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3 Nov 2009 : Column 732

Mr. Gordon Prentice (Pendle) (Lab): With the sale of 900 bank branches, might we see the Bank of China on our high streets?

Mr. Darling: At this stage, I do not know who is likely to be bidding for these banks, but, obviously, we will need to make sure that whatever safeguards we think are appropriate are in place. I make the general point, however, that the British financial sector is what it is largely because it is pretty international and, provided we have the right regulation and supervision, that will be good for us in the long run.

Mr. Brooks Newmark (Braintree) (Con): The Chancellor said in his statement that before we could reach a binding agreement with RBS we needed to carry out due diligence on the assets. What was the level of write-down after, as opposed to before, in respect of RBS's balance sheet on those assets?

Mr. Darling: I said that we and the FSA had to carry out due diligence; the FSA has carried out that due diligence. As to write-downs, they will appear in the bank's accounts.

Rob Marris (Wolverhampton, South-West) (Lab): Canada has some of the biggest banks in the world, Canadian banks undertake both investment and retail banking, and the most robust banking system among the G20 countries during the world recession has been Canada's. What lessons does the Chancellor draw from that?

Mr. Darling: There are a number of points that could be made in relation to the Canadian economy, but on its banking system I repeat the point that I do not think it is possible to make the neat distinction between a simple bank and a complex bank and to assume that one will get into trouble and the other will not. That is why I take the view that we have to approach these things as they are, rather than as we might wish them to be.

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): There certainly will be concerns in Edinburgh about what this means for jobs in my constituency and other constituencies in the city, and I welcome the assurances that my right hon. Friend has given in that respect. What opportunities are there to build on what is happening, and to strengthen and bring innovation to the financial sector in Edinburgh-for example, through the suggested re-establishment of a Scottish-based bank-as part of the restructuring of the banking system resulting from these announcements?

Mr. Darling: My hon. Friend is right: both of us represent a city that is home to very large financial institutions, many of which in the non-banking sector are doing very well; that is an important part of the Edinburgh economy. Both of us are focused on the fact that, whatever happens, jobs are very important, because for the most part these are good-quality jobs that provide good employment. As we restructure the banking system-as we make it safer and better for people-jobs must be at the front of our minds, because that is very important for Edinburgh's prosperity.

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Higher Education

4.26 pm

The Minister for Higher Education and Intellectual Property (Mr. David Lammy): With permission, Mr. Speaker, I should like to repeat a statement made by my right hon. and noble Friend the Secretary of State for Business, Innovation and Skills about "Higher Ambitions: the future of universities in a knowledge economy", which we are publishing today and placing in the House Libraries.

The last 10 years have been a decade of outstanding achievement for higher education in this country. Talented people and enterprising institutions, backed by public investment and reform, have delivered the twin objectives of widening access and creating excellence. When the Government reformed the universities' fees, we were told that students, especially poorer students, would be put off applying. The exact opposite has occurred. A record number of students now attend university, and the gap between socio-economic groups has narrowed, not widened. For the first time, 1 million students will start their studies this year, and the quality of student academic achievement is high. Drop-out rates have fallen by a fifth, and the number of firsts has doubled. This demonstrates that wider opportunity is not the enemy of excellence, as opponents of change have alleged.

We have a disproportionate share of the world's leading research universities. With just 1 per cent. of the world's population, we achieved 12 per cent. of the world's scientific citations. Institutions across the sector have contributed to this success-the newer universities, alongside the older ones. Public funding for both research and teaching has increased by more than 50 per cent. in real terms since 1997.

Universities have also developed new sources of income, and tuition fees are bringing £1.3 billion a year to boost the quality of a student's education. We should thank universities and their teaching staff, administrators and students for their outstanding record of achievement over this last period.

The strategy we are publishing today aims to set a course for an equally successful decade ahead, but new times and new conditions require some fresh policy choices and judgments. The coming decade will see public expenditure inevitably more constrained. Attracting the best students and researchers will become more competitive. Above all, it will be a decade when our top priority is to restore economic growth, and our universities need to make an even stronger contribution to this goal.

Able people and bright ideas are the foundation stones of a thriving knowledge economy. Producing both is what universities are all about, so in the next 10 years we will want more, not fewer, people in higher education, and more, not less, quality research.

Our first objective, therefore, is to ensure that all who have the ability to benefit can access higher education; there should be no artificial caps on talent. Our goal remains for at least 50 per cent. of 18 to 30-year-olds to enter university. We have made great progress in the number of people beginning a three-year degree at 18 or 19, but the challenge for the next decade is to offer a wider range of study opportunities-part-time study, work-based study, foundation degrees and study while at home-to a greater range of people. So we will
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encourage the expansion of routes from apprenticeships and vocational qualifications to higher education, and offer more higher education in further education colleges.

Inadequate information, advice and guidance at school still bars too many young people from fulfilling their potential. We will work with the Department for Children, Schools and Families to rectify that. To meet the social mobility goals in Alan Milburn's report, all young people must be encouraged to strive for challenging goals by teachers with ambitious expectations for them. Universities should also do more to reach out to young people with high potential. I want to make it clear that this Government will not dictate universities' admissions procedures, nor undermine excellence. All students must continue to enter higher education on merit, but I believe that merit means taking account of academic attainment, aptitude and potential. Many universities are already developing their use of contextual data, and we hope that all universities will consider incorporating contextual data into their admissions processes to assess better the aptitude and potential of those from less-privileged backgrounds. We are also asking Sir Martin Harris, who heads the Office for Fair Access, to consult vice-chancellors on improving access to the most selective universities, and he will report back in the spring.

The Government's second objective is for universities to make a bigger contribution to economic recovery and future growth. Knowledge-generation and stewardship in all subjects has public value and is important in its own right. It is vital, in particular, to creating wealth, through the commercial application of knowledge and preparing our people for employment. We have, therefore, decided to give greater priority than now to programmes that meet the need for high-level skills, especially in the key areas of science, technology, engineering and maths. New contestable funding will provide universities with the incentive to fulfil that priority. Areas where the supply of graduates is not meeting demand for key skills will be identified, and we will seek to rebalance this by asking the Higher Education Funding Council to prioritise courses that match the skills needs. We will look to business to be more active partners with our universities. Employers should fully engage in the funding and design of university programmes, in the sponsoring of students and in offering work placements. We believe that that is possible without compromising the universities' autonomy and educational mission.

Our third objective is to strengthen the research capacity of our universities and its commercialisation. The investment of the past decade has greatly strengthened the public science base, and we will continue to protect its excellence. That will require a greater concentration of world-class research, especially in the high-cost scientific disciplines. Research excellence is, of course, spread across a wide number of institutions and subjects. The challenge now is to develop new models of collaboration between universities and research institutions, so that the best researchers, wherever they are located, co-operate, rather than compete for available funds.

The Government's fourth objective is to promote quality teaching. The quality of education provided by our universities is generally good, but it needs to be higher. I welcome the action that universities are taking to raise standards in teaching and to strengthen the external examiner system. Students deserve nothing less. They will rightly expect to be better informed
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about how they will be taught and about their career prospects. We want the Quality Assurance Agency for Higher Education to provide more and clearer information to students about standards in our universities. Students' expectations and actual experience should be central to the quality assurance process.

Our fifth objective is to strengthen the role of universities in their communities and regions as well as in the wider world. Universities provide employment, enhance cultural life and offer many amenities to their surrounding communities. They shape and communicate our shared values, including tolerance, freedom of expression and civic engagement. We will support universities in safeguarding these values.

We will ask universities to continue to develop their role in local economic development with the regional development agencies and with business. The Government will also do more to champion the international standing of our universities as world leaders in the growing market for higher education across borders and continents, including by e-learning.

In the decade ahead, we will expect more from our universities than ever before. They will need to use their resources more effectively, reach out to a wider range of potential students and devise new income sources while maintaining excellence. As we look to our universities to do more, we will also need to look afresh at securing the funding that excellence requires and at how all who benefit from higher education-taxpayers, students and the private sector-should contribute.

It was agreed in 2004 that the new fees structure in England should be reviewed at this stage, and the Government will make an announcement about that shortly, but I should stress that we will seek a properly and fairly balanced approach without placing an unreasonable or counter-productive burden on any single source of funding.

At the heart of the framework published today is a strong and creative vision of higher education, with strong, autonomous institutions with diverse missions and a common commitment to excellence, a shared framework for extending opportunity to all who can benefit, and our universities as a cornerstone of our country's cultural and social vitality and a centre of our future economic prosperity. I commend the statement to the House.

Mr. David Willetts (Havant) (Con): We welcome the publication of the document and I am grateful to the Minister for giving me advance sight of it. It has, of course, been a long time coming. The whole exercise began in February 2008, so its gestation period matches that of a slightly premature elephant, I gather. Meanwhile, not only has the Secretary of State who launched the exercise moved on but the whole Department from which it was supposed to originate has been abolished. We are rather relieved to see the document at all.

We should thank the experts from the world of higher education who have contributed their reports to this exercise. I very much agree with what the Minister said about the strength of our universities, in which we can all take great pride. The next step, of course, is the funding review. Will the Minister confirm that all parts of the higher education sector, including students, will have an opportunity for their voices to be heard in that
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exercise? Will he confirm that the funding review need not be limited to the framework set out in the document published today?

The Conservatives particularly welcome what the framework document says about the importance of teaching and of information for students and prospective students. Students are not just consumers, but when they are paying so much for their university education, we can well understand that they become consumerist and want information about what they will get in return for the fees that they pay.

We, of course, have been working with Microsoft on a pro bono basis to ensure that such information is easily accessible for prospective students. Indeed, I called for it to be available almost two years ago now. We are relieved that Ministers in the Department have caught up with this agenda, which is extremely important. But why is the QAA to be put in charge of releasing the information? Students' demand for more information may not be best met by that quango. Surely we need to use far more imaginative ways to make the information available to students and prospective students-such as via websites and social networking sites, or third sector and other organisations. I very much hope that the information will be available in a wide and accessible way.

There also need to be strong incentives for good teaching, to match those that already exist for research. I want to ask the Minister about research and the STEM subjects. Of course, STEM subjects make a very important contribution to the growth of our economy, but it was disappointing that, in the context of research, the Minister referred in his statement to those subjects only. Is he not aware of the dynamism of our creative industries, and of the crucial role also played by the arts and humanities? Does he recognise that a dynamic and well-balanced economy needs to draw on the dynamism and research capacity of university departments in the arts and humanities as well as those in STEM subjects?

A key theme in the statement was broadening access to university. We recognise the importance of that agenda, to which the Minister said reference was made in the excellent report from Alan Milburn, whom we think of as the right hon. Member for Darlington. However, I think that the Minister has ignored some of the very sensible ideas in that excellent report, and embraced some rather risky ones.

The report calls for a proper independent careers service to take the place of Connexions. The Conservatives strongly support that proposal, which we have advocated as well. The Minister came to the House to talk about open access to university and social mobility, so it is a great disappointment to find that his Department and the DCSF have failed to embrace the proposal for an independent careers service. Many people believe that it would improve access to information, and hence access to university, for people from a wider range of backgrounds.

Meanwhile, the Minister flirts with contextual data for university admissions. I warn him to be very careful in this territory. There are, of course, excellent initiatives, such as the one that links King's college London with Guy's and St. Thomas's hospitals. It takes students from poorer backgrounds who have less good A-level results and gives them a high-quality medical education. Does the Minister agree that that excellent initiative should be repeated?

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Students and their parents will lose confidence in the integrity of the university admissions system if it is used for crude class warfare. We need to hear from the Minister how he believes that this contextual information will be used. Today, it is students from households on modest incomes who are suffering the most from problems such as those afflicting the Student Loans Company. The Minister tells the House about broadening access to university, but does he not recognise that it is students from the poorest backgrounds who are most desperate when they cannot get their maintenance grant or loan? Disabled students are having particular difficulty accessing their grants at the moment. Will the Minister take this opportunity to give us an update on that situation?

The Minister talks about progression from FE to HE, which is also very important for broadening access. However, will he confirm that, under this Government, the proportion of FE students progressing to HE has fallen from 9 to 7 per cent?

Conservative Members therefore believe in the importance of the debate that the framework document has launched and we will contribute to it positively. It is a pity, however, that in launching this useful document, the Minister has had to lard his statement with quite so much self-congratulation when the very problems that are rightly identified in the framework document and that need to be tackled are ones that have been developing in the past 10 years of this Labour Government.

Mr. Lammy: I am grateful that the hon. Gentleman broadly welcomes what we have said today. I did not seek to lard the Government for all that has been achieved. In fact, I congratulated the sector and students on much that has been achieved, but it is important at this critical stage to contrast the past 10 years with a previous period in which the unit of resource was cut- [Interruption.] Lecturers were paid less, students put up with poor facilities, and our research fell behind international standards. This is an important juncture at which we seek to- [Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Member for Reading, East (Mr. Wilson) should not maintain a sedentary conversation when the Minister is speaking.

Mr. Lammy: It is important to contrast that period with the present, as we look forward.

On the funding review, we always said that we would hold that when the first cohort of students come to the end of their studies. They did that this summer, so we will set up the review, as the hon. Member for Havant (Mr. Willetts) knows, because we have had conversations with him on Privy Council terms. I will make the announcement shortly.

The student dimension is central to that review. I would expect the review to take into account a range of student opinion. We also said that the review should look back at how the system has worked over the past few years, but it should also look forward. In looking forward, it must assist us as a nation better to support mature students and part-time students in particular, as we look at the student support mechanisms.

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