1. Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): Whether she has had discussions with the Secretary of State for Justice on the likely effects on Wales of her Department's proposed programme of court closures. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend the Secretary of State and I are fully engaged with our colleagues at the Ministry of Justice on these proposals. We both met the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), in September and further meetings have been arranged.
Mr Llwyd: I thank the hon. Gentleman for that reply. Will he tell me when exactly he met his colleagues and what he discussed? Which courts did he say should not close?
Mr Jones: I and the Secretary of State met the Under-Secretary in September. We have another meeting arranged for 10 November. We discussed all the courts in Wales that I am sure the hon. Gentleman is concerned about.
Mr Speaker: I call David Davies.
Mr Speaker: Order. I apologise. The hon. Gentleman has the right to come back.
Mr Llwyd: May I make the point that since the hon. Gentleman and his colleague have been in post, we have lost the investment in St Athan, we have lost the investment in the south Wales railway line, we have lost jobs in Newport and we have lost the north Wales prison? What on earth are they doing for Wales?
Mr Jones: It is in fact inaccurate to say that we have lost either St Athan or the north Wales prison. I would have thought, frankly, that the hon. Gentleman, as a lawyer, would be more concerned about the administration of justice. That is the primary concern of our Department and of the Ministry of Justice.
David T. C. Davies (Monmouth) (Con): May I thank the Minister for all he is doing to try to right the terrible economic wrongs foisted on us by Labour Members? In doing so, will he also take account of taxpayers' money that has been spent on Abergavenny court before making any final decision on it?
Mr Jones: Yes, indeed. Both the interests of justice and the interests of taxpayers' money will be fully considered.
2. Jonathan Edwards (Carmarthen East and Dinefwr) (PC): What discussions she has had with the Chancellor of the Exchequer on Government policy on the funding for the National Assembly for Wales determined in the comprehensive spending review. 
The Secretary of State for Wales (Mrs Cheryl Gillan): I have discussed the comprehensive spending review with my right hon. Friend the Chancellor of the Exchequer and other Cabinet colleagues. The spending review sets out how the Government will carry out Britain's unavoidable deficit reduction plan. We have secured a fair settlement for Wales. It is now for the Welsh Assembly Government to decide how to manage the reductions, reflecting their own policies and priorities.
Jonathan Edwards: The UK Government refuse to review Wales's funding settlement, despite four independent reports highlighting the inequity of the Barnett formula, until the proposed March referendum. Will the Secretary of State explain the link between legislative competence for the National Assembly and funding for the Welsh Government, because under the terms of the Government of Wales Act 2006 they are distinct bodies?
Mrs Gillan: The hon. Gentleman knows very well that there have been two recent reports to the Welsh Assembly Government by Gerald Holtham, both of which I have looked at and discussed with the First Minister. We are still waiting to see what the response is from the Welsh Assembly Government to the second report from Gerald Holtham and it is right and proper that we should wait and see what the Welsh Assembly Government say first. As the hon. Gentleman knows, the details in the coalition agreement are quite clear. We have said that the Barnett formula is coming towards the end of its time, but we have a priority to put this economy back into shape after it was left in such a disgusting mess by the outgoing Government.
Mr Peter Hain (Neath) (Lab): On what date was the Secretary of State informed by the Secretary of State for Culture, Olympics, Media and Sport of his plans to change the status of S4C?
Mrs Gillan: The right hon. Gentleman knows that I have many meetings with the Culture Secretary on S4C. I have discussed the future of S4C on many, many occasions.
You will have noticed that she did not answer the question, Mr Speaker. The day before the comprehensive spending review, on the evening of Tuesday 19 October, the BBC's Nick Robinson first broke the news that S4C was to be joined with the BBC before the S4C authority had even been informed. It is not clear
from her answer whether the Secretary of State knew what the Culture Secretary was planning before Nick Robinson did or whether, like the rest of us, she found out from him. It saddens me that she has absolutely no influence in the Cabinet. She failed to stand up for S4C, she failed to stand up for the defence training college, she failed to stand up for the Anglesey energy island, she failed to stand up for the Severn barrage and she got a terrible deal for Wales out of the comprehensive spending review. I am sorry to say that she is failing Wales abysmally. If she is not going to fight for Welsh jobs, she should not be in her job.
Mrs Gillan: I welcome the right hon. Gentleman back to his place on the Front Bench. For a brief moment during the elections for the shadow Cabinet, I thought we were going to be robbed of his charm and wit in Welsh questions, but that is not to be the case.
The Conservative party initiated the legislation on the Welsh language, which helped to put S4C on the map, and I have always supported S4C, both as the shadow Secretary of State for Wales and now as the Secretary of State. The deal for S4C is that it has firm funding for the next four years, and there will be meetings to ensure that it remains independent and continues to make a valuable contribution to Welsh language broadcasting.
Mr Speaker: Order. As I want to make some progress down the Order Paper, we must have shorter answers, so I shall cut them off if necessary.
Hywel Williams (Arfon) (PC): Perhaps I can help the two Front Benchers. In a written answer to a question to the Secretary of State for Culture, Olympics, Media and Sport, I was told that he and others were informed of the S4C decision
"in the days leading up to, or at the time of, the spending review and licence fee settlement announcements."-[ Official Report, 28 October 2010; Vol. 517, c. 413W.]
Can our Secretary of State be a little more precise, or is her memory deficient-tactically or otherwise?
Mrs Gillan: No, my memory is not deficient. I assure the hon. Gentleman that S4C has been so important to me that I have been supporting it through its troubles. He will be well aware of the precipitate departure of the chief executive. I remember going out clearly at the Eisteddfod and backing S4C and saying that it had a great broadcasting future and was secure in our hands. It has now secured its financial deal, the details of which will come later.
3. Karen Lumley (Redditch) (Con): What recent discussions she has had with ministerial colleagues on an exemption from Severn bridge toll charges for serving armed forces personnel. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones):
I have regular meetings with ministerial colleagues regarding transport issues in Wales. I recently met the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), to
discuss the Severn bridge tolls. In particular we discussed the possibility of offering various discounts once the concession ends.
Karen Lumley: Does my hon. Friend agree that we ought to honour our armed forces by giving them concessionary fares, as happens in France and the United States?
Mr Jones: We certainly ought to honour our armed forces. The issue with the Severn bridge is that it is currently managed by a concessionary company, Severn River Crossing plc, and that the concession is likely to continue until 2017. Until then, discounts are entirely a matter for the company, but when the concession ends the Government will be responsible for tolling and might well consider further concessions.
Geraint Davies (Swansea West) (Lab/Co-op): Does the Minister agree that the tolls act as a tax on the economic gateway to inward investment in Wales? Will he consider reducing the tolls for the maintenance charges when the Severn bridge comes into public ownership in 2016 to encourage inward investment and prosperity at a time when the Welsh have been hit so badly by the comprehensive spending review?
Mr Jones: I understand what the hon. Gentleman says. Clearly there would be more of an economic barrier if the crossing were not there, but he is right that when the concession comes to an end in 2016-17 it will be possible to review the tolls and see whether, for example, they should be charged only in one direction or both.
4. Mr David Hanson (Delyn) (Lab): What plans she has for discussions with the Welsh Assembly Government on the likely effects on child poverty in Wales of the outcomes of the comprehensive spending review. 
The Secretary of State for Wales (Mrs Cheryl Gillan): I have regular meetings with the First Minister about a range of issues relevant to Wales. We are firmly committed to tackling poverty and improving the lives of low-income families. Through decisions we have taken in the spending review, we are demonstrating that the best way to tackle child poverty is to address the root causes of poverty-entrenched worklessness, economic dependency and educational failure.
Mr Hanson: What representations has the Secretary of State made to her Treasury colleagues about the child trust fund, to which the Assembly continues to contribute? Page 42 of the Conservative party manifesto committed the Government to continuing to support the child trust fund for the poorest third of families, but that commitment is being ripped up by the Bill that is currently before Parliament.
The right hon. Gentleman knows that the cuts we are being forced to make are not these Government's cuts but have arisen from his Government's mismanagement of the economy. We certainly want to help disadvantaged children now, when they need our
help, and it would simply be wrong to defer that help for 18 years. We have had to take difficult decisions regarding the child trust fund, but the record deficit has made it unaffordable. The problem with the economy at the moment is that his Government broke it and we have to fix it.
Roger Williams (Brecon and Radnorshire) (LD): Does the Secretary of State agree that the substantial increase in child tax credits announced in the June Budget will do substantial work to address child poverty not only in Wales, but right across the UK?
Mrs Gillan: The hon. Gentleman knows that to change the prospects of all children through the new fairness premium of £7.2 billion over the spending review period is exactly what this Government want to do. It includes a £2.5 billion premium to support the educational development of the poorest pupils.
Owen Smith (Pontypridd) (Lab): It is not simply in respect of child poverty that people in Wales are worried; whole towns in Wales are now worried that the Government have them in their sights. We are used to it, of course, in places such as Merthyr-in the 1930s, the Tories proposed to close it down completely and move people to the colonies-but I wonder whether Wales Office Ministers share the view of the Work and Pensions Secretary that people there, in Merthyr and in the valleys, are workshy and should simply get on a bus and find a job.
Mrs Gillan: The hon. Gentleman knows that, with our packages of welfare reform, we are trying to lift people out of lives of dependency. The right hon. Member for Delyn (Mr Hanson) asked about child poverty, which had been increasing under his Government since 2005. Is the hon. Gentleman not ashamed of the previous Labour Government's record on the matter?
Mr Speaker: Order. I think that the Secretary of State will have intended to welcome a new occupant of the Opposition Front Bench.
5. Nia Griffith (Llanelli) (Lab): What recent representations she has received on the implications for Wales of the Government's proposals on constitutional reform. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend and I have received a number of representations, and we have also discussed with the Welsh Assembly Government and other interested parties the implications for Wales of the Government's programme of constitutional reform. Fairness throughout the United Kingdom is the underpinning principle of those reforms, and the Government have moved fast to introduce the constitutional reforms needed to restore confidence in Britain's political system.
We all understand the idea of a maximum time limit of two months for responding to Select Committee reports, but we do not have to go for the maximum; we can respond earlier. Will the Minister explain why his right hon. Friend the Secretary of State
did not respond to the Welsh Affairs Committee's report on the constitutional reforms in time for those comments to be considered while the relevant Bill was being considered on the Floor of this House?
Mr Jones: As the hon. Lady will know, the Committee's report was only recently received. The Wales Office will do it justice by giving it full consideration and providing a mature and considered response.
6. Chris Ruane (Vale of Clwyd) (Lab): What recent discussions she has had with ministerial colleagues on the economy of seaside towns in Wales. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend has had regular discussions with ministerial colleagues on all issues affecting the Welsh economy, including the vital role that the prosperity of seaside towns plays. The Government are committed to working with the Welsh Assembly Government to promote Wales as both a tourism and an investment destination, so that seaside towns prosper as we deliver sustainable economic growth.
Chris Ruane: What assessment has the Minister made of the effect on seaside towns, especially Welsh seaside towns such as his and mine, of what Boris Johnson calls the "Kosovo-style" clear-out of people on housing benefits in inner cities?
Mr Jones: I can fully understand the hon. Gentleman's concern that after 13 years of Labour government the west ward of Rhyl became the poorest and most deprived area in the whole of Wales. In so far as benefits are concerned, the most important aspect of the matter is to ensure that housing is available in the west ward of Rhyl and in other parts of his constituency.
Guto Bebb (Aberconwy) (Con): Does my hon. Friend agree that tourism is a key part of the north Wales economy, and as such is it not inexplicable that the Assembly Government's economic renewal plan does not mention tourism at all?
Mr Jones: Yes. Tourism provides £4 billion per annum to the Welsh economy, and it is essential that we do as much as we can to encourage it. However, the north Wales coast regeneration area fund will also utilise private funding, and that is a Welsh Assembly Government initiative of which we approve.
7. Paul Flynn (Newport West) (Lab): What recent discussions she has had with the Secretary of State for Business, Innovation and Skills on steps to increase employment opportunities in Wales. 
The Secretary of State for Wales (Mrs Cheryl Gillan): May I apologise, Mr Speaker, for not welcoming the hon. Member for Pontypridd (Owen Smith) to the Front Bench? I am so incensed by the previous Government's treatment of the economy that it quite passed me by, but I would not want any impoliteness, and I welcome him warmly to the Front Bench.
I have had regular discussions regarding increasing employment opportunities in Wales with my right hon. Friend the Secretary of State for Business, Innovation and Skills, and he is as committed as I am to ensuring that the Welsh economy benefits fully from new growth in the economy.
Paul Flynn: Wales, and Newport in particular, have provided a successful and welcoming habitat for jobs that were relocated from London. Would it not be a great shame if the present cuts hit disproportionately Welsh areas, resulting in the reversal of that very successful process? Will the Secretary of State renew her efforts to persuade Government that a cut of 250 jobs at the Newport passport office would seem especially devastating if they understood the local situation?
Mrs Gillan: The hon. Gentleman knows exactly how I feel about the issues concerning the immigration and passport office, because I was delighted to welcome him and the hon. Member for Newport East (Jessica Morden) into the Department to meet the Minister for Immigration and me to discuss its future. The hon. Gentleman is absolutely right: Newport is a city that ranks third in the Lambert Smith Hampton study of the best office locations outside London. We have businesses there such as Admiral, Wales and West Utilities, and even the HM Prison Service shared service centre. I can assure him that I will make my best efforts to protect all the jobs in Newport that I can, and to promote Newport among my colleagues as a good place to which to relocate.
Jenny Willott (Cardiff Central) (LD): The Driving Standards Agency is planning to close its Cardiff office, with the loss of 80 jobs, partly as a result of the cost of office rental. Since the Government own a huge office estate in south Wales, will the Secretary of State work with colleagues to undertake an audit of that office space to see if it can be better used more efficiently in order to save jobs?
Mrs Gillan: I would be very willing to give that undertaking to the hon. Lady. In fact, if she writes to me with any details, I will be pleased to take it up with my colleagues. She should be aware, however, that I am talking to all the Departments right across Whitehall, as I did right at the beginning when I was first appointed, to suggest that Wales is a great place for them to relocate their expensive offices from other parts of the country. [ Interruption. ]
Mr Speaker: As usual at this time on a Wednesday, there are far too many private conversations taking place in the Chamber. It is very unfair on the Member asking the question and the Minister answering it, and it is also rather discourteous to the people of Wales.
8. Kevin Brennan (Cardiff West) (Lab): If she will discuss with the Leader of the House the convening of a meeting of the Welsh Grand Committee to discuss the matter of the effect on Wales of the provisions of the Parliamentary Voting System and Constituencies Bill. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): As I explained to the hon. Gentleman and his colleagues yesterday, there is no need for a meeting of the Welsh Grand Committee on this issue. Hon. Members have had adequate opportunity to discuss the implications for Wales of the Parliamentary Voting System and Constituencies Bill, including five days of debate in Committee and two days on Report and Third Reading, all on the Floor of the House.
Kevin Brennan: I see that Ministers are not answering again. When the Secretary of State refused, in an unprecedented way, to have a meeting of the Welsh Grand Committee, was her principal reason for doing so to snub Welsh MPs or simply to sabotage the Prime Minister's respect agenda-because she succeeded in both?
Mr Jones: The hon. Gentleman well knows that far from treating him and his colleagues with disrespect, there was in fact a meeting specially organised for Welsh Members of Parliament attended by the Bill Minister, the Secretary of State and me. There has been ample opportunity for discussion of this Bill on the Floor of the House, as the hon. Gentleman well knows.
9. Nick Smith (Blaenau Gwent) (Lab): What recent discussions she has had with the Secretary of State for Transport on funding for cross-border rail infrastructure projects; and if she will make a statement. 
The Secretary of State for Wales (Mrs Cheryl Gillan): My hon. Friend the Under-Secretary and I have regular meetings with ministerial colleagues to discuss a range of issues affecting Wales, including transport. We recognise that improved rail infrastructure is a vital component for delivering a successful economic recovery in Wales, and we are working hard with the rest of Government to ensure that this is achieved.
Nick Smith: Given that the great western main line is one of the UK's busiest, can the Secretary of State assure me that Labour's commitment to electrify the line between Bristol, Cardiff and Swansea by 2017 will be honoured?
Mrs Gillan: The hon. Gentleman knows that we recognise the importance of enhancing railway infrastructure to meet demand, and that is why the Government are investing £14 billion of the Department for Transport's £30 billion budget over the next four years in the maintenance of our railways. There will be further announcements on railway investment, and I very much hope that all the representations that have been made on the electrification of that part of the railway will find favour with the Secretary of State for Transport.
Mr Mark Williams (Ceredigion) (LD): Will the Secretary of State turn her attentions also to the transport infrastructure in mid-Wales and the train connection between Aberystwyth and Shrewsbury? We have been waiting a long time for an hourly service and a direct service to London, which requires Assembly funding. Will she look sympathetically on the Assembly's bids for funding for that train route?
Mrs Gillan: I happen to have a meeting with the First Minister tomorrow, so I can assure my colleague that I will raise the matter with him. As he knows, the Welsh Assembly Government and Network Rail have invested £13 million in enhancing the Cambrian line from Aberystwyth to Shrewsbury. That collaboration has led to a huge investment as part of the national stations improvement programme, which I hope my colleague will welcome.
10. Susan Elan Jones (Clwyd South) (Lab): What discussions she has had with the Secretary of State for Culture, Olympics, Media and Sport on the future funding and management of S4C. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend and I have had regular meetings with my right hon. Friend the Secretary of State for Culture, Olympics Media and Sport and with the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), who is responsible for culture, communications and creative industries, to discuss these matters. The Government remain committed to the future of Welsh language programming and of S4C, and we regard S4C's settlement as fair and proportionate to the cuts that the Department for Culture, Media and Sport is being asked to make.
Susan Elan Jones: Does the Minister agree with the leader of the Welsh Conservatives that there should be an independent review of S4C?
Mr Jones: The Welsh Conservatives' proposal is, of course, that S4C should have a good, viable and vibrant future. It is for my right hon. Friend the Secretary of State to consider whether there should be an inquiry.
11. Jonathan Evans (Cardiff North) (Con): What recent discussions she has had with the First Minister on proposals to decentralise powers to local communities. 
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): My right hon. Friend has regular meetings with the First Minister on all issues affecting Wales. I will meet the Assembly Government's Minister for Social Justice and Local Government tomorrow.
Jonathan Evans: As the people of Wales may shortly vote for additional powers to be devolved to Wales, and as the Government take forward their localism agenda, does my hon. Friend agree that it is essential that as many of those powers as possible are devolved down from the Assembly to local communities and councils?
Mr Jones: Yes, my hon. Friend is right to the extent that I find huge enthusiasm among stakeholders in Wales for the Government's big society agenda, which seeks to devolve influence down to the lowest possible level. For that purpose, I will be having a meeting with the Minister for Social Justice and Local Government to discuss how the Welsh Assembly Government can participate in the process.
Ian Lucas (Wrexham) (Lab): How will the removal of the right of local communities to appeal to the Boundary Commission through public inquiries enhance the power of local communities?
Mr Jones: These are matters on which the hon. Gentleman has had plenty of opportunity for debate on the Floor of the House, and he has made his full contribution. [Interruption.]
Mr Speaker: Order. There is far too much noise in the Chamber. It is a veritable commotion. I want to hear Mr Philip Hollobone.
12. Mr Philip Hollobone (Kettering) (Con): Whether she plans to amend the administration and staff costs in her Department's budget for 2010-11. 
The Secretary of State for Wales (Mrs Cheryl Gillan): My Department's budget for 2010-11 was fixed as part of the comprehensive spending review. On costs within my Department, since taking office I have been exploring ways to find efficiency savings and have already achieved significant savings on rail travel and hotel accommodation.
Mr Hollobone: Does the Secretary of State have any plans to reduce the number of days taken in sick leave by staff in her Department, so that it is the best in the public sector?
Mrs Gillan: I am not aware that there are different rates of sick leave in my Department from any other, but I will undertake to my hon. Friend to have a look at the records in my Department and return to the point in writing to him.
Mr Wayne David (Caerphilly) (Lab): Given that the Secretary of State's Department does not stand up for Wales, what does it do?
Mrs Gillan: My Department stands up for Wales, unlike the previous Secretary of State, who stood back from Wales, allowed it to become the poorest nation in the UK and then compared it to Rwanda.
13. Neil Parish (Tiverton and Honiton) (Con): What recent discussions she has had with Welsh Assembly Government Ministers on Government support for the economy in Wales. 
The Secretary of State for Wales (Mrs Cheryl Gillan): I have had regular discussions with both the First Minister and the Deputy First Minister on a range of topics, including working together to deliver strong, sustainable growth to the Welsh economy. We will continue to have discussions on supporting home grown enterprise and looking at attracting more foreign companies to invest in Wales. I will be establishing a Wales business advisory group to ensure that I am fully apprised of issues affecting Welsh businesses and what they need to help bring about growth.
Neil Parish: Does the Secretary of State agree that streamlining regulation and stimulating the private economy will be essential to the Welsh economy?
Mrs Gillan: My hon. Friend needs very little reply except to say that I wholeheartedly agree with him and will do my best.
Q1.  John Robertson (Glasgow North West) (Lab): If he will list his official engagements for Wednesday 3 November.
The Prime Minister (Mr David Cameron): I am sure that the whole House will wish to join me in paying tribute to Sapper William Blanchard from 101 Engineer Regiment (Explosive Ordnance Disposal), who died on Saturday. The work that our sappers do to make areas safe both for our soldiers and for local people requires unbelievable acts of personal courage and selflessness; they are the bravest of the brave. William was a talented and caring soldier who will be sorely missed by all those who knew him. Our thoughts are with his family and friends, and we will not forget what he did.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
John Robertson: I associate myself, as do my hon. and right hon. Friends, with the Prime Minister's comments. Our soldiers and armed forces deserve our greatest respect, particularly at this time. They will not be forgotten.
Although it is not the Prime Minister's fault that 555 of my constituents may lose out when the education maintenance allowance is done away with in Scotland, the fact is that he made a promise in January, at a Cameron Direct event, to support EMAs. How many more promises to this country will he and this Government break?
The Prime Minister: What we are having to do is deal with completely broken public finances and sort them out. On the issue of the education maintenance allowance, we are committed to ensuring that every young person remains in education and training until they are 18. Also, we will be replacing the EMA with a learner support fund which, crucially, will be administered by the schools and colleges themselves, which are far better at identifying those young people who need help to stay in education.
Elizabeth Truss (South West Norfolk) (Con): Does the Prime Minister agree that RAF Marham should be retained as a base for the Tornado? It makes economic sense, as there is a strong skills base in west Norfolk. West Norfolk also has higher unemployment and higher deprivation than the area of the alternative base under consideration in Scotland.
The Prime Minister: My hon. Friend makes a good plea for her area, and she is absolutely right to do so. She will know that we are committed to retaining the Tornado, which has been a very effective ground-attack aircraft. We have not made the final decisions about basing, but I am sure that her remarks will be closely listened to.
Edward Miliband (Doncaster North) (Lab): I first join the Prime Minister in paying tribute to Sapper William Blanchard from 101 City of London Engineer Regiment (Explosive Ordnance Disposal). As the Prime Minister said, he died doing the bravest and most heroic work, and we send our deepest condolences to his family.
We fully support the actions that the Government are taking to tackle the terrorist threat that we saw re-emerge last week. Will the Prime Minister update the House on the review of air freight and passenger security, and tell us when he believes that it is likely to be complete?
The Prime Minister: I am grateful for the right hon. Gentleman's comments. As he knows, several steps have already been taken: stopping freight transport from Yemen and Somalia; suspending the carriage of toner cartridges in passenger hand luggage on flights departing the UK; and prohibiting the carriage of toner cartridges by air cargo into, via or from the UK unless they originate from a known consigner. As he said, we are reviewing all aspects of air freight security. It is a complicated and difficult issue, there is a meeting with the industry tomorrow, and we will update the House as soon as we can.
Edward Miliband: I thank the Prime Minister for that answer. May I take the opportunity to ask him about the wider context of the incident? Does he agree that, as well as the right measures on counter-terrorism, we need to tackle its roots? He knows that Yemen has long been one of the poorest countries in the middle east. That is why the Friends of Yemen conference was held earlier this year, and one is organised for next February. Will he update the House on the progress of the Friends of Yemen talks, and also the progress on the crucial International Monetary Fund plan for Yemen to deliver much needed economic reform?
The Prime Minister: What the right hon. Gentleman says is absolutely right. As well as good intelligence sharing and tough anti-terrorism legislation, we must deal with the root causes, and there is now a worrying strain of al-Qaeda terrorism coming out of the Yemen. One of the problems is that we need to ensure that that is the priority for the Yemeni Government, who are also dealing with other problems in their country. The Friends of Yemen process, which the former Prime Minister did a great deal to establish, is up and running. It is working well. The British are co-chairs of it with the Saudis, there was a meeting at the UN General Assembly, there will be further meetings, and the whole aim is to try to pressurise and work with the Yemeni Government to deal with the issues that affect the wider region and, indeed, as recent events show, us too. We will go on with that and we will continue, as we have committed, with our development budget to ensure that development aid goes to the Yemen. There is therefore a short-term issue of getting the Yemeni Government to concentrate on what matters, and a longer-term issue about economic development in the Yemen, which badly needs to improve.
Edward Miliband: I thank the Prime Minister for that answer, and thank him and the Home Secretary for keeping the House updated on those issues. I know that they will continue to do so.
Let me turn elsewhere. The Prime Minister has talked a lot about restoring trust in politics. What does he expect of members of his Government who gave cast-iron guarantees to their voters six months ago that they would vote against a rise in tuition fees?
The Prime Minister: What I would say to everyone who is part of the Government is that I think that they have all taken some courageous and difficult decisions to deal with something that, frankly, we all want. I think that every single person in the House of Commons wants strong universities that are well funded and have greater independence. We want to ensure that people from the poorest homes can go to the best universities in our country. The proposals will achieve that. They grew from a decision by the previous Government to set up the Browne report. What a pity that opportunism has overtaken principle.
Edward Miliband: The Prime Minister used to think that trust mattered. What did he say in his joint foreword with the Deputy Prime Minister to the coalition agreement?
"We both want a Britain where our political system is looked at with admiration, not anger".
Does the Prime Minister not understand the anger that there will be among the constituents of all the Members on the Liberal Democrat Benches? Does he not understand the anger that will be felt in Sheffield, Twickenham, Eastleigh-all their constituencies-about promises made and about to be broken?
The Prime Minister: Along goes the Milibandwagon, and on we jump. The right hon. Gentleman talks about trust. What did he write in the Labour manifesto about the Browne report, which he set up? The Labour party has completely broken its word. There is a debate now in Britain about how we get strong universities and people able to go to them without being put off. That is what we propose and he opposes. He should listen to the former Labour Trade and Industry Secretary, who was part of the Browne process. He said:
"The truth is there are many tax elements to the Browne plan. You only pay when you are earning above £21,000... Browne is essentially right".
Why not join the consensus instead of just playing political games?
Edward Miliband: I ask the questions at Prime Minister's questions. The Prime Minister talks about hard choices-he claims to be making a hard choice on tuition fees. I cannot believe that he is talking about hard choices this week, because whom has he chosen to put on the civil service payroll this week? His own personal photographer. There is good news for the Prime Minister-apparently he does a nice line in airbrushing. You can picture the scene, Mr Speaker, of the Cabinet photo: "We're all in this together; just a little bit more to the right, Nick."
Let me ask the Prime Minister in all seriousness, is it really a wise judgment when he is telling everybody to tighten their belts to put his own personal photographer on the civil service payroll?
The Prime Minister:
The right hon. Gentleman asks the questions because he has no answers to anything. Is this what his Opposition leadership is reduced to? Let
me give the House this figure. The previous Government-[Hon. Members: "Answer!"] This is the answer. [Interruption.]
Mr Speaker: Order. The Prime Minister will be heard. There is far too much shouting going on, including by some very senior Members who ought to know better.
The Prime Minister: The last Government last year spent half a billion pounds on communications. We are cutting that by two thirds. That is what is actually happening. We will be spending a bit less on replacing mobile phones as well in No. 10 Downing street. Honestly, why not engage in the issues? We say that we need a new system to fund higher education, and that is what we are backing. The right hon. Gentleman says that he wants a graduate tax, the shadow Chancellor says, "Don't do it," and the shadow Trade and Industry Secretary is against it. What on earth is the Leader of the Opposition reduced to?
Edward Miliband: The Prime Minister cannot even defend his own decision. Is not the truth that we are learning that this Government are a Government of broken promises-broken promises on tuition fees, broken promises on VAT and broken promises on child benefit from the Prime Minister? That is what they meant by broken Britain. The Prime Minister used to say that he wanted to restore trust, but all he is doing, day by day, is destroying trust in politics.
The Prime Minister: The right hon. Gentleman can come here every week and have a succession of lame soundbites or engage in the substance about the future of our country. We know what he is against-he is against a housing benefit cap, against taking child benefit away from millionaires and against a benefit cap-but I think everyone is beginning to ask, "What on earth is he for?"
Mr Matthew Offord (Hendon) (Con): I am sure that the Prime Minister, and indeed the whole House, will join me in sending condolences to the family and friends of Marvin Henry, a young man who was shot and killed in my constituency just last week. What practical encouragement can the Prime Minister give to organisations such as the Watling boys club in Burnt Oak, which is attempting to direct young people towards positive role models and experiences rather than the fate that befell Marvin?
The Prime Minister: My hon. Friend makes an extremely good point. As we are making difficult decisions about public spending, we need to make sure that we go on funding organisations that divert young people away from crime. That is one reason why we have set up a special fund of £100 million this year and next year-to make sure that those organisations that need help get it, so that we keep giving young people things to do and divert them from crime.
Q2.  Julie Hilling (Bolton West) (Lab): May I give the Prime Minister another opportunity to answer the question? Does he think that the 500,000 public sector workers facing the axe will be pleased to know that he has hired his own personal vanity photographer?
The Prime Minister: The last Government-half a billion pounds wasted on communication. That is being axed by this Government. That is what is happening. Opposition Members have a choice when they come here. They can read out the Whips' handout or think of a good question. Try again.
Q3.  Andrew Selous (South West Bedfordshire) (Con): Can I encourage the Prime Minister to work with Members on both sides of the House who recognise the need for welfare reform, starting with the shadow Health Secretary, who has broken ranks to support a housing benefit cap?
The Prime Minister: My hon. Friend makes a very good point. We do need a debate about how we tackle the welfare system and get it under control. One of the best places to start with housing benefit is the Labour manifesto, personally written by the right hon. Member for Doncaster North (Edward Miliband). It said clearly-[Hon. Members: "Ooh!"] Well, they all stood on it, so they should be reminded of it. It said:
"Housing Benefit will be reformed to ensure that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford."
The level of opportunism is so great that even when we introduce their policies they oppose them.
Hazel Blears (Salford and Eccles) (Lab): The Prime Minister will be aware of the horrific explosion that took place in Salford this week. Our thoughts are with Marie Burns, the elderly lady who has been severely injured and is in hospital, and with the other people in hospital. Some 200 families have had to be evacuated from their homes and I wish to pay tribute to all of the emergency services and the city council, but most of all to the ordinary men and women of that community who have stepped forward. A grandfather rescued a child from the rubble, and neighbours opened the local pub and the leisure centre to give people comfort and shelter. They have done a fabulous job.
The costs of this event will be enormous and, like every other service, our council is facing significant reductions in its budget. Will the Prime Minister seriously consider what extra help he can give to those families to ensure that they are supported? My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley)- [ Interruption. ] My hon. Friend, in whose constituency this took place, is with the community now-
Mr Speaker: We get the essence of it.
The Prime Minister: I think that the House is being unfair to the right hon. Lady. She is speaking powerfully on behalf of her constituents on an important issue. It was a dreadful accident, and we should think of all those people who have lost their homes and are in temporary accommodation. She is right to pay tribute not just to the emergency services but to ordinary people who have gone out and done extraordinary things.
As I understand it, the City West housing trust, which owns the properties, is working closely with the local authority to ensure that residents are able to return to their homes as soon as possible. The right hon. Lady raises the issue of funding, and of course there is the Bellwin scheme, but we will ensure that we respond as we can to Salford's needs.
Q4.  Peter Aldous (Waveney) (Con): The East Anglian coast has some of the highest levels of deprivation in England and an urgent need for infrastructure development, but it has huge potential for creating jobs in the offshore renewables sector. Will the Prime Minister look again at the exclusion of the East Anglian coast from the £60 million allocated to establish offshore wind manufacturing at port sites, announced under the grant for business investment scheme last week?
The Prime Minister: There is a great opportunity for communities, especially coastal communities, to make the most of offshore wind, and I have spoken to several leading industrialists, who are thinking of investing in Britain, to ensure that the grants are there. As my hon. Friend will know, this grant scheme applies only to assisted areas. East Anglia is not an assisted area, but that does not rule out development taking place, and other sources of funding, such as the regional growth fund, can be applied to. I hope that he will look into those as he stands up for his community.
Mr Fabian Hamilton (Leeds North East) (Lab): Following the statement last week by the Secretary of State for Transport, will the Prime Minister give a commitment to the people of Leeds that the much needed new generation transport system, the trolleybus, will receive the Government funding that it has been promised for so long?
The Prime Minister: This issue is currently under consideration, and I am sure that the hon. Gentleman will be one of the first to find out the result.
Q5.  Mr Philip Hollobone (Kettering) (Con): In the year to March, more than 1,000 foreign nationals in Northamptonshire applied for indefinite leave to remain in the United Kingdom, and a massive 80% of those applications were approved. Will my right hon. Friend reassure my constituents that, in this Government's legitimate efforts to reduce the backlog of asylum claims left by the previous Government, people will not simply be waved through and offered indefinite stays?
The Prime Minister: My hon. Friend makes a very good point. There is always a danger when there is a big backlog-we have been left one of 400,000 to 450,000 of asylum records-to just wave them through, but I assure him that there will be no amnesty. All cases will be considered on their individual merits. We are committed to getting immigration and asylum issues under control. We are looking at the last Government's points system, and even under their tier 1 of highly skilled people, it turns out that around 30% of those given leave to remain are in low-skilled roles. The current system is not working, and we are going to sort it out.
Heidi Alexander (Lewisham East) (Lab): I would like to return to the education maintenance allowance. In March, the Prime Minister came to Lewisham college and spoke to students about his plans. He said:
"We'll keep it. We've taken a look at it. We think it's a good idea."
Will he explain to me and the 1,150 students at the college who are currently receiving EMA why his Government are scrapping it?
The Prime Minister: Because we face the biggest budget deficit of any country in the developed world. That, frankly, is the prism through which such decisions must be seen. In politics there is a choice: either confront the problems in front of you and deal with them-that is what this Government are doing-or run away from them, like the Labour party. We are putting in place something that will be more targeted and more effective, but we must deal with the mess that we were left.
Q6.  Mr Sam Gyimah (East Surrey) (Con): What recent representations he has received on the likely effects on small businesses of the implementation of the Government's proposals for automatic enrolment in pension schemes.
The Prime Minister: I thank my hon. Friend for the question. The making automatic enrolment work review, which was published last week, examined the impact on businesses of the reforms. It concluded that small businesses did need to be included in the reforms if we are to bring about the improvement in savings for retirement necessary to tackle the consequences of an ageing population and widespread under-saving for retirement. These reforms will give 1.2 million people who work for small businesses the opportunity to save for their retirement. The review made a number of recommendations to try to help small businesses to introduce those reforms. We shall look at them extremely carefully to ensure that they are not too onerous.
Mr Gyimah: I welcome the Government's desire to encourage a savings culture. However, for many small businesses, every new piece of legislation, no matter how small, has a significant impact on the bottom line. Will the Prime Minister introduce a scheme that allows us to road-test all new legislation and its impact on small businesses?
The Prime Minister: My hon. Friend makes an extremely good point, and this policy will be road-tested on the bigger companies that must introduce it first. However, we must accept that there is a problem with only 10% of very small businesses having pension provision, so 1.2 million people will have the chance to save. We will look very carefully at the reforms, and they will not be introduced for small businesses until at least 2014.
My hon. Friend will know that I have appointed Lord Young to look at all the impacts on small businesses. We also have the one-in, one-out rule under which every new regulation must mean that another regulation is scrapped.
Q7.  Chris Ruane (Vale of Clwyd) (Lab): Will the Prime Minister tell the House the total overall saving from reducing the overall number of elected MPs by 50, and increasing the number of unelected Lords by up to 100?
The Prime Minister: Let us start with the first thing: reducing the size of the House of Commons.
The Prime Minister: Size and costs. I remind the hon. Gentleman that his Vale of Clwyd constituency has just 55,968 people- [Interruption.] I am sorry, but my constituency has many more than that. I am afraid that I must just ask him to work a little harder.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Earlier this year, the Prime Minister visited Westhill in my constituency. It is a world centre of excellence in sub-sea engineering. Will he ensure that the Home Office meets concerned local companies to discuss the future of the visa system to ensure that vital inward investment is not lost to this country? It supports thousands of local jobs.
The Prime Minister: We will certainly do that. As I said in answer to an earlier question, as we look through the last Government's points system and immigration policy, we really do believe that it will not be difficult to achieve much better immigration control without disadvantaging business. For example, things such as inter-company transfers should not be included in what we are looking at. I do not think we will have a problem. Given the very broken system that we inherited, there should be no problems improving it.
Q8.  Lindsay Roy (Glenrothes) (Lab): In almost every answer at PMQs, the Prime Minister unfairly blames the challenges facing our country on the previous Government. Will he tell us about his biggest mistake as Prime Minister?
The Prime Minister: I will leave others to judge the many mistakes that I am sure I will make in this office. I am sure that, as a talented former head teacher, the hon. Gentleman would always say to his pupils, "You have to accept your responsibilities", and it is about time that that lot accepted theirs.
Q9.  Andrew Stephenson (Pendle) (Con): Given what the former Chief of the Defence Staff said at the weekend, will the Prime Minister undertake never to veto essential defence measures because they are politically too difficult?
The Prime Minister: My hon. Friend makes a very good point. Let me first pay tribute to the outgoing Chief of the Defence Staff, Sir Jock Stirrup. He was a dedicated public servant who has done an extremely good job for our country. He made an important point: it is important not that politicians agree with the chiefs of staff on every occasion-there should be a lively debate between them-but that we should not, as politicians, put off essential decisions that need to be taken. In our defence review I think we have taken the tough and difficult decisions that were necessary.
Q10.  Emma Reynolds (Wolverhampton North East) (Lab): It has recently been announced that there will be 300 job losses at New Cross hospital in Wolverhampton. Can the Prime Minister explain exactly how that squares with his promise to protect the NHS, or is this just another broken promise?
The Prime Minister:
The promise that we made is a promise that has been delivered, which is to make sure that NHS spending, when we combine capital and
current spending, is going to increase in real terms every year. That is not a promise that has been backed by the Opposition, so if the hon. Lady is worried about NHS cuts, she should start talking to the shadow Health Secretary.
Greg Mulholland (Leeds North West) (LD): Talking of photographs, we know from the Conservative party conference that the Prime Minister, like me, enjoys a pint. As he knows, this is the first ever British pub week. Will he join me in celebrating this vital cultural and social institution? Will he commit to being a pro-pub Government, and will he join the save the pub group-
Mr Speaker: Order. I have been very helpful to the hon. Gentleman, and he should not abuse my help by trying to ask three questions when one will suffice.
The Prime Minister: I very much agree with what my hon. Friend says. I am a big supporter of British pubs, and I want us to be a pub-friendly Government. And yes, I am going to a pub this week. I cannot say where it is, because otherwise it would be discontinued, but I am looking forward to it.
Mr Ronnie Campbell (Blyth Valley) (Lab): It is estimated that 1.4 million people are going to lose their jobs, and it is also being said that when VAT rises in January, another 300,000 will be lost. Why is the Prime Minister picking on hard-working families? Why does he not take it out on the banks and the speculators who caused the problem in the first place?
The Prime Minister: This Government, unlike their predecessors, have introduced a banking levy, so the banks will be making a contribution. The hon. Gentleman cites the report that was published this week, but it has not been received with much enthusiasm by other organisations. For instance, the Institute of Directors said that it is
"dangerous for the CIPD to make headline-grabbing forecasts which are based on little more than a guess".
Hon. Members should spend less time talking down the economy and more time working out how we can get growth.
Gareth Johnson (Dartford) (Con): Does the Prime Minister agree that it would be wrong for convicted prisoners to be able to vote, as suggested by the European Court of Human Rights? The incarceration of convicted prisoners should mean a loss of rights for that individual, and that must surely include the right to vote.
The Prime Minister: I completely agree with my hon. Friend. It makes me physically ill even to contemplate having to give the vote to anyone who is in prison. Frankly, when people commit a crime and go to prison, they should lose their rights, including the right to vote. But we are in a situation that I am afraid we have to deal with. This is potentially costing us £160 million, so we have to come forward with proposals, because I do not want us to spend that money; it is not right. So, painful as it is, we have to sort out yet another problem that was just left to us by the last Government.
Q12.  Steve McCabe (Birmingham, Selly Oak) (Lab): Following the previous question, how does the Prime Minister view the prospect of prisoners electing the new police and crime commissioners?
The Prime Minister: The hon. Gentleman raises yet another reason- [Interruption.]
Mr Speaker: Order. I am particularly anxious to hear the Prime Minister's answer.
The Prime Minister: The hon. Gentleman makes an excellent point about why this proposal is so bad, but I am afraid that we have to deal with the situation in front of us. Are we going to delay and delay and waste another £160 million of taxpayers' money, or are we going to take difficult action and explain it to the British public as best we can? I do not think that we have a choice if we are to do the right thing and save the Exchequer money.
Q13.  Sir Alan Beith (Berwick-upon-Tweed) (LD): Is the Prime Minister aware that the split-site buildings of the Duchess's high school in Alnwick are in a far worse state than many of the schools included in Labour's Building Schools for the Future programme, but the school was always excluded from that programme? Will he make sure that it gets fair consideration under a much more focused and better managed scheme of school buildings?
The Prime Minister: I can give that assurance-that we are going to have a new scheme and there will be £15 billion of schools capital spending in the programme going forward. That will enable us to rebuild many schools-primary as well as secondary schools. I look forward to doing that.
Q14.  Jim McGovern (Dundee West) (Lab): In answer to a question I put to the Prime Minister in July-and, indeed, in an answer to my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) last week-the Prime Minister said that the reason for not initiating tax breaks for the computer games industry was that they were poorly targeted. That seems to contradict talks I have had with his Ministers, who say that it is Government policy not to give tax breaks to any industry in future. Will the Prime Minister give me a definitive answer for the benefit of the House and my constituents?
The Prime Minister: The steps we took in the Budget, which I think were right, were to look at the tax system and try to simplify the corporation tax regime so that we could bring about one of the lowest rates of corporation tax in the developed world. That is what we have done-with cuts in corporation tax this year, next year and the year after to bring it down to 24%. That is what we are doing and we are paying for it by removing a number of allowances. I think it is a very progressive and sensible reform that will make Britain, including Scotland, one of the best places in the world to do business.
Mr Speaker: I have a short statement to make. Two Labour Members of the Backbench Business Committee have informed me that they wish to resign from the Committee, following their appointment to the Opposition Front Bench. Under the powers given to me by the Standing Orders, I have decided that a single by-election will be held to fill these two places on the Committee, and that the ballot will be counted under the single transferable vote method. The by-election will be held on Tuesday 9 November between 10 am and 2 pm in Committee Room 7 on the main Committee Corridor. Under the Standing Orders, I give notice that candidates must be Labour Members for their candidature to be valid in this by-election. Nominations may be submitted to the Table Office between 10 am and 5 pm on Monday 8 November.
The Minister for Universities and Science (Mr David Willetts): With permission, Mr Speaker, I would like to make a statement on higher education funding and student finance. This follows the statement made by my right hon. Friend the Secretary of State for Business, Innovation and Skills on 12 October.
Our higher education system has many strengths, but also faces challenges: the need for more focus on the student experience, the need to widen access and the need for sustained funding. These challenges led the previous Government, on a cross-party basis, to set up Lord Browne's review. We are grateful to Lord Browne for his excellent work. I think he has made us all re-examine our positions.
On 12 October, my right hon. Friend said that the coalition endorsed the thrust of Lord Browne's report, but was open to suggestions, before making specific recommendations, which would be radical and progressive. We have listened very carefully and with open minds, so I can now give the details of our proposals.
First, we will introduce a progressive system of graduate contributions to the cost of their university education, with nobody having to pay up-front fees. Lord Browne suggested that there should be no cap on the graduate contribution; we believe that a limit is desirable and are therefore proposing a basic threshold of £6,000 a year, and in exceptional circumstances there would be an absolute limit of £9,000. No publicly funded university will be able to charge more than that for its undergraduate courses. Because there will be a cap, we see no need for institutions to pay back a proportion of the graduate contribution as a levy to the Exchequer, as proposed by Lord Browne.
We are also proposing a more progressive repayment structure. At present, graduates start repaying when their annual incomes reach £15,000. We will increase the repayment threshold to £21,000, and will thereafter increase it periodically to reflect earnings. The repayment will be 9% of income above £21,000, and all outstanding repayments will be written off after 30 years. Raising the threshold will reduce the monthly repayments for every single graduate.
We will introduce a real interest rate on a progressive taper. For graduates earning less than £21,000, the real interest rate will remain at zero. For graduates earning between £21,000 and about £41,000, a real rate of interest will be tapered in to reach a maximum of inflation plus 3%. When graduates are earning more than £41,000, they will be making a full contribution to the costs of the system, but still incurring interest well below normal commercial rates. Under our proposals, a quarter of graduates-those on the lowest incomes-will pay less overall than they do at present.
The Government are committed to the progressive nature of the repayment system. It is therefore important for those on the highest incomes post-graduation not to be able to buy themselves out of the progressive system unfairly by paying off their loans early. We will consult on potential early repayment mechanisms similar to those paid by people who prepay their mortgages. Those mechanisms would need to ensure that graduates on modest incomes who strive to pay off their loans early
through regular payments are not penalised. For example, a 5% levy might be charged on additional repayments each year over a specified amount such as £1,000 or £3,000. Alternatively, those on higher incomes-for example, over £60,000-who made an additional repayment could be required to pay a 5% levy on that sum.
Although participation in higher education has improved in recent years, there has not been enough progress in securing fair access to some of our best-known universities. We can make progress by improving the school attainment of pupils from disadvantaged backgrounds. That is why the Government are investing in a new premium for two-year-olds, and in the pupil premium. However, we want that focus on improving the life chances of those from disadvantaged backgrounds to continue to university. For that reason, as the Deputy Prime Minister has already announced, we will also establish a new £150 million national scholarships programme, which will be targeted on bright potential students from poor backgrounds to encourage them to apply to university and meet their aspirations.
All universities that want to charge a higher graduate contribution than the £6,000 threshold will be obliged to participate in the national scholarships programme. We will consult students and university organisations on the details. We will seek to increase the leverage of Government funding by securing matched funding from universities. Our current preference is for universities to offer scholarships to targeted students, including the principal beneficiaries of the pupil premium. That would mean that at least their first year at university was free. Other attractive ideas include expanding the model of a foundation year for young people with high potential but lower qualifications.
To ensure that the universities that charge tuition contributions above the £6,000 threshold take account of their particular responsibilities to widen participation and fair access, we will introduce a tougher regime of sanctions. Each institution will draw up a new access agreement with the Office for Fair Access. It would be expected to include activities such as outreach initiatives to attract more pupils to apply from disadvantaged backgrounds, and targeted scholarships and financial support for poorer students. OFFA will agree with universities a programme of defined progress each year towards their access benchmarks as calculated by the Higher Education Funding Council. If they are not making adequate progress towards those benchmarks, a mechanism will be established to allow OFFA to redirect a proportion of the income from contributions over £6,000 to specified access activities.
Our student support system is one of the most generous in the world. We will make it more progressive. Lower-income students, while studying, will get improved help with their living costs. Students from families with incomes of up to £25,000 are currently eligible for a maintenance grant, which is not repayable, of £2,900; we will increase that to £3,250. Those from families with incomes of up to £42,000 will be entitled to a partial grant. There will also be increases in maintenance loans for students from families with incomes from £42,000 to £60,000. We will also retain a higher maintenance loan for those studying in London.
All parties agree that the current system gives a raw deal to part-time students. They are particularly likely to be mature or disadvantaged students. Even the great higher education reports of the past, such as Dearing and Robbins, largely ignored them. Lord Browne has confronted the challenge head on. At last, under our proposals part-time students will be entitled to a loan for tuition on the same basis as full-timers, and this support will be available to those studying for at least a third of their time, unlike the current grants for tuition, which are only available to those studying for over half their time.
Overall therefore, this is a good deal for universities and for students. The bulk of universities' money will not come through the block grant, but will instead follow the choices of students. It will be up to each university or college to decide what it charges, including the amounts for different courses. All universities and colleges, whatever contribution they decide to charge, will be expected to publish a standard set of information about their performance on the indicators that students and their parents value: contact hours, teaching patterns and employment outcomes. We also propose to open up higher education provision to new providers, including further education colleges. These proposals offer a thriving future for universities, with extra freedoms and less bureaucracy, and they ensure value for money and real choice for learners.
We need to act quickly so that prospective students know where they stand. We intend to implement these changes for the 2012-13 academic year. We will therefore bring to the House our proposals on changes to graduate contributions before Christmas. Both Houses will have the chance to debate the proposals before a vote is taken. I am today placing in the Libraries of both Houses additional material that explains the modelling that we have done. We will also take powers next year to set a real interest rate for graduate contributions. We will, as usual, publish the details of the university financial settlement for 2011-12 in our annual funding letter to HEFCE next month.
Later this winter, we will publish a higher education White Paper covering the wide range of long-term issues that arise from Lord Browne's report. We will hope to bring forward legislation in due course. Given the time scales, we would not expect to be implementing those changes before the 2013-14 academic year.
Lord Browne's report has rightly generated much debate. When the review was established exactly a year ago, it was on a cross-party basis. I hope the Opposition will feel able to maintain that spirit. From our side, the two parties in the coalition have accepted the report's broad thrust and are today putting together a single, coherent and progressive policy. It will deliver a better deal for our students, for our graduates and for our universities. I commend it to the House.
Mr Gareth Thomas (Harrow West) (Lab/Co-op):
I am grateful to the Secretary of State for giving me an advance copy of his statement, but is not the truth that what he has announced today is a tragedy for a whole generation of young people? It makes it much more difficult to protect our world-class university system and, for the country, puts the very building blocks of our economic future at risk. Even though there has been movement since the Business Secretary's statement,
is it not the case that our students will now face some of the most expensive and worst-funded degrees of any public university system, with students paying fees that are higher than those of the average public university in the United States? Our universities will be plunged into turmoil, facing massive funding cuts just when we need them most, supporting economic growth. All this because of choices being made by the coalition. The first is the choice to make reckless cuts in public spending. The second is the choice to put a disproportionate share of those cuts on to higher education. The third is the choice to bring about the biggest and most ideological upheaval in higher education since the Robbins report in the 1960s. All this is set to be rushed through Parliament without proper consultation with the sector and without our even yet having a higher education White Paper to tell us how this brave new world is supposed to work.
Is the reason why fees will be so high not very simple? Despite the Prime Minister's claim that he wants to see well-funded universities, is the truth not that what motivates today's announcement is a massive cut in the funding of universities? We are talking not about a cut of 19%, 25% or even 40%, but about an almost 80% cut in the undergraduate teaching budget. Is the truth not that universities will lose millions of pounds, that the London School of Economics stands to lose all its teaching funding, that Oxford and Cambridge between them will lose almost £56 million a year in teaching funding, that Sheffield Hallam university will lose more than £63 million and that Kingston university will lose more than £44 million? The Government do not have to do this, but the Minister and his friends in the Conservative party want to do it. They believe that a crude competitive market, with the Government largely kept out of the way, is the best way forward for higher education.
Like Lord Dearing, Labour Members believe that higher education funding should be a partnership between taxpayers and graduates. It should involve the taxpayer because the whole country benefits from good higher education and graduates get a direct personal benefit. So how much extra income will our universities have as a result of the Minister's proposals today? Our fees brought more than £1 billion extra into higher education. Most graduates will now be expected to pay for the whole cost of their degrees. Many courses vital to a growing economy, such as those in the creative arts and digital industries, will receive no public funding. Why is this country joining Romania as the only OECD country to be cutting investment in higher education and science?
Has not the right hon. Gentleman managed to produce the worst of all possible worlds? Not only will most graduates be paying off their debts for 30 years and most universities will need to charge fees of at least £7,500 just to avoid losing money, but with some universities charging £9,000 many students will feel forced to choose the cheapest course, not the one that is best for them. Why does the coalition reject any idea that universities, employers, students and the Higher Education Funding Council should work together to make sure that we have the quality higher education that we need? Everyone believes that student choice is important, but why do the Government rely entirely on the choices made by students, who have very different levels of knowledge, aspiration and confidence about what higher education can offer them?
Labour Members welcome moves to improve access for those from low-income backgrounds, but does the right hon. Gentleman recognise how unfair the system will seem to those on middle incomes, who have worked just as hard to help their sons and daughters get to university? The Business Secretary says that he is against a graduate tax. Is it not true that Lord Browne proposed a system where more than half of graduates will pay 9% of their relevant income every year for 30 years and never pay off their debts? How many more now will never pay off their debts as a result of the Minister's proposals? Will he confirm that those who are wealthy enough to pay up-front fees will pay less than those on middle incomes, such as teachers, police officers and engineers, who have to take out a loan? He says that universities will be able to charge the most fees only if they are working to increase access for those from low-income backgrounds, but is the truth not that universities are already carrying out the very measures he says they will now have to carry out? So his comments today on access are just a meaningless fig leaf.
The right hon. Gentleman has proposed today that higher earners should pay higher interest rates. Will that raise extra money? If so, will the extra payments go back into higher education or back to the Treasury? This is the day we found out how much Liberal Democrat ministerial cars cost-£9,000 a year, for students. All those principles so boldly championed have been forgotten; all those solemn promises to students and their families up and down the country waved away. All so that the right hon. Member for Tatton (Mr Osborne) can carry on as the real Deputy Prime Minister. After weeks of being told that Liberal Democrat Back Benchers were in full rebellion, have tuition fees been reduced as a result? No, they are set to treble. What a huge success those Back Benchers have had and how they have made their leadership listen. This is not a sustainable system of university funding and it is not a fair system of student finance. We will not support it.
Mr Willetts: What we just heard from the hon. Member for Harrow West (Mr Thomas) was a classic old Labour attack, when all it can do is complain about cuts and make its own uncosted and indiscriminate public spending pledges. Last week we heard from the shadow Business, Innovation and Skills team that they did not approve of what we are doing on regional development agencies. They want to spend more on RDAs. Today we hear that they want to spend more through HEFCE on universities. How would they pay for it? What is the costing of that? Are we supposed to cut the science budget, which we are protecting so that we can invest in our future? Are we supposed to cut apprenticeships, which we are increasing by 50,000, or is it just a general belief that public spending can rise, from the party that brought us the fiscal crisis that we are having to tackle?
Even with the fiscal crisis that we face, we are nevertheless able to produce proposals that are progressive and recognise that there is a continuing role for Government. It remains the case that of every £100 that Government loan to students, just as with the previous Government, we accept that we will not get back £28 because it is a necessary subsidy for poorer students and people who have intermittent earnings. We have improved the maintenance package. As part of our Government's
commitment to our universities, we have secured a ring-fence for science and research spending, much of which money will go to our universities.
The hon. Gentleman asked specifically about student choice. I thought his point about student choice got to the heart of the difference between us in the coalition and the Opposition. He says, "You can't trust students to choose." We say, "Of course, we trust students to choose, but we are committed to more information, better information, advice and guidance, and proper careers advice because we want to see students driving the system." That is what we believe in, and students will know that the Opposition do not trust them.
The hon. Gentleman asked about interest rates. The higher interest rate of the retail prices index plus 3% will go into financing the system as a whole, but it is a more favourable interest rate than anyone would be able to secure on the open market for a loan of the sort that is being offered-an unsecured loan that does not have to be repaid if the borrower's income falls below £21,000.
What was missing from the hon. Gentleman's speech was any clear Labour alternative. He announced that he was against this policy, but he did not explain what his policy was. Surely we are at least entitled to know whether he agrees with his own leader. The Leader of the Opposition-I quote from only 14 October this year-said:
"I do favour a graduate tax. I said that during the campaign and that remains my view . . . I am someone who believes in the graduate tax."
That is the policy of the Leader of the Opposition. As for the shadow Chancellor, he has a rather different view. Also in the past few weeks he said:
"I like the two lads"-
that is, the right hon. Members for Doncaster North (Edward Miliband) and for Morley and Outwood (Ed Balls)-
"dearly, but I can't understand why they are pushing the Graduate Tax and even going further in suggesting the introduction of tuition fees was one of the things we got wrong. It wasn't. . . It was one of the things we got right."
If Labour cannot even resolve a fundamental disagreement between the shadow Chancellor and the leader of their party, why should we take what it says on this subject remotely seriously?
Stephen Williams (Bristol West) (LD): I thank the Minister and the Secretary of State for working constructively together to construct a graduate contribution scheme that has many progressive elements in it and is a much fairer system than was left behind by the last Labour Government, especially for students who study part-time. But the Minister knows that my concern, and that of my colleagues, has always been to make sure that students from poor backgrounds are not put off accessing the best universities in our country. Will he confirm that the access arrangements that he outlined will be rightly demanding of universities, but will be transparent and easy to understand for prospective students?
The hon. Gentleman makes an important point. He is correct that part of the process whereby the coalition developed these policies was a recognition of
the importance of improving access to some of our most prominent universities. We are absolutely committed to what he proposes.
Mr Speaker: Order. A very large number of colleagues are seeking to catch my eye so, as usual, brevity from both Back Bench and Front Bench is vital if we are to make some decent progress.
Mr Jack Straw (Blackburn) (Lab): May I first repeat to the Minister the commendation expressed by my right hon. Friend the Member for Southampton, Itchen (Mr Denham) on the statement of 12 October for the work of Lord Browne? On any basis, whatever the final view that people take, it was an extraordinary effort.
May I press the Minister on what will happen to the Exchequer contribution to universities? That is a matter for the Government, not for Lord Browne, and it seems to us in the Opposition to be the most serious defect in what the right hon. Gentleman is now proposing-almost that pound for pound, the increase in fees will be used to offset a reduction in Exchequer contribution.
Mr Willetts: Our proposals do, indeed, save public money, but they are not simply a matter of saving public money. They are also a reform of higher education in universities, which we believe will strengthen them and offer a fair deal for students, especially students from poor backgrounds. The overall position is that we will set out in the letter we will be sending to HEFCE at about the end of this year what the teaching grant is, but much of the money that currently reaches universities through the teaching grant and through HEFCE will in future get to universities via students and through the choices that they make. They will not have to make any up-front payment, but they will be expected to make a graduate contribution after they are earning in order to pay for the university education that they enjoy.
Mr David Evennett (Bexleyheath and Crayford) (Con): I particularly welcome the statement today from my right hon. Friend as it relates to part-time students in further education colleges, which is good news for the sector. Does he agree that it is essential that we have well-financed and excellent, world-class, independent universities offering a good student experience and student choice?
Mr Willetts: I am grateful to my hon. Friend. He is right, and I know that he was a lecturer in an FE college before. The opportunity for the delivery of more higher education in FE colleges is an example of one of the many freedoms that we are trying to introduce.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): The Minister has rightly emphasised measures taken to improve access for low-income students. In my constituency, West Bromwich West, the education maintenance allowance, coupled with the Aimhigher project, have made significant improvements in the take-up of university places by lower-income students. Can the Minister guarantee that whatever steps are taken to replace those-if indeed they are replaced-the level of Government funding under the previous Government will be maintained?
Mr Willetts: What I can guarantee is that we will place on universities an obligation to achieve the things that were previously being achieved by the kind of schemes that the hon. Gentleman described. That, we think, is the best place for the obligation to fall, and we are looking carefully at the best and most effective way in which that can be done, but it should be for individual universities to come up with their proposals for how they can best improve access.
Margot James (Stourbridge) (Con): I congratulate my right hon. Friends on achieving increased funding for the university sector while avoiding students having to pay anything up front and not having to start repaying their loans until they are almost on average earnings. I also welcome the impetus behind attracting students from poorer backgrounds. May I draw the attention of my right hon. Friend to the foundation course offered by King's college London's medical department, and the impact that that is having in getting poorer students in to study medicine? Could he comment further on initiatives to encourage universities to that course of action?
Mr Willetts: That is exactly the kind of initiative that we wish to encourage. It is obviously up to individual universities to come up with proposals that they wish to put forward, but I agree that that proposal is a very interesting model from which we can learn.
Joan Ruddock (Lewisham, Deptford) (Lab): What analysis has the Minister made of his proposals on our world renowned institutions, such as the music and dance conservatoire Trinity Laban in my constituency?
Mr Willetts: I am not aware of the specific financing point that the right hon. Lady has in mind. I have to say that I had an interesting discussion with our drama schools and conservatoires and I felt I was able to persuade them that many of our ideas would give them the greater freedom they wished for.
Mr Charles Kennedy (Ross, Skye and Lochaber) (LD): The Minister of State and our right hon. Friend the Secretary of State both well appreciate the long-established reasons why I cannot go along with this particular direction of travel. It is to do not just with the last election but with the two previous general elections, during which I had the privilege to lead the Liberal Democrats. We made a lot of this policy area, as the Minister well knows.
That being said, may I come back to what the Secretary of State said to me in the House on these matters on 14 October? He referred to
"the growing funding crisis in Scottish universities".-[ Official Report, 14 October 2010; Vol. 516, c. 469.]
We all acknowledge that whatever one's view of this policy in England, there is an immediate knock-on financial impact on the Scottish sector, particularly on those Scottish universities in the Russell group. As the Minister is coming to visit Glasgow-we are looking forward to welcoming him-will he confirm that it is of intense importance that Ministers in London keep the communication line open with Scotland to ensure that we do not skew the playing field intellectually within the United Kingdom?
Mr Willetts: I accept the right hon. Gentleman's point-it is very important that we consider the links between the English and Scottish systems while respecting the Scottish devolution settlement that means we do not have direct responsibility for the teaching settlement. Of course, research is also a UK-wide responsibility and that is an area in which we are committed to supporting Scottish universities through the research funding. Of course, as my right hon. Friend the Business Secretary made clear the other day, we accept the right hon. Gentleman's invitation to consider the Scottish angle.
Pete Wishart (Perth and North Perthshire) (SNP): Tuition fees-started by Labour and taken up with such relish by the Con-Dem Government-could, as the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) said, have a disastrous impact on Scottish universities. Will he therefore pledge not to bully and cajole further the devolved nations to follow these appalling proposals? Will he respect our tradition and culture of free education in Scotland?
Mr Willetts: I do respect the devolution settlement. From reading the press, it is clear that there is a growing debate in Scotland about how Scotland is to finance its universities in the longer term. I watch with interest some of the suggestions that are emerging as part of that Scottish debate.
Mr Rob Wilson (Reading East) (Con): May I welcome the statement by my right hon. Friend, particularly for part-time and disadvantaged students? As a recent visitor, he knows that Reading has an excellent university whose success has been partly constrained by a central cap on student numbers. Will my right hon. Friend confirm that under his plans universities will now have the freedom to recruit students in an open market?
Mr Willetts: I do remember my visit to the university of Reading, which is a very impressive university. One of the chapters in Lord Browne's report tackles the crucial question of how we can have greater freedom and flexibility in the regime on student numbers. Our proposals today do not directly touch on that, but it is one of the issues that we want to tackle as we put forward our long-term response to Lord Browne. Our belief is in greater freedom and flexibility for individual universities.
Mr Andrew Smith (Oxford East) (Lab): Does the Minister understand that this is fundamentally about trust in politics and will he confirm that all his key proposals, including the huge cuts in teaching funding, will be subject to a vote in this House so that those on the Government Benches-including the Business Secretary-who are so shamefully breaking their promises can be held to account?
Mr Willetts: I thought that my right hon. Friend the Business Secretary, in his statement on 12 October, set out very powerfully the reasons why we offered this broad endorsement of Lord Browne's proposals. We are of course bound by the coalition agreement and we believe that these proposals meet the criteria set out in the coalition agreement. Of course there will be an opportunity for the House of Commons to vote on them.
Conor Burns (Bournemouth West) (Con): On Friday, I will be attending the graduation ceremony of Bournemouth university, voted Britain's No. 1 new university. Future graduates of Bournemouth and other universities will welcome the Minister's proposal to increase the repayment threshold to £21,000. Is he in a position to give the House more detail on how that will be reviewed in coming years so that the threshold goes up along with average earnings?
Mr Willetts: It clearly will be important to uprate that figure periodically on the basis that my hon. Friend suggests, and we will consider that. He is absolutely right that one of the most progressive features of these proposals is the fact that the repayment threshold, which is currently £15,000, will increase to £21,000- different from a graduate tax, which would have meant people making higher payments as soon as their incomes went above £6,500.
Andrew Miller (Ellesmere Port and Neston) (Lab): What analysis has been undertaken to consider the differential impact on different universities, different types of universities and different faculties? Will the Minister publish any such analysis, because it is quite clear from discussions with some vice-chancellors that some institutes are at risk as a result of the proposals?
Mr Willetts: The crucial decisions will be taken by students. It will be the universities that win the students that also win the funding that comes with the students. It is right that we must expect a diversity of responses from universities. When it comes to individual departments, universities will wish to consider whether they have a single charge at an agreed rate across all their departments or whether they want to propose different charges for different departments. That will be a decision for them.
Simon Hughes (Bermondsey and Old Southwark) (LD): Can the Minister tell the House which categories of future part-time or full-time students in Southwark and everywhere else in England will be financially better off under these proposals than under the current arrangements?
Mr Willetts: We believe that people will be assisted in several ways. The increase in the maintenance grant for the poorest students at university is a clear gain for them-an improvement in the current system. In fact, we believe that more than half a million students will be eligible to get more non-repayable grant for living costs than they do now. We believe that about a quarter of graduates will contribute less than they do now, and indeed around half will have some of the balance written off. We have tried to rise to the challenge of ensuring that this is a progressive settlement.
The hon. Gentleman asked about part-timers. We estimate that about 60,000 part-timers are currently eligible for a tuition grant, and under our proposals about 150,000 may be eligible for loans on a more extensive basis than at present.
Mr David Lammy (Tottenham) (Lab):
The decision to withdraw state funding from arts and the humanities entirely-from politics, geography and history-is a huge constitutional decision that cuts to the heart of what it means to be a democratic country. Will the Minister confirm that there will be a vote on the Floor
of the House, not in a Committee room, and that the entirety of his proposals-widening participation and the fee levels-will be debated together?
Mr Willetts: There will be a vote on the changes that are necessary in the regulations for fees that are in the legislation that we inherited from when the right hon. Gentleman's party was in government. Yes, I fully recognise that this is a matter of great interest to Members on both sides of the House and we undertake that that debate should take place on the Floor of the House. The exact amount of time will of course be for the usual channels and party managers to decide.
Paul Uppal (Wolverhampton South West) (Con): Is the Minister aware of the words of Michael Arthur, chairman of the Russell group of universities, this morning? He said of the coalition's funding initiative that it sends a signal that the Government recognise
"the importance of higher education to the future of our country, its economy and our ability as universities to help the country out of recession."
Mr Willetts: I did hear that interview and I thought that the leader of the Russell group made the point very well. We are backing our universities. The combination of the new freedoms we are offering them today and the excellent settlement for research and science in the comprehensive spending review enables them to go forward on a solid footing.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Many of the students at Liverpool's three fantastic universities have been helped by the Aimhigher programme. Across the UK, the programme has helped more than 2,500 schools and 300 colleges and has provided summer schools at which young people can stay for three to five days. It has provided impartial workshops and bespoke programmes, particularly for people with disabilities as well as for looked-after children. Will the Minister guarantee that all the activities currently provided by the Aimhigher programme will continue under his plans?
Mr Willetts: It will be for individual universities to put forward their proposals on what they believe to be the most effective way of widening participation and access. It will then be for the Office for Fair Access to set, with them, benchmarks for their progress. We think that trusting universities to come forward with initiatives and then rigorously assessing their performance against them is the right way forward.
Iain Stewart (Milton Keynes South) (Con): I, too, warmly welcome the announcement regarding part-time students; it will do much to help the Open university, which is much cherished on both sides of the House. On making higher education more flexible, may I urge the Minister to look closely at the model being pioneered by University Centre Milton Keynes in partnership with local FE colleges?
Mr Willetts: My hon. Friend is a very powerful champion of the Open university, which I have enjoyed visiting in his constituency. The aim is to have much more flexibility, and the models he describes are the kind that we wish to flourish in a more diverse university system.
Sammy Wilson (East Antrim) (DUP): The Minister has described his proposals as delivering
"a better deal for our students,"
but given that costs might go up by 100%, many people will not see them as a good deal. What steps is he taking to ensure that universities do not simply increase fees for students rather than considering the costs of the degrees they are supplying, which seem excessive in many cases?
Mr Willetts: The hon. Gentleman is absolutely right. We need to have tough pressures on universities to hold down their costs in times such as these. That is why the £6,000 threshold we propose will act as a discipline on universities and will ensure that they have to hold down their costs. We expect universities to respond to that pressure, and the Secretary of State and I have made it clear to universities on many occasions that we expect greater efficiencies and the holding down of costs as a result of the proposals.
Nicola Blackwood (Oxford West and Abingdon) (Con): Some of the best and brightest students and researchers in the country come through Oxford universities and contribute enormously to our economy and society. I welcome much of the report as progressive and I believe it can offer as sustainable a funding solution as possible in the current economic climate, but can the Minister assure me that the proposals will not compromise our universities' international competitiveness? Also, will he explain how he intends to improve careers and financial advice for students as we expect them to make greater contributions?
Mr Willetts: It is very important that our internationally competitive universities are able to compete with the best in the world. That is why we understand their arguments about the need to recruit and retain staff of the highest quality. My hon. Friend is absolutely right about information, advice and guidance and I know that the Minister for Further Education, Skills and Lifelong Learning is working very hard in the Departments for Business, Innovation and Skills and for Education to ensure that we have a significant improvement in those areas. The destruction of the professional careers advice function under the previous Government has been a disaster for social mobility.
Helen Goodman (Bishop Auckland) (Lab): A couple of months ago, the Minister published a book about the unfair advantages that the baby boomers had. Will he explain why he has now come to the House with a proposal that will burden the next generation instead of following the example of my hon. Friend the Member for Harrow West (Mr Thomas) in placing the burden, through our taxes, on those of us who had such an excellent free education?
Mr Willetts: I am grateful to the hon. Lady for the plug for my book-that was very good of her. It is available in all good bookshops. I do not accept the way that she characterises our policies, which will offer a better deal for students because universities will have to focus on the quality of the teaching experience they offer. Graduates, not students, will have to pay the costs only when they are earning £21,000 or more, which is close to median earnings.
Dr Julian Huppert (Cambridge) (LD): I welcome some of the changes. They are more progressive than the Conservatives would have achieved on their own, more progressive than Browne and more progressive than the Labour party intended-the same Labour party that introduced both fees and top-up fees having promised not to. However, I do not support an increase in the cap, as the Minister well knows. Does he share my concern that the increased level of student debt will provide a disincentive to students entering university and will make it harder for them to get mortgages and loans after they leave?
Mr Willetts: I hope that the hon. Gentleman recognises that the proposals clearly offer a progressive way forward whereby graduates will have to start repayments only when they earn more than £21,000 a year. That will have a crucial implication for the issue he raises because their monthly repayments will be lower than they otherwise would have been. They will be paying at the rate the previous Government fixed, at 9%, but they will be paying 9% of their earnings over £21,000 rather than those over £15,000. When many building societies and lenders assess young people and graduates for mortgages, they will see lower monthly outgoings under our proposals than they would under the system that we inherited from the previous Government. I hope that the hon. Gentleman will consider that important point.
Fiona O'Donnell (East Lothian) (Lab): Why does the Minister think that the Lib Dems in coalition with Labour in Scotland stuck to their promise to students whereas those in this coalition are so willing to break their pledge?
Mr Willetts: When I follow from the sidelines the debate in Scotland about financing its universities, it is clear to me that many universities in Scotland are concerned that they are not on a secure, long-term financing basis and that they are looking at a wider range of options. They might even be reading Lord Browne's report with interest.
Gavin Barwell (Croydon Central) (Con): Croydon college has recently started offering degrees from the university of Sussex. Does my right hon. Friend agree that there is huge potential for a much more diverse higher education sector in which people can study degrees from our top universities closer to home, potentially over two years rather than three?
Mr Willetts: A cause to which my right hon. Friend the Secretary of State attaches particular importance is having a more diverse range of degree courses, particularly two-year courses. We need the kind of freedoms we are putting forward and the incentives we are describing today to encourage that type of provision in future.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab):
The Minister referred to the interest rate that will be reclaimed as 3% plus inflation without being precise about which measure of inflation he was adopting. I think I detected from a subsequent answer that he was proposing to use the retail prices index. Given that the Government propose to substitute the consumer prices index for the RPI in relation to a huge range of benefit payments that involve the Government paying out, why
is he proposing to adopt the RPI in this regard, particularly considering that he has talked about trying to minimise repayment costs for students?
Mr Willetts: We are, of course, following the precedent set by the previous Labour Government.
Amber Rudd (Hastings and Rye) (Con): In January 2010, it was estimated that 18.5% of school-age children in Hastings were on free school meals, against the national average of 14%. Can the Minister reassure me that the national scholarship scheme will particularly help the young people in my constituency, some of whom come from very low-income families?
Mr Willetts: My hon. Friend makes a very important point. The ambition is to tie together a coherent package of support going through the different stages of childhood and on into adulthood. There is more help for early years, we have the assistance in the pupil premium for children on free school meals and we are using those sorts of criteria to continue to assist those young people through into university. That is absolutely our aim; there is a lot more work to do on the detail of the national scholarship scheme, and her thoughts and those of Members on both sides of the House will be very welcome as we develop our proposals.
Angela Smith (Penistone and Stocksbridge) (Lab): The Government's policy represents a major shift in all sorts of ways, not least because it is based on a massive 80% reduction in public sector funding for higher education teaching. Surely, therefore, it is crucial that the Government ensure a proper debate on those changes by publishing a White Paper as soon as possible.
Mr Willetts: We are going to produce a White Paper, and I have also made it clear that there will be a proper opportunity for debate in this House.
Mr Robin Walker (Worcester) (Con): I congratulate the Minister on delivering what the Secretary of State promised, something even more progressive than the Browne review, and I reassure my hon. Friend the Member for Cambridge (Dr Huppert) that plenty of progressive Conservative Members have been pushing for just that. However, the great step forward in support for part-time students will benefit a great number of mature students, and my local university, the university of Worcester, looks after many of them. Does the Minister accept that many of those people are concerned about the suggestion in the Browne report of a UCAS points threshold? As his statement does not address that issue, can he assure me that the White Paper will?
Mr Willetts: Those are exactly the kind of long-term issues in Lord Browne's report, and my hon. Friend is quite right: we were not able to cover them in the statement. A lot more consideration is required, and that will lead into the White Paper that we will publish over the winter. My hon. Friend was also quite right in that this is absolutely a coherent, single, coalition proposal, in which we have worked together as a coalition and come up with a set of proposals that will probably be better than either party could have come up with on its own .
Roberta Blackman-Woods (City of Durham) (Lab): The Minister suggests that the proposals are good for universities, so will he explain how it is good for them to have 80% of their teaching income withdrawn? Why is he not making it clear that the money from additional fees will largely be replacement income, not the additional investment that our universities need to be internationally competitive?
Mr Willetts: The money will reach universities in a different way; it will come via the choices of students. Students will not have to pay out of their back pocket-they will not have to pay directly-but eventually the money will reach universities. When graduates benefit from higher earnings as a result of their study at university, their graduate contribution will pay for the system. A graduate contribution is the right way-an equitable way-of paying for that system, because it empowers students and, at the same time, secures progressive access to universities.
Andrew George (St Ives) (LD): The lobby for university students is particularly powerful, but for those studying for vocational qualifications less so. In that light, can the Minister reassure me that today's proposal will not have a detrimental impact on those students from low-income backgrounds who study for such qualifications?
Mr Willetts: All Ministers in the Department for Business, Innovation and Skills are very strongly committed to the vocational route. One thing that has gone wrong with this country has been the creation of a bottleneck owing to the belief that university is the only route into a career and a well-paid job. We will put forward our skills strategy in the very near future, and I hope the hon. Gentleman will recognise that it addresses absolutely the point that he rightly raises.
Michael Connarty (Linlithgow and East Falkirk) (Lab): I am in no way a nationalist, but there is clearly an impact on Scotland, even under the current fees structure, with many English students moving to cheaper education in Scottish universities. If the fee is a graduate fee, would it not be appropriate for the Minister to say that his minimum charge of £6,000 should follow every student who leaves England for cheaper education in Scotland?
Mr Willetts: We will be in close touch with the Scottish Administration, and of course we will continue to have our arrangements for funding English students when they go to Scotland.
Matthew Hancock (West Suffolk) (Con): I detect widespread support for the proposals to improve access to universities, which is an extremely important issue. Does the Minister think, therefore, that it is incumbent on all of us, whether or not we support the whole package, to make sure that we explain to students and to people thinking of going to university that they will not pay anything until they earn £21,000 and that access will be broader?
My hon. Friend is absolutely right, and the crucial thing is the number of young people who are anxious because they think that they somehow have to pay fees up-front, when that is not the case. [ Interruption. ] During the Labour leadership contest over the summer, it became clear that at least one candidate seemed to
believe that students paid fees up-front. That is not the system, and our proposals, with our new graduate contribution, are a fairer, more progressive way, because the point at which graduates start repaying will be so much higher than it is at the moment.
Liz Kendall (Leicester West) (Lab): As well as giving extra support to those on low incomes, a genuinely progressive student finance system would ensure that those who ended up on a middle income, let us say of £21,000 to £41,000, paid proportionately less of their income and lifetime earnings than higher earners. Can the Minister guarantee that that will be the case?
Mr Willetts: Yes. On the estimates that we have done-and we are placing some of our figures in the Library, not least because of the request from the shadow Secretary of State-it is clear, contrary to the rather misleading report in The Guardian the other week, which in turn drew on some work by the Social Market Foundation, that as graduates go through each stage on the earnings scale, they will be expected to pay more.
Greg Mulholland (Leeds North West) (LD): I accept and welcome the fact that this proposal is more progressive than the current system, but I cannot accept that it has to be tied to an increase in fees. That is something that I cannot and will not accept. Will the Minister acknowledge some perversities within the idea of increasing fees? First, increasing fees to £6,000 leads to the possibility that students going into lower-entry courses and institutions will subsidise those on higher-entry courses. Secondly-
Mr Speaker: Order. The hon. Gentleman will resume his seat. I am sorry but this is the second- [ Interruption ] . Order. This is the second time that this has happened today. There are lots of Members trying to get in. I want to help the hon. Gentleman and other Members, but we cannot have twin-hatted questions. It will not do.
Mr Willetts: I am not aware of any feature of the proposals which would lead to the cross-subsidy that concerns the hon. Gentleman.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Considering that higher education funding structures in Wales are more or less tied to those in England, following our adoption of top-up fees, what discussions has the Minister had with the Welsh Assembly Government concerning today's announcement?
Mr Willetts: I have had discussions over the months with Leighton Andrews, who has described to me his proposals for Wales, where I know there is an ongoing debate about university financing. I hope to be able also to have a quick phone conversation with him about our proposals today and, of course, to keep in close touch.
Damian Hinds (East Hampshire) (Con):
Does my right hon. Friend agree that, although it is undeniably true that earlier generations of students, including most of us, got a much more generous deal, it was always based on a very restrictive formula for exactly to whom it could be generous? We all benefited. In future, if we want to have wider access, improve social mobility and protect the high quality of our university education,
which does carry a cost, exactly this sort of measure, which ties contribution more closely to cost, will be necessary-
Mr Speaker: I am grateful. I call the Minister.
Mr Willetts: My hon. Friend is absolutely right. Many of us in this House benefited from a higher education system that was funded in a very different way from today's system, and we were able to enjoy that system only because such a small proportion of young people went to university. As we see so many more people going to university nowadays, which is a trend that we welcome, it is right and necessary to put university financing on a better basis.
Mr Speaker: Order. I would like to accommodate a few more, but I really do appeal to Members to help each other.
Lilian Greenwood (Nottingham South) (Lab): Does the Minister not understand that many talented young people will simply feel unable to choose to go to university because they will be terrified of leaving with debts hanging over them of more than £20,000, which they might never be able to pay off?
Mr Willetts: I hope that the hon. Lady will join me in sending the very clear message to young people that the system is not like having a credit card debt of £20,000. It is a graduate contribution scheme in which there is no repayment unless someone earns more than £21,000, and, if for whatever reason, they become unemployed or withdraw from the work force during that time, they will not have to make any repayments. It is far better than conventional debt, and it is important for all of us in all parts of the House to make that clear.
Andrew Stephenson (Pendle) (Con): How does today's announcement sit with the Government's wider approach to higher education, such as the funding of the science and research budget and other university income streams?
Mr Willetts: In the comprehensive spending review, we were able to secure a very good settlement for science and research, protected with a ring fence. The combination of that ring-fenced support and these reforms offers a very good, strong prospect for our universities.
Chris Williamson (Derby North) (Lab): Will the Minister stop referring to his policy as progressive and fair, because it is no such thing? What assurance can he give me that the university of Derby, which is one of the institutions that could be adversely affected by his proposals, will still be in business in 10 years' time?
Mr Willetts: Our proposals are progressive, because they help to encourage people from poorer backgrounds to go to university, because of the higher education maintenance grant, and because of the higher repayment threshold. That crucial commitment to taking progressive measures is one of the reasons we commend these proposals to the House.
Mary Macleod (Brentford and Isleworth) (Con): I welcome the progressive and fair announcements that my right hon. Friend has made. How can we ensure that we still get enough science, engineering and technology graduates, and how will this measure help?
Mr Willetts: This relates to the mechanisms whereby the teaching grant is allocated. For the more expensive, lab-based courses, there will of course continue to be teaching grant to recognise the extra costs involved in delivering those courses. We believe that that will maintain a continuing level playing field for STEM-science, technology, engineering and mathematics-subjects.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): The right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) has already detailed some of the implications for Scotland. May I ask the Minister specifically about the impact of the RAB-resource accounting and budgeting-payments, which will have a direct impact in Scotland? My hon. Friend the Member for Glasgow North (Ann McKechin) wrote to the Secretary of State on 12 October asking for a meeting with Scottish MPs, but despite continual chasing up, that meeting has not yet happened. Will he undertake that it will happen as soon as possible so that we can discuss these issues with Scottish MPs?
Mr Willetts: We have to respect the devolution settlement, and I am very aware that we are talking about higher education finance for England. However, I keep in close contact with Scottish colleagues, and I am sure that the Secretary of State or I will be very happy to have such a meeting.
Christopher Pincher (Tamworth) (Con): Does my right hon. Friend agree that these welcome proposals will begin to even up the opportunity for British students who, when competing for places at our best universities, compete with overseas students with bigger cheque books?
Mr Willetts: I hope that these proposals will ensure that British students have a very fair deal at our universities; indeed, that is a key feature of our proposals.
Paul Farrelly (Newcastle-under-Lyme) (Lab): The Minister will no doubt be pleased that in the past fortnight the six-point timetable for scrapping tuition fees has been deleted from the section of the Liberal Democrat website called "What we stand for". Strangely enough, however, it does not mention any rise in fees. My question is another book plug. In his recent memoirs, the Secretary of State described himself as a "free radical", but in reality has not he, and every single Lib Dem Minister, now become a £9k Conservative?
Mr Willetts: I think that "free radical" captures very well the enormous contribution that the Secretary of State makes-and what a pleasure it is to work alongside him.
Duncan Hames (Chippenham) (LD): If raising the repayment threshold is to benefit every single graduate, in the Minister's words, can he confirm that current students-and indeed, current graduates-will see their repayment threshold raised also?
Mr Willetts: The hon. Gentleman makes a very important point. These are proposals for the future, which come in for 2012. They are not retrospective changes, and for current graduates the existing regime will not be changed. This is only for the future from 2012 onwards. I am grateful for this opportunity to make that clear.
Nic Dakin (Scunthorpe) (Lab): My question rather follows on from that point. Young people who are in their final year of a level 3 course-say, doing A-levels-might choose to take a gap year next year and therefore apply to UCAS through deferred entry for a 2012 start. Will they be affected by these changes, or will they go to university under the current rules?
Mr Willetts: All students going to university in 2012 will do so under the regime that I have proposed to the House. Some young people-this is a very important practical point-may already have applied for deferred entry as part of not going to university in 2011-12. Admissions procedures are the responsibility of individual universities, but we hope that universities and UCAS, working together, will open a window to enable those young people, if they wish, to have the opportunity of going to university in 2011.
Mr James Clappison (Hertsmere) (Con): May I warmly welcome my right hon. Friend's statement and this package, which is a good deal for students and universities? Can he give me an assurance that while universities will rightly be under an onus to attract applicants, and to give appropriate financial support in certain cases, admissions to university will remain a matter entirely for individual universities judging on individual merit and academic potential?
Mr Willetts: My hon. Friend is absolutely right. Universities must maintain control of their individual admissions procedures; of course, we respect that freedom. Although we are absolutely committed to broadening access, the reports in the press this morning about so-called quotas were completely misleading. Neither the Secretary of State nor I believes in quotas.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): Everything that the Minister has said about student choice suggests that we are moving towards a market in higher education. When I asked the Secretary of State about this when we discussed the Browne report, he gave a categorical assurance that we are not moving towards a market. Which one of them is right?
Mr Willetts: We are in a system where there will be a continuing and very important role for the Government, through providing financial support and through the new regulatory regime that emerges as we think through the proposals from Lord Browne, and where there is a very clear cap-a threshold of £6,000, and in exceptional circumstances, up to £9,000. That is the right way of combining freedom of choice for students and the legitimate role of public policy.
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