Leaving the EU: Airbus Risk Assessment
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Vicky Ford (Chelmsford) (Con)
Airbus is also a key player in the space sector, which is important for many jobs in my constituency. Can the Secretary of State confirm that the partnership that we are looking for will cover co-operation on standards and a deal on services, so that maintenance contracts and the like can continue to be fulfilled?
Greg Clark
My hon. Friend is absolutely right that there is no hard and fast distinction between manufactured goods and services, and that is especially illustrated in the aerospace sector. If, for example, Rolls-Royce sells an engine, the money that it makes in the years ahead is from maintaining and servicing that engine. That involves skilled engineers being able to travel, so it is very important—again, as part of our agreement—that such services should continue to be supplied uninterrupted.
Erasmus Plus Programme
Vicky Ford Excerpts(6 years, 4 months ago)
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Vicky Ford (Chelmsford) (Con)
It is a great pleasure to speak in the Chamber about Erasmus+. I am delighted to be here and to speak on behalf of British universities. I have received feedback from Universities UK, the Russell Group and MillionPlus, the association of newer universities, and I speak as the representative of Chelmsford, the heart and home of Anglia Ruskin University.
Britain has 14 universities in the world’s top 100. We are less than 1% of the world’s population, but researchers in Britain are responsible for one in six of the world’s top research articles. We have among the highest level of Nobel prizes per head of population of anywhere in the world. Our universities are the jewel in the British crown, and our students matter. When it comes to supporting them, international opportunities matter. Each year, Erasmus+ funds about 16,000 British students to undertake work or study placements abroad. Through the scheme, about 2,000 higher education staff go and work abroad, and about 27,000 European students come to our education institutions.
I am particularly plussed that the scheme is called Erasmus+, because—I must declare an interest—I helped put in the “+”. This great project is not just for universities as it also provides traineeships, internships and sports opportunities. Students who study, work and volunteer abroad are more likely to have better academic and employment outcomes. When I visited Essex University a few years ago, its vice-chancellor told me that studying abroad, even if for just a short period, was worth more than going up an entire degree classification when it came to employability.
After 10 years, Erasmus graduates are 44% more likely to be in managerial roles than their non-mobile counterparts, and the positive impact is especially great for those from less advantaged backgrounds, because the ability to cope with changing circumstances and the development of soft skills that one gets from international experience is attractive to future employers. In our global economy, businesses want clued-up employees who understand different cultures and know how the world works.
That said, the sad fact is that less than 7% of British students go abroad at the moment, so we must do better. I was delighted to be at the launch of Universities UK’s Go International campaign and to be asked to give a keynote speech. It wants to double the number of UK undergraduates who study, work or volunteer abroad by 2020. When it comes to the next generation, we must be ambitious, and I totally support that. The most popular host countries for students who go on work placements are France, the US, Spain, Germany, the Netherlands and Italy—most are in the EU. That is why it is so important that we try to stay in the Erasmus+ student exchange. I was delighted to hear the Prime Minister say in her Mansion House speech that she wished to keep an ongoing relationship with the EU in respect of educational and cultural programmes, and she was talking about Erasmus+. Doing so is the right thing, and that is the aim of the Prime Minister and the Minister.
Alongside Erasmus+, we must remember the greater number of students who come to Britain from outside the programme. More than 100,000 EU students currently study in the UK, and they bring huge cultural and academic benefits to our universities through that diversity. It is estimated that they generate more than £4 billion for our economy each year, much of which arises from off-campus expenditure. These students also generate a huge amount of local jobs, both on campus and off campus. It is really important that we keep EU students interested in coming to UK universities as their destination of choice, which is why it is so good that the Government have focused on ensuring that there is clarity regarding the fees paid by EU students. I say to the Minister that we must continue to give those EU students clarity so that when they apply for our university places, they know how much they will be expected to pay.
Another, bigger issue is the work that our universities do on science and research. Continued collaboration is vital to keeping British universities in their leading role across the world. Research today has changed. Increasingly, it is not done by one academic sitting in a laboratory alone, but delivered through networks of collaboration— between different disciplines, between academia and industry, and between people in different countries. As the Government point out in their industrial strategy, some of our closest research relationships and collaborations are with EU member states.
The UK was at the forefront of developing framework programmes for scientific collaboration across Europe. I worked with the Minister’s predecessor to deliver the latest framework project, Horizon 2020. That programme has helped British scientists to work with European scientists to make real advances on issues that affect us all, such as healthcare, environmental research and food security. These matters affect all our lives today, and the work will continue to make the world a better place.
More British-based scientists hold grants from the European Research Council than scientists from any other country. It is absolutely in our national interest to make it easy for our researchers to continue to work with others. As I was getting up this morning, I was delighted to hear Sir Mark Walport talking on the radio about the Rutherford research fellowships because they will continue to ensure that international talent comes here. It is not only the top universities that benefit from these exchanges. The top universities can apply for many other grants, and it is in fact places such as Anglia Ruskin University in my constituency that benefit, as more than three quarters of its funding has come from EU-funded programmes.
It is really good that the Prime Minister has made an early commitment to continue forming a long-term partnership with the EU in its next programme. The European Commission has just launched its draft proposals for Horizon Europe—a seven-year investment programme that could be worth in excess of €100 billion. We want to continue to participate, and I am delighted to hear that the feeling appears to be mutual. This week, German research organisations of the Max Planck Institute stated that they believe that European research is better when they have Brits working alongside them.
The Minister is rolling up his sleeves to ensure that we keep Erasmus, we keep the “+”, we keep the students, and we keep the science co-operation. That is in the interests of not only Britain but Europe, our students and the long-term future of the world.
Huw Merriman (Bexhill and Battle) (Con)
It is a pleasure to follow my hon. Friend the Member for Redditch (Rachel Maclean). I thank the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) again for securing this important debate about the future of Erasmus. He and I were both on a question time panel at our county’s university, the University of Sussex, and I know he has a great knowledge of and passion for this subject.
I too have a positive passion for the ability of not just students but those involved in education to learn abroad and for us to reciprocate, because we learn hugely from those who come from abroad to study or work here. It is a vital cog in our ability to maintain relations, to develop and to learn from other countries. I am absolutely on the side of ensuring that the UK continues to participate in the Erasmus scheme in the next seven-year block.
I maintain that it is vital for all people—not just young people—to go and have that taster abroad and to develop their language skills. The statistics undoubtedly show that people are more likely to succeed in the workplace, with the responsibilities they will be given, if they have such an opportunity. I am passionate about ensuring that we continue to participate in the scheme, and I was heartened by the Prime Minister’s recent speech in which she talked about the importance of continuing with our education networks and partnerships across Europe. There is no reason to believe that we will do anything but continue in that way.
I am, however, slightly concerned about the ongoing cost, as I said to the hon. Member for Brighton, Kemptown. To a certain extent, this is a bit of an indicator of why perhaps people in this country have fallen out of love with the European project, as it were. For a scheme—it has become Erasmus+ and already been widened to cover training, apprenticeships and even job seeking—to go from a cost of €15 billion to €30 billion is quite extraordinary. That was why I asked the hon. Gentleman what the scheme was being expanded in scope towards.
Huw Merriman
I will just finish this point.
I understand the point that there is lots more we could fund, but unfortunately we have run out of funding. We have the same issue with funding many of our own projects in this country. It is the mentality of the European Union that you can just double the budget in one period, that causes concern about our ability to continue to fund that budget.
Huw Merriman
I seem to have stirred the hornets’ nest. I will give way to my hon. Friend first.
Vicky Ford
I completely agree with my hon. Friend that money needs to be well spent and that sometimes the EU has not spent its pennies quite as carefully as we have done. However, Universities UK wants us to double the number of young people who take part in these programmes because of the benefits and because so few do at the moment. Does he agree that, if we are to double the number taking part, we need to increase the resources?
Huw Merriman
I do indeed, and without turning this into a wider universities debate, this is similar to the debate about doubling the number of students, how we fund that and how we then look students in the eye when it comes to their tuition fees. I acknowledge, of course, that these students bring funding over, so my argument is not a brilliant one, and I am sure the hon. Member for Bath (Wera Hobhouse) is about to tell me the same thing.
Gordon Marsden (Blackpool South) (Lab)
I warmly congratulate my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) on securing this debate and in showing that he—like the hon. Member for Chelmsford (Vicky Ford), whose speech I greatly enjoyed—has an honourable place in the progress and expansion of Erasmus benefits. I think that everything he said struck a chord with Members from across the House. One point that my hon. Friend made, unlike the hon. Member for Bexhill and Battle (Huw Merriman)—I enjoyed his speech, but he seemed to have a rather curious view of the concept of parliamentary scrutiny—was on detail and I want to emphasise that point to the Minister. The devil, as the Minister will know, is in the detail. I congratulate my hon. Friend on the superb way in which he put forward his case. I congratulate the hon. Members for Chelmsford, for Redditch (Rachel Maclean) and for Bexhill and Battle on the positive points they made—in particular, the personal observations made by the hon. Member for Redditch—and the hon. Member for Aberdeen North (Kirsty Blackman) on the pertinent remarks she has just made.
There are continuing misconceptions that Erasmus+ is just a higher education programme. In fact, it is open to education, training, youth and sports organisations across all sectors of lifelong learning, including school, further and higher education for both the adult and youth sectors. It took on that wider field in 2014, making it all the more important that we should fight for it to be continued in a post-Brexit world. Erasmus+ is unique in that it provides additional funding for both disadvantaged and disabled students. It allows low-income UK students, who may not otherwise be able to afford to go abroad without financial assistance, the opportunity to study. It provides them with a fee waiver and a grant for living expenses.
Social mobility, widening participation and encouraging social inclusion are key elements of the programme. As the Russell Group observed in its latest briefing on Erasmus, most Russell Group universities are able to offer supplementary grants specifically for disadvantaged students to undertake an Erasmus+ placement. MillionPlus says that modern universities educate the vast majority of students from areas of the country with the lowest participation in higher education. Schemes such as Erasmus are therefore particularly important. It makes the point that EU students in the UK, as well as UK students in Europe, are an enormous benefit to this country and may be even more significant post Brexit, as the UK reshapes its relationships with these nations. The National Union of Students also made the point in its briefing that
“the opportunity for transnational education, including… Erasmus+…benefits…students…UK education… local communities and the UK economy.”
The Confederation of British Industry has produced clear evidence that the UK workforce requires more graduates with international cultural awareness and, as Members have said today, foreign language skills. The need for these skills will become even more important after we leave the European Union, so it is vital that we do not take those opportunities away from the future workforce. There is also very strong evidence that student exchange programmes can have a beneficial impact, particularly on black and minority ethnic students and students from disadvantaged backgrounds.
Erasmus+ also offers young people the opportunity to develop the enabling skills that translate into the workforce and every aspect of their life. The UK is currently rated one of the world’s leading soft powers. It is no surprise, therefore, that the UK has been in the top three EU countries in terms of numbers participating and EU students coming here.
I do not think we should ever underestimate the importance of that soft power. Last month, I was in Georgia—not Georgia, US, but Georgia, Caucasus—for the 100th anniversary of its independence. I went to universities and met a group of Chevening students from Georgia. As Members will know, Chevening students come here and participate in not dissimilar ways to Erasmus+. Their affection for the UK was palpable. Only last week, one of those same Chevening scholars—alumni, I should say—who had been at that meeting with the hon. Member for Huntingdon (Mr Djanogly) and me in Tbilisi, led a trade delegation to this House for us to expand our trade with Georgia. That is an example of where that soft power can work.
Such programmes offer a once-in-a-lifetime opportunity for students to challenge themselves and develop as individuals, and that is why they play such a beneficial role in boosting the skills of the UK workforce. We will need that to develop the workforce of tomorrow. Research commissioned by the Local Government Association reveals that the skills gap is worsening. It states that by 2024, there will be more than 4 million too few high-skilled people to take up the available jobs, 2 million too many with intermediate skills, and more than 6 million too many low-skilled people. That is why the Government cannot afford to dither and allow participation in Erasmus+ to lapse.
The importance of Erasmus+ was recognised, as we have heard, through the EU Commission’s proposals for the new expanded programme. Doubling the funding does indeed enable the EU to support 12 million people and triple the number of participants. It also makes it easier for people from disadvantaged backgrounds to have an Erasmus experience by promoting more accessible formats, virtual exchanges and shorter learning periods abroad.
It is important to note—my hon. Friend the Member for Brighton, Kemptown touched on this today and in a previous Adjournment debate—that this funding includes some €3.1 billion for youth programmes and €550 million for sport. The implications for the new Erasmus programme are that it would offer even more possibilities—for example, for students at further education colleges, such as my Blackpool and The Fylde College, for apprentices and for others retraining with FE and skills providers, as well as opportunities for adults to retrain and reskill. These also help to address the issues of social mobility, which this Government consistently claim is at the forefront of their policies and indeed, is part of their post-18 education review.
However, actions speak louder than words. Despite these issues being raised consistently in calls from the sector and the Labour party for the past two years for guarantees on our continued involvement, it is still very unclear what the UK’s participation in the scheme will be following the end of the current period in 2020. The British Academy, in its review of the Brexit process, says:
“Continuing full participation in the Erasmus+ programme on the basis of an arrangement that would enable the UK to fulfil all the obligations of the Erasmus+ programme as a non-EU Programme Country”
is essential.
I pay tribute to the British Council, which has supplied a number of the statistics that have been shared across the Chamber today and has played a crucial part in administrating and promoting the Erasmus programme. It has also had a vital role in presenting evidence of the beneficial outcomes to Government. Anyone who saw the excellent Erasmus+ Shaping Futures exhibition in the Upper Waiting Hall in February, which helped to lay out the clear advantages through personal case histories, will know what I mean.
Alongside an array of higher and further education stakeholders, we have consistently pressed the Government on this issue, during the negotiations on the phase 1 agreement and during the passage of the European Union (Withdrawal) Bill. We tabled amendments to the Bill, both here and in the other place.
Vicky Ford
The hon. Gentleman speaks forcefully about the need to retain Erasmus+, and also, I presume, ongoing co-operation in science. Does he not agree, however, that if we are to continue to participate in Horizon Europe, which will cost the British taxpayer many billions of pounds, we must have more than just third-country status. We must also have a say in how the programmes are structured.
Gordon Marsden
That is a very good point, although it might be better directed at the Minister rather than the shadow Minister. I agree that we need a rigorous debate on the subject.
As my hon. Friend pointed out, it was not until November, in a letter to my hon. Friends the Members for City of Durham (Dr Blackman-Woods) and for Sheffield Central (Paul Blomfield), that the Government made a commitment to continuing participation in the Erasmus+ scheme until the end of the current EU funding cycle, and spelt out some of the details. That letter did not in any way answer our questions about our participation in the new expanded Erasmus+, which will be so beneficial to social mobility, and which will begin in 2021.
I therefore pressed the Prime Minister during Prime Minister’s Question Time, asking whether she would ensure that Erasmus+ was
“now a top-line item for her Ministers”
in the continuing negotiations. I was disappointed by her answer, which was non-committal. She merely said:
“there are certain programmes that we wish to remain part of when we leave the European Union, and Erasmus is one of those we have cited that we may wish to remain part of, but of course we are in a negotiation with the European Union”.—[Official Report, 16 May 2018; Vol. 641, c. 277.]
On that occasion, Mrs May said “may”, but as parliamentary draftsmen will know, “may” is not the same as “would” or “want”.
We continue to believe that it is imperative for future involvement in this programme to be on the agenda, and to be explicit in the Brexit guidelines. The Government must ensure that Ministers in the Departments for Education, for Business, Energy and Industrial Strategy and for Culture, Media and Sport are involved in the negotiations, and ensure that it is clear that Erasmus+ is a key part of that agenda. I do not doubt for a minute the commitment of the Universities Minister, but I want to see him, if not actually at the table, as close to it as possible, and whispering in the ears of the Secretary of State for Exiting the European Union.
Erasmus+ is every bit as important to the future of our country, and to our young and our older people, as Horizon, or the money from EU structural funds that will be lost to higher and further education, on which the prosperity fund—a slightly Orwellian title—has yet to comment. As the Russell Group has said, maintaining our membership of the programme is likely to be less costly than an attempt by universities to replicate it, either on a bilateral basis or through the European University Association. It would be very difficult to replicate via a national scheme.
Since the phase 1 negotiations the Government have had opportunities to express a stronger commitment to Erasmus+. I have met members of the European Commission twice, and have raised the implications of Brexit for our higher and further education and skills. Everyone to whom I have spoken has agreed that it is a benefit to both the EU and the UK. It is not just a glorified twinning experience. If the Government are in any way serious about our being a global Britain, they need to address this issue with the effort that it deserves; otherwise they will not be forgiven, either by the millennial generation or by their families and friends who have seen the life-changing opportunities that Erasmus+ has brought them.
Oral Answers to Questions
Vicky Ford Excerpts(6 years, 4 months ago)
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Vicky Ford (Chelmsford) (Con)
The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)
When it comes to science, research and innovation, this Government are putting their money where their mouth is. We are investing an additional £7 billion in research and development funding by 2022—the biggest ever increase in public funding. Our ambition is to increase the UK’s R&D spend to 2.4% of GDP by 2027, which will be an additional £80 billion over the next decade to help us to dominate the new industries of the future.
Mr Gyimah
My hon. Friend is right to mention agri-tech. As he is aware, we set out in the industrial sector that agri-tech is one of the six priority areas for the artificial intelligence and data economy grand challenge. On progress in what we are doing, we have announced a £90 million transforming food production challenge, which will continue to bring together the UK’s world-class agri-food sector with expertise in robotics, AI and data science.
Vicky Ford
In Chelmsford, we are making the sensors that will go on the Sentinel satellites, which will provide a step change in how we monitor our planet’s environment from space. Many European countries have national space programmes and are members of the European Space Agency. Will the UK have a national space programme and contribute to the European Space Agency going forward?
Mr Gyimah
I can answer categorically: the UK will continue to be a member of the independent European Space Agency—currently, for every £1 we invest, we get £10 back—and Innovate UK is looking at a national space programme with the UK Space Agency. In addition, we are looking at a space sector deal to boost the work in our thriving space sector.
Retail Sector
Vicky Ford Excerpts(6 years, 5 months ago)
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Rebecca Long Bailey
With the hon. Gentleman’s knowledge of the sector, I am surprised that he says that, given that business rates are one of the critical issues affecting the high street. Retailers often tell me about the unfairness of businesses such as Amazon receiving skewed business rates valuations due to the size of their operations, so I have dealt with that point.
Vicky Ford (Chelmsford) (Con)
I have listened carefully to the hon. Lady, who has accused British retailers of lacking innovation. However, the UK is the third largest e-commerce market in the world. Digital taxation needs to be done on a cross-border basis, so will she join me in congratulating our Chancellor on getting 100 countries across the world to look at implementing a digital tax to allow us to address the level playing field between online and offline?
Industrial Strategy
Vicky Ford Excerpts(6 years, 6 months ago)
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Greg Clark
As the hon. Gentleman knows—the industrial strategy is clear about it—we benefit from the contribution of workers, scientists and engineers from all over the world. There is no successful future for an economy that does not engage with the world. That means that we should be open to talent from around the world. We need to make sure, as every responsible nation does, that we have an orderly system for managing immigration from around the world. That is what we are achieving and what we will continue to achieve. It is very clear, on every page of the strategy, that this is a vision for an international Britain, rather than one that is moving towards a kind of national self-sufficiency.
Vicky Ford (Chelmsford) (Con)
I thank my right hon. Friend for giving way and for the commitment he is making to ensuring that world-class talent from across the world can continue to come to support science in Britain. When the president of the Royal Society came to speak to the Science and Technology Committee, he pointed out that world-class scientists need to be mobile, anthropologists need to work abroad and those working for the British Antarctic Survey need to go to Antarctica. Will he make sure that the visa system is able to provide that mobility?
Greg Clark
That is very important. One of the commitments in the industrial strategy is to increase the number of visas and studentships for international researchers coming to work in the UK. Nobel prizes were mentioned earlier. I had the privilege, when I was Science Minister, to go the Nobel prize ceremony. What is notable is not just that a lot of Brits receive these awards, but that most Nobel prizes in the sciences are given to teams of researchers and that those teams are usually international. That embodies the fact that the best ideas come from the connections that are made between researchers from different cultures and different countries.
Rebecca Long Bailey
The hon. Gentleman makes his point very passionately, but I do not think he has really listened to what I have been saying. We are certainly—[Interruption.] Please! If Government Members would listen rather than chunter, they might actually learn something.
We are far from average, as these comments from the Commission on Economic Justice illustrate quite articulately:
“We have vast ingenuity and creativity among our people, where enterprise and industry have deep roots going back to the Industrial Revolution. Many of the most important scientific discoveries in human history have taken place in Britain, advancing not only this country but also the entirety of humanity.”
We are far from average—I agree with the comments that the hon. Gentleman made in a, shall we say, quite haphazard and incoherent way—so why should we have to trail behind the world and settle for mediocrity from this Government in terms of investment in research and development?
Rebecca Long Bailey
I will make some progress, if I may, then the hon. Lady can make further interventions.
In relation to skills, we were promised about £500 million of investment. That is frankly pitiful and does not even begin to repair the damage done to the adult skills budget between 2010 and 2015, when over £1.15 billion was cut. With research by PWC finding that 77% of CEOs worry that skills shortages could impair their company’s growth, and with the CBI stating that 69% of businesses are not confident about filling their high-skilled jobs, the Government’s actions have done little to show that they are creating a workforce truly ready for our industrial renaissance.
On infrastructure investment, we were promised £31 billion of investment through the national productivity investment fund. Again, that is below the levels seen in other leading industrial nations. As TUC analysis shows, the sums promised will simply increase investment to just 2.9% of GDP, whereas the average spend on investment by the leading industrial nations in the OECD is 3.5%. It is also clear that the Government have made no attempt to halt the skewing of infrastructure spending towards London, which is due to get more transport spending over the next five years than the rest of England put together.
That brings me to local industrial policy. Labour has been clear on the need for a national industrial strategy, but we are also clear about the need to be regionally powerful and distinctive, with the resources to match, and to build on the already world-class universities and businesses in our regions and nations. Since last November, the Labour party has been convening roundtables in every region and nation of the UK to discuss what businesses in those regions need from an industrial strategy. Alarmingly, in one region I heard that the responsibility for formulating a local industrial strategy had simply landed on the desk of the local enterprise partnership’s chief executive, with no additional resources. Could the Minster confirm whether there is a team in his Department working on local industrial strategy or whether that is simply now the responsibility of LEPs? Last month, the Local Government Chronicle argued that the Government should put more resources into agreeing a local industrial strategy if they did not want to risk concentrating their efforts on improving the economy in just a handful of areas.
Vicky Ford (Chelmsford) (Con)
We are in the middle of the fourth industrial revolution—a time of huge technological, demographic and environmental change—and the decisions we make now are crucial to our future. I welcome the focus brought by this industrial strategy, and particularly its focus on innovation. I am proud to serve on the Science and Technology Committee. It is science and research that delivers the innovation that drives a modern economy, and we are a world leader in science and research. Four of our universities are in the world’s top 10, one in six of the world’s top research papers are written here, and we have more Nobel prize winners than any country other than the US.
But we cannot rest on our laurels. Countries such as India and China are accelerating their investment and they want to woo our best scientists. That is why it is absolutely right that this Government are investing more in science and technology than any other Government in the past 40 years. Scientific innovation is not just about money—it is about people, too. World-class science needs world-class people. I am pleased that this industrial strategy establishes the Rutherford fund to help recruit researchers, doubles the number of tier 1 visas and gives a commitment to make it easier for world-class researchers to settle here. However, the devil is in the detail. We need a visa system that makes mobility easy for scientists. I thank the Secretary of State for the answer he gave on that earlier.
Research is changing. It is not just done by one scientist in one lab working alone; it is delivered through networks of collaboration. This industrial strategy points out that our closest relationships and collaborations are with EU member states. Britain has led the EU framework programmes, and I worked with Ministers to lead the latest one. More British scientists participate in them, and more hold European Research Council grants, than those from any other country. It is in our national interest to continue to participate. Ministers have confirmed that if the next framework is materially the same as the last one, Britain would like to continue. I ask them to make that point more positive by saying that we will continue to participate unless it is materially different.
We need to ensure that the best ideas are not just generated here but also developed and manufactured here. That is why I welcome the sector by sector focus in the strategy, and I would like to concentrate on some of those sectors.
Our space sector has trebled in size, and the jobs in it are highly skilled and highly productive. The Space Industry Act 2018 means that next-generation smaller, smarter satellites will not only be developed here but launched here. Space assets are key to our communications and our security. We are the only G7 country that does not have its own earth imagery assets. We have paid for the Galileo satellites, and Britain needs to benefit from that.
We are a world leader in life sciences. We are home to the Wellcome Genome Campus. It was a British Prime Minister who led the visionary 100,000 Genomes Project, and it is absolutely right that life sciences are at the heart of the industrial sector. We need to ensure that drugs are not just delivered and developed here but used here, and our Select Committee has done some very good work on how we can ensure that those revolutionary genomic drugs get delivered into the NHS.
Data is the lifeblood of the digital revolution, and we cannot separate digital from other sectors of the economy. The scandal of Facebook and Cambridge Analytica reminds us of the need for clear rules. It is great that the general data protection regulation is becoming the global standard and that this Government are delivering it into British law through the Data Protection Bill. The strategy also points to the need for legislation to be flexible, which I welcome.
Domestic Gas and Electricity (Tariff Cap) Bill (Third sitting)
Vicky Ford ExcerptsThursday 15th March 2018
(6 years, 7 months ago)
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The Chair
We will now recommence line-by-line consideration of the Bill. There are the usual words about turning off your mobile phones. I can see at least one cup containing what is a banned substance as far as the House of Commons is concerned—
The Chair
It is water! I do apologise. It was the Clerk who drew it to my attention. We have to obey the rules, but water is very acceptable. Thank you.
Clause 8
Extension and termination of tariff cap conditions
Claire Perry
I could not agree more. I thank the right hon. Lady for her kind congratulations. I feel it is an undeserved honour, but it is amazing. She is absolutely right. One of the reasons we were minded to bring forward the Bill was that we have a competitive energy market, with more than 60 companies that would like to sell us energy—either combined heat and power or, in some cases, just power—but we gifted incumbency to a large number of companies when we took what I thought were sensible steps to privatise the energy system. That brought in more than £60 billion of new capital and caused prices to fall and power cuts to halve, but the companies that were gifted incumbency have not had to work for customers. It was interesting to hear from new entrants about how they are determined to shake up that complacency.
I think the right hon. Lady also alluded to practices further up the energy system—or further down; I am not sure whether it starts at the top or the bottom—and particularly profits in the distribution sector and overall network costs, which have come down but arguably could come down further. Work has been done in that area, but I am determined that the whole sector, from generation right to the customer’s meter, should be highly efficient, that efficiency and customer service should be rewarded, and that we ensure we have not created a shield of incumbency that allows companies to persist with bad customer practices. This is the start. We may not need legislation to get there, so we may not have the pleasure of—
Vicky Ford
I thank my right hon. Friend for giving way and wish her many congratulations from the Government side of the Committee, too. On incumbency and the investment that she mentioned, is it not extremely important that the price cap is set at a level that continues to encourage investment the whole way through the energy chain and into the new infrastructure we need? That is one of the reasons it is so important to signal that this is not a permanent cap; it is an incentive to increase competition and to ensure that the market continues to be dynamic and that infrastructure continues to be invested in.
Claire Perry
My hon. Friend brings her great knowledge of these markets on a broader European scale to make a telling and vital point. The need to maintain investment in the industry, which we must have as we go through what is possibly the most exciting revolution in our energy markets for decades, is included in the Bill for exactly that reason. Clause 1(6)(d) speaks to exactly that point: we must ensure that we still have the financial investment in the industry that we so desperately need.
Having talked about the need to keep on improving efficiency, and having accepted the view of the Select Committee that the price cap should be only a temporary measure—reflecting a cross-party view that the Government should not be unduly involved in setting energy prices— I hope that I have persuaded the hon. Member for Kilmarnock and Loudoun that his amendment is unnecessary and provides an obligation on a future Secretary of State to impose another price cap. A future Government may decide to do that—who am I to suggest what legislation a future Government might introduce? However, I do not feel that the amendment is appropriate; it creates disincentives and uncertainty in a market where we have to have certainty to generate investment. On that basis, I hope he might be persuaded to withdraw his amendment.
Domestic Gas and Electricity (Tariff Cap) Bill (Second sitting)
Vicky Ford ExcerptsTuesday 13th March 2018
(6 years, 7 months ago)
Public Bill CommitteesRead Full debate Domestic Gas and Electricity (Tariff Cap) Act 2018 View all Domestic Gas and Electricity (Tariff Cap) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 13 March 2018 - (13 Mar 2018)
Dr Whitehead
The hon. Gentleman is absolutely right. If there do turn out to be legal challenges, despite our best efforts in this Committee to ensure that the Bill is as watertight as it can be, it is conceivable that the whole timetable of a price cap could be seriously derailed—I think we have all understood that, as far as the process is concerned. Indeed, one reason there is legislation, rather than Ofgem going down the road of a price cap under its own steam, which it has been claimed at various times could have been the case, is to ensure that, as far as possible, the proposals and what Ofgem puts in place around them, are legally watertight. That comes in two parts. First, there is the question of ensuring that the legislation is as watertight as possible, but there is also a duty on Ofgem to ensure that, in translating the instruments in the legislation into a workable price cap, it takes measures that are also legally watertight, so that it does not slip up after we have done the good work in Committee of making the legislation as watertight as possible.
Vicky Ford (Chelmsford) (Con)
In the evidence session this morning, I clearly asked whether Ofgem would be ready for next winter, and Ofgem was not only clear that it would be ready for next winter, but outlined the very robust, transparent and deep process being undertaken to ensure that.
Dr Whitehead
Yes, indeed. The hon. Lady will recall that, in answer to my question, Ofgem went through the processes it is statutorily required to undertake, together with an estimate of the time that that would take. Between us, we were able to get on record a pretty clear note of intention from Ofgem that, subject to the possibility that the whole thing could come off the rails because of an unexpected legal intervention, it would bend its efforts to ensure that the process of five months was adhered to.
The amendment seeks to go a small step further and to place on the face of the Bill an indicative time by which Ofgem should have done its business, to ensure that the working price cap becomes reality under the Act. The amendment does not seek to interfere with, foreshorten or undermine what Ofgem is trying to do, quite properly, to make the Bill a reality.
Vicky Ford
I am sorry, but I read the amendment completely differently. If we have all agreed that Ofgem has made it clear that it will go through the process to come up with the right level of cap—taking the right level of evidence—by next winter, and that the only thing that could delay it would be a legal judgment, why would we even suggest, through the amendment, that it may not be ready? That throws unnecessary doubt on the process, which would still be subject to a legal challenge were the amendment there. I think it would just add confusion and doubt.
Dr Whitehead
I fully accept the hon. Lady’s reading of the amendment, but I assure her that that is not its purpose.
Dr Whitehead
I appreciate the hon. Gentleman’s point. Paragraph (e) would, conceivably, make life more difficult for Ofgem with respect to what it has to consider. As he correctly points out, it is required first to take a very general view
“to protecting existing and future domestic customers who pay standard variable and default rates”,
and then
“in so doing it must have regard to the following matters”—
those listed in the following paragraphs. In other words, if my reading is correct, after Ofgem has undertaken its initial consideration, it has a number of specific further considerations to take into account. All our amendment says is, “Here are two more to add to the list.”
Vicky Ford
The way I read amendment 4, it suggests that all customers on standard variable and default rates will get a £100 reduction, whereas the Prime Minister’s statement was that the millions of consumers who are on unacceptably high default rates would get a reduction. In the statement this morning, there was a suggestion that at least two of the big six do not have unacceptably high rates. I am rather concerned about the one-size-fits-all nature of the amendment.
Dr Whitehead
The hon. Lady has a point, but if hon. Members read amendment 4 and clause 1(6) reasonably carefully, they will see that
“the need to ensure that customers on standard variable and default rates have their annual expenditure on gas and electricity reduced by no less than £100 as a result of the tariff cap conditions”
would be a consideration—I emphasise the word “consideration”—that Ofgem needed to take into account.
Dr Whitehead
That is a reasonable and honestly held opinion about the extent to which it is possible easily to distinguish when greenwash is not greenwash and the point at which an energy company, even with a partially green tariff, puts in something that is honestly green and not something that they have just cooked up because they happen to have purchased something that has an element of traceable green energy in it.
Even under the circumstances that the hon. Gentleman mentions, it would be fairly difficult for Ofgem to make easy distinctions when it came to what it was doing about tariffs that could be jumbled up with a lot of brown energy but nevertheless be claimed to be at least partially green.
I have tried to think this through and consider how we might be able to make honest citizens of those companies under such circumstances. It is possible to argue that even if a company accidentally buys green energy, if it is genuine green energy, then yes, it has sourced green energy. However, the bar needs to be set rather higher.
Vicky Ford
The hon. Gentleman’s amendment uses the word “wholly”. In my view, “wholly” means that 100% of the energy would be renewable. To me, that is wholly unworkable. I want more consumers to get more choice. If they really wish to buy more renewable energy packages, they can do that. I would also like to see green tariffs that encourage smart consumption—smart appliances that switch on and off at peak times, for example. Those could also be bundled into a green tariff.
Furthermore, as more and more people want to buy renewable packages, what happens at a peak time on a very, very cold day when our renewables cannot cover the amount of consumption those consumers need? Would they have to be switched off and have no energy at all? Would they not be allowed any back-up supply? “Wholly” is not the right word.
Domestic Gas and Electricity (Tariff Cap) Bill (First sitting)
Vicky Ford ExcerptsTuesday 13th March 2018
(6 years, 7 months ago)
Public Bill CommitteesRead Full debate Domestic Gas and Electricity (Tariff Cap) Act 2018 View all Domestic Gas and Electricity (Tariff Cap) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 13 March 2018 - (13 Mar 2018)
The Chair
Good morning. We will now hear evidence from Greg Jackson, CEO of Octopus Energy; Hayden Wood, co-founder of Bulb energy; and Juliet Davenport, the CEO of Good Energy. Thank you all for being here this morning. Members of the Committee will now ask a series of questions. Unfortunately, this session has to finish by 10.15, so brief questions and brief answers will be gratefully heard.
Vicky Ford (Chelmsford) (Con)
Q
Octopus, do you think there is a risk that once the cap comes in, prices will all bunch around that cap level? Some people have said that switching activity might then reduce. Do you think that is a risk? Bulb, do you think that the cap will disincentivise investment in infrastructure at this stage, or do you think we can manage the infrastructure need separately?
Greg Jackson: To answer those three questions, on the bunching question we do not agree. There are 70-odd energy suppliers in the retail market currently. The majority of them price below any realistic level at which an absolute cap would be introduced. If there is any bunching, it will be the welcome bunching of the suppliers that currently charge their loyal customers more than an absolute cap by bringing their prices down to that level. Underneath any realistic cap, there is still plenty of room for competition, and competition among the challengers that have to fight for and win every single customer from scratch will be unabated.
In terms of switching rates, the first thing is that the idea that very high levels of switching is a good thing is outdated. For 20 years, consumers have been told that they have to switch; in any given year, no more than 15% to 20% will do so. All the rest are getting ripped off. What we need is a market in which you get good value without switching, and an absolute cap is a step in the right direction. It is an excellent measure that will help reduce the rip-off for those who switch and those who do not.
Finally, in terms of investment in infrastructure, Octopus Energy is backed by the Octopus Group, which is one of the largest investors in renewable generation in the UK. Frankly, something that makes the retail market behave more like a proper market—one in which consumers get good value by staying loyal to good suppliers—will generate more investment in the sector, rather than the current strangulation that occurs because of things such as predatory pricing, whereby back-book customers of large companies cross-subsidise loss-making deals.
Vicky Ford
Q
Juliet Davenport: It is going to be interesting—that is the answer. If you look at the current data in the marketplace, with no intervention whatever four out of the big six have a 25% gap between their most expensive tariff and their cheapest tariff. There are two that do not—two have closer to a 6% to 8% differential between the two. Interestingly, the one with the smallest differential also has the lowest standard variable tariff.
If you have an absolute price cap, you will obviously see that the affordability of the lower tariffs for the big six will be less: you will see some shrinkage between the highest price and the lowest price. That is what we are trying to do—to get rid of cross-subsidisation between the most expensive and the cheapest.
Will we see some bunching? We will see a narrowing of that. The question is: how do you want to achieve that? I am assuming that is what you are trying to achieve: the stopping of cross-subsidisation, keeping those people who are very faithful to their suppliers and making the suppliers pay for the discounts that they are using to get other people. I think there will be some slendering through that and the data is kind of showing that already, if you look at it.
Hayden Wood: I would say two things. The first, on the bunching question, is that a price cap would have absolutely no effect on how Bulb sets its prices. We have one tariff, so whether the cap is there or not we would continue to charge the rates that we charge now, and they are among the cheapest rates in the market. There will probably be some bunching, but it is going to occur because suppliers currently adopting these “tease and squeeze” tactics, where they have a great rate in the first year and then they charge more in later years, will be less able to do that: they will not be able to subsidise those teaser rates with expensive rates later. However, we do not expect the long-term cost of energy to change.
On your question about whether this will disincentivise investment in infrastructure, there are two parts of infrastructure that spring to mind: the first is network infrastructure and the second is generation infrastructure. On the network infrastructure question, those investment decisions are made by the regional power networks. Those are regulated local monopolies. They make a metronomic profit margin of between 7% and 9%. The price cap should not affect the profit margin that they will make here, so I do not see any reason why they should be disincentivised from investing.
On the question of generation, from where I am sitting the introduction of a price cap would be a big stimulus to investment in renewable generation, because it would mean that more and more homes could choose to buy their energy from a low-cost, efficient renewable supplier. We see no reason why renewable suppliers should be exempt from this cap, because my view is that Bulb can provide 100% renewable electricity, at a rate that is at least £200 lower than the cap.
Bim Afolami (Hitchin and Harpenden) (Con)
Q
Hayden Wood: I struggle to explain it. We do not understand why two people in the same street using the same amount of energy from the same supplier should pay different rates. That just does not seem fair to us. There are some suppliers who will provide a fixed tariff and then they claim that there are substantial costs to providing that fixed tariff, and that those costs then need to be reflected in a—
Bambos Charalambous
Q
Greg Jackson: That is exactly right. For example, if you are going to have an exemption, maybe a company would have to do 100% green products for all of its customers on all of its products. Something simple like that means you cannot get away with greenwashing a company that is really a cap evader.
Vicky Ford
Q
Juliet Davenport: What is the alternative? Is there an alternative? To make a definition in the Bill?
Vicky Ford
Q
Juliet Davenport: I would agree on that.
Hayden Wood: This Committee has an opportunity to help 12 million homes that are currently languishing on standard variable tariffs and massively overpaying for their energy, and help them to reduce their bills. If we allow a loophole such as this into the legislation—let us say that it is Ofgem’s responsibility to manage that loophole and to keep it closed—we open it up to being manipulated or lobbied on or people working around it. We saw how the retail market review regulation years ago led to some unintended consequences in how the energy market is structured, and we now suffer from this “tease and squeeze” problem, which others on the panel have described. We would propose completely removing clause 3(2) of the Bill to eliminate any issues with unscrupulous suppliers introducing non-green tariffs and removing the effect of the cap.
James Heappey (Wells) (Con)
Q
Hayden Wood: I completely agree with that. It perpetuates the myth.
Juliet Davenport: My view is that you can have cheap greenwash tariffs alongside genuine innovative tariffs and you can have a differentiation. You have to focus on the big six and make sure that there are not any loopholes, but most of these companies have had people come to them as a choice. What is great about this market is that we do have choice. We have the cheap greens, and we also have the more innovative products such as us. Why would you close that down? You can see that we have been leading this market and making changes in it. We support about 140,000 homes who generate power in their own house. Those are the kind of innovations that we want to continue to do. To be honest, if you price-cap us, we are going to have no investment left for that kind of innovation.
I completely agree that we should have a differentiation and we should have products that are cheaper green. I met one of Bulb’s customers at the rugby the other day who was very enthusiastic. She was so excited by the fact that she is going on a green journey. I think that is brilliant, and that is what we should embrace in this. We should not try to close it down to be one thing or another. We should allow innovation within the marketplace.
Bim Afolami
Q
Dermot Nolan: Yes, I certainly would have. I will be responsible if I do not get it right, so I would have communicated that.
Vicky Ford
Q
Dermot Nolan: We will consult as openly as possible. We will issue consultation documents, because that is the nature of what we are required to do, but we will also hold workshops which are open to all and we will try to get views from every possible supplier. Not only that, however—I want to be very clear on this—we will want views from stakeholders far beyond suppliers. I think your next session is consumer groups, and we will try to consult as extensively as possible with them. In fact, being blunt, we are both required to and want to listen to as many as we can hear over the next few months, to inform any decision.
Regarding next winter, as you say, it was cold recently, but I have said before and I repeat again very clearly here that we will have the cap in within five months of Royal Assent. We will have it in place and affecting consumers by that point.
Vicky Ford
Q
Dermot Nolan: Yes, it would be on our website and we would make a specific—[Interruption.] Sorry, Chair.
The Chair
No, no, I am sorry. I am just keen to get as many people in as possible. Alan Whitehead.
Michelle Donelan (Chippenham) (Con)
Q
Dermot Nolan: I think six months is the maximum. If the Bill goes through as is, we will consult on it. I honestly cannot say what we would ultimately pick, because it would be an open consultation. Certainly, I cannot imagine, at this point in the way the energy market is, having prices change every week or month. I think it would be a consultation along the lines that I have already mentioned. There is no perfect number though. We would want to try to hear from consumers what they thought was best and what reflected their preferences.
Vicky Ford
Q
Dermot Nolan: We will listen to everybody when taking views on setting the cap. However, the infrastructure should not formally be part of the price cap. It should not affect the way in which the price cap will broadly be set in terms of interactions with suppliers and the prices of the inputs they purchase. So although we will listen to everyone, I do not think infrastructure investors per se will be crucially involved.
I came in at the end of the last session and heard about smart metering. We will have to consider the smart metering costs, but only in the efficient cost. One of the difficult tasks in setting any level of cap is deciding a precise, efficient cost for the firms and ensuring that those efficient costs are passed on in the cap.
Stephen Kerr
Q
Dermot Nolan: The CMA view was split. We said we would go with the majority view, but one of the points about the process is that Parliament has now taken a decision. It is absolutely something that we will implement, because we are servants of Parliament, and we will implement it as quickly and as effectively as possible.
On the theme of competition, in my reading of the draft legislation, it seems to me that there is a desire to bring in a cap but also a desire to develop a more competitive market. There are a number of things that we are putting in place that we believe will help develop a competitive market further.
On smart metering, I know there were different views among the earlier panel, but smart metering is helpful. It is in some sense a necessary condition for, if you like, a digitised retail energy sector. There will be faster and more reliable switching processes. There are a number of remedies we have tested for prompts—ways in which people who have not yet been prompted to engage in the market will be prompted further. We have tested a lot of those already, trialled many of them and are going to roll them out in the next couple of years. There is the work on what we call midata, where we are going to push forward with a secure piece of your data that you can use in any price comparison website or any particular thing that will facilitate competition.
There are two more points—I know I am listing them off, but I want to be clear. One is that we think vulnerable protections will still be necessary if a full price cap is removed. We will look at whether any vulnerability price caps should be kept and, in particular, whether other forms and ways of protecting vulnerable customers, including things such as collective switches, could be used.
Vicky Ford
Q
Dermot Nolan: I hope we do not, frankly. We will do our very best to bring competition as quickly as possible.
Dr Whitehead
Q
Are you happy with what appears to be an almost complete lack of pillars on which your report might be based? Is that something that you can live with easily, or would you prefer or welcome further pillars in the report to ensure that your understanding of the report was in line with what was required to bring competition back into the market?
Dermot Nolan: It is a fair question. I am personally content with the drafting, but I respect the fact that it is a matter for Parliament. I think we have a reasonably clear idea, and I hope we have given some of it today, but I assure you that we will spend a lot of time preparing an analysis of whether we think competition is working effectively in the market.
If further areas are to be put in, that is a matter for Parliament. I am slightly worried that putting specific targets and measures directly into legislative language now, in a market that will change radically over the next five years, might be somewhat distortionary. All I can say is that on the current language we will do as comprehensive a job as we can and look at all possible indicators to give an overall assessment to the Secretary of State of whether we think the market is working for consumers.
Michelle Donelan
I just want to follow up and build on the topic of consumers. How do you each feel this Bill will impact on the interest groups you represent? This is particularly pertinent to Which?
Pete Moorey: We represent all consumers, and the Bill may have a number of different impacts for all consumers. Clearly, for the large number of people on standard variable tariffs, it is going to mean a cut in their energy bills, which will be very welcome for them.
However, as you are probably aware, we have some concerns about the risks presented by a price cap and the impact that could have for consumers as a whole, which may well be mitigated by the measures in the Bill regarding Ofgem, ensuring that it maintains attempts to promote competition.
Nevertheless, the things that we are concerned about with the introduction of a price cap are that we do not see any softening of competition and that we do not see prices for consumers overall going up. It is likely that for some consumers we will see some price rises, as some tariffs get removed. We do not want to see a reduction in the standard of customer service, which is often deemed as being poor among the larger suppliers; the annual satisfaction survey that we do at Which? every year shows that the larger suppliers do very poorly on a whole range of metrics.
Also, we do not want to see less innovation in the market. So we do not want to see the introduction of a cap having an impact on the smart meter roll-out, or indeed on the transformation that Dermot Nolan spoke about, which we really support, around the introduction of new suppliers in the market, who may well be able to bring a transformation to energy, which is what we want to see.
I absolutely understand why the price cap is being introduced. I think the energy industry had opportunities, time and again, to stop this from happening, and they failed to react to that and to the problems that their customers were facing in the market. However, as we now introduce the cap, we have to be very mindful of those risks: the last thing we want is a price cap to come in, be removed at the end, and for us then to be left with exactly the same kind of broken market that we have now.
Vicky Ford
Q
Pete Moorey: Absolutely. Smart meters themselves are only the facilitator of a new kind of market. Gas and electricity is a homogenous product. Of course it is dull for consumers to engage with, and our expectations around them switching have been—by and large—fairly ridiculous really, given that there is generally little value in switching beyond the price that you can be saving, which can be significant. But beyond that, why people should really engage with this market has been bewildering to consumers, really.
However, we are now just starting to see potentially a very different energy market, because of smart metering and then smart appliances, as well as the introduction of electric vehicles, storage and a whole range of other changes. They should make energy an attractive industry for new kinds of players to enter, which may well mean that consumers start to be offered very different kinds of things. It may well be, as Dermot said, that there will be much more bundled products, whereby suppliers effectively offer to look after your whole house—your whole life—and that may well be attractive.
Of course, with that comes the risk that that will potentially only benefit people like me, who perhaps have the ability and the money to engage with that market. We obviously want to see all consumers benefiting and we will need to be very mindful, as that change comes, about vulnerable consumers and their ability to benefit from the price cap, too. They should do, because the positive benefit could well be that you can target much more specific products at the most vulnerable, and ensure that they really are getting value out of their relationship with their energy supplier, or indeed with a whole range of other suppliers that could start to form a hub around smart meters and other smart appliances.
Vicky Ford
Q
Pete Moorey: Yes. I think it is the right date, but the critical thing is that Ofgem has the ability on a very regular basis to review how the price cap is working, to set out transparently the changes being made in the market, and to be able to recommend to the Government whether the cap should be removed earlier. I think that having that balance is right.
Bill Grant
Q
Finally, picking up on Pete’s reference the less well-off groups, or those who are less price-savvy—I think that was the term—do you think the meters will assist those people in understanding their expenditure? Do you really think it will have an impact?
Pete Moorey: I hope so, but I think there are significant challenges for the roll-out. The fact is that the roll-out does not appear to be going as well as it should. Our own research in the last few months revealed that energy suppliers would be having to install 24 meters per minute for us to hit the target by 2020. So we have to keep a close eye on the smart meter roll-out. I do hope that it leads to changes, and changes that benefit all consumers, but that will require not only groups like us but also yourselves to keep an incredibly close eye on the roll-out.
Peter Smith: National Energy Action runs something called the communities programme, alongside Smart Energy GB, which is the organisation that exists to engage smart meter roll-out. We are doing some valuable work on that, but we are concerned that the roll-out is significantly back-loaded now. That challenges the cost-benefit analysis that the Government originally estimated, which assumes cumulative benefits running all the way through successive years, up to 2020. Now we are in 2018—and 2020 is there; so there is a concern.
James Heappey
Q
Rich Hall: We do not have any analysis on that to hand, but it is a crucial issue, in that the problem with SVTs is not their name, but their characteristics; it is the fact that they are extremely poor value products that exploit consumer inertia. If the replacement products simply have the same characteristics, and they are benchmarked to a similar level of pricing, that is simply an attempt to get around the intent of the Bill rather than to reduce the detriment that those customers see. That is an area where we, Ofgem and others will need to improve our monitoring in the coming months, as we see more of those tariffs in the market. At the moment, it is still fairly soon after the launch of these approaches by three suppliers, so it is a bit too early to say, but it is a genuine issue.
Vicky Ford
Q
Pete Moorey: That is good news.
Stephen Kerr
Q
Pete Moorey: I don’t know. It might do. That probably returns to the point I made to Alan Whitehead around testing and trialling different ways of engaging people in the market. It is really important that Ofgem tests how it communicates the safeguard and whether it should be called the safeguard. There is a real danger that most consumers, once they hear they are on a safeguard tariff, think that there is absolutely no reason for them to switch. Once the cap is in place, one of our key messages at Which? would be to go out there and say to people, “The safeguard tariff is not the cheapest tariff on the market. You could well still be saving hundreds of pounds by switching, particularly to some of the smaller suppliers in the market.”
Oral Answers to Questions
Vicky Ford Excerpts(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Greg Clark
I will indeed. I pay tribute to the hon. Gentleman for the stalwart way in which he and his colleagues stood up for their constituents and, indeed, the supply chain that covers the whole United Kingdom. Right from the beginning, this has been a joint endeavour between us, the Canadian Government, the company and everyone with an interest in the success of Bombardier.
Vicky Ford (Chelmsford) (Con)
Does my right hon. Friend agree that the future of our space and aerospace industries is key to our economic future and that practical measures like the new Space Industry Bill will open up new opportunities?
Greg Clark
I do indeed. Space is one of the fastest-growing sectors of the economy, and we are world leaders in it. Through the Bill, we will ensure that we have the right regulatory regime to underpin that.
Budget Resolutions
Vicky Ford ExcerptsTuesday 28th November 2017
(6 years, 11 months ago)
Commons ChamberRead Full debate Finance Act 2018 View all Finance Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts
Rebecca Long Bailey
I could not agree more. That is very articulately put.
It is not as if the Government were not warned of the problems of austerity by my right hon. Friend the shadow Chancellor. Indeed, the International Monetary Fund warned the Government that
“episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output… The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting.
Refusing to heed that advice was a deeply reckless act.
The current Chancellor may well turn around and lament post-crisis productivity, but let us remember that he was in the Cabinet while this economic mess was being created. He is not absolved of responsibility, but he has the opportunity to admit that that approach was wrong and to change course.
Unfortunately, although the Chancellor admitted in his Budget speech last week that there is a big productivity problem—a big gold star for Phil there—there was very little to give our economy the upgrade it desperately needs, nor was there any attempt meaningfully to level up regional investment spend.
Indeed, despite the Chancellor’s jovial attempts at talking up our ability to harness the fourth industrial revolution, the Office for Budget Responsibility looked at his future investment plans and cut its forecast for growth in productivity, but he still had one last chance—the industrial strategy. I waited with bated breath yesterday, desperately hoping that the action would match the rhetoric. It started well enough with the strategy’s stated goal to create an economy that boosts productivity and earning power throughout the UK. “That’s spot on,” I thought. But sadly, having looked into the strategy in a little more detail, it seems little more than a repackaging of existing policies.
Unfortunately, the Conservatives have form on this. There has been a long line of PR gimmicks that simply do not deliver. Members may recall that, back in 2011, the previous Chancellor announced a march of the makers, but UK manufacturing has since grown at less than half the European average. Similarly, much was made of the northern powerhouse, which sounds great, but only two of the top 20 infrastructure and construction projects in the Government’s pipeline are in the north-east, north-west or Yorkshire and the Humber, leading my hon. Friend the Member for Bolsover (Mr Skinner) to call it the “northern poorhouse.”
No one can argue with the core principles outlined in the 255-page document we saw yesterday but, as the Financial Times summarised today,
“the judgment being passed…is that it amounts to a good start—but much still remains to be done to ensure success.”
Although the strategy certainly acknowledges many of the fundamental problems our economy faces, I fear that the level of detail and proposed investment simply do not match the surrounding rhetoric, falling far short of what is needed.
The White Paper gives us a handy one-page summary of the strategy’s key policies to strengthen the “foundations of productivity.” It is perhaps poignant to point out that even the previous Chancellor was trying to fix our foundations and outlined a productivity plan called “Fixing the foundations” two years ago. What happened to that? I digress slightly.
Let us look at the first foundation: ideas. The key policies are raising total R and D investment to 2.4% of GDP by 2027, increasing the R and D tax credit and allocating some of the increased spend to a second wave of the industrial strategy challenge fund. Although increasing R and D spend is, of course, a step in the right direction, it is an unambitious target.
Vicky Ford (Chelmsford) (Con)
Given that this is the largest increase in research and development and innovation funding in more than 40 years, what part of it is unambitious?
Rebecca Long Bailey
The hon. Lady misses the point. The UK has been below the OECD average of 2.4% of GDP for years, and we are way behind global leaders such as South Korea, Japan, Finland and Sweden, which all spend at least 3% of GDP on R and D. If we are to be in any way capable of competing on a world stage, we have to up our game. If the Government really want us to be at the forefront of the fourth industrial revolution, they should be aiming above the average, rather than just trying to catch up.
Furthermore, not reforming where and how it is spent risks widening regional divides, as almost half of all research funding currently goes to the south-east. To quote a Conservative Member:
“If we just put more money into the same funding streams we will have the same outcomes and continue to spend half the science budget in just three cities.”
Vicky Ford (Chelmsford) (Con)
This is my first time taking part in a Budget debate, and I would like to say some thank yous.
Thank you to my Conservative colleagues for the work they have already done on controlling the deficit, restoring the public finances and rebuilding a strong economy, so that we can afford the many measures we take today.
Thank you on behalf of young people. I remember that, under Labour, nearly 1 million young people were not in employment, not in education and not in training. Today, youth unemployment is at all-time lows.
Thank you for investing in skills and especially in maths. When I went to university, I was a very rare breed: a girl who did maths. Today, that breed is still too small. So, girls, listen: if you do maths and a science at A-level, you will earn 30% more than your peers. The £600 per pupil taking A-level maths that will go to each school can be transformational for this country.
Thank you for removing stamp duty for first-time buyers. It is hard to get on the property ladder in my constituency, and that will make a difference.
Thank you for listening on universal credit. We must help those most in need. Thank you especially for making it easier for the housing element of the benefit to go straight to the landlord. That is an idea I pitched to the Chancellor, and he had no tin ear.
Thank you for funding the NHS, and especially for underwriting the pay increases for our nurses and for investing in the capital budgets. I am glad that south and mid-Essex will be among the first to benefit.
But most of all, thank you for the support for innovation. I am proud to live in a country where there are 40 start- up businesses every hour—that is three a day in my constituency. I am proud that there are 28 great British start-ups that are now billion-dollar businesses. I am proud that this Government are investing more money in science and research than any other Government for the past 40 years, because scientists are the people who find real solutions to real problems, and they will build us a better future.
Ms Nusrat Ghani (Wealden) (Con)
Will my hon. Friend give way? [Hon. Members: “ Oh.”] I will be very quick. Is my hon. Friend also thankful for the £21 million—
Vicky Ford
Absolutely, because we need to make sure that we invest in not only the ideas and the innovators but the skills, the people and the places.
Brexit is coming, and it does bring huge risks. Now, more than ever, is the time to back ideas, back the innovators, invest in our infrastructure and inspire our industry. I am very proud to be supporting this Budget.