Oral Answers to Questions

Adrian Bailey Excerpts

Monday 3rd September 2012 Commons Chamber

[Sarah Teather]

This issue about paying a retainer to child minders is, again, symptomatic of the difficulty some families face in some areas in accessing holiday child care, and it is precisely why the commission is looking at this issue.

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

5. What steps his Department is taking to reduce the number of young people who are not in education, employment or training.

[Chris Williamson (Derby North) (Lab)]

21. What steps his Department is taking to reduce the number of young people who are not in education, employment or training.

--- Later in debate ---

[Mr Hayes]

The proportion of young people not in education, employment or training has been too high for too long. It is a structural problem, reflecting wider changes in the labour market, which we are determined to tackle. This month sees the start of our £126 million youth contract programme for 16 to 17-year-olds supporting some 55,000 young people who are not currently participating. That is on top of our record spending of £7.5 billion on education and training places for young people.

[Mr Bailey]

I thank the Minister for his reply. The latest increase in the number of NEETs seems largely to be a result of the drop in employment in the 16 to 18 age group. Local manufacturers in my area report that they have great difficulty in getting young people to go into manufacturing, but that those who do have successful apprenticeships have normally done work experience. Will he lobby his colleagues to reintroduce compulsory work experience in secondary schools to overcome this problem?

[Mr Hayes]

The hon. Gentleman is a champion of apprenticeships, as am I. He will be delighted that there are now a record 104,500 apprenticeships for 16 to 18-year-olds, but he is right to say that the engagement of employers is needed, and employers do indeed say that early contact with the world of work is important. He is right to make that case and I share his argument. We will continue to pursue that course of action.

Oral Answers to Questions

Adrian Bailey Excerpts

Thursday 24th May 2012 Commons Chamber

[Mr Hayes]

My hon. Friend is right that we need to allow people to access education at the point that is right for them. That is why continuing education is so important and why the apprenticeship programme is both for young people entering the labour market for the first time and for those who want to upskill and reskill. I strongly support, as he does, the expansion of that programme in both quantity and quality.

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

The ability of mature students to access further education courses in order to access higher education courses is vital both for social mobility and for upgrading the nation’s skills. As things stand, anybody taking that route incurs debts at the FE course level and, potentially, at the higher education course level—in effect a double whammy. What is the Minister going to do about it?

[Mr Hayes]

The hon. Gentleman will know that loans in further education are restricted to older learners and those learning at higher levels precisely because of my determination that the people I have described are protected from additional cost. The information that we have garnered from our early research suggests that the overwhelming majority of people would not be deterred from engaging in the way that he describes.

Oral Answers to Questions

Adrian Bailey Excerpts

Thursday 2nd February 2012 Commons Chamber

[Mr Hayes]

I am aware of that excellent development, which enjoys the wholehearted support of my right hon. Friend the Minister for Universities and Science, who has done much to encourage the widening of access to higher education. My right hon. Friend will offer some exciting news about additional places when he rises to his feet, because we are determined that everyone, wherever they begin, should have their chance of glittering prizes.

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

There is very real concern in the FE sector that, arising from the core and margin provisions for higher education and a potential reduction in university places, higher education institutions may claw back provision from FE colleges. What reassurance can the Minister give the sector that that will not happen?

[Mr Hayes]

The hon. Gentleman is right to draw attention to that risk, and it is absolutely right that, given our ambition to widen access, which I articulated a few moments ago, universities should not engage in anti-competitive practices. The Secretary of State has made it clear that that is not acceptable, and my right hon. Friend the Minister for Universities and Science is taking action to prevent it. We will take a very dim view of universities that are not engaged with our mission to elevate the people through access to learning.

Apprenticeships

Adrian Bailey Excerpts

Monday 19th December 2011 Commons Chamber

[Mr Hayes]

My hon. Friend has a lot to be pleased about in respect of apprenticeships; as he will know, in his constituency their number has grown by 98%. I did say that I did not think there was an exact correlation between quality and the length of a course, but I think there is a relationship. By setting down a marker about the minimum length of an apprenticeship, we will drive up quality. We will certainly reassure those who are genuinely committed to the apprenticeship programme, but have doubts about the tension between quality and quantity, that we are serious about standards. That matters.

I take my hon. Friend’s point. It may be possible, particularly for older learners with greater prior attainment, to top up skills—perhaps they are moving from a level 2 to a level 3 qualification, or they already have many of the skills necessary to gain their first level 2 qualification. None the less, I still think that length matters.

I should like to put the debate in context, Madam Deputy Speaker; you would expect me to do no less. The Government’s macro-economic policy is built on twin pillars—reducing the deficit and reshaping our economy to make it more sustainable. That second core aim is served by the apprenticeship programme, because it assists in recalibrating work force skills so that productivity rises and competitiveness grows. Britain’s future chance to prosper lies in a high-tech, high-skill economy and to prosper in that way we need a high-tech, high-skill work force.

The recent announcements of reform to the programme concentrated on three areas key to the programme’s continued expansion and success: how to get more employers involved in offering apprenticeships; how to ensure that apprenticeships continue to offer people, especially young people, a firm first step on the ladder that leads to fulfilling careers and further learning; and how we ensure that the money that we spend on apprenticeships has the greatest success.

In the end, apprenticeships are jobs and the programme is demand-led. That means that the growth depends on employers coming forward to make places available. In the current economic climate jobs are in short supply, notably for young people, so the record increase in apprenticeship numbers is remarkable. Hon. Members will join me in commending the 100,000 employers that are using apprenticeships to develop work force skills—helping their businesses, but also providing opportunities for people across this country to grow their skills and improve their prospects.

Our work to recruit more employers to our cause goes on. Only this morning, I was at No. 10 Downing street briefing major employers on what apprenticeships can do for them. They were as committed to spreading opportunity and to social justice as I am.

Our objective is to improve and strengthen the programme even further so that more individuals and employers can access the benefits of high-quality apprenticeships. Overall, employer ownership of vocational skills is the key to our approach. This ambition informs all our priorities in moving forward: first, by reducing bureaucracy to an absolute minimum, speeding up processes and boosting employer engagement; secondly, by safeguarding quality, raising standards, and enhancing the reputation of the apprenticeship brand; and thirdly, by focusing future growth where the returns and benefits are greatest, including growth sectors of the economy, small and medium-sized enterprises, young people and new employees.

SMEs tell us that they still face considerable hurdles in taking on apprentices, and we have taken a serious look at what we can do to help to remove the barriers that they face. This has rightly been raised on the Floor of the House by Members on both sides and in all parties. I can announce today that, first, we will bring reduce to one month the time it takes for an employer to advertise an apprenticeship vacancy, including identifying the provider and completing an agreement on a training package between the employer and the provider; and secondly, we will remove all health and safety requirements that go beyond what health and safety legislation requires. From 1 January, employers that meet the Health and Safety Executive’s requirements as set out in “Health and safety made simple” will be deemed to provide a satisfactory level of compliance. We will also work with the insurance industry to encourage an approach that is proportionate to risks, and with training providers to develop new service standards for supporting SMEs to be included in all contracts for apprenticeships delivered from March 2012.

In addition, we are committed, in a significant new pilot programme, to taking radical steps to give businesses direct access to up to £250 million of public funding for training and apprenticeships over two years. This pilot is a key part of the Government’s growth review. It will route funding directly to businesses, will be more efficient than current arrangements, and will give businesses real purchasing power in the schools marketplace to secure the support that they need.

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

Will the Minister give way?

[Mr Hayes]

I happily give way to the Chairman of the Business, Innovation and Skills Committee.

[Mr Bailey]

I thank the Minister for his customary courtesy in giving way. I welcome the announcement about provider and employer engagement, and speeding that up, but will he clarify whether there are any restrictions regarding a member of a board of a provider company being precluded from being a member of a board of a user company?

[Mr Hayes]

The answer is that I do not know; in these circumstances, it is always right to be straightforward. Because I know that the hon. Gentleman takes these matters seriously and is committed to getting this right, as I am, I will take his point away and look at it. He is arguing that there might be a conflict of interest in terms of provider and employer, and he is right to say that there should be a proper separation. However, as he will know, it is often the case in large companies that the training wing of the company provides the pedagogy associated with an apprenticeship while the apprentice is engaged in the work-based training in the same company, though in a different part of it. I would qualify his query with that caveat. None the less, I will take another look at the subject and will be more than happy to respond to him directly.

The pilot that I described will involve employers being asked to demonstrate how public funding will be used to leverage private investment and commitment to raising skill levels in their sectors or supply chains. As we grow the apprenticeship scheme, it is very important to take advantage of the value chains associated with our major corporates—their supply chains and their distribution chains, where they exist. Typically, Governments have spent insufficient time considering how that might work in the light of the well-established nature of those relationships and the dependence of large organisations on myriad smaller companies, the fragility of which, by their very nature, is possibly injurious to the interests of those corporates.

For example, major suppliers in the automotive industry tend to have very large numbers of organisations with which they deal commercially in their locality, some of which are vital to the effectiveness of such large organisations. It is vital, in their interests and in ours, that we do more to ensure that those relationships allow us to grow the apprenticeship system within SMEs. It may be of value for large companies to absorb some of the bureaucracy and some of the cost, and certainly to absorb some of the management associated with seeding apprenticeships in their value chain. Bidding for the employer-led pilot will formally be launched in the new year.

Above all else, my advocacy of practical learning and my faith in apprenticeships are driven not by economic imperative—not merely by utility—but by social purpose. I said earlier that for too long the myth that only through academic accomplishment can a sense of worth be achieved has been perpetuated by those who themselves have travelled a gilded path to academia. Now it is time once again to recognise what Ruskin and Morris knew—that all those with practical tastes and talents, with technical vocational aptitudes, deserve their chance of glittering prizes too. This is not just because of the relationship between craft and beauty and, in turn, between beauty and truth, but because for society to cohere we must promote the common good through a shared appreciation of what each of can achieve. All feel valued when each feels valued. Given that inequality is the inevitable consequence for a free economy in a free society, only through social mobility can a communal sense of fairness be achieved. A society that is unequal and rigid is bound to be unable to secure the ties of shared identity, as invisible and yet as strong as the heartstrings of love.

--- Later in debate ---

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

In opening the debate, the Minister said that he has put apprenticeships at the heart of this Government’s policy, and I welcome that. Nobody would in any way decry the commitment to and passion for this issue. However, when someone makes such a bold assertion, they have to produce statistics to demonstrate that the Government are succeeding, and that is at the heart of the Government’s problem on this issue. The statistics may demonstrate a big increase in the number of apprenticeships, but if we drill down and look at what is behind the statistics, we find that it does not necessarily indicate a commensurate increase in skills or value for money. Comments have already been made about the huge increase in the number of post-24 apprenticeships and some of the poor-quality provision for 16 to 18-year-olds. I commend the Minister for his comments about trying to improve the quality of provision, but they are a tacit admission by the Government that their policies so far are not actually delivering what they are intended to deliver.

Talk about apprenticeships is good rhetoric, as it chimes with the Government’s assertion that we need to rebalance the economy, and it provides a justification for pointing out an alternative educational route for those denied access to higher education—that denial is what the Government’s higher education policies are likely to produce. Clearly what is available is not actually going to deliver the agenda that individuals need and the economy needs.

I must pose a rhetorical question: what actually comprises an apprenticeship? We can debate the definition, but this contains certain key elements. It must be a work-based course to improve skills and employability, and it should be undertaken over a sufficient period to be meaningful. At the end of the course, the apprentice should qualify for a position superior to the one that he or she had when they started the apprenticeship, either in the same company or another. The level of employment post-apprenticeship should be a measurement of the success of the apprenticeship. Most importantly, the individual who has undertaken the apprenticeship must believe that they have enhanced their skills as a result. Unfortunately, the evidence so far is that a great number who have taken the current apprenticeships do not feel that way and have not had opportunities open to them as a result.

I have evidence to suggest that young people recruited for 12-week apprenticeships have ended up doing only five weeks, with a significant element of that time taken up with stuffing envelopes. The Government have paid for that as an apprenticeship course, which poses serious questions about the value for money that we are getting, the experience that we are offering to young people and the damage to the apprenticeship brand that could arise from it.

[John Glen (Salisbury) (Con)]

I have been listening carefully to the hon. Gentleman’s remarks. He seemed to suggest that the previous Government’s university access policy was delivering something superior and he seems to be denigrating the status of apprenticeships. Is not half the problem that people talk down apprenticeships, which denigrates their status—that status is very important in encouraging people to take up apprenticeships in place of going to university—and delivers an outcome that is no better?

[Mr Bailey]

I am glad the hon. Gentleman made that intervention, because it allows me to point out that under the previous Labour Government there was a huge increase in the number of people going to university, including a fourfold increase in the number going from my constituency, and there was also a fourfold increase in the number taking apprenticeships. By and large, we find that those apprenticeships were far superior to the those being classified as “apprenticeships” under this Government. As has been said on a number of occasions, the huge number of apprenticeships for over-24s is just a rebranding of the Train to Gain programme. They would not have been included in the previous Government’s statistics on apprenticeships, so to compare one with the other is not to compare like with like. I believe that in the retail sector more than 70% of those who get an apprenticeship level 2 qualification are in existing employment, so does that really meet the test of improved professional qualifications and employability? I doubt it.

[Mr Hayes]

The hon. Gentleman is the Chairman of the Select Committee and I know that he would not want to present a parody of what is happening. We are determined to deliver quality, but I cannot imagine that he is saying that apprenticeships should not be a vehicle for retraining and upskilling and improving the prospects for existing workers. If he was saying that, it would be an extraordinary claim.

[Mr Bailey]

I was not going to make that claim. In fact, the Minister raises an important point. I would not in any way decry the upskilling of existing workers, and Train to Gain was very successful in doing that, but whether we want to call it “apprenticeships” is debateable. Perhaps we do, perhaps we do not, but statistics cannot be traded with the previous Government’s apprenticeship statistics when such people were not included in them. That is my essential point. I am not decrying in any way the benefits of in-work training, but there is a genuine issue with measuring the enhanced employability of people who have undergone that training and the amount of money invested in it.

Let me consider the Government’s approach to the education maintenance allowance. One reason for scrapping it was the alleged deadweight cost of the fact that many young people would have taken courses irrespective of whether that allowance had been paid. The same sort of detailed scrutiny must take place of some of the post-24 training to ensure that we are not spending a vast sum of money—there is a lot of money involved—on providing people with training that they would have had anyway. A secondary issue is the fact that if we can retain the level of skills enhancement we have already and refocus some of the money that would be spent on it on other areas, we might well be able to enhance other apprenticeship provision in other areas, which is equally important.

I could go on for a very long time about this—[Interruption.] But not today. My Committee will carry out a detailed inquiry, but I conclude by saying that we should get away from the rhetoric of apprenticeships and talk about general skills. There are a range of skill packages for different groups of different ages and different skill levels and we must ensure that they are supported rather than talk all the time about apprenticeships—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

Oral Answers to Questions

Adrian Bailey Excerpts

Thursday 8th December 2011 Commons Chamber

[Vince Cable]

I was in the west country just over a week ago looking at the aerospace industry, which is a considerable success story. My hon. Friend is quite right that one of the constraints is the need for skilled manpower, which is why in our rapidly growing apprenticeship programme we are setting aside funding specifically for advanced apprenticeships in engineering skills of the kind that firms in his constituency need.

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

There is an increasing body of evidence to show that small manufacturing companies are not only having difficulty in accessing finance to expand but are discouraged from applying for it because of a lack of confidence in the ability to sell any increased production. What is the Secretary of State doing to persuade the Chancellor that the time is right for a stimulus in the demand side of the economy as well as provisions for the supply side?

[Vince Cable]

A stimulus to demand is coming from two sources. One is rapidly growing export markets in emerging markets, where our export growth is very substantial. Manufacturers, including small and medium-sized enterprises, are taking a substantial part of that. In addition our monetary policy, which is supported by the Bank of England, with low short and long interest rates, quantitative easing and credit easing, is supporting demand.

Economic Growth and Employment

Adrian Bailey Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Vince Cable]

I will describe in more detail, as will the Minister for Further Education, Skills and Lifelong Learning, some of the initiatives that we are taking on apprenticeships, for example, which reflect real imagination and real change.

Let me try to respond to some of the points that the hon. Member for Streatham made. First, he wholly misunderstands what is happening with the regional growth fund. More than half the projects are under way in the first wave of the regional growth fund. The factories have been built and the jobs are being created. Because of due diligence, the disbursement—I have had this confirmed—is still taking an average of three to six weeks. I am happy to pursue the individual cases that the hon. Gentleman raised. As I understand it—I may be wrong—the case that he dwelt on at some length is the result of the applicant having radically changed the status of their application, and we will happily look at that. However, I am not going to take lectures on the disbursement of Government money. I do not know whether he is aware of this, but the previous Government set up a £5 billion trade credit insurance scheme which, after two years, has managed to disburse £81,000. The regional growth fund is proceeding as predicted and suggested by Lord Heseltine and his team. We are following those processes. The factories are being built and the jobs are being created, and that is what matters.

The hon. Gentleman challenged me on procurement. I have been to Derby and talked to the people involved. Obviously, we are very concerned about what has happened in that case. The problem with procurement is that for a decade or more the public procurement policies pursued in this country were unbelievably short-sighted and legalistic. In the case of the Thameslink contract, we inherited a contract procedure based principles that did not allow for the wider effects on the British economy. However, that particular decision has been made. I have made it absolutely clear, and my right hon. Friend the Minister for the Cabinet Office made it clear two days ago, that we are going to approach public procurement in a different way. We are going to do it strategically and take account of supply chains. Of course we will operate within the law and will not be protectionist, but a lot can be done through public procurement that we are now going to pursue. My only question is why on earth Labour Members did not do this when they were in office if they care so much about it.

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

Is the Secretary of State now in a position to give me an answer that he could not give when I questioned his departmental report a couple of weeks ago—namely, exactly how many jobs have been created by the regional growth fund so far?

[Vince Cable]

No, I cannot do that, because the projects are under construction. When they are fully completed and fully staffed and their supply chains are established, it will be possible to come up with a meaningful number.

The third area of criticism and questioning of the hon. Member for Streatham related to the banks. The motion recycles the idea of a bank bonus tax, so let us go over what that involves. The current estimate from the CBI, which has carried out research on this in the City, suggests that the yield from bonuses this year—the bonus pool—is likely to be something in the order of £4.2 billion. Of that £4.2 billion, £2.5 billion goes to Her Majesty’s Revenue and Customs in tax because of high tax rates on bonuses, and rightly so. That leaves £1.7 billion in bonuses paid out, assuming that the projection is correct. The Opposition are suggesting that they will have a £2 billion tax on bank bonuses. Where is this £2 billion going to come from? It is considerably more than the total bonuses paid out. Even if they applied 100% tax, which is implausible, what would happen, obviously, is that pay would be consolidated. They have not thought this through. Perhaps that is why the hon. Gentleman did not bother to raise it. Can he can tell us how it will work?

--- Later in debate ---

[Mr Hayes]

That was the ponderous exaltation of a basic economic fact: when tax yields fall because there is less growth than expected, and welfare payments go up, of course that is a result, but it is not a reason not to have a credible fiscal policy. The hon. Gentleman remains in denial, just as the shadow Chancellor remains in denial, but the OECD—

[Mr Bailey]

rose—

[Mr Hayes]

I am sorry, I will not give way. I usually do but I do not have time.

The OECD says that we have a £37 billion structural deficit and that it is the largest in the G7. It is not just about the Government debt. The hon. Member for Streatham must know that if we look at debt as a whole, we have the largest debt as a proportion of GDP in the developed world, with the exception of Japan.

Oral Answers to Questions

Adrian Bailey Excerpts

Monday 17th October 2011 Commons Chamber

[Michael Gove]

One of my team will be more than happy to meet my hon. Friend—I imagine my colleagues will be fighting to see her. Plymouth is already benefitting from a new UTC, but there is no reason why other equally beautiful parts of Devon should not also benefit.

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

10. What assessment he has made of reductions in the budgets for Sure Start children’s centres in the financial year (a) 2010-11 and (b) 2011-12.

[The Minister of State, Department for Education (Sarah Teather)]

There was no reduction in revenue funding for Sure Start children’s centres in 2010-11. From April 2011, funding for children’s centres is included within the early intervention grant. It is for local authorities to decide how to use that funding, taking account of their statutory duties and local needs.

[Mr Bailey]

I thank the Minister for her reply. The changes to the funding streams for Sure Start amount to a slashing of expenditure of around 22% nationally and 25% in my local authority of Sandwell, and the removal of the ring-fencing condition gives local authorities the opportunity to plug their gaps in other services with Sure Start funding. Will the Minister undertake to conduct a full assessment and monitor the impact of those cuts on Sure Start centres in future?

Oral Answers to Questions

Adrian Bailey Excerpts

Thursday 9th June 2011 Commons Chamber

[Vince Cable]

I would not regard £3 billion as a small capitalisation—it is very substantial, and hopefully it will mobilise an additional £15 billion in this Parliament from the private sector. There is a question over how we develop the capacity of that bank, but the hon. Lady is right that we must take account of the ability of small companies to participate in the supply chains of the big bids that will undoubtedly be made under the GIB proposals.

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

Our embryonic solar power industry has huge concerns about the Government’s current policy on feed-in tariffs. If the Minister cannot assure me that he has consulted industry representatives, will he consult them?

[Vince Cable]

I have had consultations with the industry, although of course the primary responsibility rests with my colleagues in the Department of Energy and Climate Change. There is a particular problem with the large-scale solar power suppliers because of the subsidy element and the ability of Government to continue to support it, but certainly small-scale solar providers are helped under the feed-in tariff arrangements and we are looking at the wider implications for the industry.

Higher Education Policy

Adrian Bailey Excerpts

Wednesday 27th April 2011 Commons Chamber

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

I welcome the fact that the Minister admitted that these proposals have been driven by the need to cut the public sector deficit, rather than by any wider educational considerations. Borrowing to give grants to universities counts as public borrowing, whereas borrowing to make loans to students does not, because that is offset, at least in part, by an income stream. This is an accountancy smoke and mirrors exercise, on which the Minister has based one of the most seismic changes in educational funding imaginable. At the end of the day, if the figures are wrong, it will still be the taxpayer who foots the bill. If the loan obligation is higher than expected, that will present problems. If the income, in return, is lower than expected, that will present additional problems. On the basis of the evidence that we have seen so far, that is the situation that is emerging.

[Mr Andrew Smith]

Was my hon. Friend struck, as I was, by the failure of the Minister, who declined to take my interventions on the point, to address the issue put to him by our right hon. Friend the Member for Southampton, Itchen (Mr Denham)—that at the Public Accounts Committee, his own permanent secretary had said that at the current level of fees, universities faced a cash funding gap, which could be plugged only by cutting the teaching grant further or by cutting numbers? Is not that the mess they have left us in?

--- Later in debate ---

[Mr Bailey]

Yes, my right hon. Friend anticipates one of my later points. Both the Higher Education Policy Institute and, by implication, the Office for Budget Responsibility have recognised that issue.

Let me make it quite clear that from my personal perspective I have always believed that graduates should make a contribution to their education. There is a legitimate debate—it should have been had before these proposals were introduced—about the appropriate balance of benefit between an individual and the country’s economy and about what the appropriate obligation for payment should be between the individual and the state. That has to take place, obviously, within the constraints of affordability.

[Andrew Bridgen]

The hon. Gentleman comments on the allocation of payments and the contribution that graduates should make to their education, but was that not the entire function and purpose of the Browne report, which has been taken into account?

[Mr Bailey]

Yes, it certainly was and I was just coming to that. We should have had a White Paper, followed by a full debate, which would have enabled the Government to put forward their proposals and the Opposition and others to probe them. A range of educational institutions —there are an enormous number of them—would have been able to contribute their expertise. What we have had, however, is this seismic shift in Government funding, carried out without adequate research and debate.

I spent 10 years on the Government Benches listening to lectures from Conservative Members about the dangers of hasty legislation and the unintended consequences that almost inevitably arise from it. If ever there was a case in point, I honestly think this is it. Hasty legislation, or hasty regulation in this case, is usually bad legislation, or regulation.

The lack of research and work done highlights a number of issues. The first is the setting of the fee levels. The Minister’s hopelessly optimistic estimates, on which the financial model was predicated, have been demonstrated as completely incorrect. The repayment implications are considerable. A whole range of expert research has been done to demonstrate that the income stream on which the Government predicated their financial model will not be met. There will therefore be a long-term financial liability, possibly an expanding one, that the Government will have to meet.

Another issue that could and should have been explored far more comprehensively if we had had a White Paper is of course the role of the Office for Fair Access. When Ministers were pressed on the setting of the level of tuition fees, they seemed to ascribe to OFFA powers that were completely beyond it, as my right hon. Friend the Member for Southampton, Itchen (Mr Denham) said in his opening remarks. The fact remains that OFFA is an organisation of four people, to whom responsibility was attributed by the Deputy Prime Minister for setting the tuition fee levels of all universities. That is totally beyond their resources, and they could not do it anyway, because they do not have the legislative basis to do so. This could and would have been teased out in a full and open debate of a White Paper, but by virtue of the Government’s actions it has been precluded.

The outcome is that the figures in the financial model do not appear to stack up. I mentioned the potential long-term financial implications earlier. As the Minister has acknowledged, the options are to cut funding for universities further and to reduce student numbers. I believe that if tuition fees averaged £8,000 per annum, it would be necessary to reduce the number of students going to university by 17,000 in order to stay within the model. There is actually a third option: the Government could change graduates’ repayment conditions. I think that that would open another can of worms, and would provide the basis for further research to assess the possible outcome.

[Mr Graham Stuart]

Will the hon. Gentleman give way?

[Mr Bailey]

No, I will not give way again.

A reduction in student numbers is inevitable, either because the Government decide to ration them or because of the deterrent effect of the higher fees on student recruitment. I should like the Government to make it clear whether, if the figures indeed do not stack up and the average fees exceed £7,500, they will limit student numbers. I do not know the answer and I am not sure that the Government do, but I should welcome their opinion none the less.

I should also welcome some sort of statement on when we will see the White Paper so that we can debate the issues further. It was originally to be published in January, we were then assured that it would be published in June, and I understand that in subsequent speeches to the civil service the Minister has referred to the summer. It is a bit like Billy Bunter’s postal order. I pressed the Secretary of State on the matter in the Select Committee this morning, and even then he would not give a commitment that the White Paper would be published in June. What I should like him to do today is tell us when it will be published, and whether it will deal with questions raised not just by me but by a range of Members about the funding implications of the current proposals.

Other countries recognise the value of higher education and the number of graduates who make an economic contribution. Other countries, even those that have suffered from the same sort of financial problems that we have experienced during the recession and are subject to the same sort of financial constraints, are investing more in higher education. The long-term implication of not getting this right and reducing the number of graduates is very serious indeed. On the basis of the picture that is emerging at the moment, I think that we are in danger of having fewer graduates, of damaging our economic growth, and of adopting a financial model that will make our public sector deficit far worse in the long term.

Oral Answers to Questions

Adrian Bailey Excerpts

Thursday 31st March 2011 Commons Chamber

[Vince Cable]

I am aware of the firm that my hon. Friend describes and of its difficulties in Libya. If companies are operating in difficult markets, such as Libya, they are advised to take out trade insurance. Where the market cannot provide that, the Export Credits Guarantee Department will underwrite it. We are expanding the range of ECGD products and the Treasury has authorised payments to companies in Libya for which insurance is due.

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

Over the next four years, UKTI is set to have its budget cut by some 17%. The schemes most commended by the CBI are passport to export and gateway to global growth. Will the Minister give an assurance that among the budget cuts those services will be protected?

[Vince Cable]

I can assure the hon. Gentleman that UKTI is capable of and committed to providing an increased range of activities and a better service even within its budget.