Oral Answers to Questions

Paul Farrelly Excerpts

Wednesday 10th June 2015 Commons Chamber

[David Mundell]

The Government’s position is clear: the best way out of poverty is into work. There is a record low number of workless households in Scotland, and I hope that the hon. Gentleman welcomes that. I also hope that he welcomes the Government’s decision to devolve significant welfare powers to the Scottish Parliament so that if there are specific issues in Scotland decisions can be made in Scotland to deal with them.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

2. When he plans to publish the third annual report on the implementation and operation of part 3 (Financial Provisions) of the Scotland Act 2012.

[The Secretary of State for Scotland (David Mundell)]

The report has already been published: it was laid before this Parliament on 23 March 2015.

[Paul Farrelly]

I thank the Secretary of State and also say how much I and all my Back-Bench colleagues will miss the real gentleman who was Charles Kennedy.

Part 3 of the Act includes the power to devolve further existing taxes as well as creating new ones. Just so that we know where we stand following the election, will the Secretary of State update the House on what further taxes the emboldened Scottish Government have asked to be devolved and which requests he is minded to grant?

[David Mundell]

The hon. Gentleman will know from the Second Reading debate on the Scotland Bill that there was some uncertainty on the SNP Benches about whether proposals would be brought forward to put in place the SNP’s previous policy of full fiscal autonomy. I now understand that such proposals will be brought forward, but only on the basis that other parties with a real interest in Scotland will vote them down.

Oral Answers to Questions

Paul Farrelly Excerpts

Wednesday 11th March 2015 Commons Chamber

[The Prime Minister]

I totally agree with my hon. Friend. The hospice movement is another good example of something that provides vital health and social services in our country but is not necessarily owned and operated by the NHS. I am a parent who used a hospice in Oxford regularly, and I was absolutely amazed by the brilliant work they do. We have allocated over £100 million of capital funding to hospices since 2010, and that is in addition to the £10 million for children’s hospices. I would welcome more NHS money being made available to hospices, as he says, and I think that the Greater Manchester decision is a way of ensuring that decisions are made between local authorities and the NHS and are made closer to the patients who they are serving.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

A leaked NHS report shows a looming deficit of £200 million in Staffordshire in three years’ time. Last year, 10 more of these reports were commissioned into distressed local health economies around the country, and yet, after repeated stonewalling, health Ministers are now saying:

“Consultancy firms were not commissioned to produce reports on the local health economies, as described in the question”.

May I ask the Prime Minister why, election or no election, the Government are engaged in a cover-up of what lies in store for large parts of the NHS around the country?

[The Prime Minister]

There is a pattern, which is that Labour MPs in Staffordshire are determined to try to frighten people about the future of the NHS, and they are the last people who should do that after the appalling mess they made in Mid Staffordshire. We are seeing £12.7 billion more money going into our NHS and a strong future for the NHS in Staffordshire that will be continued as long as I am in this place.

Higher Education Funding

Paul Farrelly Excerpts

Thursday 8th January 2015 Commons Chamber

[Mr Bailey]

I understand that my hon. Friend is due to speak, so although I will draw on his report, I will not pre-empt him by discussing its conclusions.

The motion mainly deals with the policy’s public spending and budgetary aspects, but it is important to recognise that we are not just talking about money. Higher education is vital to the economy of this country and to our society. It is an £8 billion export earner and attracts students from all over the world, because British universities consistently feature at the top of the rankings of world universities. In addition, universities drive and sustain economic growth in their immediate local economies, which are often in some of the most deprived parts of the country.

For an individual going to university, such an education is a potential path to personal fulfilment, and of course an economic advantage. Various estimates of graduate earnings show a minimum of something like £150,000 earned by a graduate over their lifetime over and above what they might expect had they left school after A-levels, and many estimates show more.

The Treasury estimates added benefits from taxes earned, and further benefit to employers through productivity gains. In short, higher education in this country is a success story that needs to be sustained, and it is crucial to reinforce Britain’s position in a global economy that is becoming ever more competitive.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

I congratulate my hon. Friend and the Business, Innovation and Skills Committee on its report. Clearly, the size of student loans reflects in great part the size of fees. I have read the Government’s response to the consultation in which they state that they have

“no current plans to initiate a formal review of the sustainability of the student loans system in England.”

That means that there are no formal plans for a review of fees. Does my hon. Friend think that that is right or responsible?

[Mr Bailey]

My hon. Friend, as ever, touches on the key issue underlined in the Committee’s report, and I will address that issue in due course.

As I was saying, higher education is a success story and vital for our economy, our society and the aspirations of millions of young people in the country. To underpin it we need a funding system that enables it to respond to the demands that will be placed on it by outside pressures, and to sustain its role as a driver of social change. The current funding system is based on recommendations in the 2010 Browne review and subsequently implemented, with some changes, in 2012. The key change was to replace direct Government funding of university teaching by a fees-based system payable by individual students on the basis of Government loans through the Student Loans Company, capped at £9,000. Those fees are to be repaid after graduation once a salary of £21,000 has been reached, over a period of 30 years.

There were short-term benefits to that model. It removed the cost of funding from public accounts, except for those costs that would have to be written off through under or non-repayment in the future—technically known as the resource accounting and budgeting, or RAB, charge. That model benefited the universities because it led to an increase in funding at least in the short term, and it benefited taxpayers because there was a drop in public subsidy per student of something like 5%. The benefit to the student is far less clear. Although the system delays payment for education until later in life and is income-contingent, the Institute for Fiscal Studies estimates that the average debt per student will be more than £44,000 for a combination of tuition fee and maintenance loans. In its report the Higher Education Commission stated that focus groups demonstrated a low level of awareness among students about that issue and its potential implications for them.

--- Later in debate ---

[Mr Bailey]

Far be it from me to intervene in the exchanges between the Front-Bench teams on this point, but I stand by my earlier point: when this response was made, it was done on the basis of evidence submitted on the pre-2012 model.

[Paul Farrelly]

Let me come to the Select Committee’s aid. Does my hon. Friend recognise that it is not only his Committee that has found the system to be unsustainable, but the former adviser to the right hon. Member for Havant (Mr Willetts) when he was a Minister, Nick Hillman, who said that the Government had got their maths wrong? He is now the director of the Higher Education Policy Institute and he said in March last year:

“The government has got it wrong and therefore there is a big funding gap and something has to be done about it.”

[Mr Bailey]

I agree. What I find odd is that Ministers will pray in aid a body such as the OECD, but refuse to recognise the overwhelming consensus of opinion of experts across the academic and economic sphere in this country that the system is unsustainable.

So far, the Government’s approach has basically been to say that the figures on which the estimates are based are essentially projected hypothetical figures, which could be altered if macro-economic conditions change. I certainly accept that that is absolutely true in broad terms. One point quoted more often than others is that if graduate incomes increase, it will substantially alter the projected potential deficits and increase in RAB charges.

The trouble is that it is possible to look at a whole range of economic variables, many of which might work in the other direction. Let me cite a couple of examples off the top of my head, but there are many others. First, if the cap in student numbers is removed and we have a larger number of graduates coming on the market as a result, that could further depress the starting salaries for graduates to a lower level than before. That could also have a significant impact on future RAB charges. If the Government had to borrow money at a higher rate than applies at the moment in order to re-lend, that, too, could considerably alter RAB charges.

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[Mr Binley]

No, not patriotism; I meant patronage, and I am glad that my right hon. Friend has pointed that out. I will now continue to speak according to the terms of the motion, Mr Deputy Speaker, which I am sure will delight you.

My colleague—indeed, I shall use the term “hon. Friend”—the Chairman of the Committee said that he would concentrate on wider issues than that of the money itself. I want to concentrate on the issue of the resource accounting and budgeting charge, the money and the black hole that the charge is producing for future generations.

[Paul Farrelly]

I realise that pinning down the RAB charge is rather like Phil Taylor—the legendary darts player who comes from my constituency of Newcastle-under-Lyme—throwing darts at a moving board, but does the hon. Gentleman agree that, with 45% of student debt expected to be written off in the future, the current system is really not working for students or for the taxpayer? Even in this age of austerity, lower fees would lead to the recovery of more debt, as well as wider potential economic benefits for students as they make their way in the world after university.

[Mr Binley]

I welcome the hon. Gentleman’s remarks. I shall say a little more about my views on the point he raises as my speech unfolds, but I will say now that every small business man in the land—I do not mean small in stature; I mean small in the sense of the size of the business—will know that if he lends money that he will not get back, he will have a cash flow problem that will create real trouble for him, if not now, then certainly in the future. I do not believe that Government money is any different in that respect.

The saga of higher education funding and support has rumbled on for a long time. Reforms in the 1990s created an expansion in higher education that widened participation, which, of course, is welcome. However, those reforms necessitated a change in the financial model for universities and those attending them. That is becoming increasingly unsustainable and could lead, as I have said, to a sizeable black hole in the Exchequer accounting, which the Government seem not to wish to recognise.

Many Government members are also my personal friends, and I am sure they are working on contingencies and do not have this in mind, because I would not ascribe to them the financial inadequacy that not recognising the problem would suggest. I hope my good friend the Minister will recognise that I do not think he is inadequate and I do think he will come up with the answers we require—that he will recognise the problems and consider very carefully the need for a proper review not only of the RAB charge itself and the loans surrounding it, but the way our universities work. I will talk about that as my speech unfolds.

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[Mr Binley]

I fear that they are enjoying my contribution immensely, but your job is another matter.

Any business would be seeking to tighten credit controls and to find ways of increasing productivity in the areas of service provision, and would talk to its bank about contingency arrangements that might be in put in place and how that might be done. We are simply appealing about that aspect, because in this respect our bank is the taxpayer. I wonder what the taxpayer might feel about our not considering those contingencies. I have made that point in a number of ways during these remarks, but it is a vital part of what this place is about.

How must we seek to emulate that good, solid business man who would take those steps? I would seek from the Minister a wish and plans to improve loan contracts, with special emphasis on repayment procedures. We now have the information to prove that the procedures are simply not good enough to reclaim taxpayers’ money, especially from overseas students, and we have to look at that. Secondly, we have to improve collection procedures—again, particularly in respect of overseas students. It is not the job of this House to finance the education of those people, even though doing so creates a better world; I understand that aspect, but it is still not our job to finance their further education for the nations that they come from—I do not believe that our bank of the taxpayer would disagree with that view.

I would also equalise the cost of university education through the nation. My hon. Friend the Member for Beckenham (Bob Stewart), who is no longer in his place, has already talked about the disparity in the fee situation between England and Scotland, which many people find unfair and unacceptable.

We need to increase university productivity. We should also consider compressing the time it takes for a student to complete a course. We could have courses of two years, or even 18 months if we are talking about golf course management. As a businessman, I despair at some of the degrees that come before me when people seek jobs, but that is another matter. We need to think about compressing courses and improving the productivity of a sector of our national life that has had it easy for too long. Members may think that there speaks a secondary modern schoolboy who did not have the opportunity to sit at the high table, but many people in this land believe that our university structure has been too aristocratic and too full of itself and that it needs to recognise that it is a contributor to our national wealth and well-being, and it is from that aspect that I come to this subject. We need to ensure that the Treasury finally improves contingency planning to reduce the impact of the deficit that we say will meet us in ever greater amounts as time goes by.

I have some questions for the Minister. I would welcome his confirmation on some of the details of our assumptions. In particular, what proportion is assumed to be used up by foreign nationals whose offspring would not have legal access to loans? What analysis has there been of the key variables affecting repayment rates, such as the future performance of the economy? A very long telescope is required for such a difficult job. None the less, we must have some contingency plans in place for worst-case scenarios, as they have not been built into the sector.

What work are the Government undertaking to understand more the nature of defaulters and, in the light of other options, the desirability of the continued expansion of higher education, particularly in the context of apprenticeships? We need to put even more effort—I do recognise how much the Government are doing in this regard—into technology apprenticeships and all those practical skills that the target of university entrance has demoted in the minds of many of our young people. I see too many people who think that the only objective in life is to go to uni. What a tragedy that is. We are increasing the number of people who see opportunities in engineering, technology and other such skills, but we are still not putting enough effort into that sector, and we are still not changing the view of young people that university really is the place to be.

[Paul Farrelly]

I take on board the hon. Gentleman’s points about engineering and vocational degrees. But does he also agree that at levels of £9,000 a year plus maintenance loans, many of those degrees at the likes of Imperial, which stretch over more than three years, make it less likely that people from more modest backgrounds will enter those professions, and therefore socially restrict the entry?

[Mr Binley]

That is absolutely correct, and it underlines the need for a proper review and perhaps the need to rebalance things. We should have not an across-the-piece £9,000 level of payment, but a rebalancing of the loans in association with what is required. This is a more complicated business than we first thought, and we need a review to take into account those factors to ensure that we have enough young people who can pay for my pension and the pensions of those who follow me and that this nation has the well-being to compete in an ever-more competitive world. That is what we are talking about. This arrogant view of universities as the place where we produce rounded men who talk with wonderful accents must end. These people who talk the Queen’s English sometimes do so to such an extent that they are not understood by those from a working-class background. I want all of our people to benefit. I want our nation to be serviced by people, from whatever background, with the skills and the ability to ensure that we maintain the well-being that I and other Members of this House have had the good fortune to enjoy.

Finally—you will be delighted to hear that, Mr Deputy Speaker—I want to mention the European dimension to this black hole. What prediction has the Minister made of changes and developments whereby equal access rights and obligations arise for EU nationals to borrow and study in the United Kingdom? If that is to be the case, will we find ourselves increasingly subsidising foreign nationals? I believe that charity and support must start at home.

I have every faith in my right hon. Friend the Minister. I know that he is an honest man and I look forward to his response with great interest, because I think that he might surprise us all and say that he agrees with many of our points.

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[Mr Denham]

That must of course be the case if graduates are working in non-graduate jobs. That is a bigger issue than higher education, of course, but the failure to use a graduate work force in graduate jobs is a huge drag on the economy and is one of the reasons why the RAB charges and debt write-off charges are as bad as they are.

Let me be clear that if we understand an honours degree as giving not just knowledge but technical expertise and the capacity to analyse, think independently, exercise intellectual judgement, take responsibility and innovate, we certainly need 50% or more of our population to be educated in that way. We do not have too many graduates, but too many graduates who are not receiving the most appropriate degree-level education.

One of the effects of Government policy over the past four years has been to undermine employer-based higher education. Foundation degrees, usually employer supported, have declined by nearly a half under this Government and employer-funded part-time degrees fell from 40,000 to 25,000 in one year. Out of the hundreds of thousands in university, fewer than 20,000 full-time students across the entire higher education system in all years of study are being funded by employers to do their degrees. The work force development programme, created when I was a Minister, was shut by the coalition, even though it alone was creating 20,000 employer co- financed degrees a year by the time of the last election.

There is much that is good and much that is excellent in the English higher education system and we do not need to change all of it, but we need to make changes that increase the diversity of routes to study and enhance employer engagement with delivering higher education. When we talk about funding higher education, we need to think about how we deliver a better system.

Let me make one point about the long-term sustainability of the system. The Business, Innovation and Skills Committee has done an excellent job and I will not go over that ground, but since then we have had the latest fiscal responsibility report from the OBR, which makes interesting reading. Ministers justified heavy cuts in teaching funding as part of a deficit reduction programme, arguing that we should not put the costs on to future generations. The Chancellor said in 2010:

“If we do not deal with these debts and do not have a credible plan, it will be our children and grandchildren who are saddled with the debts that we were not prepared to pay.” —[Official Report, 20 October 2010; Vol. 516, c. 989.]

The leader of the Liberal Democrats said:

“This strikes me as little short of intergenerational theft. It is the equivalent of loading up our credit card with debt and then expecting our kids to pay it off.”

The recent OBR report underlines just how the debts we are building up now will hang around the necks of graduates and non-graduates in years to come. The OBR estimates that additional net debt arising from new loans will reach nearly 10% of GDP in the late 2030s and 2040s. That debt brings cost. Some debt will have to be written off after 30 years and after 2046, when that kicks in, it will leap dramatically to 0.25% of GDP. Graduates will be making cash repayments of about 0.45% of GDP in the same period and the Government will be paying interest on that stock of debt that the Library estimates at 0.3% of GDP. Many of those costs fall on taxpayers as a whole, not just on graduates.

There is a lot of uncertainty about the figures, but those are the best we have. They tell us that in about 30 years, the public and private cost of paying for the regulated debts will be around 1% of GDP. None of that will fund anybody going to university. According to the OECD, in 2010 the UK spent only 1.3% of GDP from public and private sources on higher education and at that time little was being spent on the cost of debt. The simple conclusion from the OBR is that the policies of the Government are pre-empting a massive share of future national wealth being used to pay for their high-fee, high-debt priorities and not being available to fund future higher education. It is the opposite of what Ministers claimed and it is loading debt on to future generations in a way that is unfair and unsustainable. That is my answer to those who say that we should not worry about RAB charges as they are all technical: there comes a point at which these debts have to be paid and when they do, they will take money out of the national economy that will not be available to pay for higher education.

As for the alternative, I have set out my views over the past year on a number of occasions and, given your remarks, Mr Deputy Speaker, I shall make just two brief observations. Let us not deny that this started under the Labour Government, but it has accelerated under this Government, and we have developed a one-size-fits-all higher education system that is entirely focused on 18-year-olds studying for three years away from home for a residential degree. That has been at the cost of part-time education, at the cost of employer co- sponsored education and at the cost of mature student study.

In a constituency such as mine, where even today relatively few young people go to university, we are closing the door on every single person who did not get a chance to go to university by saying that if they did not do it when they were 18 or 19, they cannot afford it, it will not be flexible, it has to be done over three years, they cannot study part time, they cannot do it intensively and all the rest of it. That is a bad thing for social mobility. Of course, the fact that the move towards younger people from deprived backgrounds going to university has continued is welcome, as many of us said at the time, but we must consider the whole picture if we want to see what is happening.

Of course, we have a difficulty in that there is no new public money for higher education so we will have to do something within the skin that we have. The good news is that money, public and private, is wasted hand over fist in the current system. Every year, billions of pounds are borrowed with the intention of writing it off. The RAB charges essentially mean that almost £1 in two is written off. We have the most wasteful, or at least the most expensive, model of higher education in the three-year residential degree. We are by far the outliers in the OECD as regards the extent to which our higher education system is based on a three-year residential degree for young people. Nobody else graduates so many young people so expensively in that model at the moment.

[Paul Farrelly]

I fully appreciate the point that my right hon. Friend is going to make, because I have read all of his work. Germany, to take the example of one of the most successful economies in the world, does not have the levels of fees that we do, so what is Germany doing so wrong that we are doing so right?

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[Mr Denham]

We should therefore not say that there is a simple model to pick off the shelf from somewhere else, but, as I shall say in a moment, we should pick up the elements of our system that work and take elements that work from other systems. We could even invent things of our own that are appropriate to our needs. We have the most expensive model of higher education. Ten years ago, when we first aimed for 50%, very few people, including Labour Members, assumed that the expansion would be done through having so many young people in such an expensive model of higher education.

Because teaching funds have been deliberately cut, fees are higher than would otherwise need to be the case. The private cost has risen, which is important because we should be stewards of what happens to people’s private money just as much as we are stewards of public money. Those who repay do not just repay their own course costs. Their fees help to subsidise research and to pay the fees of those who will never repay in full. I predict that there will be a point at which those graduates kick up against the bills they are being asked to pay for other people.

That is wasteful because the introduction of increased fees has caused politicians on both sides of the House to introduce new elements of public spending that do not teach students anything—Government’s of all parties have made maintenance systems more generous. The current Government required universities, under the Office for Fair Access, to put back 30% of all fees above £6,000 into widening participation, much of which was in fees and bursaries of completely nugatory value, which does not encourage universities at all—they just make universities compete for the same students. We have built waste into the system because politicians have been afraid of the consequences of their decisions. There is huge potential to use public and private money more efficiently to deliver a better system.

I have had a lot of support from the House of Commons Library, for which I am very grateful. Apart from my colleagues, one of the things I will miss most about being a Member of the House is the excellence of the House of Commons Library staff. I asked them to look at a model that would retain current levels of public spending; maintain institutional income to the sector from public and private sources; protect low-income students, so that no one in future would pay as much as people pay today, whatever the mode of study; have more intensive and flexible two-year and part-time courses; and have more employer-funded courses. I asked the Library to consider a system in which 70% of students do the traditional three-year residential degree and 30% study more intensively, have employer-sponsored courses and so on.

I also said to the Library, “Let’s be radical. Let’s spend public money on higher education to teach students something. Let’s strip away as much as we can of the money that is not spent on teaching students something.” That has the effect of reducing fees dramatically and reducing the cost of debt cancellation. In the spirit of my idea of keeping what is good, I said, “Let’s keep the current system that allows students to choose the university they want and take their resources with them—let’s not go back to a fixed allocation of numbers.” Having created a much larger fund for teaching, I would grant every English student a student entitlement that goes to the university that accepts them towards the cost of their fees.

In summary, in my model, public spending is at current levels and university sector income is unchanged, but spending on teaching increases from £0.7 billion to £5.5 billion. RAB charges fall by £3 billion a year. The student entitlement for each student, irrespective of the type of course they do, is £15,000, meaning that fees at full-cost universities, which currently charge £9,000 a year for a three-year degree, would fall to £4,000 a year. A two-year intensively studied degree costs just £4,500 in total—the student would probably study from home. Employers could co-sponsor a degree for an average contribution of £5,000 towards fees, less than typical recruitment and retention costs for a graduate. The same number of people would graduate because intensive study means fewer students at any one time. Spending per student would rise by 13%, an immediate and important boost to university finances.

More graduates would pay for their course in full. Let me be clear that I happen to believe that that is morally right: if we ask people to take on a debt and buy something, they should pay for it in full. For every mode of study, average lifetime payments would be less than they are today. If under that new much lower-cost system the higher-earning graduates—the City high-fliers—were paying too little, there would clearly be scope to introduce a free-standing graduate tax on the highest earnings, which could provide a useful fund for reinvestment in higher education teaching and research.

[Paul Farrelly]

I trust my right hon. Friend’s expertise, rigour and figures, but for the benefit of hon. Members, has he had his figures verified independently, for example by the House of Commons Library?

[Mr Denham]

I take responsibility, as all hon. Members must, for the use of those figures, but I have done my very best to ensure that they and the modelling have been done by the House of Commons Library, using the simplified higher education model produced by the Department for Business, Innovation and Skills.

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[The Minister for Universities, Science and Cities (Greg Clark)]

We have heard many good words to inspire us in what has been, as many Members have said, an excellent debate. The fact that three of the Members who have spoken will be leaving the House at the election invites us to pay tribute to the contribution they have made over the years. It could be, of course, that more than three may find themselves leaving the House, but three, at any rate, are planning to leave.

I am grateful to the Backbench Business Committee for granting us the opportunity to have this debate, and to the Select Committee, several of whose members have spoken. They have done a valuable job and I echo the tribute paid by my predecessor, my right hon. Friend the Member for Havant (Mr Willetts). They have an important job to do in scrutinising the implementation of the reforms to student finance. As the Chair will know, the Government have rightly adopted many of its specific recommendations, for example on continuously improving the forecasting methodology and on targets for the Student Loans Company. In a different context, I told the Committee that my experience in this House has always been to listen very carefully to the advice of Select Committees. I will always do so.

As the new system is gradually exposed to the clear light of how it works in practice and not in prospect, it is becoming increasingly plain that it is a very considerable achievement and a source of confidence in our future excellence and prosperity. My right hon. Friend the Member for Havant has reason to be very proud of his achievement in carrying through the reforms.

[Paul Farrelly]

Will the Minister give way?

[Greg Clark]

I want to make some progress. I have the least time of all, which is appropriate in a Backbench Business debate. However, if I have some time later, I will of course take an intervention.

Since the Committee took its evidence, which the Chair will acknowledge was about a year ago, the evidence in favour of the positive effects of the reforms has been mounting. We have discussed whether to undertake a review. I encourage the successor Select Committee in the next Parliament to undertake a stocktake of the system in practice. I suspect that it will draw the same conclusion as I have.

In the words of the OECD, which is widely regarded as the leading authority in the world on comparing education systems, the UK is one of the few countries that has figured out a sustainable approach to higher education finance and the investments pay-off for individuals and taxpayers:

“among all available approaches”—

the OECD includes 34 countries—

“the UK offers still the most…sustainable approach to university finance.”

In responding to the debate, I want to summarise how the advantages are clear for students, the taxpayer and universities.

The system is good for students, because it has allowed more of them than ever before to fulfil their dream of a place at university. Many Members have acknowledged the importance of achieving what has previously been beyond the reach of many of our fellow citizens. This autumn, for the first time in the history of this country, half a million applicants were placed in higher education. The head of UCAS put it this way just last month. It is, she said,

“a stunning account of social change, with the most disadvantaged young people over 10 per cent more likely to enter higher education than last year and a third more likely than just five years ago – 40 per cent more likely for higher tariff institutions.”

Despite predictions to the contrary, students have seen that going to university is an exceptional investment. Graduates earn on average £9,000 more than non-graduates. In the past year, the graduate premium for young graduates—those under 30—has risen to £6,000. Graduates are half as likely to be unemployed as non-graduates and two-thirds are in highly skilled jobs, a proportion that has been rising substantially as we recover from recession. Students know that they will pay nothing up front and that they will pay back only if and when they can afford to do so. It is important to be clear to the House that for a graduate earning £30,000, a high salary compared with the population as a whole, for the benefit of a three year degree they will repay £2.22 a day. That is an eminently reasonable reflection of the value they obtain from that degree. It is no wonder that students are responding with such alacrity—more than ever before.

Let me say why the system is good for taxpayers, as the OECD director said. The reforms have made it possible—without them it would not have been possible—to abolish the cap on student numbers. That is overwhelmingly in our national interests, as I think most Members would acknowledge. The earning power of graduates means that it is not just the graduates themselves who gain—the Exchequer gains hundreds of thousands of pounds over a graduate’s lifetime of employment. That is many times more than even the most conservative estimate of the so-called RAB charge. Andreas Schleicher of the OECD said that what one loses through non-payments is small versus the tax revenue uplift from more students earning more in work and that this premium is expanding.

It is important to emphasise—it has not been clear in some of the contributions—that this subsidy is nothing like a commercial loan, in which any debt that is written off is somehow a mistaken lending decision. It is not like that. It is a reflection of a set of deliberate policy choices to write off, for example, outstanding debt after 30 years, and to repay at 9% above earnings of £21,000. It is highly progressive, according to the Institute for Fiscal Studies: the lowest earning 10% get a 93% subsidy and the highest earning 10% get a 1% subsidy. For the record, I am perfectly content with all the policy choices that produce the published RAB charge.

[Greg Clark]

I have been very clear on this. I am not persuaded that there is any reason to increase the ceiling. I think the ceiling at £9,000 is reflective of the costs of providing a good education to people.

[Paul Farrelly]

Will the Minister give way?

[Greg Clark]

Let me make a bit of progress, but I will come back to the hon. Gentleman.

As my right hon. Friend the Member for Havant said, the published RAB charge, as it is known, is notional and, in fact, ultra-conservative. I mentioned—to the mystification to the OECD, I might add—that it takes no account of the dependable tax revenue uplift that the Treasury takes. It also assumes, as my right hon. Friend said, that the Government’s cost of borrowing is 2.2% a year in real terms. In practice, it has been closer to 0% in real terms. The student loans system is therefore a good deal for students and a good deal for taxpayers.

[Paul Farrelly]

The Minister speaks of confidence in the system. Does he share the widespread concern across the country that other Government changes are making it more difficult for students to cast their verdicts on the fees and funding system they have inherited? The changes to electoral registration rules mean that universities cannot register their students en bloc. For example, at Keele university in Newcastle-under-Lyme just 144 students registered last month, and we have lost nearly 2,600. Is he concerned about the likely effect on student participation and their ability to give a verdict on the system in which he is so confident?

[Greg Clark]

Every Member takes great pains to encourage young people to register to vote. Through the online registration system, it is easier than ever, and I think that everyone in the House, over the next few months, will encourage people in schools and universities to register. The hon. Gentleman mentioned the university of Keele, but he has to accept that without the reforms that my right hon. Friend the Member for Havant introduced, there would be fewer students going to Keele university in the future than is now possible. That would be bad for the university, which I had the privilege to visit just before Christmas, and bad for the hon. Gentleman’s constituents, who benefit substantially from the presence of that fine university.

The system is excellent for universities too. It is an extraordinary achievement, at a time of financial stringency, that, according to the Institute for Fiscal Studies, the resources available to universities for teaching have on average increased significantly. It estimates an increase from £22,000 under the previous system to about £28,000 per student under the current system. The Institute for Public Policy Research, which tends towards the left in its assessments, said that the main strengths of the current system are that it has increased the resource flowing into higher education, which has enabled institutions to maintain or enhance their level of provision. This led the OECD to conclude that the UK is probably the only country in Europe, and one of the few in the world, to be able to support and sustain a big increase in participation and yet raise unit costs. No wonder that recruitment increased last year for all university types with higher tariff providers to record levels.

Our system of university finance offers extraordinary opportunities to students, universities and the taxpayer, which is why it is mystifying that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) called for a review. It was not clear to me in his response whether that was the Opposition’s new policy. They have had four and half years to come up with a policy, but now it seems to be a review. Just a few weeks ago, he was speculating vaguely, just as the success was being recognised, about turning turtle on it. It is completely unclear what his policy is. Is it a review or a change? He has previously said that fees would be reduced by £3,000, but that would blow a £3 billion black hole in the public finances and force universities to go cap in hand to the Treasury every year just to maintain their funding. It would decimate that stunning social progress I referred to earlier, since it would obliterate the funds from the access agreements, which will be worth £718 million next year—I was surprised that the right hon. Member for Southampton, Itchen (Mr Denham) did not think they were worth having—and impose pressure to cut student numbers. The IPPR said that the pressure to cut student numbers would crowd out students from disadvantaged backgrounds.

Ukraine (Flight MH17) and Gaza

Paul Farrelly Excerpts

Monday 21st July 2014 Commons Chamber

[The Prime Minister]

As I said earlier, I spoke to the Israeli Prime Minister last night, and while I said that we believe in Israel’s right to defend itself, we believe that it needs to exercise restraint, to avoid civilian casualties and to find ways of bringing this to a close. But the best way to bring this to a close is the fastest way, and that is for the rocket attacks to stop.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

The revelation to waiting cameras of the previous advice to the Government about the possible effect of sanctions against Russia on the City of London, gave the dreadful impression that the UK, too, was just following its own narrow interests, when, frankly, London would be much better off without much of that tainted Russian money. After this latest abominable act, is it not time for much harsher financial sanctions against Russia, including the denial of use at all levels of international payment systems in London, Frankfurt, Paris, New York and all across the world?

[The Prime Minister]

These are all things that can be looked at as we look at tier 3 sanctions. But when it comes to Britain’s negotiation within the EU over these issues, although, as the hon. Gentleman says, there are a lot of Russian money and Russian businesses in Britain, Britain is not the back marker in arguing for tougher sanctions; we are usually in the vanguard, with the Poles and Baltic states, arguing that we need to give a strong, clear and predictable lead on these issues. It is not those interests that are holding us back.

Oral Answers to Questions

Paul Farrelly Excerpts

Wednesday 2nd April 2014 Commons Chamber

[The Prime Minister]

I thank my hon. Friend for what he said about the cut in beer duty, which is the second in a row in the Budget. It is about making sure that the industry creates jobs and about supporting our pub trade. It was noticeable that straight after the Budget Marston’s announced 3,000 additional jobs. We want to look very carefully at what is happening in tied pubs and at the activities of some pub companies. It has been debated in the House. We are looking very closely at what more we can do to make sure there are fair outcomes for Britain’s publicans and Britain’s pub goers.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

What plans does the Prime Minister have to reform higher education fees and loans so that the system works for students, works for all universities and works for the country?

[The Prime Minister]

The biggest plan we have in this area is to expand the number of people going into higher education by taking the cap off the numbers who can attend. Our plans on fees and repayments are clearly set out. It is encouraging that they have not put people off going to university, nor have they put people from low-income backgrounds off going to university.

I would make this point to the hon. Gentleman. Someone said in June 2010:

“A graduate tax would replace upfront tuition fees…I want to consult widely before publishing detailed plans later this year.”

That was the Leader of the Opposition, in June 2010. I know we are dealing with a blank page and an empty head, but for heaven’s sake, get on with it.

Oral Answers to Questions

Paul Farrelly Excerpts

Wednesday 30th October 2013 Commons Chamber

[Mr Maude]

My hon. Friend has taken a close interest in this matter and made some extremely robust and helpful comments. We take contractor security extremely seriously, and following this breach, which took place in the United States, we are obviously redoubling our efforts to ensure that it is as secure as it can be.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

When assessing the leaks from Edward Snowden and the reporting by newspapers, including The Guardian, will the Minister and the Government take clear account of the statement from President Barack Obama last week that some of the activities of the National Security Agency in the US raised legitimate questions for friends and allies?

[Mr Maude]

I hear what the hon. Gentleman says, but I would just like to make this point about GCHQ: it comprises very, very dedicated, hard-working Crown servants who do incredibly valuable work to protect our safety and security every day of the week, and they deserve solid support from right across the Chamber and from both Front Benches. I hope that that will be made absolutely clear.

Syria and the Use of Chemical Weapons

Paul Farrelly Excerpts

Thursday 29th August 2013 Commons Chamber

[Mr David Anderson (Blaydon) (Lab)]

I have spent a lot of time this summer working with a veterans group in Tyneside called Forward Assist, which works with people who have left the forces and fallen through the cracks in society. Talking to those men and women made me realise what we ask them to do. We do not just ask them to go around the world and to be prepared to die for us; we also ask them to be prepared to kill for us. We ask them to do abnormal things. Most people would run away when someone was firing at them, but we ask those people to run into the gunfire. Those people are our constituents and the husbands, wives, sons and daughters of our constituents. They say to us clearly that if we are going to commit them to such action again, we must do it on the very best evidence. We have heard today that we do not have that evidence or the certainty that we need.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Does my hon. Friend agree with the many Members who have expressed concerns about the apparent timetable for action before the recall of the House? Does he agree that being seen to act through cruise missiles or airstrikes should not be confused with taking more cautious but effective action against the regime?

[Mr Anderson]

It is clear that we are being driven by a timetable that has no basis in anything other than appeasing America, which says that the red line that it drew last year has been crossed. We saw the same thing 10 years ago when we were driven by the deadline of an American President—the deadline for him to get re-elected in 2004. We were wrong to follow America then and we would be wrong to follow it now.

The Labour amendment helps to bring clarity, but I make it clear to my Front Benchers that if the amendment is passed, it will be no more than a checklist. It will be a job sheet for the Government and the Opposition to work through so that they can say to the people of this country that they have the support of the United Nations and that there is more clarity and better evidence before they bring us back here to vote again. I want to make it very clear to my Front Benchers and to Government Front Benchers that even if the motion goes through amended, it will not be an automatic green light for anybody in this House to say that we are supporting military action. It will be a statement that we will come back in a given period with good information and good evidence, that we will have another debate and that we will then decide whether to support military action.

The ghost of Tony Blair haunts this debate, but the ghost of Hans Blix haunts it even more. We should have listened to him in 2003. We should have given him time and waited. We ignored the one independent voice in the arena. We should not do that again. We should be very clear about what we are doing tonight. We are giving the Government nothing more than the remit to improve what is happening. We are not giving the green light for any military action whatsoever.

Oral Answers to Questions

Paul Farrelly Excerpts

Wednesday 19th June 2013 Commons Chamber

[Mr Hurd]

That is absolutely the right question, and part of the answer is that in the future any new proposal for creating a public body will have to get the approval of the Minister for the Cabinet Office, and I think I can reliably inform the House that the answer would likely be no. Furthermore, in the future, every public body will be subject to triennial reviews set up to justify their continued existence. It is about changing the culture that we inherited from the last Government.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

One set of so-called quangos that was immediately abolished were the very accountable regional development agencies, and since then regional assistance has noticeably been a pale shadow of what it was. What steps is the Cabinet Office taking to audit the effectiveness with which the subsequent bodies—the regional growth fund, the local enterprise partnerships—are delivering regeneration to areas that desperately need it, such as mine in north Staffordshire?

[Mr Hurd]

I am puzzled by the hon. Gentleman’s question, particularly in relation to exactly whom the RDAs were accountable to. I do not think that anyone is weeping for their absence, and I think that he should give LEPs a chance. My impression is that they are doing increasingly valuable work. We have new city deals and a whole new era of localism, with more and more decisions being taken locally and accountable to the communities they serve. I hope he will welcome that.

--- Later in debate ---

[The Prime Minister]

My hon. Friend makes a very important point. That is why section 106 agreements exist. We need to keep this under active review, particularly with a view to how we are going to handle fracking and shale gas, for instance, where we might need a simpler and more direct mechanism to make sure that communities feel the real benefit of things that benefit the economy overall.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Q4. On Monday, the Milburn report showed that the proportion of students from state schools at elite Russell Group universities is now lower than a decade ago. Meanwhile, another report, Project Hero, is secretly considering lifting interest rates on previous graduate loans. After £9,000 tuition fees, does the Prime Minister think such another breach of faith is more likely to encourage students from less wealthy backgrounds to apply to university, or discourage them?

[The Prime Minister]

I will make two points to the hon. Gentleman, because this is an important question. First, the number of children from disadvantaged backgrounds going to university is higher than it has ever been, so that is a good step forward. Secondly, if we want to get children from disadvantaged backgrounds into universities, we should be supporting things like the academies programme and free schools. We saw in Labour’s announcement this week that they are now saying that they support free schools. That is great. The trouble is they then went on to say that they are not going to allow any more of them. Then they said this, which is quite extraordinary:

“What we will have is a new academies programme including parent-led academies, really good teacher-led academies like Peter Hyman’s school in east London”.

They want more schools like that. The shadow Education Secretary is nodding. There is only one problem: that school is a free school. What a complete shambles.

Royal Charter on Press Conduct

Paul Farrelly Excerpts

Monday 18th March 2013 Commons Chamber

[The Deputy Prime Minister]

The right hon. Gentleman makes a strong case, and that course of action was recommended by Lord Justice Leveson as well. It is not covered by this cross-party agreement, but it is one of the issues that we will need to sweep up.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Will the Deputy Prime Minister give way?

[The Deputy Prime Minister]

If the hon. Gentleman does not mind, I would like to conclude my remarks.

With these protections, the royal charter represents the best possible outcome.

--- Later in debate ---

[The Deputy Prime Minister]

Hallelujah! A question that was not about Europe. I do not think that it will make any difference whatever to the status of the statutory entrenchment governing the circumstances in which the royal charter could be changed.

[Paul Farrelly]

rose—

[The Deputy Prime Minister]

If the hon. Gentleman does not mind, I will not give way. Many hon. Members wish to participate in the debate, and I want to conclude.

With these protections, the royal charter represents the best possible outcome. I want to pay tribute to the campaigners, the victims and the families, without whom none of this would have happened. Their ordeals forced us to sit up and take notice, but it has been their tireless efforts and remarkable determination that have kept up the pressure. Throughout the sometimes fraught political negotiations, they have remained steady and consistent, asking simply that we do the right thing.

Finally, I would like to commend Members across the House, and the Prime Minister and the Leader of the Opposition, for working across party lines to get this done. The truth is that this is not a victory for any one individual or any one team; it is a victory for working together, for putting narrow interests to one side and for sticking with it. Today we turn a page on the mistakes of the past and, finally, establish a proper independent watchdog to serve the British people while protecting our free press.

--- Later in debate ---

[Mr John Whittingdale (Maldon) (Con)]

I join those who have already congratulated the leadership and members of all three parties on achieving at the eleventh hour an agreement on a way forward. It is now more than six years since Clive Goodman and Glenn Mulcaire were convicted of unlawful interception of communications. The reverberations from that are still continuing, but what we know for certain is that the initial claim that it was one rogue reporter was completely untrue. We now have evidence to suggest that the claim that it was one rogue newspaper was also untrue. We await further developments, but we are now on the point of getting what was needed for at least that six years or, arguably, for far longer—a tough independent regulator of the press with real powers, able to carry out investigations. That is necessary to avoid any repetition of the abuses we have seen.

[Paul Farrelly]

rose—

[Mr Whittingdale]

I give way to my fellow member of the Select Committee.

--- Later in debate ---

[Paul Farrelly]

I thank the Chairman of the Committee on Culture, Media and Sport for giving way. After the journey we have all been through, does he agree that to command public confidence, what we need now for the new regulator is a new chairman and also a new chairman of the code committee so that we can have a clean break from the discredited past?

[Mr Whittingdale]

We do need a new tough regulator, and the appointments to it will be conducted under the processes now contained in the royal charter. There is a recognition body to be established that will make sure that those appointments are compliant with the requirements of the Leveson report.

I want to make sure that the House does not lose sight of the fact that although there have been terrible abuses committed by the press, we still need to recognise the vital role that the press play in a democratic society. The press have also been responsible for uncovering acts of corruption and abuse of power, and that does not apply only to the broadsheet newspapers: some tabloids have an equally honourable record in conducting such campaigns. As I think the Deputy Prime Minister said, we should recognise the vital importance of local newspapers, and ensure that whatever system we introduce does not add to the burden on them at a time when they are experiencing very difficult economic circumstances.

The majority of Lord Justice Leveson’s recommendations have always been the subject of agreement on all sides. Everyone agrees about the need for a tough, independent regulator. It may well be that the outside world will wonder why, in that case, it took until two, three or four in the morning for agreement to be achieved on what might appear to be a very small issue. However, I commend the Prime Minister for his recognition of the fact that even a small amount of legislation could—I repeat, could—be very dangerous. Certainly the suggestion of statutory underpinning caused real concern, and not just among people who were singing to the tune of the press. Organisations that are dedicated to fighting for civil liberties in this country and abroad also raised genuine concerns about the implications.

--- Later in debate ---

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

This whole debate began because the public felt that some of the press, not all of the press, were far too close to some politicians, not all politicians, and particularly to politicians in government. It began because the public felt that some of the press, not all of the press, were far too close to some police, not all police, in a way that was very corrupting. It also started because people were worried that some of the press would become all-powerful, leaving no pluralism among those looking after news and current affairs, which is a guarantee of real freedom and understanding.

In many years since the war, Parliament and Governments have perfectly properly and reasonably commissioned inquiries into the press. When the most recent scandals broke and the Prime Minister took his brave decision to announce that an inquiry would be carried out by Lord Justice Leveson, with the agreement of the Deputy Prime Minister and the Leader of the Opposition, it seemed to me that Parliament and the parties all agreed that such matters should be reconsidered as things had gone badly wrong. There was consensus; I have never known such strong consensus in this House as there was at the moment when Parliament said that we had to put our house in order.

I commend Lord Justice Leveson and those who worked with him on his inquiry, to which the three party leaders, I and many others gave evidence. Lord Justice Leveson came up with an extremely balanced report and its credibility is strongest because it is so well balanced. It did not come up with a draconian new regime to deal with the press, but understood the desirability of, the need for and the absolute imperative for a free press in this country while saying that we needed systems in place.

We had a bit of a debate in this place and in the media about what the structures should be and Lord Justice Leveson spent a large part of his time and conclusions on that subject. He was clear about two things, however. He was clear that there should be an independent self-regulatory system, and that that should be underpinned by statute. He made that explicitly clear and today, in a clever but appropriate way, we have ensured that there is a charter at one remove from legislation through which we can guarantee the new system and that is locked in by a legislative safeguard. I commend those who thought of the idea and I think it gets the balance right. There is underpinning in legislation, but the key document is a charter agreed by this Parliament and by all the parties in this place.

[Paul Farrelly]

Another advantage of today’s agreement is that the Defamation Bill, on which we have worked so hard, will be free to proceed. The amendments made by Lord Puttnam will be dropped, but another important amendment to the Bill raises the bar on the ability of corporations to use the chilling effect of libel law on legitimate investigative journalism and wholly helps the press. Will the right hon. Gentleman commit to supporting the retention of that provision when the Bill returns to the House of Commons?

[Simon Hughes]

I thank the hon. Gentleman, who is a journalist by training, for his work on the subject. One of the good things about today is that we liberate the Defamation Bill and enable it to become the law of the land. We have a very out-of-date defamation law. It has fallen into disrepute and one of the things that we will have done—I was going to mention it—is make sure that we do not clog up other legislation on which both Houses have worked very hard, and prevent it from becoming law—the Crime and Courts Bill, the Enterprise and Regulatory Reform Bill and the Defamation Bill. I hope we can now go on to get the legislation as right as is humanly possible in the remaining weeks of this Session.

There is a suggestion that some parts of our society should be outwith any legal construct. I do not think that has ever been accepted in this country, and when we have not seen adequate self-regulation, Parliament has intervened. We have done it in recent years in respect of doctors, solicitors and ourselves. We have taken complete self-regulation away from this place because we did not think we were doing the job properly, and The Daily Telegraph and others showed that we were not doing our job properly. I commend them for what they did.

We have always followed the adage of the old judge, “Be you ever so high, the law is above you”, and that applies to the press too. We have never had a press free from the laws of the land, but—returning to the intervention from the hon. Member for Newcastle-under-Lyme (Paul Farrelly)—the libel law, the defamation law, was not available to most of the public. It was available to the rich and famous, and very difficult for ordinary people to pursue. Yes, there is criminal law governing the press, and phone hacking was illegal under criminal law. That did not deal with all the complaints and all the problems that had arisen.

I, like others here, am one of the victims of those illegalities, but I do not think any of us here think that the problem was that we were getting it in the neck or that celebrities were getting it in the neck. We felt moved to act because people who were entirely out of the public eye suddenly found themselves entirely in the public eye, vilified, abused, misrepresented, traduced or publicly humiliated. It is people in the estates in Bermondsey and in the constituencies of all of us whom we are seeking to support, not because they do not need a free press—they do—but because on occasions the press had abused them without adequate remedy.

--- Later in debate ---

[Mr Nigel Dodds (Belfast North) (DUP)]

I am grateful for the opportunity to participate briefly in this important debate.

At the outset, it is right that we remember what has brought us to this point: the terrible abuses and suffering inflicted on the Dowler family, the McCanns and many, many others. Nobody in this country in the 21st century should have to go through what they went through. As a result of the action taken today, we hope that such abuses will not happen, but that if they do there will be appropriate, speedy and fair mechanisms in place to deal with them. Many hon. Members have referred to laws that are in place, in both criminal and civil law, to deal with such abuses. However, the law of defamation and the ability to take action in the civil courts for libel are not available to many people, because of the punitive nature of the costs and the fear that they may end up bankrupt. I am glad to hear that the right hon. Member for Hitchin and Harpenden (Mr Lilley) has had success in the civil courts, but many ordinary citizens, and even many with greater means than those in this House, have been prevented from getting justice because of their fear of the consequences of going to court.

We on these Benches have always believed that the Leveson report offers a balanced way forward. We did not subscribe to the view that it would impose statutory regulation of the press—far from it. I commend the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition, and all those who worked with them, for coming up with what I believe is a fair, balanced and sensible way forward. It is better that the House of Commons should speak with a virtually united voice on this issue, as that makes it harder for any section of the press to stand outside what is agreed, and that is extremely important. There has never been any question of any threat to the freedom of the press, and the freedom of the press is not endangered by what has been suggested here today through a royal charter.

[Paul Farrelly]

I commend the right hon. Gentleman and his party for their support. On that point, we congratulate ourselves today, but does he agree that the press itself sets up the regulatory arrangements and the press itself sets up the appointment panel? The only requirement is to demonstrate that the people appointed to the panel are independent of the industry, whatever that means. Must we not be vigilant all the way through, so that we do not repeat history and allow regulatory capture from day one?

Mid Staffordshire NHS Foundation Trust (Inquiry)

Paul Farrelly Excerpts

Wednesday 6th February 2013 Commons Chamber

[The Prime Minister]

I thank my hon. Friend for what he has said. He did call repeatedly for a public inquiry, and he was right to make such a call. That is reflected in the report, and he can read it today. What was required was not an investigation of the failure in the hospital, but an investigation of the wider systemic failure. For instance, why was this not brought to light more quickly? What was the role of the regulator? What was the role of the Nursing and Midwifery Council? All that is laid out in the report.

However, I think that there was another very profound reason for holding a public inquiry, although I know that it will not satisfy some of the victims. They feel incredibly strongly, and rightly strongly. These terrible things happened to their loved ones, but where is the criminal prosecution? Where are the people who have been struck off? There has not been proper accountability, and there is not proper accountability in our system. A public inquiry can look to the future and say, “Here’s what needs to change,” so if this ever happens again—I hope to God it does not—there will be much better accountability than the people of Stafford have had.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

The tragic events at Stafford are having a continuing impact on both management and care at the University hospital of North Staffordshire. A and E closures at Stafford have caused major strains, for example, and our new hospital was already struggling as a result of bed closures ordered a few years ago by Sir David Nicholson’s travelling troubleshooter, Antony Sumara. For reasons of patient safety, our hospital’s chief executive last year rightly reopened many of those beds to cope with the added A and E pressures. That has only added to the financial pressures, however. When rather distant bureaucrats at the Department of Health and the regional health authority play their part in responding to those pressures, will the Prime Minister ensure that they do so with sympathy and local understanding and put patient safety and care at the heart of the response?

[The Prime Minister]

I agree with the hon. Gentleman that when those above and beyond a hospital are making decisions on questions such as whether the hospital should become a foundation trust, they must look very closely at quality of patient care, not simply financial and other metrics. That is at the heart of what Francis is saying. The CQC believes that the hospital is currently providing an adequate standard of care. Only last week it carried out an unannounced inspection and it was content with what it found. Recent reports have been disturbing, however, and there is important work still to do in this hospital as in others, because “adequate” is never good enough; they have to strive to be better, and I know that that is what is going on.