Leaving the EU: Higher Education in Wales

Debate between Hywel Williams and Owen Smith

Wednesday 23rd May 2018 Westminster Hall

[Hywel Williams]

The hon. Lady makes the point that I was going to make next. In fact, when I asked a similar question in the Select Committee on Exiting the European Union, the answer persuaded me that I might have been better off researching unicorns.

Last week, in that Committee, I questioned Dr Main of the Campaign for Science and Engineering and Professor Brook of the Association for Innovation, Research and Technology Organisations—people who should know their business—about the shared prosperity fund. They both confirmed that they had not heard much about it since it was announced, so it is a fund in name only. We do know that it is under the remit of the Ministry of Housing, Communities and Local Government, which I think is significant, because that Ministry is England-only, which speaks for itself.

On research and collaboration in Wales, there has been historical under-investment in research infrastructure compared with the rest of the UK, and a lower level of science, technology, engineering and maths activity. A recent Royal Society report said that Wales has the lowest percentage of research infrastructure in Great Britain. It has benefited greatly from EU funding, however. In 2016-17, Welsh higher education institutions received about 19% of their research income from EU sources, compared with about 15% for other UK higher education institutions. We depend more heavily on them. In particular, Welsh higher education institutions received money from such programmes as Erasmus and Horizon 2020. In 2014-15, the total EU research grants and contracts income for Wales was approximately £46 million, which represented about 21% of the total research grants and contracts income in Wales for that year. Again, universities and the higher education sector in general in Wales have a greater dependence on those sources.

Horizon 2020 has a budget of about €70 billion for the period between 2014 and 2020. The Welsh higher education sector has been successful in winning funds from that highly competitive programme. Universities have accounted for nearly two thirds of the Welsh participation in Horizon 2020 so far. When the money is there we compete successfully, and universities do disproportionately better.

Interestingly, on Monday, the Prime Minister said that she wants us to be part of any future such schemes—the successor schemes of Erasmus and Horizon 2020. More surprisingly, she said that she was willing for us to pay, but that we should have a “suitable level of influence”. That exemplifies the unreal nature of the Government’s thinking. Those are EU programmes. We are leaving the EU. We will become a third country. In respect of Horizon 2020 and Erasmus, Times Higher Education has said that associate countries are not in the European Council or the European Parliament, and they have no say in the research budgets. The fantasy is that we will somehow leave, but stay in—that we will benefit and be able to fix the rules—but we will be a third country. At some point, the Government will collide with reality, and the sooner the better as far as I am concerned.

Now and again I get angry emails from frustrated Brexiteers, usually late at night, which say, “We’re leaving. Get on with it.” I only wish that the Government here would get on with it. Uncertainty is the most obvious feature of Brexit, for higher education as for everyone else, and that goes for people who are in favour of leaving and those who are in favour of remaining.

An alternative might be that the Welsh Government take charge, if they can be shaken awake on the matter. After all, Quebec, which is a province of Canada on the other side of the Atlantic, takes part in Erasmus+, so why not Wales? Needless to say, the Scottish Government are way ahead of us already, and are using their offices in Brussels, Berlin, Paris and Dublin to lead the charge. I am not sure whether we have an office anywhere apart from Cardiff these days.

Another strong pillar of our HE sector are the thousands of EU students who study in Wales and bring academic, economic and cultural benefits to our universities and our communities. That is particularly obvious in Bangor, where the population almost doubles and a large proportion of the students are from EU countries and other foreign countries. They bring enormous benefits. The latest figures for 2016-17 show that more than 6,000 EU national students were at HE providers in Wales, but applications are down. Perhaps the Minister can confirm the Institute of Welsh Affairs’ figure that there has been a drop of 8% this year.

[Owen Smith (Pontypridd) (Lab)]

I congratulate the hon. Gentleman on securing the debate. Does he agree that we are already seeing a financial impact of Brexit on our universities, in the reduction of the number of EU students? The excellent University of South Wales in my constituency had to propose laying off fully 5% of its staff last year, explicitly citing Brexit and the reduction in the number of EU students as the reason.

[Hywel Williams]

The hon. Gentleman makes a very telling point—the effects are with us already, even though we are still in.

There are also effects that are not so apparent in facts and figures, which are to do with the morale of lecturers and students from abroad and perhaps even their commitment to their work, in the face of offers that they might get from universities outside Wales and outside the UK. That effect is beginning to make itself apparent. In fact, it is one of the early signs of the impending Brexit vote hangover.

The Welsh Labour Government should give EU students who are starting courses in Wales now or in the near future some guarantees—for example on fees, loans and grants—to reassure them that Wales welcomes them to study and to contribute. The Welsh Labour Government should do that, but whether they will is yet another Welsh Labour mystery.

I come to the last pillar for today’s debate—staff from the EU who have chosen to research and teach in Wales. We have universities and individual departments of outstanding quality. That is no accident. We have built on our strengths, and EU staff and staff from other countries have been attracted here because of those strengths. The latest information I have shows that there are 1,355 staff from the EU at Welsh universities. They need to be reassured that they have a future with us, working at the forefront of their fields and building Wales’s future.

I have some brief questions for the Minister. What representations have the Welsh Government made regarding the design and implementation of the UK shared prosperity fund? I think we would all be glad to hear something about that. What representations have the Welsh Government made regarding Wales’s future participation in Horizon 2020 and Erasmus+? What discussions have Welsh Office Ministers had with the Home Secretary about immigration arrangements for EU students who might want to study in Wales? What assurances can the Minister give me that universities in Wales will still be able to attract and retain talented academics from the EU? Lastly and perhaps most importantly, will he give a guarantee that Wales will receive “not a penny less” after we leave the EU? He will recognise those words, as they were a promise by the Leave campaign.

We have great strength in our universities. We would be foolish in the extreme to allow a political vote, or a petty, clueless, split and confused Government here in London and a somewhat indifferent, somnolent one in Wales, to drag them down.

Welfare Reform and Work Bill

Debate between Hywel Williams and Owen Smith

Tuesday 27th October 2015 Commons Chamber

[Owen Smith]

I have heard that argument a lot recently, and there is no evidence to support such a contention. It is nice to believe that were we to reduce the amount of money people have—withdraw the subsidy, as the hon. Gentleman would say—some employers would increase their payments to people and wages would go up, but I do not suggest that that is true or that any evidence supports it. Tax credits have been a necessary subsidy for low wages, and I welcome and applaud the decision by the Government to increase the national minimum wage. That is the right thing to do, which is why Labour called for it before the election—the Government could get on with it a little faster and stop spinning it as a national living wage when we know it is not, but it is a welcome step. There is no evidence to suggest that if we withdraw the subsidy at a stroke, employers will think, “I’d better put up wages for my workforce because they will struggle to survive on what they earn.”

[Hywel Williams (Arfon) (PC)]

Surely the answer to the first question from the hon. Member for Sherwood (Mark Spencer) is that tax credits must ensure a decent, reasonable standard of living. Such standards have been defined over many years by large numbers of people in research institutions—I will not trouble the House with those matters now, but they are well understood.

[Owen Smith]

Let me be clear: tax credits are a success. They have kept people in work in this country, and we have seen a shift in the volume of single parents in work.

Wales Bill

Debate between Hywel Williams and Owen Smith

Tuesday 24th June 2014 Commons Chamber

[Owen Smith]

It is a pleasure to serve under your chairmanship, Mr Deputy Speaker, and to do battle once more with the Exchequer Secretary, who seems to have been permanently seconded to the Wales Office—he is like a ringer, to use football parlance. We welcome him and the opportunity he now has to clarify some of the things that he was unable to clarify when we last debated the Bill.

On income tax, the Opposition’s priority is very clear: we believe that we ought to have a fair and progressive tax system across the whole UK. For us that means reinstating the 50p rate and having a starting rate of 10p. That will be far fairer for the people of Wales, and indeed the people of every other part of the UK, than the tax cuts for millionaires that the Exchequer Secretary has overseen at the Treasury.

In the context of the Bill, we have three further priorities. Our first priority—this is why we will support the Bill this evening—is to ensure that Wales has access to borrowing powers in order to offset the £1.6 billion that the Conservatives have cut from the budget for Wales. That is linked to the taxation powers set out in the Bill.

Our second priority is to ensure that Wales is not further disadvantaged by potential additional cuts to the block grant that might be associated with the transfer of tax powers, as we heard a moment ago from the Exchequer Secretary, and as I will test in a moment.

Our third priority is to test properly the costs and benefits to Wales of the transfer of additional powers, particularly in respect of tax, because one of the truths about the Bill thus far is that the Government cannot really be taking this seriously. If they took it seriously and thought that it would really benefit Wales, they would have done a bit of the work to determine what the net costs and benefits would be for Wales. They have undertaken no such analysis, which I think calls into question the seriousness with which they address it.

[Hywel Williams (Arfon) (PC)]

The hon. Gentleman has outlined three priorities. May I ask him, perhaps a little cheekily, which of those priorities is his priority?

[Owen Smith]

If I understand the hon. Gentleman’s question correctly, the answer is borrowing powers for Wales, because we have seen £1.6 billion cut from the budget for Wales, which is money that could usefully be made up by borrowing. Of course, all the tax powers set out in the Bill—income tax and, more immediately, stamp duty and landfill tax and other minor taxes—are directly associated with those borrowing powers. We are keen to see those borrowing powers afforded to Wales, and therefore to see the Bill passed.

However, we have never said that income tax-varying powers are a Labour priority for Wales. We remain sceptical about the benefits they would afford to Wales. Our scepticism is entirely factually based. The Silk commission’s report looks extensively at the revenues Wales receives from taxes and compares them with expenditure in Wales. It determines, to put it in blunt terms, that Wales currently spends around £35 billion in public moneys and nets in revenues from tax receipts of around £17 billion. That leaves a significant deficit that would need to be made up by a Welsh Government, were they to be reliant to a greater extent on their own tax receipts.

The Minister explained a moment ago that, under the terms of the formula outlined in the Bill and in some of the explanatory material, Wales would of course benefit if the growth of GDP in Wales outstripped that of England, but he also said that it

“would be adversely affected if growth in Wales was slower.”

Although in recent years the rate of GDP growth has been faster in Wales than in England, he will know that historically—if we look at the past 20 years, for example, and certainly over any longer period—the rate has been lower in Wales than in England, for all the obvious demographic and industrial reasons. We need to be certain that Wales would not be worse off, in both the short and the long term. We remain suspicious that tax competition, which seems to be the Government’s driving ideological imperative on the matter, will not benefit Wales, for the reasons I have given.

Wales Bill

Debate between Hywel Williams and Owen Smith

Wednesday 30th April 2014 Commons Chamber

[Owen Smith]

The hon. Gentleman claims that I implied that, but I do not think I have been explicit on the matter, either then or now. When we last debated the issue, we were clear that the majority opinion is that four years is better than five. Another orthodox opinion in Britain and elsewhere is that too many changes to constitutional matters are bad for the electorate and that constantly chopping and changing for partisan reasons—as the hon. Gentleman did when introducing the 2011 Act—is bad for democracy in Britain. In the light of that, and in a period in which people are disengaged from politics, we may choose not to be partisan and not to pursue that sort of strategy when we win the next election.

[Hywel Williams (Arfon) (PC)]

I want to refer to the point made by the hon. Member for Cardiff North (Jonathan Evans). There is a great deal of virtue in considering holding elections on days other than a Thursday. That is the practice in other countries. Perhaps the hon. Member for Pontypridd (Owen Smith) can help the Committee with his historical knowledge: have elections in the UK always been held on Thursdays? I seem to remember that at some point in our history they were not.

[Owen Smith]

I believe that the hon. Gentleman is right. Elections have not always been held on a Thursday. However, in recent memory and certainly in the last century, elections have mainly been held on a Thursday, which is why we are sticking to it in amendment 9. That is not the substantive point that we are trying to make; it is an interesting debating point, but not one that we need to bother the Committee with any longer.

With that, I conclude my remarks on our amendments to clause 1. We do not intend to put them to the vote, but we want to hear the Government’s views on the need for them to engage properly with, seek proper consent from and pay proper respect to the devolved Administration in Cardiff.

--- Later in debate ---

[Owen Smith]

I am grateful to the hon. Gentleman for his intervention, but I think it was made in the same spirit as that with which he has repeatedly made other arguments, which is to cloak his party’s partisan intent in the Parliamentary Voting System and Constituencies Act, the Fixed-term Parliaments Act and, indeed, clause 2 of this Bill with the veneer of a principled objective. That is not true: the rationale for all of those measures was to benefit his party, which is a smaller party—a minority party—in Wales. I intend to demonstrate why that is the case.

[Hywel Williams]

The hon. Gentleman has used the magic word, “minority”. In what way is a party with 30 out of 60 seats and that does not command the support of more than 50% of the Welsh electorate who actually vote a majority?

[Owen Smith]

The point I was making is very simple and I do not need to embellish it, because I can rely on the evidence provided by the Government’s own impact assessment, which states extremely clearly that the proposal’s objective is to benefit the

“smaller parties in Wales who may have a smaller pool of high quality candidates to represent them in elections.”

Labour Members certainly would not for one moment contest the argument that the smaller parties in Wales—among which I would, unfortunately, count the Conservative party—may have a smaller pool of high-quality candidates to represent them in elections, but I do not believe that that is an adequate reason for seeking to amend legislation with regard to this country’s constitution and elections.

Wales Bill

Debate between Hywel Williams and Owen Smith

Monday 31st March 2014 Commons Chamber

[Owen Smith]

That is precisely the impression that it gives. The rationale, as I say, is very clear. The policy only benefits the minority parties in Wales—the Tory party, of course, is a minority party in Wales. It specifically benefits Leanne Wood, the leader of Plaid Cymru in Wales, who intends to stand under first past the post and on the list. I put it to the Secretary of State that the people of Wales will not look well on his gerrymandering elections in Wales in this fashion.

[Hywel Williams]

As we have a unified British Labour party, did the hon. Gentleman make those arguments to the Labour party in Scotland, where a Minister was elected on a dual mandate? Did he campaign to get that Minister sacked?

[Owen Smith]

I am not talking about Scotland today; I am talking about Wales. I am talking about the Clwyd West scandal, which the Secretary of State oversaw. I am talking about the fact that this measure is clearly in the interests of the Tory party and nationalist allies, which is why our nationalist colleagues are so keen to intervene.

Regional Pay (Public Sector)

Debate between Hywel Williams and Owen Smith

Tuesday 10th January 2012 Westminster Hall

[Owen Smith]

For the third time, I have to tell the hon. Member for Montgomeryshire that there is no inquiry. A couple of letters have gone from the Chancellor to the heads of the pay review bodies asking them to come forward with evidence on how local pay might reflect local market conditions, which is not an open inquiry. I thought that the hon. Gentleman had taken up the challenge to appeal for an inquiry.

The world has changed since the policies were implemented in 2008 on the Courts Service, which took place in an economy that was growing right across the UK. The world has changed. When the facts change, we reconsider our views, and we are doing that right now. We are thinking about the meaning of the Government’s proposals on regional pay and what the evidence shows us. We will come to a considered view when we know what the Government are proposing, but let us look at the evidence.

Of course, it was a previous Tory Chancellor, in the 1990s, who first talked about introducing regional pay on a much wider scale. What happened in the NHS? Local bits of the NHS were given the right to conduct local bargaining, but they lacked the necessary experience and were unable properly to assess local market conditions. As a consequence, there was more than a year’s delay before regional pay bands were set. When regional pay bands were set, the differential across the country was 0.1%. The rationale for that was, of course, that managers understood that, given the problems and complexity that widespread differentials would throw up, a collective agreement right across the country was the best possible option. The Chancellor agreed, and a year later he took back the power, concerned that there might have been spiralling costs had the situation continued.

[Hywel Williams]

Will the hon. Gentleman give way?

[Owen Smith]

I will give way in a moment.

NHS trusts have the capacity to engage in a greater degree of differentiation, but by and large they do not do so, because they accept that it would be unfair and lead to unintended consequences. We saw some such unintended consequences when the police looked into regional pay. In the London Metropolitan area, there was an agreement a few years ago to offer a much higher rate of pay to Metropolitan police officers. The unintended consequence was that officers transferred in droves from the areas around central London, and outer metropolitan boroughs consequently had to set higher rates themselves. Such a policy leads to unintended consequences and involves significant risks, so the Government need to think carefully before they pursue it.

[Hywel Williams]

I do not want to dwell on the policies of the previous Government, because I think that those of the current one are infinitely more damaging, but before we leave 2008, will the hon. Gentleman confirm that the previous Government were not considering regional pay in any other part of the public sector apart from HM Courts Service? Was it just the Courts Service?

[Owen Smith]

The hon. Gentleman knows that I was not in the House in 2008, but as far as I am aware, we introduced the policy in the Courts Service and there was further consideration. The former Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), certainly talked about regional pay, but we did not introduce it in other areas. At the end of our period in government, there had been some experimentation in respect of the Courts Service, but we did not introduce the policy elsewhere.

Let us look at what happened at the Courts Service and consider where we go from here, because there are significant risks. At the time, the Government, and certainly the Treasury, understood that there were risks. My hon. Friend the Member for Sedgefield has mentioned the Treasury paper in 2004-05, which stated that

“extremely devolved arrangements are not desirable. There are risks of workers being treated differently for no good reason. There could be dangers of leapfrogging and parts of the public sector competing against each other for the best staff.”

That takes us to the motive: why have the Government now decided to bring this forward? If it was not a good idea a few years ago, why is it a good idea now? The reason is, of course, found in the two issues that they have with the public and private sectors. First, they believe in a totally outmoded, almost Manichean split—the public sector is bad, bloated and inefficient and the private sector is good, lean, hungry and eager to work. That is their understanding.

Secondly, the Government have a thoroughly outmoded notion that cutting the public sector and effectively forcing people to transfer to the private sector—through actively cutting jobs, as we heard was the strategy in the Budget, or through reducing regional pay, as we now hear might be the strategy—will somehow inflate the private sector. There is absolutely no evidence to support that. It is a totally misguided prescription, and one I fear that the Government will repeat.

The Treasury has said that the reason for looking at getting rid of national pay bargaining is to produce

“an economic reform to boost regions of the economy that are over-dependent on the public sector. All the evidence is that flexible public sector pay to reflect local labour market conditions will allow the private sector to flourish.”

Show us the money and show us the evidence, because we cannot see it at the moment. We can see a pamphlet with a lot of inflammatory language about the Manichean split between the fat public sector and the lean and hungry private sector from a think-tank which is pretty close to the Prime Minister and which some would say is a free-market, right-wing organisation, but apart from that I do not see a lot of evidence to support the position.

I suspect that the Minister will come out with some inflammatory comparisons, but I hope that she will not. We have heard so often about paramedics earning 16% more in the public sector than in the private sector, and I hope that we will not hear such unnecessary and unfair comparisons now. As the Institute for Fiscal Studies itself has said, such comparisons do not take into account the fact that there are invariably older and more experienced workers with better qualifications in the public sector. When such factors are taken into account, the differential between the public sector and their private sector counterparts is perhaps only 2%.