Oral Answers to Questions

Lord Willetts Excerpts

Thursday 9th June 2011 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

19. By how much on average he expects fees for part-time university courses to change between 2011-12 and 2012-13.

[The Minister for Universities and Science (Mr David Willetts)]

The majority of institutions have not yet set their fees for part-time courses for 2012-13, so it is too early to tell what average fees will be. From September 2012, eligible new part-time students will have access to loans to cover the cost of their tuition—extra support for part-time students that has been widely welcomed.

[Kate Green]

I welcome the introduction of loans for part-time students, but for lone parents that often means the loss of income support as a result. Moreover, they will be required to begin repaying those loans before they have completed their academic studies. Will the Minister look again at the proposals, to ensure that no lone parent is financially disadvantaged and put in the position of being unable to complete their course?

[Mr Willetts]

Our proposal has been widely welcomed. We believe that the number of people who will benefit from support while they are engaged in part-time study will increase from 60,000 to 175,000. Of course, people will repay their loans only when they are earning more than £21,000 a year.

[Mr Rob Wilson (Reading East) (Con)]

Can my right hon. Friend tell the House whether the Office for Fair Access has the power to block fee levels set by universities if they do not agree to access targets?

[Mr Willetts]

The Office for Fair Access has the power to refuse to permit fees higher than £6,000 if it believes that a university is not doing everything possible to broaden access and if it is not satisfied with its access agreement.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Fees for part-time students are set to rise significantly, and there is growing concern that the quality of higher education in our universities will suffer as Government cuts begin to bite. The Public Accounts Committee has confirmed this week that the Government’s sums no longer add up, and a considerable number of would-be students are likely to be turned away from university this summer because of Government cuts in student places. The Government are chaotic, incoherent and incompetent. Are we not now watching “Fawlty Towers” in Whitehall, with the Minister and his boss the Basil and Manuel of the Government?

[Mr Willetts]

Let us be clear: the previous Government were planning cuts in higher education support. Under our plans, there will be extra cash going into universities by the end of the public spending period, compared with the amount going in now, and it will be going into the universities based on the choices of students and the courses that they wish to study. That is the right way for money to reach the universities. The hon. Gentleman should recognise the importance of a vision of universities that provides extra cash and respects student choice and the autonomy of the universities.

[Jack Dromey (Birmingham, Erdington) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

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[Sarah Newton (Truro and Falmouth) (Con)]

T2. The Minister will be aware of the outstanding Truro and Penwith college, which is based in my constituency. In recognising the new opportunities to expand its provision of higher education, he will also be aware of the constraints on the ability of further education colleges to award degrees. At the moment, they need a university partner. What support can he offer to excellent FE colleges to enable them to award high-quality degrees?

[The Minister for Universities and Science (Mr David Willetts)]

I support the excellent work of FE colleges in providing higher education in Cornwall and elsewhere. I am concerned, as is the Secretary of State, by reports that some universities might be threatening to end their partnerships with FE colleges without good reason, but I reassure my hon. Friend that FE colleges are indeed eligible to apply for their own degree-awarding powers. In addition, our White Paper will propose making it easier for FE colleges to access a wider range of external degrees.

[Mr John Denham (Southampton, Itchen) (Lab)]

I welcome the good news from Nissan and BMW, which, despite the Secretary of State’s curmudgeonly response, built on Labour’s support for those companies’ investment in the UK. In 2006, he was very clear when he said:

“The DTI, and its army of Sir Humphreys, should be scrapped.”

Then he was offered the job of running it, and said that it would be the Department for growth. How is the Department for growth getting on?

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[Mr Willetts]

I will undertake to discuss the matter with my right hon. Friend the Secretary of State for Education, because my hon. Friend is absolutely right. We do wish to encourage young people to study science at school, college and university.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Growth, which was mentioned earlier, does not seem to be happening in the north-east of England. Workers at the H A Interiors factory in my constituency have not been paid for nine weeks— although I understand that they were paid their April wages yesterday; I will have to check that. Can the Minister help the company in any way? At least under Labour the workers got their pay.

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[Duncan Hames (Chippenham) (LD)]

I noted the Business Secretary’s earlier answer citing the STEMNET project. I hope he is also aware of the work of I’mascientist.org.uk, whose events reach over 10,000 students, with funding of less than £9 per student drawn from charitable and business sponsors. Will he learn from the success of this initiative as a model for the online engagement of students with the futures they could realise through science, technology, engineering and maths?

[Mr Willetts]

That is a very imaginative suggestion which I certainly undertake to pursue—and will, perhaps, discuss at the Cheltenham science festival this weekend.

[Alison McGovern (Wirral South) (Lab)]

One in 10 people in the north-west of England works in manufacturing, whereas just 3% in London work in manufacturing. The sharp fall in the purchasing managers index last month showed that all may not be well with UK manufacturing. Will the Secretary of State or the Minister therefore confirm that UK Trade & Investment will publish annually the regional impact of its work, so that we can be sure that Government policy works for all economies in Britain?

Higher Education Policy

Lord Willetts Excerpts

Wednesday 27th April 2011 Commons Chamber

[The Minister for Universities and Science (Mr David Willetts)]

I welcome this opportunity for us to set before the House the Government’s approach to higher education and to clear away the farrago of confusion, misplaced speculation and plain old-fashioned errors that we have just heard from the shadow Secretary of State.

I congratulate the right hon. Gentleman on one thing: his sheer audacity in standing in the Chamber and denouncing cuts and financial black holes, when he was in the Cabinet of a previous Government who got our finances into the crisis that the coalition inherited. So yes, we are having to take some tough and difficult measures, but that is because, as always, Labour left behind a mess and then denounced us for clearing it up.

[Sheila Gilmore (Edinburgh East) (Lab)]

Some months ago the Minister indicated in the House, in response to a question from me, that his proposals were not to do with the deficit, but were to do with a new way of providing for the financing of higher education, yet he introduces his speech by referring to the deficit.

[Mr Willetts]

I will turn to that point as I develop my argument. I hope the hon. Lady will accept that the Government whom she supported left behind a fiscal crisis. We were borrowing £120 million a day and were heading for the largest budget deficit in the G20. In fact, the position was so bad that the previous Chancellor had set out proposals for bringing down the deficit by reducing public spending. It is an irony that the Opposition called this debate in the very month when the previous Government’s spending cuts would have started to take effect—£14 billion of cuts planned for this financial year by the previous Chancellor, £16 billion of cuts that we are implementing.

As the shadow Secretary of State knows because he was in the Government at the time, it is clear from the pre-Budget report of December 2009 that there was a commitment to £600 million of cuts from the higher education and science and research budget. It was never explained what those were to be. As we know from the work done by the Institute for Fiscal Studies when it tried to assess Labour’s plans when the previous Government left office, there were to be reductions in public expenditure that the IFS estimated as a 25% reduction in the budget of the Department where the Secretary of State and I serve. So we inherited a mess that we have to sort out.

[Hugh Bayley (York Central) (Lab)]

The question is not whether the deficit needs to be reduced, but whether the decision to impose cuts of 80% on universities is the right way to do it. How will students benefit when they pay three times as much in fees but get less spent on the quality of their education in our universities?

[Mr Willetts]

Let us turn to that. Given that we face a crisis in the public finances, and given that even the previous Government had planned £14 billion of saving, how does one best deliver those in a departmental budget which I do not think any of the three parties represented in the House said could be exempted from reductions? Fortunately, the previous Government set in train an exercise that helped tackle precisely that problem. In November 2009 they commissioned Lord Browne to review the financing of higher education, and they made perfectly clear the wide range of options that they wanted him to look at.

[Mr David Lammy (Tottenham) (Lab)]

rose—

[Mr Willetts]

I will give way in a moment to the right hon. Gentleman, not least because of his role as a Minister in the previous Government, but I hope he will accept that Lord Browne’s report was commissioned precisely so that when public expenditure had to be saved, the finances of higher education would be examined.

[Mr Lammy]

The right hon. Gentleman knows that the higher education review was indicated in the Higher Education Act 2004, some years before the deficit.

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[Mr Willetts]

It was made perfectly clear—[Interruption.] Let me quote from the very first sentence of the terms of reference of Lord Browne’s report. It was to

“analyse the challenges and opportunities facing higher education and their implications for student financing and support. It will examine the balance of contributions to higher education funding by taxpayers, students, graduates and employers.”

So, the previous Government left us a deficit, recognised that they needed to make £14 billion of savings and set up an inquiry under Lord Browne to look at how universities should be financed in those circumstances—almost in the same month, incidentally, that we had the plan from the right hon. Member for Edinburgh South West (Mr Darling) for large reductions in public spending.

After considering Lord Browne’s report, which took him a year to produce and in which time he took a large amount of evidence, the coalition has adopted a strategy that, although not in every respect his strategy—[Hon. Members: “Ah!”] I do not know why Opposition Members react with such glee; in many ways, we have improved on the strategy that Lord Browne put forward. The fundamental proposal in the report that the previous Government commissioned is the one that we are now implementing in order to put the finances of higher education on a stable footing.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Will the right hon. Gentleman give way?

[Mr Willetts]

Let me just develop this point, because crucially the best way to save money is not to go for reductions in the teaching grant per student, as that simply means a lower-quality experience for students in our universities; instead, the aim is to provide universities, as the teaching grant is reduced, with an alternative source of income from fees and loans which does not involve students paying any money up front.

[Hugh Bayley]

rose—

[Mr Willetts]

I am just going to carry on explaining the basic finances of the measure, because they are so important and the Opposition clearly do not understand them. The point is about lending students money to pay fees. For example, if we lend them £1,000, we can reasonably expect, on the basis of outside forecasts, about £700 of that to be repaid, so we account for the £300 of the loan that is written off—that will not be repaid—but know that we will get approximately £700 back. That is the financing model in Lord Browne’s report, which the Labour party commissioned, and that is what enables this coalition to save money for the Exchequer, to continue with high levels of finances and to ensure that students do not have to pay any money up front. That is an excellent combination of policies at a time when money is tight.

[Tristram Hunt]

I am grateful to the Minister for giving way as he digs himself ever deeper and reveals the fallacy of the sums involved. The whole point of the Browne review was that it would introduce a market in higher education, but, if we strip away the teaching grant and everyone charges £9,000, we do not have a market. That is why the policy is such a car crash.

[Mr Willetts]

I will move on to that stage of the argument in a moment, but let me just explain to the hon. Gentleman why this measure, which is not mine but that of the report commissioned by the Government whom he supported, is very straightforward, simple and absolutely the right way to tackle the challenge of financing higher education at a time of fiscal crisis. It enables us to save money for the Exchequer, because the money that goes into universities is lent to students and is not a grant, and at the same time we ensure that universities are well financed.

The shadow Secretary of State sounded as if he was willing to contemplate large reductions in the amount of resource going to universities, but that would affect the quality of students’ education. On our estimates, the cash going to universities rises from about £9.2 billion in 2010-11 to £10 billion in 2014-15, so we save money, there is more resource going into universities and, crucially, at the same time the money is accompanied by reform.

[Several hon. Members]

rose—

[Mr Willetts]

I give way to my hon. Friend the Member for Beverley and Holderness (Mr Stuart).

[Mr Graham Stuart]

Will my right hon. Friend nail the misinformation, peddled not least by Opposition Front Benchers, about the increase in fees putting people from lower-income backgrounds off going to university? The truth is that the payments per month will be lower under the new system, that those who earn lower amounts will pay less, that the new system is more progressive and that Opposition Front Benchers, who cry crocodile tears for caring about those from the lowest incomes having access to a university, are scaremongering and providing misinformation. Will he please put them right?

[Mr Willetts]

That was an excellent intervention. After this debate, I hope that Members on both sides will agree to commit ourselves to visit, between now and the summer, the secondary schools and colleges in our constituencies and explain to them that not a single young person is going to have to pay up front for their higher education. They will repay only if they are earning more than £21,000 a year and that means that their monthly repayments under our proposals will be lower than under the system we inherited from the previous Government.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

rose—

[Mr Willetts]

I will accept the hon. Lady’s intervention, especially if she makes that commitment.

[Dr Whiteford]

Last month, the BBC published figures from the accountants Baker Tilly. They suggested that a student who borrowed £39,000 to complete their higher education would end up paying back something in the region of £83,000. What does the right hon. Gentleman make of those figures?

[Mr Willetts]

I am afraid that I do not recognise those specific figures. We are talking about a system whose powerful logic is simple—no student pays up front, a point that my hon. Friend the Member for Beverley and Holderness correctly made.

[Graham Stringer (Blackley and Broughton) (Lab)]

rose—

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[Mr Willetts]

I need to make some progress because this is not simply a matter of finances, important though they are. It is essential that the measures be accompanied by reform. Above all, that means a focus on the quality of the teaching experience for students. Many students, and their parents, come away from university not convinced that they had the teaching that they needed during their time in higher education. The third challenge, therefore—as well as saving money for the public finances and ensuring that proper financing gets into our universities—is to focus on improving the quality of the teaching experience. We do not achieve that by—

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Will the Minister give way?

[Mr Willetts]

I am responding to the point made by the hon. Member for Stoke-on-Trent Central (Tristram Hunt); it is an important stage in the argument. The money must be accompanied by reform that puts teaching up front and enables students, for the first time, to choose the course and university that they believe will best meet their needs. That is why the Secretary of State and I are absolutely committed to ensuring that it is easier for universities to escape from the shackles of the detailed quotas and restrictions set, university by university, in the system that we inherited from the previous Government. One of our highest priorities is to ensure that our reforms also improve the quality of the student experience. That will be at the heart of our White Paper.

[Graham Stringer]

Will the Minister explain how the quality of education will improve? Due to his miscalculations about the number of universities charging £9,000 and the structure of the students who will be going, there will be a huge deficit. That will lead to cuts in universities or in the number of students going to universities.

[Mr Willetts]

Let me deal briefly with that point. A fortnight ago, the Labour party was claiming that there was a £1 billion shortfall; last week, apparently, the shortfall was £450 million. We simply do not recognise those figures. We will see in autumn next year exactly what students are paying and how much they choose to borrow; they do not necessarily even need to borrow the full amount of fees that they face. That will be a decision for them. At that point, we will assess the financial situation that we face, but we see no reason to amend the broad estimate that we put before the House last autumn.

[Angela Smith]

Given what the Minister has just said, will he guarantee that there will be no cuts in quality or numbers in higher education?

[Mr Willetts]

We have a set of proposals that ensures that increasing resources will go to our universities, so, absolutely, I see no reason why quality should suffer. Indeed, I believe that as we liberalise the system in the way that the Secretary of State and I wish to, we will see improvements in the quality of the student experience. I do not see any need for a reduction in student numbers; on the figures that we have in front of us, I do not believe that that will be necessary.

I want to deal with another point made by Labour Members. There is so much confusion and misapprehension on their part that there is a large amount to sweep away.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Will the Minister give way?

[Mr Willetts]

I wanted to move on to the improvements that we have made to the Browne plan, but of course I give way to the shadow Minister.

[Mr Thomas]

Will the right hon. Gentleman distance himself from the Secretary of State’s comments at the Higher Education Funding Council for England conference when he threatened universities with either more cuts to the teaching grant or further cuts to student numbers?

[Mr Willetts]

We will obviously have to keep a very close eye on the situation. When one looks behind the headline figure of the £9,000 fee, there are so many waivers and special arrangements that the average fee will be significantly lower than that. Given the evidence that has so far come through, we do not recognise the so-called figures for fiscal black holes that are being perpetrated by Labour Members. I suggest that they calm down and wait until the autumn of 2012 when we see what students are actually paying in fees when they arrive at their universities.

[Mr Thomas]

The right hon. Gentleman was asked a very straight question—does he, or does he not, agree with his Secretary of State, who clearly threatened universities at the HEFCE conference with either further cuts in teaching grant or further cuts in student numbers? Does he agree with him—yes or no?

[Mr Willetts]

I am always in agreement with the Secretary of State. The position that he was describing related to options that would be necessary if the financial position was very different from the one that we estimated last autumn. On the basis of the evidence that we have, we do not believe that that will be the case.

[Margot James]

Does my right hon. Friend agree that university costs should be looked at very closely, just as with every other kind of public sector institution? Lord Browne found that the average fee was £6,000 if one took into account efficiencies that universities could make in relation to what would be the break-even point compared with what they currently enjoy in terms of funding.

[Mr Willetts]

My hon. Friend is absolutely right. We look forward to the report that Ian Diamond is preparing on precisely how we can improve efficiency in our universities.

[Mr Andrew Smith (Oxford East) (Lab)]

Will the Minister give way?

[Mr Willetts]

No, I am going to make some progress because Members in all parts of the House wish to speak and I have a lot more ground to cover.

We have not only taken on Lord Browne’s proposals in the report commissioned by the previous Government as their way of reforming the finances of our education system, but tried to improve on those proposals. The crucial way in which we have done that is by improving the repayment terms for graduates. A very important feature of the new system is that instead of the repayment threshold of £15,000 that was left to us by the previous Government, we propose a threshold of £21,000. The only way in which people pay for higher education is as graduates repaying their loans, so the level of threshold and the amount of the repayment that they make is crucial. Under our scheme, a care worker graduating in 2016 with a £20,000 starting salary would repay nothing. Under Labour’s £15,000 repayment threshold, that care worker would have been repaying £37.50 a month. Under our scheme, an accountant graduating in 2016 with a £25,000 starting salary would repay £30 a month. If the repayment threshold had remained at £15,000, that accountant would have been repaying £75 a month.

The crucial figure that matters for young people thinking about the cost of their higher education is how much they will have to repay. Under our scheme, their monthly repayments will be significantly lower. That is why the Secretary of State and I are confident that these reforms are the right way forward and are genuinely progressive. We are discharging our obligation to future generations in exactly the way the shadow Secretary of State set out at the beginning of his speech. That is the crucial challenge and we believe that our reforms rise to it.

That is not just my view or that of the Secretary of State, but the view of bodies that have scrutinised our financing proposals. The Institute for Fiscal Studies said that

“the Government’s proposals are more progressive than the current system or that proposed by Lord Browne.”

The OECD endorsed the coalition’s policy:

“The increase in the tuition fee ceiling is reasonable and should pave the way for higher participation in tertiary education”.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Can the Minister quote any vice-chancellor of any reputable higher education institution in this country who has said that the Government’s record in their first year of office has been good for higher education in this country?

[Mr Willetts]

I have been at many events with university vice-chancellors at which they have all accepted that, given the circumstances that we inherited and faced with the policy options of reducing teaching grant, reducing student numbers or implementing Lord Browne’s proposed changes in student finance, we took the right decision. I am confident that we have improved on Lord Browne’s proposals by making the repayment threshold more progressive.

Let me quote someone who is not a vice-chancellor, but who is perhaps still treated with a degree of respect by some Opposition Members, namely Lord Mandelson. The new postscript to his excellent memoirs, which I commend to Opposition Members, states:

“When the university fee debate came up before the Lords, for example, there was a large part of me that felt I should weigh in.”

I am sure that there was. It goes on:

“It was I, after all, who had set up the Browne Review”—

the Labour party seems to have forgotten that—

“into what future changes were necessary to ensure proper funding for universities in the best and fairest way, for both them and their students. When I did so in November 2009 I assumed, as the Treasury did, that the outcome would have to include a significant increase in tuition fees. I felt that they would certainly have to double in order to offset the deficit-reduction measures that we too would have implemented had we won the election. The alternative would be a disastrous contraction of higher education.”

Those are the words of the previous Secretary of State, and I take them as an accurate account of what was in the minds of Labour Ministers when they set up the Browne review.

[Andrew Bridgen]

I remind the Minister of the words of Professor Steve Smith, the president of Universities UK, who said that the coalition Government’s higher education policies

“will bring in the resource needed to allow students to go to university regardless of their financial circumstances, provide financial sustainability for universities, and ensure that we can maintain the UK’s international competitiveness in terms of undergraduate education.”

[Mr Willetts]

Absolutely. That is the view of Universities UK, and, as I have explained to the House, it holds that view because in the difficult circumstances that we inherited from the previous Government, we have taken the correct strategic decisions.

I have set out our approach to higher education. What was striking in the speech of the shadow Secretary of State was the complete absence of how he believes higher education should be financed in tough times. What was particularly noticeable was the absence of any reference to what we understand to be the preferred policy of his party leader, namely a graduate tax. We are still waiting to see the move to the graduate tax, which we understand is now the view of the shadow Secretary of State. Of course, the last Labour Government produced a helpful document on the subject entitled, “Why not a Pure Graduate Tax?”, which sets out clearly some of the issues surrounding a graduate tax. We are still waiting to hear whether the shadow Secretary of State advocates it.

Of course, our proposals involve a capped graduate tax, which has a threshold of £21,000 and a rate of 9%, is linked to the university that one went to, and is extinguished when one has discharged the cost of one’s higher education. That is the right way of delivering a graduate tax to pay for higher education. I would be very interested to hear from the shadow Secretary of State whether he believes that that system should be improved in some way. Does he prefer a model of graduate tax with, perhaps, a lower threshold and a lower rate?

[Lilian Greenwood (Nottingham South) (Lab)]

Will the right hon. Gentleman give way?

[Mr Willetts]

No, I am going to make some progress on this important point.

Would the shadow Secretary of State prefer a model with a 3% tax for graduates? That is one possibility, but of course it would bring low earners into the burden of graduate tax, whereas they will be exempt from it under our proposals. It would have another significant defect, because whereas we can collect student fees from people across Europe, there is no way in which a graduate tax could be collected from a graduate who has been educated in Britain and then goes to live abroad.

Once again, the memoirs of Peter Mandelson are very clear on this point, and we now know where the Labour party’s policy comes from. He writes:

“To be fair to Ed”—

he is referring to the current Labour leader”—

“from his days in the Treasury when we were first introducing the top-up-fees scheme in government, he shared Gordon’s preference for an alternative graduate tax”.

So it was Gordon who wanted a graduate tax—that is where this bold, new Labour idea comes from. The memoirs continue that the current Labour leader held that view

“even when our research concluded that it was simply unworkable.”

That is what Peter Mandelson says. Labour’s research showed the defects of a graduate tax, and we are still waiting to hear from the shadow Secretary of State what his policy is on such a tax.

The position is clear: the Government have a plan for financing higher education in tough times. We are financing it in a way that continues healthy support for our universities and enables us to save funding for the Exchequer at the same time. We are doing that without any cuts to student numbers or to the teaching resources going to universities, without any burden on students when they are at university and while improving the regime for graduate repayments after they have left university. That is why our plan is realistic, sober, reformist and progressive. We believe it is the right way forward, and in the absence of any constructive proposals from the Labour party, we remain convinced that ours is the correct strategy.

[Several hon. Members]

rose—

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[Mr Wilson]

Indeed I do agree with that. There are some fabulous FE colleges that could easily deliver high quality higher education degrees.

Thirdly, if we are to have a Treasury-imposed affordability limit on student numbers, we need to think more creatively about how we tease the best out of a more limited market system. As I have said, we need to encourage the best high-quality, sought-after courses that students actually want to take. We have to design a system that allows good universities with good courses to expand, and poorly performing universities with poor quality courses to decline, or at least take action to improve their offering.

[Mr Willetts]

My hon. Friend is focusing on the crucial issues of how we get more competition and choice into the system. I assure him that these are absolutely the issues that we will focus on in the White Paper.

[Mr Wilson]

I am grateful to my right hon. Friend for that reassurance.

Let me turn quickly to my other point about the Office for Fair Access. As Professor Eastwood rightly argued, more higher education places should mean more social mobility. Although I welcome any constructive suggestion to increase social mobility and opportunities in this country, I am concerned that a heavy-handed attempt to do so would risk another cornerstone of our university system, which is academic freedom.

In a commendable feature of the Higher Education Act 2004, OFFA was given a legal duty

“to protect academic freedom including, in particular, the freedom of institutions…to determine the criteria for the admission of students and apply those criteria in particular cases.”

The first guidance letter issued by the Labour Secretary of State in October 2004 confirmed that the Government’s priority was financial support for the poorest students, and noted that

“institutions that generally attract a narrower range of students may want to put more money into outreach activity to raise aspirations”.

The guidance also made it clear that institutions’ admissions policies and procedures were outside OFFA’s remit.

This Government’s new guidance to the director of fair access is much more aggressive, and I believe that it has clear and serious implications for universities’ admissions policies. It instructs OFFA that it

“will want to ensure that each institution is making sustained and meaningful progress towards a more balanced and representative student body, reflected year on year in its own benchmarks, measures and targets.”

Under the February 2011 guidance letter, if an institution is deemed to have seriously or wilfully breached its access agreement, OFFA can decide not to approve or renew the agreement. That would remove the institution’s right to charge its students above a basic fee level. I understand that a fine of up to £500,000 is also available.

The message to universities, via OFFA, appears to be that unless they make progress each year towards achieving a “more balanced and representative” student body, they can expect OFFA to set much more onerous obligations and require them to devote more of their resources to outreach and financial support. In addition, they could be fined. So, while the Opposition call for new powers for OFFA, will the Minister confirm that the Government remain committed to protecting the academic freedom of universities, and that they have no plans to interfere with university admissions policies through access agreements?

[Mr Willetts]

I can give that assurance. We have no plans to change the legal framework guaranteeing the freedom of universities to run their own admissions procedures.

[Mr Wilson]

I thank my right hon. Friend for that assurance, but the legal framework is slightly different from the access agreement. I do not have time to go into that now, however.

I agree with the Russell group when it argues that too few poorer pupils are getting the right grades and that the achievement gap according to socio-economic background is getting even wider. It also argues that the most effective way to get low income students into the best universities is to help them to improve their academic performance at an early stage. It is in the schools that we should be looking to change things, not in the universities. As I have said, I am passionately committed to raising aspirations and spreading opportunities more widely in our society, but it would be far better to tackle the real cause of unfair access to higher education—too few poorer children achieving the right grades at school—than to bring the Government into conflict with the legal duty to protect university independence and academic freedom.

Oral Answers to Questions

Lord Willetts Excerpts

Thursday 17th February 2011 Commons Chamber

[Gordon Birtwistle (Burnley) (LD)]

20. What his policy is on widening access to higher education for students from disadvantaged backgrounds; and if he will make a statement.

[The Minister for Universities and Science (Mr David Willetts)]

This Government are committed to social mobility. That is why our higher education reforms have no payments up-front, more generous maintenance support and the extension of loans to part-time students. Last week we gave updated guidance to the director of fair access about access agreements and outlined details of our £150 million national scholarship programme.

[Mr Wilson]

I thank my right hon. Friend for that answer and for the additional support to disadvantaged students. In a report, the Sutton Trust has described university entrance quotas as

“a punitive measure against talent and effort”

and argued that no child should be denied a university place because of their social or educational background. Does he agree with that view and will he clearly rule out any move towards the social engineering of university admissions?

[Mr Willetts]

We in the coalition Government do not believe in quotas, for the reasons that my hon. Friend rightly sets out. They would be not only undesirable but illegal because the autonomy of universities in running their own admissions arrangements has legal protection.

[Gordon Birtwistle]

Will my right hon. Friend congratulate Burnley college, which is operating in a disadvantaged area, on its event last Friday, when dozens of companies met scores of young people who wish to take up apprenticeships in engineering? Does he agree that that is the right way to go and that the coalition Government are repairing the damage following the destruction of manufacturing engineering by the previous Government?

[Mr Willetts]

As we heard so eloquently from the Minister for Further Education, Skills and Lifelong Learning, the coalition Government are absolutely committed to apprenticeships. It would be a mistake to hold the view that apprenticeships and places in higher education are in conflict. Indeed some apprentices may subsequently go on to university and benefit from a university course, too.

[Mr David Lammy (Tottenham) (Lab)]

Can the Minister give an estimate of the likely shortage of funded places at university in the next academic year? Can he square that estimate with his desire to get young people from deprived backgrounds into university?

[Mr Willetts]

We have committed to repeat the initiative this year with 10,000 extra places at university. Current indications are that applications are running perhaps about 5% higher than at a similar point last year, but we will have to see what the eventual figure is. As the right hon. Gentleman used to say when he was in government, application to university has always been a competitive process. No individual place can be guaranteed but we are committed to broadening access to university.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

In the last month, the Secretary of State’s Department has confirmed that another 10,000 student places are set to be axed. We now know that his national scholarship programme will help under 2% of students. The logic of his rhetoric on access would have us all believe that Oxford and Cambridge are to be the last universities in England allowed to charge the full £9,000, which nobody thinks is credible. In his mind, the Secretary of State may well still be “St Vince”, but with Corporal Jones from Havant and Private Pike from Southwark and Bermondsey by his side is he not really just Captain Mainwaring, bumbling along out of his depth with all his best moments long since past?

[Mr Willetts]

We’re not panicking; we’re not panicking. In fact, it is Labour Members who left us with a situation whereby access to our leading, most research-intensive universities for people from the poorest backgrounds was declining. That is the challenge that we are tackling. I do not recognise the hon. Gentleman’s figure of 10,000 fewer places, as there are extra places. That is perhaps why the National Union of Students, in a leaked e-mail this morning, apparently described our reforms as “relatively progressive”.

[Amber Rudd (Hastings and Rye) (Con)]

The university centre Hastings is doing some excellent work with children from poorer families who want to go on to higher education. It is very concerned about the future of higher education for them and asked me to inquire about the national scholarship fund and what more can be done to help children on free school meals when they leave school and might need some assistance.

[Mr Willetts]

Absolutely. When the national scholarship programme is mature, it will be worth £150 million a year. With match funding, which we expect the universities to provide, it could offer—contrary to the assertions of Labour Members—extra financial support to up to 100,000 students. It could work in various ways, providing help with accommodation costs, fee waivers and extra direct financial assistance, which we think is a very practical way of helping students from poorer backgrounds.

--- Later in debate ---

[Helen Jones (Warrington North) (Lab)]

Does the Minister plan to switch higher education numbers to low-cost courses in further education colleges, as recently reported in the Financial Times, and, if so, what modelling has his Department done on the effect on student choice and possible increased social segregation?

[The Minister for Universities and Science (Mr David Willetts)]

There are further education colleges across the country that are keen to deliver more higher education, and the coalition Government believe that that is an opportunity that they should be able to take up, provided they meet the necessary standards.

[Mr Christopher Chope (Christchurch) (Con)]

T6. Do the Government agree that universities should be free to admit students on the basis of academic merit without interference from the Government, and, if so, why are they intent on more regulation and meddling in the freedom of university admissions?

[Mr Willetts]

As I explained earlier, universities are of course free to control their own admissions and must have that freedom. Universities have always assessed students not only by what they have already achieved, but by their potential to achieve in future. They have often made that judgment informally and we support them in continuing to do so.

[Mr Mike Weir (Angus) (SNP)]

In answer to an earlier question, the Minister talked about the development of electric vehicles. Is the Department looking at encouraging the development and take-up of a hybrid version with a petrol back-up, rather than a traditional hybrid, to deal with the problem of range in rural areas?

--- Later in debate ---

[Graham Evans (Weaver Vale) (Con)]

T9. I have mentioned in the House before my constituency’s excellent Daresbury science and innovation campus, which really is a world-class centre for hi-tech entrepreneurship. Daresbury recently bid for a share of the £1.4 million regional growth fund. Can the Minister assure me that that bid will be looked upon favourably?

[Mr Willetts]

I am aware of the strengths of that excellent campus, and I am sorry that business in the House meant that I was not able to visit the other day, as I had hoped. I will visit very soon. Of course, there have been many bids for the regional growth fund, but in that way or in others I hope that we can continue to support my hon. Friend’s facility.

[Natascha Engel (North East Derbyshire) (Lab)]

Government Front Benchers have today stated their intention to extend from one year to two a worker’s right to claim unfair dismissal, but, in industries such as construction, where tens of thousands of workers who have worked for many years for the same employer do not even have a written contract, what is the Secretary of State doing to enforce such basic employment rights before he starts taking workers’ other rights away?

--- Later in debate ---

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Will the Minister explain how the Government can possibly hope to promote access by cutting the teaching budget for universities by 80%? As a result, universities will have to charge £7,500 simply to stand still. Rather than attacking the autonomy of universities with Whitehall over-interference, why do the Government not invest the requisite public resources in our great universities?

[Mr Willetts]

The hon. Gentleman cites a figure that even the NUS no longer accepts as viable. He seems to have failed to understand the fundamental feature of our reforms, which is that the money will continue to reach universities but via the choices of students. That is the right way in which to finance them.

[Mr Andrew Turner (Isle of Wight) (Con)]

Sixteen months ago, the Office of Fair Trading declined to investigate ferry services to the Isle of Wight. Many islanders feel that the ferry operators view the OFT’s decision as carte blanche to cut services and to change their pricing structure. Will the Minister agree to meet me and a small group of my constituents to discuss those matters?

--- Later in debate ---

[Laura Sandys (South Thanet) (Con)]

I thank the Department and the Minister for all the work they are doing to secure jobs on the Pfizer site in Sandwich. What is his vision in securing those jobs and a future for the site in the science area?

[Mr Willetts]

I am grateful to my hon. Friend. This is a very serious challenge that we face, and we are doing our best to tackle it. Yesterday I met the leader of Kent county council and other members of his taskforce, and last week I visited and met members of the work force. We are absolutely committed to the future of that site and believe that it should be possible for a range of different research organisations to be active on it. The site should have a great future.

[Lilian Greenwood (Nottingham South) (Lab)]

I recently met representatives from the Union of Jewish Students at the university of Nottingham, who tell me that they are concerned about increasing incidents of anti-Semitism and racial incitement by guest speakers at university campuses. Will the Minister take steps to support the implementation of speaker policy guidelines in universities across the UK to help student unions and vice-chancellors to deal effectively with guest speaker invitations and prevent incidents of hate speech and intimidation?

[Mr Willetts]

I have discussed this with representatives of Jewish students. It is a challenge for universities, and the hon. Lady is right to raise it. We will continue to be absolutely emphatic on the rights of individual students to enjoy freedom without facing harassment and abuse, which, sadly, has been occurring.

[Duncan Hames (Chippenham) (LD)]

Perhaps, like me, Ministers can recall how it felt to be among one of the last to be picked for a team in a game of schoolyard football. The experience is very similar for some areas wishing to join local enterprise partnerships. Can the Minister reassure residual LEPs in smaller areas that they will still have fair access to regionally administered skills funding?

Department for Business, Innovation and Skills (Performance)

Lord Willetts Excerpts

Wednesday 2nd February 2011 Commons Chamber

[The Minister for Universities and Science (Mr David Willetts)]

What a dismal picture of the business of government the hon. Member for Wrexham (Ian Lucas) has just painted. He thinks that all we should ever do is wage war with our own colleagues in order to raise the growth rate. That might be how the Labour Government functioned, with everyone having to fight their own corner against all the other Departments, but it is not how the coalition Government function. We all work together on an agenda to sort out the mess we were left by the previous Labour Government and the only way we can sort out a mess that big is if all the Departments share the same agenda—and we absolutely do. That agenda has business and being pro-business and pro-growth at its heart.

Let me take hon. Members through the measures we are introducing that are aimed absolutely at backing British business and raising our growth rate. For a start, we are reforming corporation tax, bringing the main rate down from 28% to 24%, making it one of the lowest rates in the advanced western world. We have already eased the burden of national insurance on British business by £3 billion and we are specifically helping small businesses. Several colleagues, including my hon. Friends the Members for Brighton, Kemptown (Simon Kirby), for Northampton South (Mr Binley) and for South Staffordshire (Gavin Williamson), have raised the issue of small businesses, to which we are committed. There is the scheme that the hon. Member for Wrexham mentioned, which we inherited from Labour—the enterprise finance guarantee scheme—which helps small businesses. We have put an extra £600 million into it so that there is extra lending to small businesses. In addition, we have created the new enterprise allowance scheme, aimed at helping unemployed people to get work as self-employed. Of course, we know that one of the biggest problems that small businesses face is the burden of employment regulation, which is why we are committed to reforming employment tribunals—to give small businesses confidence to take on new staff.

Of course we are committed to bringing down the burden of red tape. We are absolutely committed to the one-in, one-out rule, and we are also ending the gold-plating of regulations from Brussels that add completely unnecessary burdens to British business. We are committed to well-balanced regional growth, which is why we already have 28 local enterprise partnerships going. They already represent two thirds of all businesses across the country. There is a regional growth fund with £1.4 billion to invest on excellent projects across our regions.

Yes, we are absolutely backing growth and we are tackling the fundamental weaknesses that we inherited from the Labour Government, such as insufficient investment in infrastructure. That is why we have produced a national infrastructure plan, with a green investment bank and £1 billion for energy-efficient investment, with more to come as asset sales come through.

We are committed to trade and to ensuring that Britain is open for business. I can tell my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) that we absolutely understand that and we will be setting out in our trade policy White Paper, which is due very soon, the overall framework of trade policy. We do not believe that LEPs should automatically be held responsible for trade policy. Inward investment will be a responsibility of UK Trade & Investment, but if LEPs wish to work with UKTI on that, they are welcome to do so.

[Mr Tom Harris (Glasgow South) (Lab)]

Will the Minister give way?

[Mr Willetts]

No, I shall try to make progress.

We have taken a deliberate decision to focus our trade activity on the big, growing economies of the future—Brazil, Russia, India and China. My right hon. Friend the Secretary of State has already personally led trade missions to all four of those growing economies—crucial markets for the future. So yes, we are absolutely battling for Britain in trade talks.

[Geoffrey Clifton-Brown]

I made this point in my speech: we should be concentrating not only on the BRIC countries, but on other fast-growing markets such as Indonesia and Turkey, and I seek the Minister’s assurance that we will do that.

[Mr Willetts]

I intend, time permitting, to go to Indonesia, where we have some specific trade objectives, and I think the Secretary of State plans to be in Turkey, so we recognise those countries’ importance. All of us, working with Lord Green in the other House, have trade promotion at the top of our agenda for this Government.

I have referred to the burden of tax, the burden of regulation, our support for small businesses, infrastructure and trade. There is also the crucial investment in the skills that we need for the future. Again, we inherited a mess from Labour. Many Members on both sides of the House will remember the disappointment when further education colleges, having had their hopes raised that there would be billions of pounds for capital projects, found that the money ran out. Labour’s problem with further education was that the money ran out even before the election, so Labour Members were holding the baby. They know the situation they left us.

[Mr Harris]

The Minister has outlined the impressive growth strategy being pursued by this Conservative-led Government, which has resulted in a 0.5% contraction in the economy. What would that have looked like without his growth strategy? What would have been the result if we had been deprived of that strategy?

[Mr Willetts]

We do not know what would have happened to the British economy if the Labour party had been in office, but I tell the House that if Labour had carried on borrowing in the way it was, we could well have faced a crisis of the kind that happened in Ireland, Greece and Portugal. We will never let Labour Members forget that they were taking Britain to the brink of that type of financial crisis. We have taken our country away from it.

I was about to refer to the investment that we are also making in skills, with support through the capital renewal fund for our FE colleges, steered by my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, and a commitment to 75,000 extra apprenticeships. We can already see the impact of our commitment on apprenticeships: in the first quarter of the year, we had 120,000 new apprenticeship starts, while a year ago, at the same moment, the figure was 100,000. Extra apprenticeships are already coming through because of our practical commitment to vocational training.

Alongside vocational training, of course we recognise the continuing pressure on our universities. That is why we had to reform their financing. Had we not done so, we would have faced reductions in the number of university places or reductions in the financial support for each student at university. Instead, we have been able to maintain our commitment to 10,000 extra places at university and urge universities, with requirements to back this up, to focus on the employability skills of their students. When people emerge from university, they should have had practical experience of the world of work already, so we are focusing on skills and universities as well.

We are protecting the budget for science and research and enabling important capital projects to go ahead, such as the UK centre for medical research and innovation at King’s Cross. We are taking practical steps to ensure that we can enjoy the benefits of our excellent research effort—speeding up the process of getting a patent and intellectual property protection, which can be too slow. Yes, we are backing research and development, and we are backing the technological application of that by encouraging our new technology innovation centres.

It was a great disappointment when we had the news from Pfizer. I met the global chief executive officer and the UK chief executive of Pfizer on Monday 24 January, when they informed us in strict confidence of their intention to close the Sandwich plant. We did, of course, press them on their decision. They made it clear that it was a decision based on global strategic considerations by the company as a whole, as it moved away from some of the lines of research in which Sandwich specialised. They made it clear that it was not because of any disagreement that they had with this Government’s economic policies.

Since then we have been in close contact with Pfizer. I have asked Paul Carter, the leader of Kent county council, to lead a local task force on the matter. The Secretary of State and I will be working hard to try to find innovative alternative uses for that excellent research facility and to back the very skilled people there.

We are doing all this against the background of a serious financial crisis left for us by the previous Labour Government. The shadow Secretary of State, the right hon. Member for Southampton, Itchen (Mr Denham), said, “There are no deficit deniers” on the Opposition Front Bench. He was able to say that only because the shadow Chancellor was not sitting beside him at the time. We know that deficit denial is one of the fundamental problems that the Labour Opposition face if they are ever to become a credible party of government again.

Although the shadow Secretary of State said that he was not a deficit denier, he went on to say that the large deficit had arisen because of the banking crisis. Britain was running one of the worst structural deficits of any advanced western country before the banking crisis. One of the tests of whether people recognise the seriousness of the challenge that they face is their willingness to accept that that was the problem. If they do not accept that that is the problem, they are deficit deniers. It is as simple as that.

Then the right hon. Gentleman seemed to fail to recognise the wide range of business leaders in Britain and elsewhere who have backed our policy to tackle the deficit. He went on to say that we just blamed the snow for the economic problems that we faced. Okay, I will do a deal with the shadow Secretary of State. We do not just blame the snow; we blame the last Labour Government.

It was the last Labour Government who got us into this mess. They left us an economy with the worst deficit, unsustainable spending, the most leveraged banks, the biggest housing boom, unsustainable levels of personal debt and personal saving negative—almost unprecedented in any advanced western country. That is the mess that they left us. That is what we have to sort out. Already, working with the Secretary of State, we are putting in place a growth strategy to emerge from the mess.

My right hon. Friend the Secretary of State was one of the most eloquent and effective people in warning about the mess that Labour was making of our economic situation. He warned about the level of debt. He was quite right to do so. Now, the present Government must tackle it. It was those on the Labour Benches who left the patient dangerously ill. Now they complain as we, sadly, have to deliver the treatment.

Question put.

Oral Answers to Questions

Lord Willetts Excerpts

Thursday 13th January 2011 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

4. How many universities he expects to charge £9,000 in tuition fees in 2012-13.

[The Minister for Universities and Science (Mr David Willetts)]

Universities have not yet set their level of graduate contribution for 2012-13. Any institution in England wishing to charge above £6,000 must have an access agreement approved by the director of fair access. The Office for Fair Access will shortly begin discussions with individual institutions that intend to submit an access agreement under our demanding new requirements. We have always made it clear that £9,000 should be charged only in exceptional circumstances.

[Sheila Gilmore]

The Minister will be aware of the discussion within the university sector; many universities, especially Russell group universities, have already said that they are likely to charge at the higher level. Even some other universities are saying that to break even, they would need to charge more than £7,000. What modelling did the Department for Business, Innovation and Skills do when presenting its financial calculations to the Treasury, if it does not know the answers to questions that the universities appear to know?

[Mr Willetts]

We are waiting for universities to approach OFFA; they will have to submit a request to OFFA if they wish to go above £6,000. In our financial modelling, which we shared with the House, we made it clear that on average, replicating the income that universities are getting at the moment would involve fees of around £7,000. Of course, we are expecting universities, just like every other organisation in Britain, to make significant efficiency savings and hold down their costs.

[Mr Rob Wilson (Reading East) (Con)]

My right hon. Friend will remember that under the previous Government a number of higher education institutions were categorised as being at risk of financial failure. In the light of the funding changes taking place, has he updated his risk assessment of the HE institutions at risk?

[Mr Willetts]

The Higher Education Funding Council for England has always kept an eye on the financial position of universities. As a result of the new revenues that universities will get from graduate contributions, we estimate that it is very possible that at the end of this Parliament universities could well have a higher combined cash income in total from the Exchequer than they do at the moment; that is a sign of our commitment to the strength of British universities.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Like the Minister for Universities and Science, the Secretary of State says that universities charging the full £9,000 in tuition fees will be the exception. No one independent thinks that that is credible. The Secretary of State also says that university leaders support his plans, yet not one university vice-chancellor supports the 80% cut in university teaching grants. He cannot even organise a scholarship fund without creating perverse incentives for universities to turn away students from the very poorest backgrounds, so just to get back to being Mr Bean the Secretary of State has quite a long journey ahead of him. Is it not clearer now that the trebling of tuition fees was not fair or necessary, and still has not been properly thought through?

[Mr Willetts]

The hon. Gentleman is absolutely wrong. It was made clear when the House debated the issue last month that more than half of all vice-chancellors support our proposals, because, given the tough decisions that we have had to take on public expenditure, we have provided them with an alternative source of income, coming not through a quango but through the choices of students, who can be confident that they will have to pay for their higher education only after they have graduated and are earning more than £21,000 a year.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

I know that the Minister recognises the force of the point made by the Glasgow university principal, Anton Muscatelli, in his recent article in The Sunday Times, about the fact that the decisions in England will inevitably create a funding shortfall for Scottish universities. Will the Minister again undertake to stay closely in touch, on behalf of the UK Parliament, with the Scottish Parliament, which has reconvened the all-party technical working group to look at the matter ahead of the all-important May elections?

[Mr Willetts]

I have ministerial responsibility for the financing of universities in England only, but the right hon. Gentleman is absolutely right, and we do keep in close contact with the devolved Administrations, because there are significant connections between decisions that we take in England and decisions that they take affecting Scotland and Wales.

[Grahame M. Morris (Easington) (Lab)]

6. What assessment he has made of the prospects of establishing a single local enterprise partnership in the north-east; and if he will make a statement.

--- Later in debate ---

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

15. What progress he has made on preparations for the higher education White Paper; and if he will make a statement.

[The Minister for Universities and Science (Mr David Willetts)]

We are consulting students, universities and other experts and will publish a White Paper in the early part of this year. It will set out how we will sustain our world-class universities, encourage them to deliver high-quality teaching and improve social mobility.

[Mr Evennett]

I thank my right hon. Friend. As he knows, a significant number of higher education courses are now being provided at further education colleges. Can he advise me whether the White Paper will build upon that?

[Mr Willetts]

My hon. Friend was, of course, a lecturer in a further education college, and it is only right that he should remind us of the contribution that FE colleges can make. He is absolutely right, and we do hope to encourage higher education in further education institutions as part of our White Paper.

[Justin Tomlinson]

In an ever more complex financial world, does the Minister agree that offering additional financial education will give universities a unique selling point in providing quality student support on post-study matters, and therefore should be considered as part of higher education pastoral support in the forthcoming White Paper?

[Mr Willetts]

My hon. Friend is absolutely right about the importance of people having access to good financial advice. Of course, one thing that students can be advised is that in future, under the coalition’s proposals, their monthly repayments on their student loans will be lower than under the current scheme.

[Nicola Blackwood]

The Institute for Fiscal Studies has found that socio-economic disadvantage has already had an impact on academic outcomes by the age of 11, and that disadvantage explains a significant proportion of the gap in HE participation at 19 or 20. Does the Minister agree that simply expecting universities to bridge educational inequalities once they have become entrenched will not work? If so, how does he intend to work with relevant Departments, such as the Department for Work and Pensions and the Department for Education, and with universities as they develop their access programmes, to try to break the link between socio-economic disadvantage in the early years and HE participation once and for all?

[Mr Willetts]

My hon. Friend is absolutely right to say that that problem needs to be tackled at all stages of the educational process, in early years, at school and at university. I am pleased to inform the House today of a new initiative, an excellent collaboration between KPMG and the university of Durham, whereby school leavers will go straight into employment with KPMG while also studying at the university, with their fees paid by KPMG. That is an excellent example of the type of initiative that we want to see.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

What assessment has the Minister made of the disconnect between the cuts in higher education funding, particularly in the arts and humanities, and the delayed implementation of the education White Paper, which contains the new funding arrangements? Universities will have cuts before they get the new funding arrangements following that White Paper.

[Mr Willetts]

As I said earlier, it was clear in the grant letter that we sent to the Higher Education Funding Council for England that over the next few years, as the teaching grant income of universities falls, there will be increased income through the graduate contribution scheme. We believe that by the end of this Parliament, universities could well have a higher total income than they have at the moment.

[Mr David Lammy (Tottenham) (Lab)]

On graduate contributions, can it be right that we are asking students to pay more when some universities have clearly not sorted out their inefficiencies? For example, is it right for Oxford fellows to get a free lunch on the taxpayer?

[Mr Willetts]

I think that we in the House have to be careful about free lunches. I do not know about the specific arrangements at Oxford, but I agree with the right hon. Gentleman’s wider point and appreciate his experience as a Minister in the Department for Business, Innovation and Skills. We are entitled to expect universities to make efficiency savings. There should be more contracting out; they should hold down their pensions costs—there is a lot that universities should do to hold down their costs. They should not simply pass them on to students in higher fees.

[David Simpson (Upper Bann) (DUP)]

Further to the point on universities, how many children of servicemen and women killed on active duty are expected to be eligible for the new university scholarship scheme?

[Mr Willetts]

We obviously do not know, as the years progress, how many children in those tragic circumstances can benefit. I think some estimates suggest that the figure could be 100 a year at the peak of the scheme. Our commitment to the education of the children of servicemen who sadly lost their lives is an important sign of our commitment to maintaining the military covenant.

[Michael Ellis (Northampton North) (Con)]

16. What representations he has received on his Department’s policy on the future of the post office network; and if he will make a statement.

--- Later in debate ---

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The cuts in higher education funding will begin at the beginning of the next financial year, in April 2011. The university year will not end until the summer, and the new income streams from tuition fees will not arrive until some indeterminate time in the future. There is a disconnection in the cash flow to higher education. What is the Minister doing to prevent it from damaging higher education?

[The Minister for Universities and Science (Mr David Willetts)]

As I explained earlier, we are of course providing an alternative source of income for universities as graduate contributions come in. There will be a reduction in the teaching grant in the coming year, just as there will be public expenditure savings across many Departments, but universities will be able to go through that period, and we expect that at the end of the current Parliament, they will have a higher total income than they have at present.

Oral Answers to Questions

Lord Willetts Excerpts

Thursday 18th November 2010 Commons Chamber

[Graham Evans (Weaver Vale) (Con)]

1. What assessment he has made of the likely effects on the economy of maintaining his Department’s science and research budget at present levels.

[The Minister for Universities and Science (Mr David Willetts)]

Investment in science and research attracts inward investment, drives innovation and delivers highly skilled people to the economy, which is why we are protecting the cash budget for science and research at £4.6 billion and ring-fencing it.

[Graham Evans]

The Government are right to protect the science budget in cash terms, which is a decision that will reap dividends for our economy in the future. Does the Minister agree that the world-leading Daresbury science and innovation campus in my constituency should continue to receive the funding it needs so that it may play an important role in future economic growth?

[Mr Willetts]

My hon. Friend has campaigned effectively for Daresbury, and I can tell the House today that we have agreed that the public sector bodies can sign the joint venture agreement with their preferred private sector partner. That means that Daresbury now has excellent prospects as a national science and innovation campus, and I look forward to visiting in the new year.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

If the science budget is to be protected in the way the Minister describes, it is important that the right people are taking the right decisions. Since 1993, the post of the director general responsible for the science budget has been occupied by a senior scientist. Lord Krebs and I, in our respective roles as Chairs of the two Science and Technology Select Committees, have written to the Secretary of State asking for a guarantee that that will be maintained. Will the Minister give that guarantee now?

[Mr Willetts]

The Secretary of State and I have seen this correspondence, and I can assure the hon. Gentleman, whose close interest in these matters I recognise, that a very satisfactory solution can be found.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The Government speak of their support for science—support that has seen the science budget cut by 10% in real terms, stripped away the £400 million of annual science spend by the regional development agencies and exposed science capital expenditure to cuts of up to one third. Now the Minister is abolishing the top scientific post in his Department without even discussing it with the scientific community, which is a move that the former chief scientific adviser, Lord May, described as

“stupid, ignorant and politically foolish”.

So the science community has neither proper funding nor real influence. Does the Minister agree that the Government’s support for science is only skin deep?

[Mr Willetts]

We believe that it is possible to deliver the efficiency savings that mean that the science budget will be protected in real terms, and we are also, of course, committed to making efficiency savings within the Department. We make no apologies, therefore, for reducing the number of civil service posts in the Department. That is the right way to save money. However, as I said in answer to the hon. Member for Ellesmere Port and Neston (Andrew Miller), I am confident that the specific concerns raised by the science community about that post can be addressed.

[Bob Blackman (Harrow East) (Con)]

2. What his Department’s policy is on the future of the post office network.

--- Later in debate ---

[Mr Rob Wilson (Reading East) (Con)]

14. What recent steps his Department has taken to increase the number of student places at universities.

[The Minister for Universities and Science (Mr David Willetts)]

Despite the need to address the deficit, we have enabled universities to recruit an additional 10,000 students in 2010-11. Had we not done so, the number of university places in England would have fallen this year. Our proposals for a fairer and more progressive system of university funding mean that we can maintain student numbers in the future.

[Mr Wilson]

Lord Browne’s review made it clear that the artificial cap on the number of students attending individual universities should be removed to improve market efficiency. Will my right hon. Friend confirm that he will implement that important recommendation in full?

[Mr Willetts]

My hon. Friend is a powerful advocate of the cause of liberalising universities. My right hon. Friend the Secretary of State and I are determined to ensure that they have a freer system, and we will set out proposals to that effect in our forthcoming White Paper.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Is the Minister aware that the Government have just asked the British Council not to recruit before 2011-12 for its English language assistant placement scheme? The scheme is vital to many language students, and cancelling it next year would cause a great deal of disruption. Will the Minister reconsider? If he does not, he will remove a valuable scheme that is important to many language students in this country.

[Mr Willetts]

We are discussing the issue with language schools, and I met some of their representatives at the Department recently.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

Will the Minister acknowledge that even before Lord Browne’s review, many universities—the university of Glasgow being a case in point—were finding that because of the purely artificial 50% figure that had been arrived at years ago, they were having to up their criteria for entry for, say, next autumn? Students who thought that they would be given a place are now finding that they are unlikely to be given one. How will the Government’s interpretation of Lord Browne’s recommendations deal with that fundamental problem?

[Mr Willetts]

While university places remain publicly funded, there has to be some sort of control. However, because of the proposals that we implemented in England this year, there were more places for British students in England. I hope that I am not being too chauvinistic when I say that, in the absence of similar policies in Scotland and Wales, the number of student places fell in both countries.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

As the Minister knows full well, there is mounting concern about the damage that will be done by the Government’s unprecedented 80% cut in funds for our universities. The Institute For Fiscal Studies, which Ministers used as a crutch, is busy revising its assessment of the Government’s plans; there is increasing evidence that poorer students will be deterred from going to university; and the Higher Education Policy Institute says that fees of £9,000 a year will be the norm rather than, as the Minister has claimed, the exception.

Is it not now clear that, rather than arranging a quick vote to end the Deputy Prime Minister’s embarrassment on the issue, the Government should publish their plans in full—including their plans for student numbers—so that they can be properly scrutinised in the House and the full facts can be considered by all Members before the House votes on increasing fees?

[Mr Willetts]

We are, of course committed to publishing a White Paper on our proposals, but I can tell the hon. Gentleman that they will ensure that power in our higher education system resides with the student, which is where it should reside. Universities will have to respond to the choices and preferences of students, and we believe that about a quarter of graduates will contribute less under our proposals than they do under the system left to us by the last Government.

[Elizabeth Truss (South West Norfolk) (Con)]

Methwold high school in my constituency is developing a pioneering plan to offer university of London degrees. It will be a first, particularly in a rural community. Does my hon. Friend agree that that is a great way of increasing participation and aspiration, and would he be willing to meet me along with a delegation from Methwold high school?

[Mr Willetts]

I think I read an interesting article about that important initiative in Times Higher Education the other day. I congratulate my hon. Friend on drawing the House’s attention to it.

We are committed to broadening participation in higher education. That is what our £150 million scholarship scheme is all about, and initiatives such as the one described by my hon. Friend are very valuable.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

15. What assessment he has made of the effects of the abolition of regional development agencies on access to unspent funding from the European regional development fund.

--- Later in debate ---

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

T2. Thousands of medical students will be crippled by the increased tuition fees, and the submission by the British Medical Association to Lord Browne’s review appears to have been ignored. Does the Minister agree that those increases will deter young people from undertaking medical training?

[The Minister for Universities and Science (Mr David Willetts)]

We do not believe that our proposals will have any such effect. Obviously, I am in close contact with the Secretary of State for Health, and we are confident that we can continue to support medical training in a way that will provide the doctors that we need.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

T4. Does the Minister agree that the true test of any education or training system is that the person concerned comes out better qualified and better equipped to be an active and employable member of society than they were before they went into it? Does he agree that the 50% target for universities did not work and was not right, and that we now need to value vocational training and apprenticeship schemes better?

[Mr Willetts]

My hon. Friend is right. That is why, as well as maintaining student numbers this year with 10,000 extra places, my right hon. Friend the Secretary of State and my hon. Friend the Minister for Further Education, Skills and Lifelong Learning have committed us to 75,000 extra apprenticeship places.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

T5. Nissan is an important local employer in Sunderland and it has rightly said that “relatively modest” Government investment can rebalance the economy. That is crucial in regions such as the north-east. Does the Secretary of State agree with Nissan that if the Government do not fight for new business, it will simply go elsewhere?

--- Later in debate ---

[Diana Johnson (Kingston upon Hull North) (Lab)]

Based on the equality impact assessment that I am sure the coalition Government have carried out on their higher education proposals, what will the impact of cutting the higher education teaching grant by 80% be on women?

[Mr Willetts]

Many part-time students are female, and it is already clear that our proposals to give a proper student loan entitlement to part-time students for the first time, in order to help with their fees, will particularly benefit women. We will publish the full impact assessment alongside our White Paper.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

I welcome the steps that my right hon. Friend is taking to increase the number of student places at universities. He mentions increasing the number of part-time courses, and that is vital, but will he urge institutions to be more innovative in their approach to study?

[Mr Willetts]

My hon. Friend is right. One of the main objectives of our reforms is to allow greater diversity of provision, which means more short two-year courses and more part-time opportunities. We want to see a new freedom for universities to innovate, and those possibilities will arise as a part of our reforms.

[Karl Turner (Kingston upon Hull East) (Lab)]

The £1.4 billion regional growth fund is clearly grossly underfunded, and if we had taken the advice of Ministers today we would have spent it 10 times over already. Did the Prime Minister give my constituents false hope yesterday, when he suggested to me that they should go to that fund for housing regeneration?

--- Later in debate ---

[Mr Willetts]

I have had several discussions with the Secretary of State for Health, and our proposals will ensure that we continue to be able to fund medical students in Britain.

[Several hon. Members]

rose—

Oral Answers to Questions

Lord Willetts Excerpts

Thursday 14th October 2010 Commons Chamber

[The Minister for Universities and Science (Mr David Willetts)]

Science and innovation are critical to our future prosperity and strongly supported by this Government. As part of the spending review, we are continuing to strengthen the way we support science and innovation, and improving the way they contribute to economic growth.

[Stephen Metcalfe]

I thank my right hon. Friend for his answer. I am sure that we all agree that the Government have a very important role to play in supporting science and innovation, but there are many other organisations and businesses that need to come together to support more scientific research. What steps can his Department take to foster the big society approach to more research and development?

[Mr Willetts]

In Britain we are very fortunate to have some very substantial charities that support scientific research, especially medical research, such as the Wellcome Trust and Cancer Research UK. Indeed, only this week I was able to announce a £50 million joint project on tumour profiling to improve cancer treatment between the Medical Research Council and Cancer Research UK.

[Mr David Lammy (Tottenham) (Lab)]

The Minister will be aware that knowledge transfer partnerships mean that the Russell group universities contribute £2 billion to British exports. Is he surprised, therefore, that Lord Browne dedicated just 300 words in a 30,000-word report to the employer contribution? Will the Minister say more than his colleagues have about the contribution that employers will make to higher education funding?

[Mr Willetts]

It is good to see the right hon. Gentleman in the House, and I look back to our exchanges when he was a Minister with responsibilities in this area. Of course, when he was a Minister in the Department, he was one of the people who commissioned Lord Browne’s review and agreed its terms of reference. I very much regret that in his first intervention on the review, he has not welcomed the fact that Lord Browne discharged the remit that he was set. It is very important that businesses contribute, alongside individuals and the taxpayer, and we are pursuing that as part of the CSR.

[Alun Cairns (Vale of Glamorgan) (Con)]

Does the Minister accept that the performance of higher education in engaging with the private sector varies considerably? Will he consider making the handing out of research grants conditional on institutions finding private sector partners?

[Mr Willetts]

That is a very important point, and we certainly welcome business backing for research, alongside public funding. There is very important evidence that public funding for research can be complemented by business backing. If I recall correctly, one of the best pieces of evidence on the subject is a research paper where one of the authors is now an official in Her Majesty’s Treasury, so it is a document that we particularly value.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

In mid-September, apparently preparing the way for big cuts in the science and research budget, the Secretary of State managed to insult hundreds of hard-working British scientists by implying on the “Today” programme that

“something in the order of 45 per cent of…research grants…were going…to research that was not…excellent”.

As the US, France, Germany and China are increasing their investment in science and research to drive economic growth, is not this just one more reason why those who thought we had the Sage of Westminster and Two Brains running the ship are finding that we actually have Arthur Daley and the rest of the cast of “Minder” running the sails?

[Mr Willetts]

The countries that the hon. Gentleman cites—incidentally, I welcome him to his new position on the Front Bench—do not have the mess in the public finances that we inherited as a result of the performance of his Government. None of them is borrowing at the high level that we inherited, yet despite that, we remain strongly committed to science and excellent research in our universities.

[James Morris (Halesowen and Rowley Regis) (Con)]

8. What recent representations he has received on access to finance for small businesses.

--- Later in debate ---

[Nigel Mills (Amber Valley) (Con)]

17. What steps he is taking to encourage universities to focus on the employability of graduates.

[The Minister for Universities and Science (Mr David Willetts)]

Students rightly expect better information about their chances of a job after studying different courses at different universities, and universities need to do more to improve the employability of their graduates. That is why I have asked universities to publish statements on what they do for students’ employment prospects. The vast majority have now done so.

[Nigel Mills]

I thank the Minister for that answer. Does he agree that a key method of achieving increased employability are schemes such as those set up by David Nieper, a full service clothing manufacturer in Alfreton in my constituency? It has agreed a scheme with Nottingham Trent university that will ensure that students get a full range of experience and skills in the textiles sector to increase their chances of employment after they finish their course.

[Mr Willetts]

I agree with my hon. Friend. Indeed, one of the proposals in Lord Browne’s report that we are looking at very carefully is to do more to encourage the accreditation of skills developed in businesses and the workplace as part of a degree qualification.

[Chris Evans (Islwyn) (Lab/Co-op)]

18. What recent representations he has received on access to finance for small businesses.

--- Later in debate ---

[Roberta Blackman-Woods (City of Durham) (Lab)]

T5. Can the Minister explain what he will do to ensure that our universities stay at the leading edge of research and innovation? That is especially important as, for many universities, the Browne proposals will mean only replacement income, not growth and investment money, despite the quite disgraceful hike in tuition fees proposed.

[The Minister for Universities and Science (Mr David Willetts)]

The package proposed by Lord Browne as a whole is intended to put our universities on a stable and secure long-term funding basis that will enable us to support and encourage their work in research, and we are considering carefully the new proposals from Sir James Dyson for technology innovation centres.

[Philip Davies (Shipley) (Con)]

T3. Further to the excellent question from my hon. Friend the Member for Kettering (Mr Hollobone), given the volume of regulation that comes from the EU, does the Minister accept that unless the one-in, one-out policy applies to EU regulation as well, it will have only a limited impact? I understand that the Minister said that the policy would apply to EU legislation in due course, but can he give us a time scale for that?

--- Later in debate ---

[Andrew Stephenson (Pendle) (Con)]

T6. In my constituency of Pendle, many graduates earn far less on average than those working in other parts of the country. Does my right hon. Friend welcome the Browne review’s proposals to raise the threshold for fees repayment from £15,000 to £21,000?

[Mr Willetts]

My hon. Friend draws attention to an important feature of the Browne review, which is also one reason why the analysis by the Institute for Fiscal Studies suggested that the poorest 30% of students would be better off as a result of those proposals.

[Valerie Vaz (Walsall South) (Lab)]

Can the Minister state whether he has received the petition from the Science is Vital group, which lobbied Parliament last Saturday, and also say whether he has listened to the group, and if not, why not?

[Mr Willetts]

I believe that the Science is Vital group is also presenting a petition today. I hope to meet the members of that campaign to discuss their commitment to science and to emphasise that this Government are committed to excellent science research.

[Mr Mark Spencer (Sherwood) (Con)]

T7. The Minister will be aware of the thousands of companies that in the past have supplied Departments, an example of which is F. J. Bamkin in my constituency, which used to supply socks to the Ministry of Defence. Can he say what progress his Department has made in achieving the manifesto commitment to deliver “25 per cent of government research and procurement contracts through SMEs”?

--- Later in debate ---

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T8. Cumbria university, which has one of its largest campuses in the Lancaster part of my constituency, has experienced a number of financial and managerial problems over the past few years. Can the Minister comment on the university’s viability, given its new business plan?

[Mr Willetts]

I know that my hon. Friend has been closely involved with that university, as have other hon. Members. The Higher Education Funding Council for England advises me that, with the university’s new management arrangements and its new plan, it will have a far better prospect for the future.

[Mark Tami (Alyn and Deeside) (Lab)]

On Tuesday, Tata Steel announced its intention to close its Living Solutions business in Shotton, with the loss of some 180 jobs. This is a hammer blow to all those employees and their families, as well as to the local economy. Will the Secretary of State join me in pressing the company to reconsider its decision, and also look at the future of the whole modular construction business?

--- Later in debate ---

[Mr John Leech (Manchester, Withington) (LD)]

Research by the Institute for Fiscal Studies suggests that the poorest 30% of graduates would pay less than they do now if the Browne review were to be implemented. However, potential students do not automatically assume that they are going to be among the bottom 30%, so any increase in tuition fees would surely be a disincentive for them to apply to go to university, even if they would ultimately be better off.

[Mr Willetts]

We can see from the evidence that the introduction of fees by the previous Labour Government did not have the effect that many people in all parts of the House feared. In reality, we have seen an increase in the number of applications from students from poorer backgrounds, because they knew that they would not have to pay up-front fees. That key feature of the system would be maintained under Lord Browne’s proposals.

[Miss Anne Begg (Aberdeen South) (Lab)]

A lot of the businesses in my constituency are involved in the offshore oil and gas sector, which is a global business that depends on the movement of labour so that it can move its work force around the world. That business is seriously concerned about the cap on immigration, and I hope that the Secretary of State is having very detailed discussions with the Home Office to ensure that that business remains in the North sea and does not go elsewhere in the world.

--- Later in debate ---

[Duncan Hames (Chippenham) (LD)]

My right hon. Friend has asserted the Government’s determination that graduate contributions should be linked to ability to pay. Will he therefore consider supplementing the Browne proposals with a less advantageous interest rate for the highest earners?

[Mr Willetts]

We are, of course, considering Lord Browne’s proposals very carefully and in greater detail. One issue that we will certainly consider is the exact interest rate that should be applied.

[Anas Sarwar (Glasgow Central) (Lab)]

What an incredible transformation the Business Secretary has made from a Labour councillor in Glasgow to a Tory front-man in Westminster, with every principle dropped at the first sniff of power. Will he please detail what consultation process took place with the National Union of Students before reaching his own conclusions on the Browne report?

Oral Answers to Questions

Lord Willetts Excerpts

Thursday 8th July 2010 Commons Chamber

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

9. What plans his Department has to improve the employability of graduates.

[The Minister for Universities and Science (Mr David Willetts)]

We are committed to increasing employment by cutting the burden of national insurance on new businesses employing new staff in areas such as Plymouth. We are cutting corporation tax over the next four years. We are easing the burden of regulation. In addition, I have asked universities to provide public statements on what they do to promote employability, to encourage them to improve the job-readiness of their students and to do better at getting their students into internships, work experience and work.

[Oliver Colvile]

I thank my right hon. Friend for that answer. Is he willing to meet me and the vice-chancellor of Plymouth university—the enterprise university—to discuss ways in which it might make greater commercial use of its excellent reputation in marine science research as well?

[Mr Willetts]

I have met the vice-chancellor of the university of Plymouth and corresponded with her when she praised the co-operation that she already had with my hon. Friend. Of course, I would be very happy to meet her. Those are exactly the kind of initiatives linking universities and business to promote economic growth that the Government are backing.

[Paul Blomfield (Sheffield Central) (Lab)]

In October last year, the Minister said:

“At a time when the jobs market for young people is tougher than ever, it is far better to find them a place in education than to leave them languishing on the dole…whereas going to university will increase their qualifications and make them more employable in the long run.”

Will he confirm that that is no longer his view, in the light of the withdrawal of 10,000 university places?

[Mr Willetts]

In that statement, I announced my commitment to 10,000 extra places at university, when the then Government were planning a cut in the number of places at university. We have delivered those 10,000 extra places. There will be more places at university this year than the then Government originally planned, and we are proud of what we have achieved.

[Mr David Lammy (Tottenham) (Lab)]

Given that the Office for Budget Responsibility has confirmed a rise in unemployment next year and that the Association of Graduate Recruiters estimates that vacancies for graduates will fall by 7%, what will the right hon. Gentleman do to support graduates in what will be the toughest year on record to get employment?

[Mr Willetts]

I have here the forecast from the OBR, and it is an endorsement of the measures that the Government took in the Budget. It makes it absolutely clear that it expects total employment in the economy to rise from 28.89 million now to 30.23 million in five years’ time, as a result of the decisions that the Government are taking. Of course, times are tough for students, but going to university and getting a degree remains a very good investment in people’s long-term prospects for well-paid employment, and we will encourage universities to focus on maximising the employability prospects of their students.

[Charlie Elphicke (Dover) (Con)]

10. How many further education colleges will receive capital funding from his Department in 2010-11.

--- Later in debate ---

[Ann McKechin (Glasgow North) (Lab)]

12. What plans he has for the future funding of university-based research.

[The Minister for Universities and Science (Mr David Willetts)]

During 2010-11, the Department will provide £5.7 billion in funding for science and research, made up of £3.9 billion, principally to the research councils, and £1.8 billion of research funding distributed by the Universities Funding Council in England. The previous Government delayed the comprehensive spending review, so budgets have not been set for future years. They will be decided this autumn as part of the spending review.

[Ann McKechin]

As the Minister will, I am sure, agree, we enjoy a world-class research base in our universities here in the UK, but stability of funding is crucial to that. I seek reassurance today that he will take that as a priority, especially for science research, which is so essential as a driver for our economy. Can he confirm whether the VAT increase, which will affect universities to the extent of £200 million, will be taken into account?

[Mr Willetts]

My right hon. Friend the Secretary of State and I are committed to a strong research base in Britain and in our universities. If the hon. Lady looks at the Budget, she will see that it contained, alongside the necessary VAT increase, imaginative proposals to try to help universities respond to that challenge.

[Dr Julian Huppert (Cambridge) (LD)]

Is the Minister aware that the decisions that individuals take to come to this country, leave this country and to stay and research in this country depend on how welcome they are made to feel here and how much funding is available over a long time scale? Will he commit to a 10-year prediction of how much money is likely to be available, so that when we are out of the current hole people will know that there is a rosy future ahead?

[Mr Willetts]

It is quite a challenge to make a 10-year prediction when we have just embarked on the comprehensive spending review for the next three years. I can say that we are committed to supporting research in this country. The challenge we face is that we inherited from the previous Government a commitment to reductions of

“£600 million from higher education and science and research budgets”.

[Chris Bryant (Rhondda) (Lab)]

13. If he will make representations to his EU counterparts to require that the proposed EU free trade agreement with Peru and Colombia undergoes ratification in each member state.

--- Later in debate ---

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

14. When he last met representatives of Universities UK; and what matters were discussed at that meeting.

[The Minister for Universities and Science (Mr David Willetts)]

I meet Universities UK on a regular basis. I last met UUK representatives at their board meeting on 25 June when we discussed a range of issues facing higher education. With my right hon. Friend being the rector of Glasgow university, and my right hon. Friend the Secretary of State having been an economics lecturer there, I am of course impressed by the excellence of that institution.

[Mr Kennedy]

Well, that is very nice to hear. I hope that the Minister will visit, and we will make him feel extremely welcome. A guest lecture would not go amiss.

Given the Government’s policy of a cap on immigration, the Minister will be aware that Universities UK and many others across the sector are worried about its impact, as 10% of university staff across the UK are non-EU nationals, including 2,500 staff at the Scottish universities alone. What can he do with his colleagues in the Home Office to mitigate the impact of that policy on the tertiary sector?

[Mr Willetts]

We are working closely on this matter with my right hon. Friend the Home Secretary, and I think that we have reached a sensible way forward, which she announced the other day. Of course, if there are individual problems affecting universities in the operation of these controls, we would be interested to hear from them, and will discuss them with our colleagues in the Home Office.

[Mr Denis MacShane (Rotherham) (Lab)]

The Minister will be aware that the United States spends 2.9% of gross domestic product on higher education. We spend 1.3%, which is below the OECD average. The previous Government took a brave decision on tuition fees, although it was very unpopular with my hon. Friends. May I invite the Minister to take equally unpopular decisions on university finance, perhaps to introduce a graduate tax or lift some of the charges that universities can make? We must get more money into our universities.

[Mr Willetts]

That is why, of course, the Browne review was set up on a cross-party basis—to look at these issues so that we can find a way forward that I hope will command consent on both sides of the House of Commons.

[George Freeman (Mid Norfolk) (Con)]

15. What steps he is taking to support the UK’s science and innovation industry.

[The Minister for Universities and Science (Mr David Willetts)]

We will encourage universities to work with businesses and enhance the effectiveness of the UK’s innovation system to support successful business innovation. The coalition agreement made it clear that we are committed to refocusing the research and development tax credit on high-tech companies, small firms and start-ups, as recommended by Sir James Dyson. We are considering the other recommendations in his report.

[George Freeman]

May I say how nice it is to see such a heavyweight business and finance team on the Front Bench? I would also like to declare an interest as someone who has had a career in business before coming to the House. Does the Minister agree that, in order to unlock the significant economic potential of our science and research base, instead of scattering money to the four corners of the kingdom, as the previous Government tended to do, we should focus our money on those centres that have a demonstrable track record in commercialising technology, such as the excellent John Innes research centre and the Norwich research park on the edge of my constituency?

[Mr Willetts]

The John Innes centre is a centre for plant science, but that does not mean it was a planted question.

[Mr Speaker]

Order. May I gently remind the Minister, who always looks very comfortable at the Dispatch Box but is usually looking the wrong way, that he needs to look at, and address, the House as a whole?

[Mr Willetts]

I can assure the House that we are looking very carefully at the important issue of concentrating research funding in the areas where it will yield its greatest results. However, concentration means concentration of research in departments. It need not be done university by university.

[Ann Clwyd (Cynon Valley) (Lab)]

17. What discussions he has had with the Secretary of State for Work and Pensions on health and safety regulations affecting businesses.

--- Later in debate ---

[Dr Julian Huppert (Cambridge) (LD)]

T3. I have been made aware recently of a number of cases of academic visitors coming to the UK, often for only a few days, and being denied visas for their entry. Will the Minister meet the Home Secretary to work out a new protocol for treating these people? Will he also meet me to talk through the issue, so that we can ensure that the reputation of British educational research is supported and not weakened?

[The Minister for Universities and Science (Mr David Willetts)]

My right hon. Friend the Home Secretary and I are both aware of the importance of these academic exchanges and visits. If there are any particular operational problems that my hon. Friend has encountered, I would be very happy to meet him to discuss them.

--- Later in debate ---

[Mark Pawsey (Rugby) (Con)]

T7. Last week, I joined students at Rugby high school in my constituency, who were taking part in a business partnership event, in which they learned the principles of running a business. Does the Minister agree that it is vital to encourage and support such entrepreneurs of the future?

[Mr Willetts]

We are strongly committed to enterprise education. People can learn how to be enterprising and learn the skills necessary to run a business. We are indeed committed to supporting such initiatives.

[Toby Perkins (Chesterfield) (Lab)]

The Secretary of State will be aware that of all the important things for small businesses, the most important of all is that people have enough money to buy their products. In that light, what impact does he think the increase in VAT will have, particularly on the retail sector, which relies so much on people having the money to purchase products?

--- Later in debate ---

[Gordon Birtwistle (Burnley) (LD)]

The university campus at Burnley college has developed what it believes to be the most advanced wind turbine in the world. The previous Government were asked to fund further research on it, which they refused, so will the Minister visit this project and look at the possibility of helping to develop it further?

[The Minister for Universities and Science (Mr David Willetts)]

I always enjoy visiting universities, especially when they have enterprising ideas that bring forward business opportunities, so I am happy to accept my hon. Friend’s invitation.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Will the Secretary of State confirm what communication he or his Cabinet colleagues have had with Corus and Tata Steel Europe, since the announcement of the departure of the coalition Government’s fiscal friend, Kirby Adams?

Industry (Government Support)

Lord Willetts Excerpts

Wednesday 16th June 2010 Commons Chamber

[The Minister for Universities and Science (Mr David Willetts)]

I am delighted that we have had so many firsts in this debate. It is the first in which I have participated with you and other new Deputy Speakers in the Chair, Mr Deputy Speaker, and we very much welcome you. We have also heard the speeches from the new Chairs of the Select Committees that will take a close interest in our deliberations: I welcome the speeches by the hon. Members for West Bromwich West (Mr Bailey) and for Ellesmere Port and Neston (Andrew Miller).

Above all, we have had some very welcome maiden speeches in the debate, and I pay tribute to the excellent speeches from new colleagues, including my hon. Friend the Member for Bracknell (Dr Lee). He spoke as a doctor, and also with great passion for space and the importance of the space industry. That cause is also close to my heart, and I welcome him to the Chamber. I hope that we shall be able to work together on that important subject.

We also heard from the hon. Member for Bolton West (Julie Hilling), and I agree with her about the importance of unionlearn. It is an excellent and cost-effective way of spreading access to skills in the workplace. We heard from the hon. Member for Wansbeck (Ian Lavery), who spoke of the importance of the coal industry to his constituency. We also heard from the hon. Member for North West Durham (Pat Glass), who explained that her predecessor had been Hilary Armstrong, and that Hilary Armstrong’s predecessor had been Ms Armstrong’s father. We therefore welcome this radical break with the hereditary principle, and welcome the hon. Lady to the House. She also referred to socialism in her speech. We do not hear the word “socialism” in the Chamber very often, but we enjoyed her contribution all the same.

The hon. Member for Barnsley East (Michael Dugher) spoke with great passion about brass bands. Just occasionally, the meaning of the word “socialism” is a bit fuzzy when used by Labour Members, but, having heard his speech about brass bands, we now know that a socialist utopia will have been achieved when the Arts Council devotes as much money to brass bands as it does to the Royal Opera House. We very much look forward to the hon. Gentleman’s advocacy of that cause.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

We’ll look into it.

[Mr Willetts]

I hope that all hon. Members heard that intervention.

We also had a maiden speech from the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop). That was particularly touching for those of us who were here in the last Parliament, because he referred to the sad loss of Ashok Kumar, who was held in high regard on both sides of the House.

As I was listening to those maiden speeches, I recalled a maiden speech delivered in a previous Parliament by a newly elected loyal Blairite Back Bencher who had previously been a London taxi driver. Many of us regretted that, in his new role, he would no longer be able to share his political opinions with us. However, we now have new Members who are certainly going to share their opinions with us in a most vigorous and effective way. Indeed, some newly elected Members are so vigorous and dynamic that they have already made their second speeches, which must be some kind of record. Among my intake in 1992, we had a competition to see which of us would first be referred to in the press as a senior Back Bencher, and I think that we have heard from several candidates for that title here today.

There was a paradox, however, in that many of these new Members, who are changing the character of our House, and rejuvenating and refreshing it by coming from all sides to bring fresh angles to the issues of the day, defined their political loyalties by historic disputes, especially disputes about the performance of our economy. I should like to set the record straight, especially for those Labour Members who have given such a caricature account of this country’s economic history.

In 1979—a year that clearly rankles with some Labour Members—manufacturing industry comprised 25.8% of the British economy. In 1990, when Baroness Thatcher lost office, as a result of the economic policies that Labour Members have been criticising today, manufacturing was down to 22.5 % of gross domestic product. In 1997, when we last lost office, it was 20.3% of GDP; and in 2009, it was 11.8% of GDP. So next time we have any sermons from Labour Members about what has happened to manufacturing industry, I hope that they will come to this House and be willing to accept the simple evidence from those statistics.

Perhaps I can give the House a second set of statistics on another important measure of the performance of our economy—business investment. In 1979, business investment was 13% of GDP. Business investment goes up and down, but there was a trend, and I regret to say that by 1997 that figure had fallen to 11.7% of GDP. In 2009, the last full year in which Labour was in office, business investment was 8.8% of GDP. When it comes to investing in the future of our economy and when it comes to manufacturing and the significance of the manufacturing sector, I hope that Labour Members will recognise the comprehensive failure of their years in office.

[Toby Perkins]

rose—

[Mr Willetts]

I have very little time.

Many Labour Members referred particularly to regional issues, and I have to say to them that of course we understand the concern about regional imbalances in our economy. In fact, another measure that deteriorated over the past 10 years has been the gap in GDP between different regions of our economy. If we are to tackle the problem of regional imbalances, we have to look objectively at the performance of regional development agencies. The report from the National Audit Office, published in March this year, made it clear that the NAO was

“unable to conclude that the regional wealth benefits actually generated”

by RDAs

“were as much as they could and should have been, and are therefore value for money.”

The report went on to refer to “weaknesses”, which

“in many cases, undermined the RDAs’ ability to make decisions and set priorities to maximise regional economic wealth”.

It concluded that RDAs were simply not doing the job they were supposed to do. That is why Government Members believe that RDA boundaries do not reflect functional economic areas; we wish to enable local enterprise partnerships to reflect better the natural economic geography of the areas that they serve. We are committed to replacing RDAs with local enterprise partnerships and we will invite local groups of councils and business leaders to come together to consider how they wish to form local enterprise partnerships.

[Mr Bailey]

rose—

[Mr Willetts]

I will give way to the Chairman of the Select Committee.

[Mr Bailey]

Will the right hon. Gentleman answer the query I posed in my contribution and tell us whether the money hitherto allocated to RDAs will follow through to the local economic partnerships?

[Mr Willetts]

We do believe that there are efficiencies to be made because of the very high overhead costs of RDAs. Government Members are committed to saving public money, and I have to say that one way in which we will do so is by saving money in the overhead costs of RDAs as we move to the new arrangements—and we make no apology for that.

We also believe that some roles currently carried out by RDAs can be scrapped to save money—regional spatial strategies, for example. We simply do not need them—full stop. There are other roles, including inward investment, that we believe should be led nationally and can be carried out elsewhere. We heard powerful examples from several of my hon. Friends of how individual RDAs were spending money around the world on regional offices; this type of function is better done at the national level. We believe that some RDA roles in sector leadership and taking responsibility for business support and innovation can also best be done nationally. That is the approach that we will take.

Our challenge is to rebalance the economy, to rebalance it in favour of manufacturing, to rebalance it in favour of investment and to rebalance it regionally as well. That is part of the inheritance that we take on from the previous Government.

[Esther McVey (Wirral West) (Con)]

I have listened to what has been said this evening, and I would like to raise the concerns of small business owners and family-run businesses in Wirral, Cheshire and Merseyside, as I have been part of the Merseyside Entrepreneurship Commission. What they say is drowning them is the burden and cost of regulation. Last year, in the north-west alone, it cost £8.3 billion and, since 1998, the overall figure has gone up by £11 billion a year. I want to know what we are going to do to help the small businesses across the north-west.

[Mr Willetts]

My hon. Friend is absolutely right. To indicate the challenge that we face, the previous Government introduced 20,938 new regulations. Between 1987 and 1997, 46 pieces of primary legislation affected the workplace. In the subsequent 10 years under the Labour Government, 92 pieces of legislation affected the workplace. In the Department for Business, Innovation and Skills, working with the Secretary of State, we have already identified on our forward programme 200 proposed regulations inherited from the outgoing Government that would have cost more than £5 billion to British business. Every one of those will be scrutinised, and we will roll back the burden of regulation, which is fundamental.

We believe in “rebalancing the economy”, and although those are the new words, I sometimes think that Winston Churchill, who served in the House as a member of the Liberal party and of the Conservative party, expressed it best when he said that he wanted to see finance less proud and industry more content. That is what the Government stand for. Getting a grip on the public finances is fundamental, because otherwise, as my hon. Friends the Members for West Suffolk (Matthew Hancock) and for Bromsgrove (Sajid Javid) described powerfully, interest rates will rise, which is a burden that British industry cannot be expected to bear. We need to bring down the burden of public borrowing and of the public finances.

The Government are not alone in believing in that—former Ministers who are now on the Opposition Benches signed up to such plans in government. They have failed today to give us any information about their plans to deliver the savings to which they publicly committed themselves. Let me remind them of what was in last year’s pre-Budget report with regard to the Department for Business, Innovation and Skills. It said that £300 million would be saved by reducing funding for adult skills budgets, and £600 million would be saved from higher education and science and research budgets. I agree with Labour Members about the importance of science, although it is a pity that they fought the last election on a proposal to save £600 million from higher education and science but have never informed us of exactly how they would have made those savings. We will now deliver the savings, and they are in no position to criticise the savings that they planned for but never had the guts to share with us and explain.

The Government are committed to a strategy for growth that involves an enterprise-friendly tax system, support for science, support for free trade and competition, a belief in investment in skills and training, and rolling back the burden of regulation, setting British industry free. As every contribution to the debate has revealed, there is a simple difference between the Government and Opposition. The Government believe in freedom, enterprise, initiative and competition, and the Labour party still believes in state control, higher public expenditure, more regulation, more RDAs, and more interference in the wealth-creating sector of the British economy. That is not the way we will recover from the recession in which the Labour party left the country.

The Government will commit ourselves to bringing down the burden of borrowing and managing the public finances prudently. In the Department for Business, Innovation and Skills, in which it is a privilege to work with the Secretary of State, we are determined to have a more flexible and dynamic industrial sector because of our commitment to free trade and free markets.

Question put (Standing Order No. 31(2), That the original words stand part of the Question.

The House proceeded to a Division.

[Mr Deputy Speaker]

I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.

Oral Answers to Questions

Lord Willetts Excerpts

Thursday 3rd June 2010 Commons Chamber

[Mr David Anderson (Blaydon) (Lab)]

8. What the terms of reference are of the review of employment law referred to in the coalition agreement.

[The Minister for Universities and Science (Mr David Willetts)]

We are reviewing employment law to maximise flexibility for employers and for employees. Our aim is fairness for employees within a competitive environment for business.

[Mr Anderson]

I thank the Minister for that response. During the election campaign, the Secretary of State said that he and the Liberal Democrats believed that the link between the Labour party and the trade unions was corrupt. Can we have an assurance from the team that that prejudice will in no way influence the employment law review?

[Mr Willetts]

The Secretary of State has made it clear that he did not make those remarks. We are looking at a review that will not cut the rights of individuals, but we want a streamlined process to cut the costs of compliance for employers. We have noticed the comments that have been made by, for example, British Chambers of Commerce and the Institute of Directors, which have called for changes to the employment tribunal system so as to streamline the process. That is what we are considering.

[Paul Blomfield (Sheffield Central) (Lab)]

10. Whether he has discussed with Sheffield Forgemasters the continued availability of a loan facility from his Department; and if he will make a statement.

--- Later in debate ---

[Lilian Greenwood (Nottingham South) (Lab)]

13. What plans he has for funding higher education in 2010-11; and if he will make a statement.

[The Minister for Universities and Science (Mr David Willetts)]

Universities will receive £5.1 billion for teaching from the Higher Education Funding Council for 2010-11. This includes an increase of £70 million since the December 2009 grant letter. That reflects the 10,000 extra university places that the coalition is committed to delivering in 2010-11.

The Government will make future funding decisions in the light of the Browne review on student finance, established by the previous Government, which will report later this year.

[Lilian Greenwood]

I am sure that hon. Members know that for almost a decade Professor Philip Cowley and his colleagues in the school of politics at Nottingham university have been studying Back-Bench behaviour. Their findings have been published on the “Revolts” website and are widely used by journalists and hon. Members—particularly, I am told, the Whips Office. Does the Minister share my concern that the project has recently lost its Economic and Social Research Council funding, just at the time when it might yield the most interesting results from the Benches opposite?

[Mr Willetts]

I attended a meeting at Nottingham university before the election when Professor Cowley presented his report on the fascinating subject of rebellions in the House of Commons, so I am aware of his work. However, it would be dangerous if we got into a position whereby Ministers responsible for higher education started commenting on and micro-managing individual universities’ decisions about their departments. I do not think that we should go down that route.

[Mr Rob Wilson (Reading East) (Con)]

My hon. Friend will be aware of the value for money that the US community college model provides in getting more disadvantaged young people into higher education. Is he having any work undertaken in the Department to assess what we can learn from that important system in the USA?

[Mr Willetts]

I pay tribute to my hon. Friend’s expertise in the subject and his record of campaigning on it. I completely agree that progression through college to university is one of strengths of some American systems, such as that in California. Experts from California are coming here next week. We definitely need to learn from those systems so that people have opportunities as they progress through education to move from college to university.

[Mr David Lammy (Tottenham) (Lab)]

I welcome the hon. Gentleman to his new role. I know that many in the higher education sector value the continuity that he provides, but they also value consistency. In November 2009, he said:

“At a time when the jobs market for young people is tougher than ever, it is far better to find them a place in education than to leave them languishing on the dole.”

Why, within days of taking up the job, has he done a volte face and condemned 10,000 young people to the dole by not providing extra student places to HE this summer? Is that not desperately hypocritical?

[Mr Willetts]

I look forward to my exchanges with the right hon. Gentleman, and of course I recognise his expertise as the former Minister for universities. As he held that position, I am sure that he remembers the grant letter that the former Secretary of State sent out in December 2009 to the Higher Education Funding Council, which involved a reduction in the number of students. We have delivered the pledge that we made to our party conference, and which is in the coalition agreement, of 10,000 extra places. That is why the amount of money going to universities in teaching grant this year is £50 million higher than the figure set out in the December 2009 letter.

[Mr Adrian Sanders (Torbay) (LD)]

14. If he will take steps to increase the use of Royal Mail by public sector bodies.

--- Later in debate ---

[Ian Lavery (Wansbeck) (Lab)]

Does the Secretary of State acknowledge that cutting the higher education budget will place pressure on Lord Browne to conclude that student fees need to rise? Is it not the ultimate cop-out for the Secretary of State to cut the higher education budget and then abstain on student fees legislation?

[The Minister for Universities and Science (Mr David Willetts)]

Of course, Lord Browne’s report was commissioned by the previous Government, on a cross-party basis, so those on both sides of the House will agree that it is right to wait for his report. As I explained to the House earlier, compared with the plans announced in December 2009, we have increased our contribution to student teaching so that we can deliver our pledge of extra student places.

[David Tredinnick (Bosworth) (Con)]

T2. Does the Secretary of State have any plans for departmental reorganisation? Does he recall that his predecessor, Lord Mandelson, went on an empire-building spree as a price for supporting the former Prime Minister, and will he be moving back innovation and skills to the Department for Education?

--- Later in debate ---

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

T5. Will the Government’s apprenticeship initiative provide scope for the training of blacksmiths and other heritage crafts, bearing in mind the concerns of blacksmiths in my constituency that the new entrants training scheme for blacksmith training seems to have been closed down following the decisions of the previous Government?

[Mr Willetts]

I know that my right hon. Friend has a strong interest in this subject, and I assure him that the Department is committed to improving the apprenticeship regime for craft skills. I have also already had a meeting on how we can improve the qualification regime so that specific qualifications in craft skills are properly recognised and funded—something that disappeared under the previous Government.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

T4. Why is this new Front-Bench team so reluctant to talk about manufacturing? Can we not start to tie up the start-up of new businesses that make things with our university sector? Is it not about time that there was yet another inquiry into doing something about expanding our manufacturing exports?