Lords Grand Committee

Wednesday 15th July 2026

(began 3 weeks, 4 days ago)

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16:14
16:15
None Portrait Speaker 2
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Yeah. Yeah.
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None Portrait Speaker 3
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I beg to move the. Committee. Consider the lifelong Learning fee Limits Regulations 2026. And to begin with, I'd like to thank the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee for the scrutiny they've provided to this instrument, and I believe that they were satisfied with it. The draft regulations were laid in Parliament on the 18th of May 2026. These regulations are the first of three pieces of secondary legislation needed to implement the lifelong learning entitlement.

The elderly. They establish a new system of tuition fee limits for higher education courses and modules that begin on or after the 1st of January 2027. The L was a central element within the government's post 16 education and skills. Over a third of job vacancies are unfilled because of skills shortages, and at least 80% of the workforce of 2030 are already in mission one that supports people to learn, upskill and retrain across their working lives. The L was a central element within the government's post 16 Education and Skills White Paper, supporting the growth and skills missions, as well as the Industrial Strategy.

The case for the L is clear. Over a third of job vacancies are unfilled because of skills shortages, and at least 80% of the workforce of 2030 are already in work today. Yet our current system was designed largely with younger, full time learners in mind. It doesn't offer the flexibility for someone who is older, who wants to study part time, take a short course or module, or retrain mid-career. The principle of a single lifelong learning entitlement was a central recommendation for Sir Philip.

August 2019 review. Parliament then established the framework for this through the Skills and Post 16 Education Act 2022, and the Lifelong Learning Higher Education Fee Limits Act 2023. These regulations now continue the serious work of implementation. The L will broaden access to high quality, flexible education and training. It will support learner mobility and help our colleges, universities and other providers respond more effectively to the skills needs of learners, employers and the wider economy. In doing this, it will support the Prime Minister's ambition for two thirds of young people to access higher level learning.

By the age of 25 and help to increase participation in high quality technical education. This government is committed to breaking down barriers to opportunity and driving economic growth, and the L is a central part of that mission. These regulations set out the details of the L tuition fee limit system. A tuition fee limit is the maximum amount that a provider in England can charge per year if they are subject to a fee cap. Currently, this limit is up to £9,790 for a standard full time course.

In 2020 627. At present, fee limits are set as a fixed cash amount for each academic year, regardless of how much learning that year contains. That works for a traditional three year degree, but it cannot price a single module or a short course effectively. These regulations replace this with a credit based approach. Credits are units widely used to signify the amount of learning student would ordinarily be expected to undertake in order to complete a particular course or part of a course.

Across the further and higher education sectors, definitions are consistent. One credit equals about ten hours of student learning. So to give a straightforward example, for a typical higher education course, the standard higher fee limit amount for academic year 2020 627 is 9790, and a standard full time year contains 120 credits. The L per credit fee limit, as described by these regulations, represents that £9,790 divided by 120. The result is therefore a tuition fee limit of close to £82 per credit, or £81.58, to be precise.

These regulations mean that tuition fee limits can be apportioned in line with the credit size of any given course. The new system established by these regulations does not change the overall tuition fee limit, as debated by this House in committee earlier this year. Vast majority of students will see no change in fees. They are charged. What changes is the application of the tuition fee limits that have been set for the first time?Fee limits will apply fairly to short periods of study as well as to traditional longer courses.

That's because they will be based on the amount of learning in a course or module. Students will therefore know that their tuition fees reflect the volume of learning they are undertaking. The regulations provide protection for students and taxpayers. There are limits on the credits a provider can charge for 360 credits for a typical three year degree, and 180 credits within any one year, subject to Parliament's approval of these regulations. It is my intention to make and lay two further instruments necessary to establish the law.

The two instruments on student support and on repayments, have already been published in draft, so that the House has full sight of the suite of legislation proposed and the sector can make appropriate preparations for the introduction of the Lea system. These two instruments will both be subject to the negative procedure, given their dependency on the regulations before us today, they will only be made if both houses approve these regulations. These regulations represent a significant step in fulfilling this government's commitment to deliver the lifelong learning entitlement. They established the fee limit system needed to support a more flexible approach to student finance, one that works better for young people and adults alike.

By doing so, they will help learners study in a way that fits their lives, helps providers respond to changing skills, needs, and support people across the country to access the education and training they need to succeed. I beg to move that these regulations are considered by the committee.
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None Portrait Speaker 2
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Entitled
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None Portrait Speaker 4
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You should know.
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None Portrait Speaker 5
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Which has the which has the honourable Minister, noble Baroness, the minister said, originated with the Augar review a few years ago, which the noble Baroness, Baroness Wolf, played an important part in, and I'm glad. That this government is continuing the work that we. Was initiated by previous governments in this respect. The regulations today are really important because they put in place the funding architecture for the Lea, without which it can't become a reality. But the real test is going to be whether the architecture translates in reality into substantially greater participation in lifelong learning, and which has always been sort of part of the missing piece of our educational landscape in England.

And that is going to become all the more important in the world. We're moving into of artificial intelligence, and ministers and others have been noting that we're going to be needing to enable the retraining of people many times over the course of their working lives. So I'd be interested in hearing from the minister how the L is intended to operate alongside employer funded retraining through the Growth and Skills levy and. I think it's really important that we have some clarity about the boundaries between these two important funding schemes and how they relate one to another, so that we eliminate any policy confusion that might inadvertently depress demand for lifelong learning, which, as I said, is already pretty low.

So if a worker needs to retrain because AI has transformed their role, how should they go about it?Should they?How should they know whether the expectation from government is that their employer funds that training, or whether they should fund it themselves through loans via the lifelong learning entitlement?So I'd really welcome some some thoughts from the minister as to that question. I also have a broader questions about the future of this policy. Now, I think these regulations are a great start, and it's better that we're going starting down this journey towards, um, you know, more.

Modular study where it's, where it's possible. But, but I think the minister herself has admitted in the past that these aren't, this isn't the end point and that this isn't necessarily the final destination. So I'd like to probe a little further as to where she sees this policy area going. In particular, um, my the minister say when the Lea will be extended to master's level study at a level seven, given the increasing demand for postgraduate level reskilling in areas such as AI, digital technologies and advanced professional practice, many adults who need to retrain in the coming decade will already hold a bachelor's degree.

Given current levels of tertiary enrollment, and we'll need to acquire higher level skills rather than simply further study at undergraduate level or subdegree level, which is the current area of focus of the Lea. And secondly, could the government say what its thinking is with respect to eligibility of funding for courses that are not drawn from existing qualifications?The stipulations in the policy are very clear at the moment that funding will only be made available for modules that are themselves drawn from existing qualifications, and I've said on a few occasions that this risks us stifling innovation in what's on offer, and meaning that we effectively only provide access to more of the same, but in smaller pieces.

So I'd be grateful for the minister's thoughts on how she can meet demand from employers for shorter, more agile programmes that respond to rapidly changing labour market needs, but don't necessarily fit within traditional qualification structures. If lifelong learning is genuinely to become a normal feature of working life, it seems likely to me that the funding system will ultimately need to accommodate that greater flexibility. And in her remarks just now, the noble Baroness, the minister, made reference to two further regulations that are going to be laid. One of which I think was student support.

Could she say, as she thinks about the future direction of this policy area, whether the government might soften its stance on student support for online and distance learning qualifications?The reason I say this is because stance to me, seems to me to stand to reason that the smaller the unit of study and this is the whole intent of the government's policy, the more likely it is to be studied at distance and online. Given that students aren't going to want to incur the frictional costs of upping sticks and moving to a to another institution in person for that study.

And they will still nonetheless, um, need to incur costs of maintenance. The current regulations do not provide for that. And I think as we move into a more modular landscape, it seems to me likely that we're going to have to rethink that. And I'd like to understand what the government's intentions are with that respect. Finally, what does success look like for this policy area and how are we measuring it?What level of adult participation does the government want this entitlement to achieve over the next 3 to 5 years, in terms of shifting the market share away from this sort of category, killing three year bachelor's degree towards other, more flexible forms of study?Where does the.

Minister and minister want us to end up in a 3 to 5 year horizon in respect to changing the way higher education is consumed and delivered, and by what measures will the government judge whether further reform is needed?Um, all of those points are not to detract from the importance of these regulations. There are really important beginning. And I hope the minister um, has every success in, in getting them through Parliament. Thank you.
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None Portrait Speaker 2
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Very.
16:28
None Portrait Speaker 6
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Thank you. Well, first of all, I would also like to welcome these regulations. They seem to have taken a while and it's really good to see them. Um, as Lord Johnson's pointed out, this was a policy that was the number one recommendation of the Augar review, of which I was fortunate enough to be a member. And one of the things that has been really gratifying has been the cross-party support for it. I think because we all recognise the importance both of continuing education and training and of greater flexibility.

But I thought it might be worth, um, in a sense, putting on record. What some of the things that we were most concerned about, because they also lead into the question of how do we know if it's working and how do we know if anything else needs doing?I think the first thing I'd want to say is that we were not actually particularly looking forward to modular study. As such, it was much more about creating a comprehensive change in the student funding system that would just build in far greater flexibility.

And the thing which we were most concerned about, actually, was the rigidity of the equivalent level qualification regulations, which had been brought in by previous governments. Um, I think though Lord Willetts will probably be able to elaborate with the idea that you should basically have people going up and up and up in levels all the time. And we felt that was deeply misconceived. And that one of the things which you had to do for everybody, not just for a few additional, was to actually make it clear that what was important was what you were learning, not the level at which it took place.

I think the other thing, it's perhaps worth remembering, which again, I suspect most people in this room will remember is that the whole possibility of the Lea came out of something rather older, namely the Bologna accord, which is now something which more than 50 European countries sign up to, and which actually created a new structure for higher education and for the way that that we actually look at it and structure it, which didn't exist before. And the reason I sort of emphasize both these things is that I think one of the challenges that we have is that there is a tendency among many people sort of in the in the wider world, think of the elderly as a sort of an addition.

You've got your basic higher education structure, and then you add an elderly on top of it. And it seems to me that that this is clearly a misunderstanding. And in terms of how do we know whether the policy is a success?I think in terms of whether it comes to be seen not as a special policy, but something that people just take for granted that what you actually have is a highly flexible entitlement that you can use at various different points in your, in your life.

But that actually leads me to my, my main concern, which is nothing to do with the regulations as such, which seem to me fine having ploughed through them, they seem just fine, but it is to do with the wider challenge of incentives in, in, in the institutions that we have. Because if you are a struggling. Further education, college or even more struggling university or any university, you have a very strong incentive to keep enrolling people for three or even better, four years. And one of the things that, again, as Baroness will know, that Augar was very concerned about was the growth in foundation years and government ministers, then both predecessors knew, didn't wipe them out the way that we would rather have liked you to made some changes, but I think it underlines the fact that we have to not only shift what prospective and actual students can do, we also have to think about the institutional incentives and the supply that is out there.

It needs demand and supply. And if you are a university at the moment for very good reasons, you are very concerned to enrol full time students for as long as possible to pay the bills. So my only specific question, which I will take the opportunity to to ask, because I think the two are so closely related, is about the forthcoming consultation on whether or not there should be obligations on institutions to actually offer something other than a straight three year degree, because I do think that in order to shift the this and in order to make sure that bluntly, the only people who respond to the new opportunities are rather marginal players.

We do need to think about this this very hard. And if people are still ending up using up their entire entitlement or most of their entitlement very early on, because there aren't any realistic, realistic alternatives, then I think we will have failed. And that's what we should be looking for. Real shifts in the structure of mainstream institutions, and not just whether or not there are a few people taking modular courses, but generally, thank you very much and very delighted to see them.
16:33
None Portrait Speaker 4
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Thank you milord. From these benches we've also long supported lifelong learning, the principle of it. And because of the rapidly changing economy where technology, artificial intelligence and transition to a greener economy are reshaping jobs, people need the opportunity to retrain and upskill throughout their lives. Education should not be something that ends in your early 20s. It should be available for people whenever they need it. Um, I can say that as someone who went into higher education in my late 20s, um, these regulations are important part of implementing the lifelong learning entitlement by introducing a credit based, uh, fee system for modular, uh, studies, rather than relying solely on annual fee caps designed for traditional three year degrees, providers will be able to charge fees proportionate to the number of credits studied.

This is a sensible and necessary technical reform. If modular learning is to work in practice. However, as my Lib Dem colleague Ian Solemn argued in the House of Commons, uh, changing the mechanism for charging fees is only one piece of the puzzle. If the government genuinely wants lifelong learning to succeed, then they must also address the barriers that prevent adults from returning to education in the first place. Because many adults are balancing work, caring responsibilities and the rising cost of living.

Flexible courses alone will not encourage participation. If learners cannot afford to take time away from work, arrange childcare and access maintenance support. The danger is that we create a system that is technically more flexible, but remains financially out of reach for many of those who would benefit the most. There are also legitimate concerns from universities and colleges about the implementation. Higher education institutions are already operating under severe financial pressure, also being asked to redesign courses, develop modular provision and invest in new admin systems while maintaining significant financial uncertainty.

So if the government wants to provide providers to embrace these reforms, they must ensure that funding and regulatory framework gives institutions the confidence to innovate rather than simply observe additional costs. Lib Dems also believe in lifelong learning should also be driven by the need of the learner and employer together. The skills shortages continue across sectors including engineering, construction, digital industries, health and education, and the lifelong learning. Entitlement should help adults access higher qualifications. High quality qualifications that respond to those workforce needs, while also giving individuals the freedom to pursue learning and personal development and career progressions.

So while we welcome the direction of travel represented by these regulations, there cannot be viewed in isolation. Success will depend on a wider package of student support, employee engagement and higher quality careers advice, and sustainable funding for universities and further education colleges. So therefore, I ask the minister three simple questions. What's the assessment?What assessment has been made of the likely impact of these regulations on participation by mature and disadvantaged learners?Secondly, what support will be available to help providers implement modular delivery successfully?And finally, what will the government.

Will the government ensure whether. Sorry. How will the government ensure. Whether the lifelong learning entitlement genuinely widens participation, rather than simply change the way the fees are calculated?As I said earlier, the Lib Dems support the ambitions of making learning available for wildlife, but ambitions must be matched by opportunity and affordability and proper investment, and only then will this important reform deliver what it promises.
16:37
None Portrait Speaker 7
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My Lords, please. Let me thank the noble Baroness, the Minister, for introducing these regulations. Lifelong access to high quality education is a key component for a successful society. Resources that improve the skills and capabilities of the workforce goes hand in hand with a more dynamic economy and a more independent public. It provides individuals with the freedom to engage in subjects that are their passion and strive for careers in the industries for which they desire. This is largely the raison d'etre of universities in our country.

Undergraduate courses provide a leg up into the workforce, whilst postgraduate and part time courses allow for further specialisation and reorientation. That is indeed a reasonable model. But whilst the structure of post 18 education is sound, His Majesty's loyal opposition believes the incentives can be improved. Undergraduate course tuition fees are capped and thus allow a broad uptake. Modular and short courses, conversely, are not. There is therefore a rational financial barrier to further higher education and particularly in the current fast changing labour market, which will only accelerate.

There is an eminently reasonable case for changing this current model. People will need to be able to retrain and reorient themselves bolder and faster. Skilled education will become all the more important, and that is why His Majesty's loyal opposition supports these regulations. The noble Baroness, Lady Wolf, played an integral part in the Augar review and the previous conservative government welcomed the recommendations of the independent review into post 18 education and funding, and introduced the primary legislation that makes a lifelong learning entitlement possible. We are therefore grateful that the government has now taken the steps to make this a reality.

Largely underpinning these regulations is the concept of proportionality. Using credits as the standard unit of learning. Time is the best way to uniformly achieve this, and limiting the number of credits that can be charged per course time and per activity is a start to ensuring that courses are rightly valued. But proportionality of credits does not necessarily equal proportionality of quality. And we have many times highlighted the extent of less valuable courses currently within the market. And this remains a concern.

It would be fair and reasonable to ask how the government will ensure that the quality of education matches the cost of the degree passed. Simply looking at credit numbers. This is a particular concern with part time courses, flexibility of education is, of course, a good thing, but it cannot be used to justify students enrolling in modular courses and not having face to face time with a teacher. So how does the noble Baroness minister propose to ensure that the highest possible in-person education is taking place face to face, engaging with each other and truly gaining from the experience in.

A similar line of thought to the noble Lord, Lord Johnson. We would ask more generally. What are the feedback mechanisms for this measure?How will its implementation, implementation, and success be monitored both for providers and students?As referenced by the noble Lord, Lord Muhammad, it was surprising that the minister and the other place did not answer this question. But how will the providers, who will naturally incur an administrative cost in implementing this new system, be supported in the transition?
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None Portrait Speaker 2
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Dear.
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None Portrait Speaker 2
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We have to wait.
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None Portrait Speaker 3
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My Lords. Genuinely, can I thank all noble Lords for their contributions to this debate. It is always, um, refreshing when you are debating something with people who were there at the beginning, who were part of the very important, um, augar review that led to, um, led to this work in the first place. And so I appreciate the points that have been made during the course of the debate. And I will endeavour to respond to the points raised as well as possible.

And just before turning to specific questions, I do want to restate why these regulations matter. They are a critical, indispensable step in delivering the lifelong learning entitlement, which is a reform that is not just a response to some of the points that have been made. It is not just about how we deliver modular courses. Important, though I believe those will be as an opportunity, but is also. About how we will, for example, bring further and higher education closer together, how will open up more flexible study as well as modular study?How will give people a real choice in how they, uh, how and when they learn and how easy it is for them to return to learning throughout their lives.

These regulations set, as we've said, the tuition fee limits that apply to higher education courses and modules funded by the lifelong learning entitlement that begins on or after the 1st of January 2027, they're not designed to overhaul the entire student finance system. In terms of some of the controversies that, we've seen recently, they address the central weakness that the current system is too rigid, too focused on traditional full time study, and doesn't work well enough for adults who want to retrain or upskill across their working lives. First of all, in response to the noble Lord, Lord Johnson, I think he is right that the test for this policy is whether or not this translates into greater participation, whether or not the flexibility enables there to be more opportunities for a wider range of people at different stages in their lives and their working lives, to be able to upskill and to return to learning.

I thought the AI example that the noble Lord used is is interesting, and he has previously, quite rightly challenged us about the relationship between the growth and skills levy reforms, the apprenticeship levy reform, essentially, and the links into lifelong learning entitlement. And, uh, um, how we ensure that employers have a role in developing the flexible courses that the L e r enables. It is a key part of our reform and our direction of travel for higher education to emphasise their role in growth and to emphasise the relationships they need to build with employers.

That's why they are now in h e, an integral part of the learning and skills, uh, partnerships. Uh. It's all. However, it doesn't necessarily mean that the only way that you would have, for example, of upskilling in AI would come through the l e, it may well be depending on how you want to learn. We have, of course, uh, as part of our reform of the growth and skills, Levy introduced the idea of short courses that can be funded through the levy for those who are employed.

And AI is one of the first areas where we have developed, um, those short courses. So it may be appropriate if you are in employment that your employer enables you to take one of those short courses using the growth and skills levy. Or it may be that you want perhaps to do something more, more fundamental that will require at least a 30 credit course where it would be more appropriate for you to use the lifelong learning entitlement to, uh, go back to a course that was part of a broader higher education course on the.

Point about the scale, uh, we have, I think it's fair to say in, um. Uh, in introducing the e, uh, being careful to do this, uh, on a way, in a way that is, um. Uh, that is, uh, that recognises that's incremental and that recognises some of the risks that we've actually seen, I'm afraid, in the higher education system in recent years of uncontrolled expansion and a failure to sort of focus on the quality of what's being offered. We that's the reason why we've taken a relatively tightly controlled approach to the first providers that will be able to provide, um, modular courses from January 2027.

Um, this is not the case that they will simply, as I think has been the suggestion be more of the same. Uh, but just chunked up a bit. I think, for example, the opportunity for further education, uh, to provide these courses and for students to be funded through the LHA is a quite significant change and an important, um, development. But we are being careful about the way that we introduce them. We will want to expand that in the future. I'm not in a position to be able to say at this point when, but nevertheless, you know, this is the start of something that will be more radical.

Noble Lord, also, um, raised the issue of the levels at which the which the l e will fund. And it is right that the L e is currently focused on modular and flexible learning. And at levels 4 to 6, where the greatest need for retraining and upskilling has been identified. And of course, it's already the case that for masters or it remains the case that for masters and postgraduate. Study the postgraduate master's loan and the postgraduate doctoral loan are available to help with course fees and living costs, which provide flexibility to the student.

And when it comes to, um, the point that. The noble Lord I know has made previously about expanding student support for distance learning. Just to be clear, the there is an expansion of maintenance support under the provisions that we're making for L e, but it remains targeted at courses that require in-person attendance, where a learner's ability to earn. Alongside their study is reduced. That's sort of the aim, isn't it, of maintenance support. And for that reason, distance, distance learning courses remain out of scope for maintenance loans at the moment.

But as I say, the L e actually expands maintenance overall because for the first time it extends to part time and to technical study below degree level that requires in-person attendance. Most of that doesn't at this moment qualify for maintenance.
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None Portrait Speaker 3
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Well, I mean, it is, of course, the case that even for distance learning, for if you had a disability, for example, you would be, you would have accessibility to the, um, the, the disabled students allowance. But I, I think, you know, we have to, with limited resource, uh, make decisions about where we want to focus maintenance support. And I don't think it's inappropriate to focus it on those for whom it is much more difficult to be able to earn alongside their learning notwithstanding. You know, I understand the point.

The noble Lords making anybody who's done a. OU course understands precisely how much time it takes to be able to, uh, to, to do that. But the government has focused in the way in which I've described at this point for this, the next, um, set of issues raised by the noble Lord, Lord Johnson and also, um, the, uh, noble lady, Baroness Wolf, um, relate to where do we, what do we see as success?Where do we see the future of, of this?And how radical do we think it should be?Well, I think it's important to say that this is this is not a short term fix.

It is a bold long term investment to support the creation of a student finance system that's fit for the challenges of the future. We've made a deliberate decision to phase in delivery of the Lea, placing quality and learner outcomes ahead of an immediate large scale rollout. But we do want to see education providers using the Lea to innovate, driving deeper collaboration between further and higher education institutions, supporting smoother learner transitions across levels, and the student finance system must also meet labour market needs, which is why we're calling on employers to be active partners.

And we want employers to see the elderly as an essential part of their workforce strategy, helping them to attract new talent, develop skills and retain employees. We expect more Fe and AG providers to work with employers and representative bodies to co-design flexible provision, helping to create coherent learner pathways into the workforce. So I hope. And can I just reiterate my, um. As others have in the committee, my, my thanks and respect to the noble lady, Baroness Wolf, for her long record in this, um, in this area and in fact for being one of only, I think, two people within this room who turned up to my, to my briefing session on the.
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None Portrait Speaker 3
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I mean, to be fair to them, that might be because I'm frequently banging on about the opportunities for modularity and different ways of providers being able to offer, uh, courses. But you, the noble lady, also raised the point, which is important about the proposed consultation on, um, break points that we will bring forward. And it has to be the case that we develop a system where it's not necessarily, you know, you can gain credit for learning short of having done a full three year, degree. And of course the Prime Minister's target for two thirds of, uh.

Young people getting a level four or above. Qualification obviously puts an emphasis on qualifications at level four and level five in a way that perhaps the student finance system hasn't supported previously. Uh, the noble Lord, Lord um, Mohammed made the point about, um, maintenance support. And I think I've already talked about how the elderly provisions will expand, um, maintenance support for those on, in part time, uh, learning, um, maintenance loans. Well actually perhaps I haven't, so I will make it now.

Um maintenance loans. Um, become. Will become available for all courses and modules that require in-person attendance, including part time and technical study below degree level that doesn't qualify. And of course, on top of other actions that the government is taking to uprate maintenance loans to introduce maintenance grants, for example, are a demonstration of our commitment to broadening access and participation within higher education. And on the point about, um, implementation, um, several noble Lords have raised the point about what support will be provided for.

Um providers to develop, for example, um modules there will of course, be some upfront costs in setting up modular study. Um, but these are costs of course that are voluntary. Uh, there will be no regulatory requirement to offer a greater provision of shorter programmes. But I do think that providers with their, uh, with their, if you like, their sort of business head on in thinking about the strategic opportunities for their institutions of what the Li will enable students to do, we'll see the real potential profitability of these sorts of um courses and will therefore, I think, um, and I hope we'll see, uh, the.

Reason why they might want to shift some resource into them in a way that will help to, um, to develop them, to develop them, of course, at a time when we have committed, although that's not part of these regulations where we have committed to an index linked increase in the tuition fee limits that will be funding the provision that is being made in higher education. So, um, and the noble Lord, Lord Effingham, I think, makes an important point about, quality again. And I will just, um, reiterate the.

Um. The announced. Easements that we have made relatively recently about the additional work that we want to do to focus on quality in higher education. Of course, we've already said that we would want to link any increase in tuition fees to the. Developments in the teaching evaluation framework that the Office of Students has, has, is currently working on. We would want to look at ways to limit the growth of poor quality courses. And of course, we're taking action on the source of quite a lot of the concerns around quality.

And that is the very big expansion in franchise provision with the introduction of regulation of, um, franchise provision. With more than 300 students in it. So I hope that I've been able to respond to the key points that noble Lords have made. I accept the point. Uh, and, and actually, this is part of the excitement of the, that not all of the answers are currently available because this is the start of something which has real potential to open up and to change the way in which higher education is offered and funded for students throughout their lives.

But this is a very important start, and it's a foundation on which we can build that much more flexible, uh, higher education system with greater work, with further education, with greater opportunities to learn throughout your life and with greater capacity to respond to some of the skills needs that we have in the economy at the moment. And I beg to move.
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None Portrait Speaker 2
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Content.
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None Portrait Speaker 2
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Thank you.
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None Portrait Speaker 7
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If you want.
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None Portrait Speaker 7
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I just did.
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None Portrait Speaker 9
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Yeah. Um.
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None Portrait Speaker 10
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Can you speak before me?
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None Portrait Speaker 2
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Lovely.
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None Portrait Speaker 3
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From the renewable obligation on the renewable obligation to the Exchequer, 75% of them. The Renewables Obligation scheme itself exists to incentivise UK renewable energy generation through a system of tradeable certificates. And of course, this is not a current scheme. It closed to new applications in 2017, but existing sites continue to receive support until the scheme ends in 2037. Scheme itself has been instrumental in taking a nascent renewable energy sector to where it is today, with the scheme supporting around 30% of total UK electricity generation.

Core of the Renewables Obligation Scheme is a process in which electricity suppliers purchase certificates from renewable generators. This process continues unchanged, however, previously, suppliers ultimately recovered the cost of complying with their renewable obligations from consumers via electricity bills. Ofgem consider these costs when setting the quarterly price cap for domestic consumers in Great Britain and from. The 1st of April, the government has instead been providing grant funding to electricity suppliers to cover 75% of the cost of these obligations attributable to domestic energy supply in GB.

A legal direction. To electricity suppliers, requiring them to pass these savings on to domestic consumers. Translated into the typical dual fuel bill used by Ofgem and accounting for other changes. Our intervention, delivered on a typical dual fuel bill, a £117 reduction in the price cap on the 1st of April, while the. Price cap on the 1st of July increased by £221. As a direct consequence of events in the Middle East. It would have been considerably higher still without the ongoing effect of moving the renewables obligation to the Exchequer, which continues to suppress bills.

When we come to the vehicle by which those changes could be placed into legislation and. The legislative basis for the grant funding that enables the energy bills reduction was originally due to expire in April, and that. Was because the Energy Prices Act 2022. Had provisions in it which have been used for the purpose of this legislation. On these reductions to sunset. At the. Possibility that those reductions can. Be undertaken. And indeed, we debated, as I've mentioned, the Energy Prices Act 2022 extension of time Limit Regulations 2026 in the chamber earlier this year.

And they came into force in April and extended the power. So it's now set to expire on the 25th of October. These regulations extend that time limit once more to ensure the removal of costs from energy, that the removal of costs from energy bills can continue. And I have to say at this point, by way of a confession, that whilst in opposition, as the energy shadow Minister and I took part in the Energy Prices Bill 2022 considerations, I did state that I was rather concerned about that bill, that some other government might come along and use the provisions in that bill for something else entirely, and I was a little mollified by the fact that there was a sunset clause placed into the 2022 bill.

Considerations. Um, but I do consider that the changes that have been put into legislation here, um, are rather. Similar to the purpose of the 2022 bill, or at least as far as the clauses that were concerned at that time, which was to provide additional assistance for people who had very high energy bills as a result of the Russian invasion of Ukraine and the volatility that resulted from that. So what we are looking at today is a further extension of those sunset clauses to cope with the next phase um of.

Of that transfer of responsibility from energy bills onto the Exchequer and indeed the. Uh, the arrangements in the. In the settlement were for three years to 2029. So. Really, as things stand at the moment, these regulations will have to be extended repeatedly during the time that those those savings for customers will be in place as far as their energy bills are concerned. So this extension. To those regulations is only until the 25th of April 2027.

Um, it says here that I therefore expect to return to the House by February to seek a further extension. Uh, of course, that should read whoever happens to be there.
17:21
17:21
17:22
None Portrait Speaker 4
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Yeah.
17:22
17:22
None Portrait Speaker 11
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May I thank the noble Lord, the Minister for for presenting the regulations before this afternoon?May I expressed the wish that I hope he stays in his position as indeed a spokesman. The whip. Uh, yeah. We don't like changes. Uh, in the House of Lords. Um, I just I just like to make a couple of comments, if I may. Um, eons ago, I served as a shadow environment minister on the, um, I think it was the 2006 2007 energy bill.

So in a way, it's, it all comes back. Um, plus plus. Well, the more it changes, the more it remains the same. I don't know how Hansard will cope with a French, uh, a quotation, so I won't give it. Um, but the, what the minister has put before us this afternoon just confirms that this is smoke and mirrors. Basically, we were all playing for this. Um, what is effectively a subsidy?And this has been the case since about the mid 2000 when, when his government introduced this type of policy.

So instead of me paying um a householder, my um. Household electricity bill, it is now me paying as a taxpayer through my general taxation. So um, I just hope the minister and the department will actually step back from saying that this is a reimbursement or a return to me of £117, because that that is not the case. What I think where the department and the noble Lord minister could make a difference is, as Martin Lewis, the money saving expert, says on many occasions, is by reducing the standing charge and I know it's outside the remit and the purport of the statutory instrument, but I would just make a plea to the minister, who has now disappeared behind the box.

I can't see him anymore. I think he's I think he's still. I'm very grateful. Um.
17:25
17:25
None Portrait Speaker 4
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Yeah. We.
17:25
None Portrait Speaker 3
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Yeah.
17:25
17:25
17:26
None Portrait Speaker 2
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Uh, my Lords, I. I stand to stand to respond to these regulations. I thank the Minister for the way in which he's introduced them. Um, it is deja vu. It's almost like a double déja vu because we've done the Northern Ireland ones and we've done these ones very, very recently indeed. And we had a good debate on them last time. So I will be incredibly brief on these regulations. I do sincerely hope that the minister does stay in post because we I enjoy working opposite him.

So these regulations really the government needs to continue to seek these six months extensions so that they can continue to deliver these savings, which are important at the moment. We've got renewed hostility in the Middle East. We have increased pressures on the cost of energy. So we absolutely recognise the need to have this done. And these regulations would extend those provisions from the 25th of October 2026 until the 25th of April 2027. So we really recognize that. I recognize in that in the absence of other primary legislation, that there is a need to continuously come back with the six month extensions.

I welcome what the minister said when the noble Lord said that his department was working on bringing forward a a permanent legislative solution so that we don't need to continue doing this again. If the minister doesn't mind me asking, is that something that we can expect in the energy independence Bill, or is the expectation that that would need to be a standalone piece of legislation?The only other really question I did have for the minister, considering that, you know, I've made all the broader points I need to make on this.

See, when we debated it before. So I'm not going to rehearse those again. The minister knows where I stand on the need to reduce energy costs, and some of the ideas that I believe in, and my party has put forward. But the other question I did really want to ask was about the situation in Northern Ireland. The minister has kindly updated us on that. I do welcome the fact that that his department has been working with the Northern Ireland Executive.

I hear what he says that that that um has been enabled and has entered into force. So that really was only my other second question. If there's anything else on the situation that the minister chooses to add that would be welcome, but other than that, we support these regulations. We won't stand in the way. And I thank the noble Lord.
17:29
None Portrait Speaker 4
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Um, my Lords, I declare my interest as chairman of hammy, chairman of Acteon Subsea Engineering Company and offshore wind and oil and gas around the world, and chairman of Buckthorn Partners, all involved with energy transition when I was. I'm very grateful to the Minister for the introduction of what is hopefully the last before the recess. Um, and I echo the comments that have been made by my colleagues about the way in which he always handles the committee with with respect. Um, and, um, responds always to as many questions as he can within the time available.

I do hope that the government will not continue to keep popping up the renewables obligation. Um, and to exchequer without secondary with secondary legislation. And I think the point has been made, um, that it's also important, um, that we have. Peer scrutiny of it through the introduction of primary legislation. And I have to say to my, um, I. Was going to say my noble friend, but he is a good friend. But he is a spokesman.

Um the noble. Russell that um I have no doubt that there will be plenty of room within the so-called Energy Independence Bill to handle this. Um it is fast becoming a Christmas tree bill. I wouldn't want to be on the bill committee. I think it must be the worst job in Disney's at the moment, because it's being written and rewritten and written and rewritten. Um, and hopefully it will now have had the clauses about, um, banning licensing in the North Sea, um, written into law, removed, um, under the new government.

Um and we will see shortly, but this will be a good opportunity for this specific point to be remedied in primary legislation. Um my Lords, the Secondary Legislation scrutiny committee noted that the government's estimated £150 savings on energy bills from the Amo to Exchequer policy would be less impactful following the conflict in the Middle East. And while um the. Opposition support the principle of reducing policy costs, we firmly believe that the way to do this, as the Minister has heard me say on many occasions, is removing policy costs, not transferring them to general expenses.

As my noble friend said in her excellent speech, let us say that due to the current market volatility, the wholesale price of electricity is on average £100 a megawatt hour. The cost of rocks is around 70. Generators will receive this wholesale price, in addition to the number of rocks by the band in which they fall, offshore wind farms will receive almost three times the wholesale price, or £240 a megawatt hour. Onshore wind farms will almost double that and receive almost double £170 a megawatt hour, and solar farms will receive 1 to 2 rocks a megawatt hour.

And so we'll get roughly double the wholesale price. These are all costs that are passed on to consumers, whether the government or energy suppliers pays the upfront fee to Ofgem is irrelevant. It is the British public who are funding it. And as my noble friend rightly said, shifting costs to make it appear as if the British people are paying less is a is a disingenuous sleight of hand. The money will continue to come out of the common person until policy costs are altogether rethought.

My Lords, with the combination of high subsidy schemes and high constraint payments to renewable generators and the government's refusal to increase domestic oil and gas production in the face of international turmoil, the government is voluntarily increasing people's energy bills, regardless of whether the subsidy is paid from the British public will foot the bill. On top of that, wind farms have paid over £200 a megawatt hour, even when they are not powering the grid. Indeed, they are paid to turn off when transmission capacity is full. The intermittent nature of renewable and our current capacity issues mean we still rely on oil and gas prices, prices, even during a war, are still cheaper than renewables with the government subsidies, the government has the chance to make oil and gas even cheaper.

Yet. However, the Secretary of State refuses to back domestic fuels and approve production of Jackdaw and Rosebank until after he leaves office. Whether he'll have to do it in number 11 is an interesting question, whether he goes on to the Foreign Office and avoids the issue is an interesting question. Whether he becomes deputy Prime Minister, he will certainly have collective responsibility, but we understand the jackdaw will be approved. That is very good news indeed. Um, but it will take more for Andy Burnham, who is destined to go to Aberdeen during the summer recess.

With this news. It will take more to persuade the people of Aberdeen than just announcing jackdaw. I hope he will have more to offer them than jackdaw. This country needs Rosebank for energy security and this country needs a licensing round to make us more energy independent. I have to say that the idea of calling a bill, the Energy Independence Bill, which is, I understand the name, has been chosen by the Department. It must be one of the greatest misnomers in parliamentary history.

It is completely an energy import dependent bill, but we can deal with that when we come to committee and consider the naming of the bill. Final item on most legislative debates. So, my Lords, the reality is that we need to look carefully at the implications of these quite repetitive essays that are coming for us. And interestingly enough, on this one, there were two phrases which caught my eye. One was that this measure could also increase greenhouse gas emissions through the rebound effect on energy consumption, and maybe the noble or the minister would like to comment on that.

And it is also stated that it's expected there will be costs to desgagnés from enforcing compliance and administering the scheme at a time when the Treasury is asking Desgagnés to save costs. Um thirdly, in the note on. Page three. I apologise. Page four. Um, it is said that there will be additional burdens on Ofgem from supplying data and supporting the scheme, but can the committee be confident that these will be, as is stated here, relatively small. My Lords and.

This comes a week. This s I after the capacity market C, which inherently acknowledged the need for more firm power. The government are therefore funding one expensive scheme renewables, and paying more money to safeguard against it. The capacity market in the space of a couple of weeks and both come at the taxpayers expense. More importantly, the impact of this is on the grid, and the grid is unstable enough. If we get through the summer without a blackout, we will still need to insure against future failures.

And the most imminent concern is sorting out Nissos operations and ensuring that they have the interest of the British people in mind, rather than mirror imaging the government's ideological or commercial concerns. They were meant to be an independent body. Um, the second issue is we need to get to the place where blackouts are not dependent on whether Nissos corporate affairs decide it's a bad look for business. This has to be done by securing a firm power source that doesn't require grid frequency, as renewables currently do, and indeed are encouraged to do.

By this measure, ending renewable energy subsidies is a good place to start. My Lords, I just end by asking the minister, and I appreciate that this is very, in my view, central to what we're talking about, because more we produce in terms of or more we support in terms of renewable energy, the more grid instability there will be. Um we may well take a. Statement, I think it was a Q in in another place today on grid instability next week or later this week.

Um so it might not be the last time we have an exchange, but could the minister provide the committee, given this is an example of how damaging, um the instability is in the grid as a result of significant, not just significant renewable energy requirements, because it is.
17:37
None Portrait Speaker 7
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Order.
17:37
17:46
None Portrait Speaker 4
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My Lords. I apologise for the interruption. Due to the vote, I was just simply going to give one example to the committee of, uh, the. Consequences of Overreliance on renewables on the 23rd of June this year, the National Energy System operator Niso faced severe supply constraints caused by high electricity demand for cooling during an extreme heat wave combined with. And this is important. Low wind generation. At the time, unplanned gas plant outages and network constraints.

And. These factors caused the grid frequency to fall below the normal operating limits. It should have been immediately reported to Ofgem, and I simply ask the noble or the minister why it was not on that day reported to Ofgem or early the following morning. There were many other important aspects that are related to this, which would be outside the scope of this essay, and I would either write to the minister with specific questions or potentially table them as. As for written answer, because this was an exceptionally important moment for the grid, and it appears that there were many problems associated with control room engineers forced to take emergency action without it being reported, and allegations from whistleblowers alleging that the grid came closer to blackouts than reported, and senior corporate staff instructing control room engineers to avoid making or preserving permanent paper trails of their operational decisions, all of which would be wholly unacceptable.

And I know that the minister would share my condemnation of those on working practices. In closing, um, can I revert to the point that I made at the outset?And that is to thank the minister and thank him sincerely for always being so gracious. So receptive, so polite, and so engaging. I wish him a good break. Um, I hope he's in his place when he comes back from the recess. Um, because the um, energy bill will be taking a good deal of our time, I anticipate, in the next 12 months.

Um, I hope he will be a renewed voice of influence in the U-turns that Andy Burnham will be making to energy policy. And I am very grateful to him for everything that he's done and the courtesy that he's shown me throughout. And I would also attribute those comments to Earl Russell, because he has always been similarly engaging with with these debates during the current session. So it's been an interesting and, and, um. Appreciated six months back in the job. Um, and I look forward to the following year and working with the minister.
17:49
17:51
17:51
None Portrait Speaker 3
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Um, yes. I mean, this particular measure is um. Taking, uh, the effect of bills off, taking the effect of charges off bills and putting it onto general taxpayers. So I wouldn't exactly call it smoke and mirrors, but it is actually, uh, yes, a charge is continued to be levied, but there is one important point in this particular change that I hope noble lords will consider, and that is that this particular changeover has an effect on the energy price cap each time round, so that the.

The change in in, in uh, as it were billing from the levy to the general taxpayer means that the energy price cap is lower than it otherwise would be, which really is a saving for energy customers. Uh, and indeed, uh, as. As we can see that that is what has transpired, um, as a result of these particular changes. Uh. Noble Lord Russell, uh, did ask about the situation in Northern Ireland. Um, and I'm grateful for him for, um, being very brief in terms of his, I know his concerns in a number of other areas.

And if he's got any further concerns, I'm sure we can take those up. But as far as Northern Ireland is concerned, my understanding is that, as it were, everything is now complete. We've had the legislation through to enable the Northern Ireland Executive to put their own scheme in place, which they which they are now doing. The net, the net benefit is going to be less about £30 per customer because of the different circumstances in Northern Ireland, but there are no impediments in the way now of that scheme being fully funded by, uh, Treasury.

And being fully operational under the aegis of the Northern Ireland Executive. So that is a process completed. Uh. Noble Lord Moynihan. I can assure him that the cost of operating this will be very small. Um, and a really small administrative changes and the cost that those concerned there are, there are no large costs that will be outstanding from these particular changes. Uh, he does mention, uh, the question of niso and the question of frequency response and the margin call that was made fairly recently.

I can assure him that as far as the, the narrow version of events is concerned, then, um, there are active inquiries underway as to what happened at that particular on that particular occasion. Um, and, uh, I believe niso is, is uh, doing that at the moment as we speak. Um, but I anticipate that there may be happy to give way.
17:54
17:54
None Portrait Speaker 3
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Yes, yes, very.
17:54
None Portrait Speaker 4
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Very.
17:54
None Portrait Speaker 3
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Very happy to do that. But I anticipate, uh, I don't know whether the noble Lord has got this actively in mind, but I think we may have an urgent question, uh, coming in on this, and we may be able to start talking about that at that particular point. Uh, the, uh, the wider question though, on, uh, frequency response is that yes, it is true that as far as. Having a substantially renewably based system is concerned, possibility of wider perturbations in frequency is something that one has to consider.

And that is why, among other things, as he will know, there have been regular, uh, auction. Calls for frequency response mechanisms which can be brought to bear, uh, to make sure that those perturbations are very, very rapidly brought under control. Uh, because it is a question of, of going more than, I think 50, 50MHz on either side of the 400 barrier. And when it goes down too low, then you do have to have to intervene. Those, those frequency response mechanisms can do that very efficiently and have done that very efficiently, efficiently.

And therefore, there was no question that, uh, that we were beyond the buffer, uh, as far as that margin call was concerned. But indeed, that may be something I might add in my, uh, in my correspondence with, with the noble Lord. Uh, as far as this particular margin call is concerned. So. I would just say that it is. Government's number one priority tackling affordability. And government did act at last year's budget by taking on average, £150 of costs of energy bills.

With those decisions now factored into bills I've said for three years to come, uh, the recent price cap announced Rathjen will be deeply concerning news for families. And we understand that the developments in the Middle East are concerning. And of course, we'll continue to monitor that situation ahead of winter and plan for all contingencies. And I might say that should there be any further action relating to what is happening presently in the Middle East, it may well be the case that the 2022. Energy Act comes to the rescue.

Uh, as far as any of those measures are concerned. So we'll keep that under close review. And let us hope that things do work out in a good way. But there will certainly be a close eye on it by government should things not work out as well as we hope they will. I beg to. Move this house, I.
17:57
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