions of pounds-worth of tax breaks from this Government and previous Governments, it should be noted. The chairman of the CNOOC, Wang Yilin, declared in 2012:

“Large-scale deep-water rigs are our mobile national territory and a strategic weapon.”

The China Huaneng Group is building Europe’s largest battery storage project in Wiltshire, and the Hong Kong company MTR owns a 30% stake in South Western Railway and has the Crossrail franchise. I could go on and on, and the Henry Jackson Society has estimated that only 23 out of 117 Chinese acquisitions of UK corporations in the past decade would have been subject to the mandatory notification in this proposed legislation.

These are all strategic areas—energy, infrastructure, transport interests—which could have a massive impact on our security and prosperity if controlled by a malign party, and on top of that there is the monopoly China is building up in the supply of lithium and cobalt, essential components of batteries and the battery technology that we need to develop globally for environmental reasons as well.

What would the impact of the Bill be on all of those operations? What are the reciprocal rights for UK companies taking a stake—a controlling one or otherwise —in equivalent companies in China? I bet they are not equivalent. Surely there needs to be some sort of equivalence test in this legislation to ensure that we have access to assets overseas that is equal to that we are allowing overseas corporations and Governments to have in this country.

I have not mentioned human rights, which has come up many times. I have not mentioned the malign influence of Russia and heavily disguised asset purchases from those close to the Putin regime. What does the Bill do for clearer declarations of ultimate beneficial ownership and the role of Companies House? We have done much in that area on tax avoidance, but what about for the purposes of the national interest? We need far greater transparency. Surely the Bill is a way of helping to achieve that. Surely there should be a wider national interest test.

We must also mention the role and influence of friendly foreign powers, particularly the concerns about US and Japanese multinational companies that have been gobbling up UK high-tech start-ups and defence companies in recent years. The hon. Member for Aberavon (Stephen Kinnock) mentioned ARM, which was taken over by the Japanese—SoftBank—in 2016 and then by the Americans this year. It makes silicon chips for virtually all our mobile phones. There are numerous examples of high-tech start-ups in silicon fen at Cambridge. Public money has gone into universities, resulting in commercial spin-offs, and then founding shareholders have been lured by pound or dollar signs to silicon valley, US high-tech giants and social media companies. That is why we have no equivalents of Facebook, Google or TikTok in this country. We have very few tech stocks; in the FTSE, the weighting of infotech is just 1.37%.

In conclusion, Madam Deputy Speaker—before some naughty extremity of your body casts itself in my direction —surely we should be using a national interest test to grow our own in the United Kingdom. Certainly there should be a reciprocity test if national interest protection laws overseas prevent UK companies from making equivalent acquisitions or taking strategic stakes. I support the Bill, but there are many questions still to be answered, and measures certainly need to be beefed up.

Net Zero Emissions Target

Tim Loughton Excerpts

Wednesday 12th June 2019 Commons Chamber

[Greg Clark]

I am grateful to the hon. Lady. The work of her Committee will be important in scrutinising the policies that are set in place to meet our ambitions. I have not seen the report to which she refers, but it will be my bedtime reading this evening.

[Tim Loughton (East Worthing and Shoreham) (Con)]

I very much welcome this announcement. In two weeks’ time, the EYE—eco, young and engaged—project that I founded in 2008 will hold its 11th eco-summit in Worthing, attended by 250 local schoolchildren, to share environmental best practice. Does my right hon. Friend agree that those who most enthusiastically embrace the need to take urgent action on climate change are our youngest citizens? If so, what more can we do to turbo-charge plans to do more in their schools and to lead by example on becoming more carbon neutral by doing more on renewable energy, energy monitoring, understanding food miles and environmentally friendly school transport plans?

[Greg Clark]

I am grateful for the support of my hon. Friend, and, as I said in my statement, we have created a particular role for young people to advise on the policy framework in the knowledge that the consequences of climate change will be felt most particularly by the younger generations. There is a further opportunity. If we succeed, as I hope we will, in hosting the conference of the parties next year, that will provide a big opportunity for young people across the world, and especially in this country, to participate in the deliberations on some of the most important decisions that the world will take. I very much hope we will be able to give that opportunity to young people.

Net Zero Carbon Emissions: UK’s Progress

Tim Loughton Excerpts

Thursday 28th February 2019 Commons Chamber

[Richard Benyon]

We could go on a global tour of the planet’s vital environmental assets that are at serious risk of being irretrievably damaged unless we tackle this issue. The hon. Lady is absolutely right to raise that point.

[Tim Loughton (East Worthing and Shoreham) (Con)]

On a related point, it is not just the melting of the icecaps. The Tibetan plateau is the water source for 40% of the world’s population. The Chinese are developing that wild area, with serious implications for that water source and for that very important and highly populated part of the world.

[Richard Benyon]

My hon. Friend is absolutely right to raise that point. These debates are invigorating, desperate though the issue is, because there is an enormous amount of expertise across the House. Members really understand and have seen for themselves the risk we face and the impact it could have.

I want to cut off, I hope for the final time in my life, the question put by some people who deny the human impact on climate change. For people who are, like me, sometimes assailed by people who read certain journalists and acquire a view, I recommend a book by Richard Black, the former BBC environment correspondent, called “Denied”. It is a forensic demolishing and devastating take-down of climate change denial. It goes through all the arguments in absolute detail. It has an outstanding foreword by a Member of this House—[Interruption.] Yes, it is me. [Laughter.] The content of the book is absolutely superb and I recommend it, despite the foreword. Richard Black refers to climate change deniers as contrarians rather than sceptics. I think that is right. It is good to be a sceptic and it is good to be sceptical about received wisdoms, but contrarians tend to be the golf club bore who strikes an opinion with no basis of information. The book provides the scientific evidence that really nails the subject.

The hon. Member for Oxford West and Abingdon rightly raised the school strikes. I think it was right to welcome that event. I think some people got it wrong and missed the point. We can all complain about children bunking off school, but that is not the point here. The strikes showed the extraordinary passion of the young people whose lives will be much more affected than those of us in middle age like me. That passion needs to be harnessed. I was moved, a couple of days ago downstairs in the Churchill room, to see the excellent “Year of Green Action” event organised by Ministers at the Department for Environment, Food and Rural Affairs. We heard evidence from two young people called Amy and Ella Meek, I think from Gedling, who have set up a venture called “Kids against Plastic” that has gone viral. It is that kind of action that we want to encourage among the young people who came to our offices on that day. This is not just something that policymakers and politicians will deliver. People on the ground, of all ages, can make a difference.

Thirty or so young people from Newbury turned up at my office. I was struck by their passion and their commitment, but I was also left with a strong belief that we need to inform people better about what is going on. I have already heard questions in this debate such as, “Why isn’t something happening?” when it is, and “Why aren’t we doing more?” when that is happening. We need to applaud in a cross-party, consensual way when good things are done and to push relentlessly where we think we are missing the point.

Draft Higher Education (Fee Limits for Accelerated Courses) (England) Regulations 2018

Tim Loughton Excerpts

Monday 14th January 2019 General Committees

[Gordon Marsden]

My hon. Friend hits the nail on the head and echoes the other misgivings expressed by colleagues.

As the Minister pointed out, accelerated degrees—fitting three years into two—are not new, and have always been with us. He has quoted some examples. They have often been crafted closely to specific needs of individual HE institutions. I hear what he has to say about the various universities; they have clearly found that that is a good model, which they have wanted to take forward. The devil is always in the detail; it is the details and the firm focus on increasing the maximum fee cap to which we are vehemently opposed, because we do not believe that, at this stage, they will bring the wider benefits to universities and most importantly to would-be students that the Minister thinks they will.

It is not just us saying that; a large number of dissenting voices the demand for accelerated degrees in the form that the Government propose. It is all well and laudable for the Minister to talk about how we might see the effects that we would all like to, but at the moment that has not been the case. That is reflected in the comments of the various university groups. The chief executive of the Russell Group, for example, Dr Tim Bradshaw, said:

“Greater choice for students is always good but I would caution ministers against ‘overpromising’…The Government’s own projection for the likely take-up of these degrees is modest and we actually hear many students calling for four-year degrees, for example, to spend a year on a work placement or studying abroad.”

The group MillionPlus said something similar:

“Demand for accelerated degrees has been low for many years and is unlikely to increase significantly on account of these fee changes.”

Who therefore will the accelerated degrees benefit? The trade union that represents many of the staff in universities states that

“there is little evidence of solid demand for this type of course”,

and that—I am afraid to say that I agree with this, in particular because it is the thrust of what the Minister’s predecessor but one, the hon. Member for Orpington (Joseph Johnson), laid out clearly in the White Paper and the Bill that followed—

“this decision is being driven by the government’s marketisation agenda and the need to row back on the spiralling costs of university education, particularly in light of the withdrawal of maintenance grants.”

We await the Augar review, and lots of promises are floating around, but as of this moment nothing concrete is in place.

I have emphasised time and again that the Government’s need to facilitate changes for a better work-life balance and the progression needed to benefit our economy must include looking at credit transfers, flexible courses and urgent action to address the catastrophic fall in part-time learning since 2010. Unfortunately—which this is, because I wish we could have a consensus on it—the Government’s pitch for the accelerated degrees we are debating smacks simply of a PR initiative that has been fashioned for new HE entrants, often with narrowly focused HE objectives, which my hon. Friend the Member for City of Durham (Dr Blackman-Woods) and others were worried about during debate on the Bill.

The result of the Government’s 2012 HE funding changes, including the tripling of tuition fees—we cannot get away from this—is that the average debt for students in England is £46,000. The Institute for Fiscal Studies found that the removal of maintenance grants from students from low-income families meant they were graduating with the highest debt levels, which are in excess of £57,000. We therefore have clear evidence that the nudge factor, which the Government—or their predecessor—have been very keen to push, is actually operating to nudge people against participating in higher education. Yet the Government have chosen this time to introduce this statutory instrument, before the Augar report has even appeared.

During the passage of the Bill, we challenged them consistently about the way in which they wanted to use the teaching excellence framework to increase or remove the fee cap. The draft SI increases the higher amount to start a degree to £11,100 on an annual basis. We have to address the impact that that will have on less well-off students’, or would-be students’, ability or willingness to take places on those courses. Can we realistically expect all the people who might want to do such a course to ratchet up to the figure mentioned?

As the University and College Union has said:

“This is not about increasing real choice for students,”

but it could allow

“for-profit companies to access more public cash through the student loans system…Instead of gimmicks which risk undermining the international reputation of our higher education sector, the Government should focus on fixing the underlying problems with our current student finance system, which piles debts on students.”

The idea that accelerated fees only mean a cut in student debt is, I am afraid, knowingly or unknowingly, hiding another motive. Wedded as they still appear to be—I have heard no repudiation of the broad themes that the hon. Member for Orpington spelled out when the Bill was introduced—to an outdated market-driven view, the Government have pinned their hopes on a rapid expansion of new providers that charge the higher fees on a two-year basis. All that is all in the various secondary papers and instruments that were produced during the Bill. So far, we have seen no evidence of that expansion.

Do all the leaks that suggest that Augar is now under pressure from the Government to lower tuition fees per year make nonsense of the rhetoric and the introduction of this statutory instrument? Incidentally, will the Minister give us the latest estimate for when the Augar review is to report?

The draft explanatory memorandum lists the theoretical benefits for providers and students, but it also refers to the numerous concerns that have been expressed across the sector. It says:

“Students on existing accelerated degrees report a very high level of satisfaction, and highlight the opportunity to graduate and start or resume work a year sooner”—

the Minister talked about that—

“together with costs savings and academic benefits.”

How many and what sort of students, and with what financial background, were interviewed to reach that conclusion? It ignores the fact that those degrees would be available only to students able to study all year round. That has major implications for access and participation, which are already faltering for part-timers under this Government.

The total number of English undergraduate entrants of all ages from low-participation areas fell by 17% between 2011-12 and 2016-17. There were 12,600 fewer English undergraduate students from low-participation areas starting university courses each year than there were in 2011-12. We must ask ourselves what these accelerated degrees, on the basis on which they have been put forward in the statutory instrument, do for them, and the answer is relatively little. There has been a 54% fall in entrants from low-participation areas studying part time, who will not be able to access funding for accelerated degrees. How does the Minister plan to address that? Can he explain in any shape or form how accelerated degree will address the devastating fall in part-time HE study?

Critics have also pointed out the danger of squeezing three years into two for personal development opportunities or participation in extracurricular activities and volunteering. Does the Minister not value the important personal development that our universities provide outside the classroom, which could be denied by this acceleration? UCU also pointed out:

“Accelerated degrees...result in reduced opportunities for students to engage in part-time employment over the course of their studies. This limitation is particularly acute for students from disadvantaged backgrounds who are more likely to need to seek employment…to fund themselves through university.”

We would like a situation with fees in which students did not have to work part time as much as they do, but given that that is the case, perhaps the Minister will admit that the giveaway in the accelerated degree proposals is that they are not focused on those sorts of people, but in many cases on richer or employer-funded applicants. UCU also said:

“The lack of holiday time factored into these degrees also means that they could prove difficult to student parents; those with caring responsibilities; and students whose disabilities mean that they might benefit from low-intensity study. For this reason, there is a risk that take-up of these courses could have strong socio-economic stratification and that students from less advantaged backgrounds might have lower attainment on these courses.”

Incidentally, there is a reference in the draft explanatory memorandum to the impact of the statutory instrument on the Erasmus+ programme. Will the Minister tell us the situation regarding ensuring our continued participation in the scheme?

[Tim Loughton (East Worthing and Shoreham) (Con)]

I have listened very carefully to the hon. Gentleman for some time now. He seems to be talking an awful lot about accelerated degree courses and very little about fee limits, which is what this statutory instrument is supposed to be about. What he has not mentioned but might want to, because it was mentioned by one of his colleagues, is value for money.

I have two daughters, one of whom has just left university and one of whom is still at Cambridge, where she has intensive tutoring. The one who has just left was at another university, where she was lucky to get five hours a week. Even if that were doubled, it would not mean a shortage of time outside the lecture room. Does the hon. Gentleman think the proposals offer better value for money? Should not he really be getting at the question whether students get value for money? At the moment, in my experience, they do not.

[Gordon Marsden]

The hon. Gentleman’s comments are enlivened and enriched by his personal family experiences, but the difference of outcome in his family rather makes the point. It is not just a matter of what students get and do on courses, although I fully accept that that is important. It is also about how students are put off courses in the first place. I think most of my hon. Friends would, like me, find it difficult to see how a suggested 20%-a-year increase will encourage, rather than deter, people who already find it difficult to make such a decision.

The Open University says that

“there needs to be increased choice and flexibility for students to study at a time, pace, mode and place that they choose.”

One of the stated objectives of the 2012 funding reforms in England was to

“allow greater diversity of provision, which means more short two-year courses and more part-time opportunities”.

However, we know that the reforms have failed spectacularly to achieve that objective, with 59% fewer people in England entering part-time undergraduate higher education each year than in 2011-12, before the reforms. That is why it is vital to increase options.

However, the Government have failed to address the crisis for the OU and other adult learning providers. Another increase in tuition fees, which they are now presiding over, and which would allow higher education providers to charge more per year, will not help the process. MillionPlus agrees. It says that

“accelerated degrees are just one form of flexibility”

and that Government have missed out on the opportunity of creating

“greater flexibility in fee structures and loan availability to enable students to access financial support for periods of study of less than a year (for example to borrow by modules rather than by year)”.

The hon. Member for East Worthing and Shoreham prayed in aid his personal experience. My experience as a former Open University tutor—although somewhat long in the tooth—is that it is precisely the people, particularly adults, from disadvantaged backgrounds, who would like support for funding by module. That is what they do not get at the moment.

“True flexibility…can only come when students are not penalised for studying part-time, or for shifting between full and part time study.”

Those are not my words but the words of MillionPlus.

The Government have given little thought to the impact on staff workloads of accelerated degrees. UCU has rightly expressed concern that the changes could put yet more pressure on its members without much immediate or direct benefit to them, at a time when they believe—and we agree—that they are getting a raw deal on full-time contracts, pay increases and progression.

Despite the Minister’s enthusiasm and good intentions, there is no guarantee that existing university teachers will be willing or able to teach the new accelerated degrees as configured. There is a risk that the move to accelerated degrees will compromise time currently allocated by such teachers to research, and fuel—of necessity, if they are not prepared to do the relevant work—the use of even more casualised teaching staff to deliver provision during the summer months. With threats to our existing world-class higher education institutions and research piling up from the uncertainties of Brexit, should we be taking that chance?

Issues to do with short-term contracts, extra bureaucracy and guarantees of quality still need to be addressed. What steps have the Government taken to alleviate the pressures on staff that these courses may create? Ministers should focus not simply on accelerated courses for a market driven by untested new providers, but on protecting the global strength and reputation of UK higher and further education.

The proposal is irrelevant to the main priorities of the HE sector in 2019. It is irrelevant to the multiple threats that existing universities and providers face from a chaotic Brexit, and the collateral damage they face from lack of certainty about our participation in Horizon research programmes through the 2020s after we leave; lack of certainty that HE students, providers and staff will continue to benefit from Erasmus+ over the same period; and the withdrawal of European Social Fund and European Regional Development Fund funding, from which many community-focused universities and providers have benefited.

The proposals, cast as they are today, represent a developing market model that the hon. Member for Orpington left in the out-tray for his successors. They do nothing to strengthen our HE sector internationally or nationally. They do not address the important issues that Augar is supposed to be looking at. That is why we will not support the regulations.

Tuition Fees

Tim Loughton Excerpts

Wednesday 19th July 2017 Commons Chamber

[Angela Rayner]

I am sure that my hon. Friend will have pre-empted some of the interventions from Conservative Members, who like to say that the Welsh Government are not doing things right. Of course, the Welsh Government have invested in their young people. They believe that their young people are the future of the Welsh economy. I congratulate them on making those decisions. Of course, the Welsh Government make decisions about education—before I get an intervention about what Wales is doing about loans.

As I was saying, burdening students with more than £50,000 of debt means that we will see more disadvantaged young people not going to university. After all, we have seen that at many of the most prestigious universities, including Oxford and Cambridge, the number of disadvantaged students is falling.

[Tim Loughton (East Worthing and Shoreham) (Con)]

The hon. Lady complains that we keep asking questions about who said what and when. The trouble is that the Opposition perpetrated a scam on the British people. They clearly led students in our constituencies to believe that their loans would be written off. If she is now saying that that was not the intention, but that they would just cancel future tuition fees, how is it fair to those people, including my children, who have notched up tens of thousands of pounds of debt, which she is complaining about, that she leaves them with a debt when future students will not have a debt? What is fair about that?

[Angela Rayner]

I thank the hon. Gentleman for his intervention, but I cannot really say it any more clearly than we have said it. We said we would look at that, but that we would not do anything with it unless we could afford it.

I have put forward and will continue to put forward three things that the Government could do right away to help our students, including the hon. Gentleman’s family members. First, the Government have decided to freeze the repayment threshold, which they do not have to do. They could put it in line with earnings. Secondly, they could look at the percentage rate of the loans. It is 6.1%, but it does not have to be that much. It was the Bank of England rate plus 1%, which would now be 1.25%—considerably lower than the current 6.1%. Lastly, if the Government really care about social mobility and getting students into university, let them bring back maintenance grants.

Post Office Closures

Tim Loughton Excerpts

Tuesday 25th April 2017 Westminster Hall

[Tim Loughton (East Worthing and Shoreham) (Con)]

I beg to move,

That this House has considered Post Office closures.

It am grateful to the Backbench Business Committee for the opportunity to discuss this important subject. The number of right hon. and hon. Members present shows how important it is—who would have thought that there was an election on? I am aware that many Members wish to speak, so I will keep my comments as brief as possible. If hon. Members wish to intervene rather than make their own speeches, I will try to take some interventions. To help with the timing, I intend not to speak at the end of the debate.

I appreciate that the last debate on the subject, which was held as recently as November and was led by the hon. Member for Luton North (Kelvin Hopkins), aired many issues that I am sure hon. Members will wish to repeat today. There is concern that plans for the Post Office will be delayed by the forthcoming election, and there are also outstanding concerns from November’s debate—I think the Minister was rather rudely cut off by Divisions in the House—on which it would be good to get some clarity today. I will briefly mention, first, my local post office closures—I am sure that every hon. Member present wants to air a local post office closure —and secondly, the bigger picture of the long-term sustainability of, and game plan for, the whole post office network.

I recognise the good work done by the Government since 2011. The network has been stabilised, the number of closures has been reduced substantially and the subsidy to the network has been managed down from £210 million in 2012 to some £80 million this year as a result of flexibilities under some of the new arrangements. There are upsides as well as downsides. There are something like 200,000 additional opening hours every week, many of them at weekends when post offices would normally be closed, and some £2 billion has been invested in the network transformation plan since 2012. That stands in contrast to the previous 10 years or so, in which half the network branches were closed. My constituency lost more than half its post office and sub-post office branches. When I became an MP in 1997, there were nearly 20,000 branches, and that figure is now down to about 11,500. There are some encouraging signs, but also some very worrying signs when people are faced with the sudden closure of post offices in their own area. When the branches were being closed, we were promised that the Crown post offices were absolutely sacrosanct and would remain the main flagship of the Post Office on the high street.

Post office branches and Crown post offices are very important parts of the local community. Local businesses, including retail and other small businesses, rely on them heavily, because without an excuse to come to the high street to use the post office, people do not use the neighbouring shops. Post offices act as community hubs. They are well used by the elderly population, particularly in areas such as mine that have a high population of pensioners, and by those from disadvantaged backgrounds, particularly those who do not have conventional bank accounts. For those reasons, post offices remain popular and well used, with something like 17 million customers a week.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on securing this debate. Does he agree that the Government need to look at the services that post offices provide, which they are losing, and the return that they are getting on them?

[Tim Loughton]

That is a very important point that I would like to come on to; it is a question about why the Post Office is not growing rather than retrenching.

In 2016, the Post Office announced the closure of 31 Crown post office branches— even though the Crown offices are now breaking even, after making a £46 million loss four years ago. Some of those post offices have not been converted into the new type of post office and their future is still uncertain. In January this year, a further 37 Crown post offices were identified for closure, including the last two remaining Crown post offices in my constituency, which were in Lancing and Shoreham. That caused huge concern among my constituents and gave rise to lots of petitions and demonstrations by people from all parties. I found it particularly disrespectful that the first I heard of it was when a constituent rang me up to ask what I was doing about it; the Post Office had not even had the courtesy to let the sitting Member of Parliament or councillors know what it was planning.

I organised an urgent meeting with the Post Office and it went through the procedures. I was reassured that firms such as WH Smith had taken on more than 100 of the franchises and everything was supposedly working well. I gather that the other firms that have taken post offices on include a chain called Bargain Booze, an off-licence with some 30 post offices—some hon. Members may have concerns about how appropriate that is. I was told that both the Crown post office branches in my constituency were unprofitable, which was why they were to be franchised out, yet the Lancing branch, along with one very small sub-post office right on the fringe of the village of Lancing, now looks after a population of 27,000. Not surprisingly, queues are frequent. It also services the second largest business park in the whole of West Sussex, with 228 firms that employ more than 3,000 people. The village has lost almost all its bank branches; we were told that when we lost them, we could do all our banking at the post office, so there was no great concern. If the post office branches are not making a profit, that suggests that they are not being run very well—it is certainly not for lack of usage or lack of demand from the local population.

I was told today that one of those Crown post office branches is to be transferred to a nearby convenience store, which is much smaller than the existing post office and has operated since only 2013. On the upside, there will be extended opening hours on Saturdays and Sundays and new disability access, but on the downside, nobody believes that the store is big enough to house a replacement Crown post office. It will have fewer serving positions, when there are already serious concerns about queues, and it will not be able to offer the biometric enrolment service for Home Office applications. There are also concerns about staff transfer: we know that in the post offices that have so far converted, only 10 of the 400 staff have been TUPE-ed across and they are often going into minimum wage jobs. There are question marks over ongoing training for staff who now work in non-Crown post offices, which have tended to have a big turnover of staff. In many of these shops, staff hours get cut and, after initial promises about extended opening times, the shops tend to retrench.

What happens if the model fails? Some 8,000 sub-post offices are now in convenience stores, which have seen a 4% reduction in staff hours since the national living wage came in. Some 30% of businesses also face challenges with the revaluation of business rates. The Daltons website currently shows 705 post office branches for sale. There is a lot of change and churn in the sector, so longer-term questions arise about the viability and sustainability of the new arrangements.

Both my Crown post offices are co-located with sorting offices. Although the sorting offices are run not by the Post Office but by Royal Mail, they are very conveniently placed next to the post offices. Experience has shown that without those anchor partnership tenants, sorting offices are relocated to out-of-town sites, which are much less convenient for people who need to get their deliveries, particularly in places with many elderly people who may not be so mobile.

There is going to be a consultation on my post office. It will be extended because of the election, but we all know that not a single consultation has overturned any of the proposals to transfer these post offices, so I fear that it will be something of a token exercise. The measurements of an access door may be changed by a few inches or the sweet counter may be relocated because it gets in the way of guide dogs, but frankly the consultation will be a token exercise.

I am aware that Citizens Advice does a good job as the oversight body and that some of its research has suggested that in some cases there have been some improvements to access and to service with the new format, but overall the fears are that the queues will get longer, transactions will take longer and the service will be less consistent. People are dealing with different and new staff, and it is just not as good as it used to be.

That brings me to my second point. Where exactly is the Post Office going? Everything that the Post Office has done—I have cited the statistics about making it more efficient, reducing losses and so on, and perhaps extending some opening hours—is all based on retrenchment, which is a policy that sees the post office, especially the directly owned post office, getting smaller and offering fewer services to its customers. There are now fewer than 300 post offices that are directly owned Crown post offices.

The financial services part of the Post Office, which should be a big money-spinner, is diminishing. At the beginning of the year, 150 financial specialists were made redundant. There was a specialist financial office in the Lansing post office, but it was closed earlier this year. I gather that the specialist mortgage advice that the Post Office gives, because of its relationship with the Bank of Ireland, generates a one-off payment of just £800 for brokering mortgages, and there is no ongoing revenue. The Post Office seems to be selling itself very cheap in that regard and it is caught in that relationship until 2023, and it does not sound as though it is a very profitable one for the Post Office.

My question to the Minister, which I hope she will be able to answer to enlighten us, is: why is the Post Office not making more of banking and financial services in particular, given that it is a trusted name and a presence on the high street, at a time when conventional banks are disappearing from high streets?

Post Office revenues roughly break down as follows. I gather that about 47% of the revenue of post offices is from stamp sales, but increasingly stamps are available to buy anywhere. There are also Government services, including Driver and Vehicle Licensing Agency services, fishing licences and the Department for Work and Pensions card account, but of course those services are all being squeezed and the revenue from them has been diminishing. The Post Office also offers access to current accounts. Banking protocols have been sorted out so that there can be cross-fertilisation of different bank services within a post office, which had been a problem. And then there are the Post Office’s financial services, but again that seems to be a declining market for the Post Office.

Why is the Post Office not copying the challenger banks, for example? Banks such as Metro Bank and Handelsbanken are making a really good fist of expanding into new markets. Metro Bank now has 915,000 customers; it has taken £8 billion in deposits and has 110 branches, and it is growing. Alternatively, as hon. Members have asked in these kinds of debates before, why are we not doing what has been done in France? One thing that we might want to copy from France is La Banque Postale, which was founded in 2006 specifically as a tool to help to tackle financial exclusion and in 2016 had a turnover of €5.6 billion and a pre-tax profit of just over €1 billion. There are similar examples in New Zealand and Italy. There is surely a fantastic opportunity for the state-owned Post Office to take advantage of changing markets and changes in how we conduct our financial business, as a body that is trusted and that is already on the high street. For some reason, the Post Office is not taking that opportunity.

Similarly, why is the Post Office not making more of click and collect services? Everywhere I go now there are shops sprouting up on high streets specifically for people to collect their Amazon and other deliveries, because they are not at home to receive them. The Post Office is already on high streets and surely could offer that kind of service, and yet I gather that 80% of post offices do not have those kinds of facilities. There will be even fewer post offices with them if they are moved to smaller premises that just not do have the room to store and collect parcels.

The overall commercial revenue of the Post Office has been virtually stagnant in the last few years. So it is a great mystery why it is not expanding and becoming more profitable, which would be better for the taxpayer and customers, rather than following a long-term strategy that appears to be based on retrenchment and shrinkage.

Finally, I have some questions for the Minister, in addition to the bigger question of what the big game plan is for the Post Office. The network transformation programme is due to end by March 2018, by which time some 7,500 traditional sub-post offices will have been converted to the new model, but what comes after March 2018 in terms of subsidy and further transformation revenues? In opinion polls, 85% of the public have expressed support for the Government—the taxpayer—continuing to subsidise the Post Office, and not just to deal with the obvious challenges that face rural post offices, which will always face the sparsity challenge. Are any further reductions in Crown network offices planned for the next year? Citizens Advice has suggested that there should be an automatic break if 5% of branches announce that they are to be closed without breaking the access criteria, which is quite hard to do anyway. Will that happen?

The biggest question is: why is the Post Office not taking current opportunities to expand instead of retrenching, particularly as it has the security of Government backing for its revenues and is a trusted name? In 2010, when the Government promised to transform the Post Office—

[Sir Edward Leigh (in the Chair)]

Order. I have a list of 12 Back Benchers who wish to speak.

[Tim Loughton]

I am on my final sentence, Sir Edward. In 2010, the Government promised to transform the Post Office into a genuine front office for the Government and that there would be a significant expansion of the Post Office’s banking services, but they have failed so far to implement those measures, as the revenue from Government services has fallen by 40% and income from financial services has stagnated. Closing down flagship branches, getting rid of experienced staff and putting counters into the back of a WH Smith store or a Bargain Booze outlet is surely not a plan for greater innovation, which I think is what our constituents want to see.

[Several hon. Members rose—]

--- Later in debate ---

[Margot James]

I am not refusing to take interventions; I am trying to conclude my response to Members’ legitimate concerns. I think that I have responded to quite a number; but I must allow time for my hon. Friend the Member for East Worthing and Shoreham to conclude the debate.

[Tim Loughton]

I am happy for the Minister to take it.

[Margot James]

Okay, but I am not going to fill it with interventions; I am going to carry on.

Hon. Members have said that post offices do not have click and collect services, but I want to reassure them that there are 10,500 local post offices that do provide those services. That is another area of potential growth. I invite Members to write to me if their constituency branches do not have them; we will look into it. As to the allegation about hours being reduced in convenience stores, I am pleased to confirm that that is not the case. Opening hours are not decreasing in the fullness of time.

Oral Answers to Questions

Tim Loughton Excerpts

Tuesday 31st January 2017 Commons Chamber

[Margot James]

First, I can reassure the hon. Lady that Kent and Medway is ably championed by my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti), who asked the original question, but apropos of her specific point, we are in the process of appointing the small business commissioner at the moment; he will be in post by the summer and able to take complaints on the important issue of prompt payment in the autumn of this year.

[Tim Loughton (East Worthing and Shoreham) (Con)]

8. What assessment he has made of the potential contribution of power generated by tidal lagoons to UK energy provision.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Jesse Norman)]

The Hendry review published its report earlier this month. The Government are considering its recommendations and the issues that would arise from a broader lagoon programme, including the potential contribution of power generated by tidal lagoons. The Government will publish their response to the Hendry review in due course.

[Tim Loughton]

As an MP with a coastal constituency, I am a big fan of tidal power, and following the Hendry review it has been estimated that building some 10 tidal lagoon power stations by 2030 could generate 10% of our electricity requirements. So when considering the economics of the Swansea Bay scheme, will the Minister take into account the wider benefits for British manufacturing and technology of becoming a world leader in this clean technology?

[Jesse Norman]

My hon. Friend is absolutely right to recognise that the question must be considered in the round and not merely on the merits or no of the Swansea Bay scheme. It is the Government’s job to consider the advantages and disadvantages of tidal lagoons as a whole and to take a decision that includes not merely the financial elements, but also environmental elements, the capacity to generate power as part of a wider energy mix and ancillary elements.