Opportunities for the Next Generation

Lord Willetts Excerpts

Tuesday 13th September 2011 Commons Chamber

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

Of course, the Government oppose the motion. I regret that we are depleted as a result of efficiency savings, but I should explain that the Secretary of State is battling for Britain and representing British business in Paris and, sadly, our colleague the Minister for Further Education, Skills and Lifelong Learning is recovering from a minor operation in hospital. I hope that satisfies the House on our position.

I assure the shadow Secretary of State that despite our disagreement with many of the assertions in his motion, we very much agree with the underlying principle of which he reminds us. There is an obligation on all our generation to ensure that the younger generation has better opportunities in life. One of people’s most fundamental concerns is that opportunities for social mobility, getting started on the housing ladder and getting a good education should be at least as good for our kids as they have been for us. That is a principle that we absolutely endorse.

Opposition Members might be used to having rather embarrassing books passed under their noses—such as the memoirs of the right hon. Member for Edinburgh South West (Mr Darling)—but I have with me a book that need cause them no embarrassment: my book, “The Pinch”, which is on precisely this subject. I strongly recommend it to the entire Opposition Front Bench team and they should each buy a copy—they are not allowed to share it.

We support the principle of which the motion reminds us and it is a challenge to which successive Governments have had to rise. No Government can claim that they have been able fully to rise to that challenge, and the right hon. Member for Southampton, Itchen (Mr Denham) is right to challenge the Government in the House today to recognise it, which we do, and to ask us what we are doing about it. Let me try to explain what we are doing.

[Margot James (Stourbridge) (Con)]

My right hon. Friend is introducing our side of the argument with great generosity of spirit, but does he not agree that the tone of the motion encourages an extremely unhealthy sense of victimhood among our young people? I will not pre-empt his speech by giving a long list of all that the Government are doing for young people, but we are doing a great deal and I trust that the Minister will give full voice to all that.

[Mr Willetts]

My hon. Friend is absolutely right. The debate is an opportunity for me and all Government Members to set out very clearly what we are trying to do with more apprenticeship places, 80,000 work experience places, and a funding system for universities—however controversial—that has been set up on a reliable basis for the future that will enable us to maintain the number of places to students. That adds up to more education and training places in total for young people than ever before. We are also making bold reforms on schools through free schools and the pupil premium, which will help children from low-income families, as well as through the spread of the academies programme and the arrival of university technical colleges. Going beyond education, we are also making bold reforms on housing with the new affordable homes programme bringing 170,000 new affordable homes by 2015. That all adds up to a programme that is absolutely aimed at ensuring that young people get a fair deal.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the Minister explain how properties at 80% of market value rent are affordable and how that links to his party’s declared aim of reducing spending on housing benefit?

[Mr Willetts]

In our affordable homes programme we have set out arrangements whereby new providers will deliver extra homes for a given amount of rental income. We aim to generate and achieve more house building as a result.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Will the Minister give way?

[Mr Willetts]

I want to make a tiny bit more progress.

Although we are doing those very important things on higher education, skills, schools and houses, the most important single way in which we can help the younger generation is by reducing the burden of Government debt that they will have to pay for. That is at the heart of our programme. Every time the previous Government introduced some unaffordable expenditure programme paid for not out of taxes but by issuing Government bonds lasting for 25 years, they were paying for public expenditure out of burdens being placed on tomorrow’s younger generations. That is the fundamental moral failure behind the levels of debt that we inherited from the previous Labour Government.

[Stella Creasy]

I am pleased to hear the Minister talk about the importance of debt levels. Will he comment on the figures from the Office for Budget Responsibility that show that directly as a result of the Government’s plans an extra £10,000 of personal debt has been loaded on to our hard-pressed households already in the past year?

--- Later in debate ---

[Mr Willetts]

Given what happened to personal debt under the previous Labour Government, about which my colleague the Secretary of State has been absolutely eloquent, I do not think that Labour can be taken seriously on this subject. We are still waiting for Labour to learn from its fundamental mistake of having uncosted public expenditure programmes and irresponsible and unfunded tax reductions, but it has not learned that lesson as we can see from the motion, which is an absolute example of that. It is full of extra public expenditure promises, it has a tax cut in it and, once again, as always with Labour, the figures do not add up.

[Andrew Bridgen (North West Leicestershire) (Con)]

The Browne review estimated that if all new students from 2012 paid Labour’s favoured 3% graduate tax, it would not provide sufficient revenue to fund higher education until the tax year 2041-42. Will the Minister estimate how much that would add to the record budget deficit left behind by the Labour party?

[Mr Willetts]

My hon. Friend is absolutely right that the graduate tax favoured by the Labour leader would make the fiscal crisis that we have inherited far worse. That is one of the many objections to the idea.

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

Will the Minister confirm that the Chancellor’s own Office for Budget Responsibility has stated that the borrowing requirement will have to increase by £46 billion and that unemployment figures will increase by 200,000 as a result of the Chancellor’s economic strategy?

[Mr Willetts]

I do not know which specific OBR forecast the hon. Gentleman refers to, but the OBR work I have seen makes it clear that although there are reductions in public sector employment, they are more than offset by increases in private sector employment. That is one of the many ways in which we are rebalancing the economy. We are now hearing claims to fiscal rectitude from the party that left us the largest structural deficit in the G7 and the largest level of borrowing in the developed world. Unless the Labour party gets serious about the importance of prudent management of the public finances, we simply will not take seriously its commitment to caring about the interests of future generations.

[Mr Evennett]

My right hon. Friend, as always, is correct in saying that it is essential to repair the economy to ensure a good future for all our young people, and that if we had an economy like the one left by the last Labour Government, that future would be bleak. The Wolf report on vocational education said that a significant proportion of the 14 to 19 cohort are being offered a less effective path into employment than their predecessors. Does my right hon. Friend agree that this Government’s policies, particularly in respect of training and apprenticeships, will help to address that serious problem?

[Mr Willetts]

My hon. Friend is absolutely right, and I should have included Alison Wolf’s excellent report on my list of the things that we were doing to try to offer a fairer deal for young people.

[Geraint Davies]

Does the Secretary of State agree that sovereign debt in Ireland, Iceland, Spain, Italy, Portugal and so on is much worse than that of Britain, and the reason is that Labour left 2 million more people in jobs in Britain than we inherited in 1997? The future of keeping deficits down is jobs and growth—not stupid cuts, like those he is pushing forward with.

[Mr Willetts]

The crucial difference between our economy and those that the hon. Gentleman listed is that our economy has the benefit of a credible package for bringing down the public deficit, as a result of which the markets have retained confidence in us. It is because of this Government’s economic policies that we are not facing the same risks.

[John Hemming (Birmingham, Yardley) (LD)]

Does it not surprise the Minister, as it surprises me, that the Opposition seem to be unconcerned about the rate of interest paid and the fact that, as a deficit goes up, the rate of interest goes up as well?

[Mr Willetts]

That is a very important point; indeed, I understand that with its latest debt issue the Bank of England has secured historically low—almost unprecedentedly low—interest rates, which is further evidence of the confidence that people have in our seriousness about tackling the deficit that we inherited from the previous Government.

I now want to make progress on some of the specific points in the motion that the shadow Secretary of State put before us. First, let me focus briefly on youth unemployment and those not in education, employment or training. Youth unemployment is a serious problem; it does need to be tackled, and of course we regret the fact that it now stands at 949,000, having been at 924,000 when we took office. However, as we have heard, when Labour took office it was at 664,000, and the rise in youth unemployment began long before the economic crisis hit.

The really serious question that parties on both sides of the House need to address is why, even during Labour’s boom years, was youth unemployment already starting to rise. That tells us that it is a deep-seated trend, which tells us that something has gone seriously wrong with our education and training system—it was not meeting employers’ needs.

[Tom Blenkinsop]

Will the Minister give way?

[Mr Willetts]

Just a minute; I want to make a bit more headway on this point.

There is a very similar pattern in numbers of NEETs. On the current data series starting in 2000, there were 655,000 NEETs in 2000, and when Labour left office there were 874,000. I have looked up the figures for two dates that may particularly strike the shadow Secretary of State’s memory. When he arrived as Secretary of State in the Department for Innovation, Universities and Skills, there were 835,000 NEETs. During the following two years, until he left that post, he was remorselessly harried on those figures by his Opposition spokesman. By the time he left the post, the number of NEETs had risen to 954,000; we debated that many times in the House. We had an increase of 120,000 on his own watch as the Secretary of State responsible. Actually, he got out just in time: the quarter after he left, the number went over 1 million, to hit 1.74 million. I had hoped we would hear a slightly more frank account from him of the lessons he learned about the difficulty of tackling the challenge of NEETs, drawing on his own experience.

The shadow Secretary of State went on to complain about our record, but I have to say that when in opposition we warned about Train to Gain, which we said was not a serious investment in training opportunities; about programme-led apprenticeships, which were losing contact with the jobs market; and about paper vocational qualifications being churned out that did not meet the real needs of employers. Those warnings, sadly, have proved to be correct.

[Tom Blenkinsop]

I thank the Minister for giving way; he is being generous with his time. We are experiencing not only record youth unemployment, but record female unemployment. I believe that the last time that such rates were experienced was in 1988, when the Minister was last in power.

[Mr Willetts]

I was not personally in power then—but absolutely, some groups are excluded from the labour market whenever times are tough, and youth unemployment and female unemployment are both aspects of that.

[Mr Stewart Jackson]

My right hon. Friend omits to mention one of the biggest catastrophes under the last Government: the disastrous incompetence of the further education capital build programme under the Learning and Skills Council, for which the former Government have not apologised. This Government are having to pick up the pieces.

[Mr Willetts]

Absolutely; my hon. Friend the Minister for Further Education, Skills and Lifelong Learning is doing an excellent job with tight resources in trying to ensure that we can make at least some improvement to the further education estate, but I want to talk about apprenticeships in particular.

[Jeremy Corbyn (Islington North) (Lab)]

Before the Minister goes on to talk about apprenticeships, will he acknowledge that the direction of travel is entirely wrong? With many young people deterred from going to college because of the loss of education maintenance allowance and rising fees, and others deterred from going to university because of debt and rising fees, does he not think that the situation will be considerably worse in a year or two, because of the policies that he has already adopted?

[Mr Willetts]

Let me now turn to what we are doing to ensure that young people have more opportunities, so that the picture that the hon. Gentleman paints does not come to pass.

I should now like to make some progress and to say that one of my other regrets about the Opposition motion is that it repeats not only the economic mistakes that we associate with the Brown premiership, but the spinning techniques that we recall from the Blair premiership, and that is not an attractive combination. The worst example of that in the motion, which the shadow Secretary of State repeated in his speech, is the statement that

“the proportion of apprenticeship places for 16 to 18 year olds has decreased by 11 per cent.”.

I should like briefly to explain to the House why that statement is both strictly speaking accurate and deeply misleading.

We are talking about a nine-month period, because we have only nine months’ data for the latest year. In the first nine months of 2009-10, 92,500 apprenticeships were started for 16 to 18-year-olds out of a total of 211,000 apprenticeships, so 43% of apprenticeships went to 16 to 18-year-olds. By comparison, in the first nine months of the 2010-11 academic year, under this Government, 102,900 16 to 18-year-olds started apprenticeships—up from 92,500—out of a total number of apprenticeship starts of 326,000 in a comparable period. So we have more apprenticeships for 16 to 18-year-olds, as part of a big increase in the total number of apprenticeships. Therefore, because the rate of increase in 16-to-18 apprenticeships was not as rapid as that of other apprenticeships, 16-to-18 apprenticeships in our first nine months constitute 32% of the total number.

The shadow Secretary of State, using his knowledge and ingenuity as a former Secretary of State, constructs an argument in which, because 16-to-18 apprenticeships were previously 43% and are down to 32%, we are all supposed to regret the fact that they have fallen by 11 percentage points given the increase in total apprenticeships. If anyone wants an example of the Blairite attitude to statistics—using every trick in the book to take an increase in the number 16-to-18 apprenticeships as part of an increase in the total number of apprenticeships and to include in a motion an assertion that, somehow, there has been an 11 percentage point fall—we have just seen a case study.

If Labour Members want to be taken seriously, they must get serious not just about the economic challenge that we face, but about levelling with the country and dealing with the facts that we face in an honest way. Referring to that 11 percentage point fall shows something deep in Labour’s instincts; the electorate got completely fed up with it, and we all understand why. We are delivering more apprenticeships across the piece.

[Ian Paisley]

Perhaps the Minister can give me reasons why I should vote against the motion. There are 56,000 unemployed people in Northern Ireland; that is the jobless total. That has trebled over the past four and a half years. The Minister is telling the House that everything is going swimmingly, but I do not think that it is. What are the Government doing to get those 56,000 people out of unemployment?

[Mr Willetts]

I am trying to explain exactly what we are doing to deliver a significant increase in the number of apprenticeships. We initially pledged to deliver 50,000 extra apprenticeships in our first year; we believe that we have achieved more than double that—100,000 extra apprenticeship places—and there are more to come.

[Toby Perkins]

Will the Minister give way?

[Mr Willetts]

I shall try to make progress. Those are real apprenticeships. The shadow Secretary of State said that they were short-term apprenticeships; let me make absolutely clear how we are financing them. We are doing so from the savings that we are making on Train to Gain, which my party in opposition and the Liberal Democrats in opposition rightly criticised as an ineffective programme with a large amount of dead-weight. The average number of hours of training received under a Train to Gain place was 33. We are replacing that with apprenticeships, in which the minimum number of hours of training and directed learning are 280. That is what we are putting in the place of Train to Gain. For the shadow Secretary of State to complain about short-term training when we are providing real apprenticeships instead of his Train to Gain is a bit rich.

[Toby Perkins]

Will the Minister give way?

[Mr Willetts]

No, I shall try to make progress. We are delivering more apprenticeship places, which I very much hope will be of value to the people of Northern Ireland, as it is to the rest of the United Kingdom. The figures are dramatic: the provisional figures for the first three quarters of the academic year 2010-11 show 330,000 apprenticeship starts—an excellent record.

Let me turn to universities, briefly. Of course, we have debated this issue many times in the House, and will doubtless do so again. I begin by accepting something that the shadow Secretary of State said, and a point that he made when he was Secretary of State. It is painful when, in the summer, one is confronted with young people who have done their best in applying for university, and have not secured a place. It is painful for them, and we recognise the work that they have put in, but in recognising the difficulties that they face, I cannot do better than repeat the words spoken by the shadow Secretary of State when he was Secretary of State and was responsible for the matter:

“In terms of student numbers, going to university has always been a competitive process…we cannot afford to fully fund every single person who might like to go to university and we never have been able to.”

That is the correct position. We have been able to continue to provide record numbers of places at university, despite all the funding pressures that we face and the need to make reductions.

The previous Government, in their final days, had a plan for 20,000 extra places, as they called them, but there was no funding attached beyond the first year. There was no money to pay for years 2 or 3 of the studentship. Incidentally, contrary to the implication in the motion and to what the shadow Secretary of State said, that was explicitly described as a one-off funding stream for one year—“extra one-off funding” were the words of the then Chancellor in the 2010 Budget. What we have done instead is provide those 10,000 places last year, and we will provide another 10,000 next year. Instead of having to reduce places, we hope to maintain broadly that number, so that at least an equivalent proportion of the cohort of 18-year-olds has a chance of getting to university.

We inherited from the previous Government a simple statement, which I shall quote from the pre-Budget report of December 2009. In their list of cuts, there was

“£600 million from higher education and science and research budgets from a combination of changes to student support within existing arrangements; efficiency savings and prioritisation across universities”.

We never knew how that £600 million-worth of cuts was to have been delivered, but it was very hard to see how we could maintain the number of university places that we have done and continue to provide high-quality education given that we inherited that commitment to a cut of £600 million. That is why we took the tough but controversial decision, rather than simply face cuts and reduce student numbers, to base university financing on student fees and loans—absolutely following the model used by the previous Government, with no payment up front. I believe, given the fiscal pressures that we face, that that is in the best interests both of universities, which will find, if anything, that they have extra cash as a result of our reforms, and of students, as it has enabled us to maintain a high level of places, and to reduce the monthly repayments facing students. The shadow Secretary of State failed to explain at any point what Labour would do.

[Geraint Davies]

rose—

[Mr Willetts]

I shall not give way, as I am going to try to make progress, although I would welcome an intervention from the shadow Secretary of State, who could usefully clarify his position. We would like to know what Labour policy is. I have been to the House, as have my ministerial colleagues, to explain our policy, and we have heard a range of suggestions from the Labour leadership. We heard what Lord Mandelson, in his memoirs, thought that a Labour Government would have done if they had been re-elected:

“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 have been a disastrous contraction of higher education.”

Separately, the leader of the Labour party, the right hon. Member for Doncaster North (Edward Miliband), said:

“I would not go ahead with the increase they’re going with. I want to have a graduate tax. Why do I want to have a graduate tax? Because I think it’s a fairer way of paying for higher education, because it says the amount you pay is related to the ability to pay”.

We have three options: recognising that fees and loans were the way to help universities out of the fiscal pressures that they faced; having a graduate tax; or having a third policy of no policy whatsoever. Once again, we are having a debate in the House called by the Opposition with no indication whatever of how they would put our universities on a solid financial footing. Governments across Europe are battling to tackle their deficits, and it is important that we hear from Labour what it would do. Instead, what we have in the motion, alongside the promises on NEETs and apprenticeships, and quotes on student places, is a reference to the £2 billion tax on bankers’ bonuses, which will pay for those policies. Let me tell the shadow Secretary of State that that tax is already paying for reversing the consumer prices index-retail prices index switch for benefits and pensions; for jobs and growth spending, which adds up to £9.5 billion; to support the cancellation of the fuel duty escalator, worth £1.7 billion; to enable the Opposition to reverse the child benefit freeze, which costs £1.3 billion; to reverse the time-limited employment and support allowance, costing £1.1 million; to enable them to reverse the working tax credit freeze for £1 billion; and to reduce the age-related payment every year, costing another £600 million. In fact, we estimate that in total, the £2 billion that the Opposition will raise from a bankers’ bonus tax will pay for £27 billion-worth of public spending increases and other tax cuts.

The right hon. Gentleman has put his bid in and it is on the list. If wants to be taken seriously as a member of Government he has to tell us how he would make the figures add up. He does not rise to that challenge. We are rising to the challenge of sorting out the mess in the nation’s finances that we inherited from the Labour Government, and we are addressing that challenge while, at the same time, doing absolutely everything that we can to ensure high-quality education and training opportunities for young people—and we are proud of the commitment that we are displaying to them.

[Several hon. Members]

rose—

--- Later in debate ---

[Mr Thomas]

As my right hon. Friend the Member for Southampton, Itchen pointed out in his opening remarks, youth unemployment was actually falling for the vast majority of our period in office. Of course, there was a global recession, and youth unemployment rose during that time, but thanks to Labour’s jobs fund youth unemployment was actually coming down when we left office.

Perhaps we need also to dwell on the quality of the higher education that will be available to young people. Before the summer recess, the Minister for Universities and Science presented a White Paper that could have meant a dynamic future for universities and their students, that could have been the centre of our country’s plans to rebalance the economy and that could have helped to drive the growth of new jobs in the new industries; instead, we had little more than a Coulson-esque smoke and mirrors exercise to try to disguise the coming auction of places to the lowest bidder in order to help close the funding hole that trebling tuition fees has created in the Government’s higher education budget.

[Mr Willetts]

The shadow Minister attacks our higher education policies, but are the Labour Opposition committed to reversing our increase in tuition fees?

[Mr Thomas]

My right hon. Friend the Member for Southampton, Itchen set out in his opening remarks what Labour would have done had we been in office. The Minister will recognise that we have in place a detailed policy review, but there was absolutely no reason why his party needed to cut university funding by as much as it did or needed to see—as a result—university fees rise so much.

Instead, the right hon. Gentleman is taking places from universities with international reputations and seeking to auction them off to the lowest bidder. He makes much of student choice, but it will not be students who decide which universities get extra places in that auction.

The Minister, under pressure back in April, praised London Metropolitan university for keeping its fees below £9,000, but just days after his praise London Met announced that 400 courses were being closed; and in July, Carl Lygo, the chief executive of BPP, one of the new providers that the right hon. Gentleman wants to see do more, said that his institution would be forced to increase staff-student ratios as it expanded. With higher tuition fees on the one hand, and cuts in courses and worse staff-student ratios on the other, this is a Government who clearly think that such measures are a price worth paying.

“And the…financial cost”

—these are not my words, but those of the independent Higher Education Policy Institute—

“to students and taxpayers—is likely to be considerable.”

As the Minister said in his opening remarks, the Secretary of State—in his more saintly past—railed against the levels of personal debt. Now he aspires to huge increases in the levels of debt that students face on graduation. If that were not bad enough, the Higher Education Policy Institute also found in its analysis that

“social mobility is likely to be”

a

“…victim of the Government’s plans, and the new methods of allocating resources and controlling numbers look likely to reinforce…disadvantage rather than remove it.”

The Conservative party is damaging social mobility and entrenching disadvantage. Why, who on earth could have predicted that? Almost 2,000 university nursing places and 4,000 university teacher training places have gone this coming academic year; 10,000 extra student places were axed last year by the former Chief Secretary to the Treasury, the right hon. Member for Yeovil (Mr Laws); and 10,000 extra places are being axed next year. Each one is an opportunity gone for the brightest and best of the next generation to fulfil their hopes and their ambitions.

The apprenticeships guarantee scheme has been axed, EMA has been ended, there is rising homelessness and we have a Government in need of a plan B. They are leaving young people with a more uncertain future than at any time in the recent past.

The Government need a serious strategy for growth; they need a plan B; the motion offers them one, and I commend it to the House.