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House of Commons Hansard
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General Committees
14 January 2019

Delegated Legislation Committee

Draft Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2018

The Committee consisted of the following Members:

Chair: Stewart Hosie

Ali, Rushanara (Bethnal Green and Bow) (Lab)

Coaker, Vernon (Gedling) (Lab)

† Dodds, Anneliese (Oxford East) (Lab/Co-op)

† Elmore, Chris (Ogmore) (Lab)

† Jenkin, Sir Bernard (Harwich and North Essex) (Con)

McKinnell, Catherine (Newcastle upon Tyne North) (Lab)

† McDonagh, Siobhain (Mitcham and Morden) (Lab)

† Menzies, Mark (Fylde) (Con)

† Merriman, Huw (Bexhill and Battle) (Con)

† Shapps, Grant (Welwyn Hatfield) (Con)

† Stevenson, John (Carlisle) (Con)

† Streeting, Wes (Ilford North) (Lab)

† Stride, Mel (Financial Secretary to the Treasury)

† Swire, Sir Hugo (East Devon) (Con)

† Tredinnick, David (Bosworth) (Con)

† Walker, Thelma (Colne Valley) (Lab)

† Whittaker, Craig (Lord Commissioner of Her Majesty's Treasury)

Ian Bradshaw, Committee Clerk

† attended the Committee

Thirteenth Delegated Legislation Committee

Monday 14 January 2019

[Stewart Hosie in the Chair]

Draft Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2018

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I beg to move,

That the Committee has considered the draft Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2018.

It is a pleasure, as always, to serve under your chairmanship, Mr Hosie. The order changes the annual inflationary increase in the business rate multiplier from the retail price index to the lower consumer price index for the coming financial year. The Government are committed to permanently switching to the use of CPI as an uprating measure for the business rate multiplier.

The multiplier is effectively the tax rate applied to the calculation of business rates. There are two business rate multipliers: the small business multiplier and the standard multiplier. Historically, those multipliers would rise in line with the preceding year’s RPI figure. On that basis, the multipliers were due to increase to reflect the September 2018 RPI figure, which was 3.3%. The Budget 2016 committed to switching the multiplier uprating from RPI to CPI indexation from April 2020, and in the autumn 2017 Budget, the Chancellor brought forward the implementation date to April 2018, to deliver a key ask of the business sector.

That measure reaffirms the Government’s commitment to supporting British businesses, of all sizes and from all sectors, to achieve their potential by reducing their tax burden. The switch is worth more than £5 billion to businesses over the next five years, and the benefit to business grows every year as the rate multipliers are uprated by the lower rate of inflation year on year. The Government introduced regulations to make the change for 2018-19, and the order will do the same for 2019-20.

The Government recognise that business rates can represent a high fixed cost for some businesses and that is why we have taken repeated action in recent years to cut the burden of rates for all businesses and make the system fairer. Since Budget 2016, the Government have announced reforms to the system worth more than £13 billion to businesses over the next five years.

The order is the secondary legislation required to effect the change in the inflationary increase of business rates from RPI to CPI for 2019-20. It sets out the new equation for setting the multipliers for the coming financial year so that the figure used is 2.4% instead of the 3.3% that I referred to earlier. That represents a cut in business rates every year, which benefits all ratepayers and frees up cash for businesses.

In conclusion, the order will change the annual inflationary increase in business rates from RPI to CPI, and I commend it to the Committee.

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It is a pleasure to serve with you in the Chair, Mr Hosie. I am grateful to the Minister for that helpful explanation of the order. As he explained, it is relatively straightforward, changing the indexing formula for business rates from RPI to CPI, which was announced back in the autumn 2017 Budget.

Initially, that change was anticipated to come into effect in 2020, but as the Minister explained, in the light of the rise in inflation, the Treasury wanted to bring the change forward by two years. That was done for the last financial year—from April 2018—through the 2017 Local Government Finance Act 1988 order, and will occur this year through this order.

As the Minister mentioned, many groups lobbied for the change, which appears to be appropriate given that the retail price index was de-designated as a national statistic in March 2013—many reports and useful sets of evidence have indicated its deficiency. Indeed, the decision seems to be supported across the board, with the Treasury Committee also welcoming the switch, as well as many in the business community.

There are many problems with the Conservatives’ approach to business rates overall, not least the fact that the current system places bricks and mortar firms at a disadvantage compared with those that have an almost purely internet presence. Of course, there is still huge uncertainty on the future of local government funding, which is increasingly based purely on council tax and business rates. Those matters are not at issue here, however, with this relatively technical change. We therefore see no reason to oppose the order.

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Minister Stride?

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I have nothing further to add, Mr Hosie, other than to thank the hon. Lady.

Question put and agreed to.

Committee rose.

Draft Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2018

The Committee consisted of the following Members:

Chair: Philip Davies

† Bebb, Guto (Aberconwy) (Con)

Campbell, Mr Ronnie (Blyth Valley) (Lab)

† Crabb, Stephen (Preseli Pembrokeshire) (Con)

† Freeman, George (Mid Norfolk) (Con)

† Hall, Luke (Thornbury and Yate) (Con)

† Harris, Rebecca (Lord Commissioner of Her Majesty's Treasury)

† Harrison, Trudy (Copeland) (Con)

McGinn, Conor (St Helens North) (Lab)

† O'Brien, Neil (Harborough) (Con)

† Perry, Claire (Minister for Energy and Clean Growth)

† Phillipson, Bridget (Houghton and Sunderland South) (Lab)

† Slaughter, Andy (Hammersmith) (Lab)

† Smith, Nick (Blaenau Gwent) (Lab)

† Smith, Royston (Southampton, Itchen) (Con)

† Timms, Stephen (East Ham) (Lab)

† Whitehead, Dr Alan (Southampton, Test) (Lab)

† Whitfield, Martin (East Lothian) (Lab)

Matthew Congreave, Committee Clerk

† attended the Committee

First Delegated Legislation Committee

Monday 14 January 2019

[Philip Davies in the Chair]

Draft Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2018

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I beg to move,

That the Committee has considered the draft Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2018.

Good afternoon, Mr Davies. It is a pleasure to serve under your chairmanship. I am very pleased to open this debate. As it says on the tin, these regulations will amend the domestic minimum standards provision in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. If approved by the Committee, they will take effect from April 2019 and will introduce a new landlord funding element to the existing provisions, ensuring that they actually deliver the energy efficiency improvements that we set out in our clean growth strategy.

For hon. Members who are unfamiliar with the private rented sector minimum standards, I will give some background on the sector and the 2015 energy efficiency regulations, before discussing the need for, and the effect of, these regulations. The 2015 regulations established a minimum energy efficiency standard of energy performance certificate band E for privately rented properties in England and Wales. There are about 4.5 million such homes across England and Wales; it is the second-largest form of tenure after owner occupation, comprising about one fifth of domestic housing stock. Many of those private rented properties already have an EPC rating of E or above, which is very welcome, but about 290,000 properties—6% of the total—have an EPC rating of F or G. That means that they are particularly energy inefficient and are costly to heat. On average, it costs about £1,000 more per year to heat an F or G-rated home, compared with one rated band D. Many of those homes are occupied by people living in fuel poverty.

The 2015 regulations were designed to drive energy efficiency improvements to the least efficient privately rented homes. Subject to a limited number of exemptions, landlords of F and G properties are required to use available third party funding to improve their homes to a minimum of EPC band E before they can be let out. The third party funding could have included energy company obligation funding and local authority grants, but it was primarily intended that it would come from the green deal finance scheme. I was very proud to sit on the Committee that considered the legislation—[Interruption.] Excuse me while I rummage for a tissue. That scheme was intended to provide a cost-effective, appealing way for owner-occupiers and landlords to borrow to upgrade their homes or the properties they were letting out. It is a source of great regret that the scheme did not work—I can answer questions about it later. That essentially meant that we were targeting a pool of homes without the scheme with which we were intending to deliver the changes. [Interruption.] Thank you to my Parliamentary Private Secretary for the tissue provision—excellent PPSing.

Where a landlord of an EPC F or G-rated home cannot improve the home to band E, either because funding is unavailable or because there are legitimate technical barriers, such as those often associated with listed homes, the regulations permitted them to continue to let the property so long as they registered an exemption on the new minimum standards exemption register.

By targeting the least efficient properties, we hoped to improve the living conditions of tenants, many of whom live in fuel poverty. In fact, about 45% of that cohort are classified as fuel-poor. The regulations were a crucial lever in our work to meet the fuel poverty strategy and the Government’s decarbonisation targets. As we know, the green deal mechanism did not work as intended, and that led to many landlords being able to file exemptions on the exemptions register. We have taken a reasonable amount of time to consult carefully on how we should amend the original legislation with new regulations.

These regulations place a requirement on landlords to invest or co-invest in energy efficiency measures where third party funding is insufficient or cannot be secured. We have capped that investment at £3,500 per property to avoid placing an excessive burden on landlords. Consequent to that, we intend to introduce several ancillary amendments, such as the cancellation of existing “no cost” exemptions by April 2020.

Let me turn briefly to the choice of the £3,500 cap. Several numbers were consulted on, and our analysis is that this one strikes the best balance between ensuring that a meaningful number of properties are improved to EPC E and that those improvements are affordable, particularly for small landlords. It is striking that the majority of landlords in this country do not have a large portfolio; they are often families with one or two properties, which are often let out in the hope of generating some additional income for the landlord’s retirement. Our analysis shows that, with the cap set at this level, approximately 48%, or almost half, of EPC F and G-rated properties can reach band E, with an average cost of only £1,200, which is well below the cap. The remaining 52% of properties will be able to receive at least one improvement and make some progress towards that target, with an average cost of £2,000.

That is beneficial in two ways. First, improvements made under this cap, whether to get to the E level, or to progress from the worst properties, will save tenants an average of £180 a year on their energy bills—of course, the savings could be very much more substantial. The improvements are also estimated to increase the capital value of a property by £8,500. There is a real sense that it is an absolute win-win situation for both tenants and landlords alike. That is alongside the energy price cap, which has come into effect with cross-party support, saving consumers an estimated £1 billion on their bills annually.

We obviously consulted carefully on these numbers and exemptions. Some 84% of consultation respondents supported the proposal to introduce the landlord funding component, and they made the point that, alongside the obvious cost-saving benefits to tenants, landlords will benefit from the improved energy efficiency of these properties in the form of reduced maintenance costs and an increase in property capital value. That will make a meaningful contribution towards our overall carbon dioxide reduction targets, support our clean growth and support our agenda of creating more routes to market for energy efficiency technologies.

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My right hon. Friend makes an important point about the potential benefit to landlords, but she will know that those are perhaps not strong enough to incentivise landlords to invest proactively in the kind of improvements to properties that tenants need to see. Will she take a moment to outline the precise mechanisms whereby the obligations on landlords will be activated? We know that far too many tenants live in substandard property from a fear of raising difficult issues with landlords or of their own insecurity. How can she be sure that the regulations will lead to the positive outcomes she hopes for?

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My right hon. Friend makes a very important point that gets to the nub of the issue: how will we ensure that these regulations are enforced? Enforcement is a power given to local authorities, which have a range of powers to support effective enforcement. To understand what that requires and what the best levers are to drive enforcement, my Department is funding seven 12-month longitudinal enforcement studies this year, which will work out what is the best enforcement toolkit.

There is now more data across Government on home standards and on which households live in fuel poverty, so there is more data available to target the enforcement work. We will have evidence from right across the UK, although not, I believe, from any constituencies in Wales—I apologise for that. We will have at least a sense of what we need to do to enforce the regulations.

The other point worth touching on is that someone might be renting a property where they could save themselves between £200 and £1,000 a year, but that information is currently not readily available to renters. Generally, agents list properties simply on the basis of aggregate rent per week or month. They might also show broadband speeds or local school quality. I would very much like—we are doing some work on this—estate agents and rental agents to put the whole question of cost to rent and cost to operate into the metrics that they show to tenants. If something looks affordable on paper, is it affordable to occupy? That is a piece of ongoing work. I hope that my right hon. Friend is satisfied with that response.

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The Minister, like me, is a great champion of British innovation and UK leadership in innovative technologies. A company in my constituency called Finn Geotherm has led the way in developing packages for social housing that deliver huge benefits for both tenants and providers. Will she reassure me and the Committee that work is being done to ensure that innovative little British companies get a chance to use this great measure to drive forward their leadership in the field?

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As always, my hon. Friend hits the nail on the head on the subject of innovation. In defining standards for energy performance certificates, we are guided by SAP, our standard assessment procedure for assessing the energy efficiency of a measure. For too long, in my view, SAP was rather retro-looking; it looked in the rear-view at traditional, albeit effective, measures such as loft insulation and cavity wall insulation, but did not particularly focus on new innovations such as smart thermostats.

One way in which the scheme can be implemented is through landlords availing themselves, where possible, of the ECO funding that is out there. We have amended that funding—sadly, without the Opposition’s support—to ensure that a higher percentage is spent on innovation so that we can promote measures such as the one my hon. Friend mentions from the company in his constituency. The intention of all these schemes is not just to alleviate fuel poverty and cut our carbon emissions, but to help us to build a really effective sector that delivers energy-saving measures wherever possible and supports the jobs that relate to the investment.

In some ways, I am rather saddened to introduce the draft regulations to amend the 2015 regulations, because they reflect a failure in the green deal, which we thought would achieve so much. The green deal is still operational, however, and there is some very important modelling and infrastructure at its core, which is why it has been bought. We are working with the Green Deal Finance Company to see how it could be repurposed, potentially to support these investments and others, but we feel it important that we put the cap in place; create an environment in which landlords know what they are expected to do to upgrade their properties; remove any uncertainty; and ensure that domestic minimum standards operate in line with our original intention and deliver meaningful energy efficiency improvements to the least efficient homes in the private rented sector, which are often rented by some of our most vulnerable constituents. I commend the draft regulations to the Committee.

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It is a pleasure to serve under your chairmanship, Mr Davies. The Minister has given a customarily comprehensive exposition of the draft regulations and of what the Government seek to achieve with them. She also acknowledged the reason for them, which is that the original 2015 regulations were based on the idea that landlords could uprate their properties for energy efficiency purposes through the green deal programme. The manifest failure of the green deal meant that those regulations, which came on the statute book a month or so before the deal went down, were completely inoperable pretty much from the word go.

I cannot let the debate pass without briefly recording the history of the 2015 regulations, which arose from the Energy Act 2011. It took four years for them to come on to the statute book, and the target at the time was that landlords letting out F and G-rated properties would not be able to do so after 2018, unless they had taken up the green deal proposal to upgrade their properties or they had received an exemption because they had spent up to the limit of the proposal and still could not get their properties up to that level.

After the 2015 regulations were demonstrated to be inoperable, it has taken another four years for these regulations to come forward. The date by which the energy efficiency of those landlords’ properties should be upgraded has also slipped as a result of the long delay in getting the 2015 regulations on to the statute book. We could say that these regulations are the housing and energy equivalent of the controversy about the appearance of Harper Lee’s novels: they have taken a great deal of time to emerge, and when they do emerge there is a great deal of time before the one that puts the previous one right emerges to take its place.

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Of course, when they do emerge, they are considered to be tours de force and best-sellers. The point I am making, rather facetiously, is that it is much better to do something right and that will have an impact—I refer to the smart export guarantee of last week, which, again, took a little longer than I intended. We have to ensure that these regulations are proportionate and balanced and can be delivered, rather than being just a bit of writing on a piece of paper.

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I take the Minister’s point, but it was widely thought that Harper Lee’s second novel was substantially inferior to the original, to which I cast my mind this afternoon. There are two key points on these regulations that hon. Members ought to consider carefully. First, as the Minister has said, following consultations on what to do about the fact that the green deal no longer gave a route for landlords to improve their properties—in theory, at no cost to themselves because of the way the green deal worked—the Government produced consultations on the uprated regulations, which initially suggested that the expenditure limit should be £2,500, after which the landlord should be exempt.

The consultations drew a substantial number of responses. Some 79% of respondents argued that the limit the Government suggested as an alternative to the green deal was far too low. Of those, 60% suggested that the limit should be at least £5,000, which is the figure used in the work that looks at what the uplift to those properties would be. The Minister has said that according to the research, should the limit be set at £3,500—it was the only figure substantively put forward in the consultation—something like 48% of properties could be improved. To put it another way, the majority of properties in F and G would not be covered by this measure and would be exempted for ever under the terms of this amendment—they would be lettable without the landlord having to do any more work, because it would not be possible to uprate the property to that level.

On the other hand, the £5,000 figure, according to some of the impact assessments, suggests that some 73% of F and G properties could be successfully uprated to band E. With a little bit more expenditure, the substantial majority of those properties could be uprated to band E. That is important, as the Minister mentioned, in the light of the clean growth strategy’s ambition for the private rented sector in general up to 2035. The Minister, who I think wrote substantial parts of the revised clean growth strategy, will know that it proposes that properties in the private rented sector should be band C by 2030.

The clean growth strategy not only suggests that upward movement by 2030, but suggests that in the meantime, there should be mandatory levels up to band D in the private rented sector by 2025. The regulation effectively takes half the properties that could be uprated to band E by 2020 and, potentially, permanently exempts them, while at the same time, the clean growth strategy’s ambition is to revisit the issue in 2025. The landlords exempted from band E by 2020 would presumably be exempted in even greater numbers from 2025 to 2030. In other words, the proposal goes in precisely the opposite direction from the trajectory that the clean growth strategy suggests.

The Opposition think that it would have been more than prudent—rather; absolutely essential—for the Government to accept the overwhelming number of submissions to the consultation on the SI, and make the figure of £5,000 the limit above which exemptions would apply. I would argue that £5,000 would not be an enormous burden on landlords to ensure that they provide their properties in a lettable and saleable way. That is especially true given that, as the Minister has mentioned, a side effect of that work is that those properties increase in value by substantial amounts of money. She mentioned the figure of £8,500—even that is £3,500 more than the £5,000 figure.

We are concerned that after effectively eight years in the making, the regulations would uprate a frankly inadequate number of properties, and a pretty startling number of properties would be permanently exempt from that process. That is the first key point.

The second key point is about the overall definition in the 2011 Act of a private rented property, how that definition was incorporated in the 2015 regulations, and what one might have expected to have been incorporated in the regulations that we are considering. The 2011 Act, in the definition of private rented sector property and the measurements that should be undertaken for the purpose of complying with exemptions, raises the question of the property having an energy performance certificate. That arrangement is based on a European Union directive, so I wonder whether a statutory instrument is about to be introduced to redefine EPCs in the light of a possible early departure from the EU on a no-deal basis—we might see that in the not-too-distant future.

The EPCs, which were already in place and on which the whole of the legislation is based, only apply to properties that have been let as whole properties. Therefore, of the 4.3 million homes in the private rented sector, a substantial minority—houses in multiple occupation, where sections of the properties have been let at different times—are exempt from the requirements. Provided landlords rent out rooms within a building and not the whole building in one go, they are free—they do not have to do anything to their building as far as energy efficiency is concerned.

When the 2011 Act was passed, as I understand it from the Minister at the time—now Lord Barker—he was not aware that that huge exemption had been written into the legislation. Before the 2015 regulations were introduced, there were a number of indications that something ought to be done about that huge lacuna. One of the people indicating that something ought to be done was me. Indeed, I raised this issue in the House on 25 June 2014—I asked what should be done about the HMO sector and how the legislation might be uprated to get it right—so the Government cannot say that they were not told, that they did not know about it or that there were no ways to put it right. Indeed, as far as the 2011 Act is concerned, it should have been put right in primary legislation very shortly after the passage of that Act.

That is not an insignificant issue. My colleague representing the constituency next door to mine, the hon. Member for Southampton, Itchen, knows that Southampton is not only the private rented sector capital of the south coast, along with Brighton, but the HMO capital: 50% of the properties in the private rented sector in Southampton are houses in multiple occupation —so those HMO properties, many of which are in bad condition, will be completely exempt from the legislation.

When the 2015 regulations were introduced, given that the Government had been told about the problem, it was surprising that the guidance stated that

“there is no obligation to obtain an EPC on a letting of an individual non-self-contained unit within a property, such as a bedsit or a room in a house in multiple occupation”.

The Government actually told landlords at the time how to evade the arrangements. One might have expected, given that there were four years to get it right—tour de force though it may be—that that issue might have been put right in the regulations, but, on scanning them, there is nothing. The situation remains exactly the same as it has been since 2011. Many landlords will drive a coach and horses through the regulations and will not improve their properties simply because they will not let out all parts of their property at the same time.

The regulations are projected to make a substantial contribution to the clean growth strategy. They do not; they are a welcome uprating of landlords’ responsibility to their properties, but they fall far short of the ambition for the Bill when it was discussed in 2011. The Minister and I both served on the Bill Committee, and there has not been a happy outcome. What we thought would take place after the legislation was passed has not happened, and the outcome remains unsatisfactory.

Unless we have a statutory instrument that properly addresses, first, what contribution landlords should make to uprating their properties in line with the ambitions in the clean growth strategy, and, secondly, how many people can escape the obligation through the definition of their property—a particular sub-definition of “private rented” escapes completely—we will have a piece of legislation that just does not work. For that reason, we cannot support the regulations. Ideally, I would like the Minister to say that she will go away and come back with a statutory instrument that addresses those two points. We would all be able to support that because it would have an overall effect on the private rented sector and really would put us on the path to discharging our ambitions in the clean growth strategy.

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I am always grateful to the hon. Gentleman for his thoughtful and extensive contributions to our legislation. I am disappointed that, once again, the Opposition cannot support what most people outside this place feel to be sensible and proportionate changes, which will help the worst 6% of properties. I take his comments on board, but—as with the clean growth strategy, our ambitions on fuel poverty and the price cap Bill—it is a shame that he feels he is unable to support the changes. Let me try to answer some of his questions and see whether he will potentially review his position.

The hon. Gentleman is absolutely right—I pay tribute to his long-standing recognition of this issue—that houses in multiple occupation are covered by this minimum standard if they are required to have an EPC. Some do, and many do not. We are currently working with colleagues in the Ministry of Housing, Communities and Local Government to review the requirements. Although tenants can request energy efficiency measures, we do not want private rented properties to be reclassified into some sort of HMO bucket so there is another exemption.

We had a big call for evidence on EPCs—I hope the hon. Gentleman contributed to it—and this question came up in it. We will review the responses, and we will publish our response in the summer. This is a concern, but not one that should prevent this valuable contribution to alleviating the number of fuel-poor homes from being put on the statute book.

The hon. Gentleman raised the issue of delays and asked why this has taken so long. He will know that the original regulations set out that landlords needed to improve their properties or register an exemption by April 2020. With the consent of the Committee, we will put these regulations on to the statute book, and that will come into force. The 2018 limit applied only to new tenancies. He will ask me what the churn rate is in the tenancies; the answer is that I do not know, but I believe from the impact assessment that we are still capturing substantially the majority of properties in this sector.

I take the hon. Gentleman’s point about the level of a cap. To clarify slightly, 52% did not support the £5,000 cap. Although the majority of people thought it should be higher than £1,500, the majority did not support a £5,000 cap, for all the reasons that I set out: this cap is considered to be more proportionate. If he looks at the impact assessment he will see that the net present value of delivering at a £3,500 cap is substantially higher.

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Will the Minister clarify the distinction between the majority not supporting the £5,000 and those people in the consultation who supported the £2,500? If I add together those who supported the £2,500 and the rest of the consultees, I get to the figure of 52% who did not support it. However, the vast majority of people who did not support the £2,500 cap supported the £5,000 cap.

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Far be it from me to replay arguments about 48:52 in this lowly Committee—we could be here all day. We are not here to debate the calculations; the majority of people in the consultation did not support the £5,000 cap. They certainly agreed that the number should be higher than £1,500, as we do. The hon. Gentleman will notice that there are other amendments such as including VAT in the cap, removing the backward-looking grandfathering—stopping it in 2017, so that people are forced to continue to invest in those properties.

The hon. Gentleman asked about exemption length, suggesting that landlords will be let off forever. That is not true; all exemptions will expire after five years. Landlords will then be obligated to try again to improve the property, spending up to the level of the cap. Hopefully, with the continuing reduction in the cost of energy efficiency measures, people will be able to do more for less.

I am disappointed that the hon. Gentleman does not support the draft regulations, but they are the right thing to do. This is a proportionate set of measures: it is fair to landlords, most of whom are not large corporates but people who have invested in one or two properties, who want to do the right thing. He makes a good point about multiple occupancy and I would be happy to take that away and, as we often do, work in concert to take it forward, because that is an important additional change we could bring forward.

This statutory instrument is a good step forward; it has received widespread support and it means that the most inefficient homes will be improved, creating savings for tenants and capital value for those who own them. On that basis, I commend the draft regulations to the House.

Question put.

Division 1

14 January 2019

The Committee divided:

Ayes: 9
Noes: 6

Question accordingly agreed to.

View Details

Resolved,

That the Committee has considered the draft Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2018.

Committee rose.

Draft Nuclear Safeguards (Fissionable Material and Relevent International Agreements) (EU Exit) Regulations 2018

The Committee consisted of the following Members:

Chair: Mr Virendra Sharma

† Beckett, Margaret (Derby South) (Lab)

† Davies, Chris (Brecon and Radnorshire) (Con)

† Docherty-Hughes, Martin (West Dunbartonshire) (SNP)

† Elliott, Julie (Sunderland Central) (Lab)

† Ellman, Dame Louise (Liverpool, Riverside) (Lab/Co-op)

† Grant, Bill (Ayr, Carrick and Cumnock) (Con)

† Harrington, Richard (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

† Harris, Rebecca (Lord Commissioner of Her Majesty's Treasury)

Hepburn, Mr Stephen (Jarrow) (Lab)

† Jenkyns, Andrea (Morley and Outwood) (Con)

† Kawczynski, Daniel (Shrewsbury and Atcham) (Con)

† Kerr, Stephen (Stirling) (Con)

† Leigh, Sir Edward (Gainsborough) (Con)

† O'Brien, Neil (Harborough) (Con)

Reeves, Ellie (Lewisham West and Penge) (Lab)

† Smith, Nick (Blaenau Gwent) (Lab)

† Whitehead, Dr Alan (Southampton, Test) (Lab)

Sarah Rees, Committee Clerk

† attended the Committee

Third Delegated Legislation Committee

Monday 14 January 2019

[Mr Virendra Sharma in the Chair]

Draft Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) Regulations 2018

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I beg to move,

That the Committee has considered the draft Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) Regulations 2018.

I am honoured, Mr Sharma, to serve under your chairmanship for the first time on a Delegated Legislation Committee. If Hansard is not listening, I would like to ask the Whips what their secret agenda is in providing us with sweets. I will not go into that, but I thank them very much.

The regulations define the terms “fissionable material” and “relevant international agreement” for the purpose of sections of the Energy Act 2013, as amended by the Nuclear Safeguards Act 2018. They are linked to the Nuclear Safeguards (EU Exit) Regulations 2018, which will be considered in the Commons tomorrow and in the Lords very shortly afterwards.

I shall begin by emphasising that the two sets of regulations are essential to establishing our domestic regime, whether we leave the EU with a deal or not—their effect will be exactly the same in either outcome. The powers to make this secondary legislation are found in the 2013 Act, which we amended with the 2018 Act. The territorial extent and application of the regulations is to England and Wales, Scotland and Northern Ireland. A second set of affirmative resolution regulations will be debated tomorrow, after Parliament has considered these regulations. Those regulations will set out the detail of the legal framework for our new domestic safeguards regime and, in certain places, use the terms defined in the regulations before us.

To remind hon. Members who are perhaps less familiar with the matter than me or the Opposition spokesman, the hon. Member for Southampton, Test, nuclear safeguards are accounting, reporting and verification processes designed to assure and demonstrate to the international community that civil nuclear material is not diverted unlawfully into military or weapons programmes. That is not to do with nuclear safety and nuclear security.

We have a very good record as a responsible nuclear state and were a founding member of the International Atomic Energy Agency in 1957. The IAEA ensures that states honour their international legal nuclear safeguards obligations in connection with the non-proliferation treaty, and basically stops civil nuclear being used for military purposes.

We have always voluntarily accepted two safeguards agreements with the IAEA: a voluntary offer agreement and an additional protocol, which is defined in the regulations. Those bilateral agreements will replace the trilateral safeguards agreements between the UK, the IAEA and Euratom that have been in place since 1978. We need that to enable the continuity of civil nuclear trade with our international trading partners.

The Government have prioritised putting agreements in place with key countries—Australia, Canada, Japan and the US—that require nuclear co-operation agreements, unlike others. NCAs are legally binding treaties that allow states to formally recognise their willingness to co-operate with each other on civil nuclear matters. We have now concluded—and Parliament has now approved—the ratification of replacement bilateral NCAs with Australia, Canada and the US. We already have a bilateral NCA with Japan.

I reiterate the Government’s commitment to establishing, by December 2020, a regime that is equivalent in effectiveness and coverage to that currently provided by Euratom, and that will exceed the commitments that the international community expects us to meet. I am confident that the fissionable regulations and nuclear safeguards regulations do that. We want to establish a regime that will operate in a similar way to the existing arrangements, taking account of best practice in our regulation making and considering the need to minimise disruption to industry, which were undertakings I gave during the passage of the Nuclear Safeguards Bill.

These regulations and the nuclear safeguards regulations are structured to require information concerning nuclear safeguards to be supplied to the relevant entity, whether that is the Commission or the Office for Nuclear Regulation. The regulator may then forward that, as appropriate, to the IAEA.

Turning to the regulator, the ONR, Members will be pleased to hear of the significant progress it has made in the set-up of the domestic regime since I last updated Parliament in October. From this month—in the past couple of weeks—our domestic regime has commenced parallel running alongside Euratom, processing and checking reports received from industry through our IT system—the safeguards information management and reporting system—and producing the declarations required to enable the UK to meet its international obligations. We have been running the scheme in parallel so that we have time in the next few weeks, if we need it before the end of March, to see whether any adjustments need to be made.

Another point made during the passage of the Bill was about recruitment of suitable inspectors. I am pleased to report that the ONR’s recruitment target for the first phase has been met: 16 safeguards officers are in place, which is seven more than the minimum of nine required to deliver the regime at the end of March; and four nuclear material accountants have been appointed, so 20 are in post.

Between July and September last year, my Department held a consultation on the content of these draft regulations and the nuclear safeguards regulations. In total, 28 formal responses were received. At the end of November we published our response. No major changes to these regulations were suggested.

I feel that I ought to go through the detail of the draft regulations, if hon. Members will bear with me for a few hours—[Interruption.] I am just checking whether anyone is listening, Mr Sharma, and I am pleased that you were. I will not be a few hours, but I feel it is important to set out the detail for the record.

The 2013 Act defines various elements of qualifying nuclear material and provides that “fissionable material” and “relevant international agreement” be defined in regulation. Fissionable material forms a component of “qualifying nuclear material”, which is defined in section 76A(6) of the Act, as amended by the Nuclear Safeguards Act. Fissionable material is therefore to be defined as: plutonium-239; uranium-233; uranium containing the isotopes 235 or 233, or both, in an amount such that the abundance ratio of the sum of those isotopes to the isotope 238 is greater than the ratio of the isotope 235 to the isotope 238 occurring in nature; and any material containing one or more of those. Basically, we use the definitions in the IAEA statute.

The second definition in the draft regulations is of a “relevant international agreement”, again under the amendments made by the Nuclear Safeguards Act. There are six agreements. The first two were signed on 7 June last year, and are between the UK and the IAEA. The other four are with other states: new bilateral agreements between the UK and the US, Canada and Australia were signed in 2018, and the one with Japan, which already exists, was signed in 1998. Parliament approved the ratification of the new bilateral agreements on 19 December last year.

The definitions contained in the draft regulations are of importance, as the nuclear safeguards regulations, which the House will consider tomorrow, will apply to qualifying nuclear material, including fissionable material. The nuclear safeguards regulations will also require operators to provide additional nuclear safeguards information to the ONR on qualifying nuclear material, and to the Secretary of State on certain non-nuclear materials, which are subject to a relevant international agreement, as defined in these draft regulations. I look forward to contributions of right hon. and hon. Members on the proposed definitions.

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It is a pleasure to serve under your chairmanship, Mr Sharma. It is sort of a pleasure to continue with our most cordial debate about the process of nuclear safeguards as they concern exiting the European Union, and what sort of regime we should have in place if we are no longer members of Euratom.

We clearly need to put several things in place relating to nuclear safeguards. I will not repeat what the Minister said about the scope and coverage of nuclear safeguards, of which we became fully aware during the passage of the Bill, other than to say that we may both have become a little proof to the acronyms and obscure sayings that peppered that Bill Committee, so I apologise if any hon. Members who were not present have no idea what I am talking about—we got well into the legislation.

The statutory instrument is pretty simple. As the Minister said, it sets the stage for the wider statutory instrument that will be considered tomorrow. I am pleased that they are being considered the right way round; we could not do one without having done the other. This statutory instrument puts into legislation two important terms, about which it will be vital to be clear when we discuss the statutory instrument tomorrow afternoon.

The first term, as the Minister said, is fissionable material. Although it has quite a long definition attached, as far as I can see, it is a pretty straight transposition of what was previously the case as part of our membership of Euratom and what we had to deal with there, and therefore, what will be applicable for the discussion that should proceed afterwards.

The second definition concerns a relevant international agreement. We had some discussion during the passage of the Bill about relevant international agreements and what had to be done. As the Minister has outlined, a number of treaties were made with third party countries and the IAEA through Euratom, of which we were a member, on our behalf. Therefore, if we leave Euratom and we are still dealing with what was treated in the Bill as a contingency, but which we are now close to, we will no longer be covered by those international treaties and we will effectively have to negotiate them anew.

At the time of the Bill Committee, I thought that would be quite a task, and I think the Minister concurred that there was a fair amount of work to be done, but I see in October’s “Report to Parliament on the Government’s Progress on the UK’s Exit from the Euratom Treaty” that we have negotiated those international treaties with Australia, Canada and the United States, and that the voluntary agreement with the IAEA is in place. It is on the record that those agreements were laid before Parliament and ratified on 17 December, so they are done and dusted.

What is missing, however, is a possible treaty with Japan. That is puzzling, because during the passage of the Bill, the Minister said to me:

“The Government have the power to conclude international treaties under their prerogative powers. Of course, that cannot automatically change domestic law or rights and cannot make major changes to the UK’s constitutional arrangements without parliamentary authority. That remains the case for international agreements relating to safeguards that are currently under negotiation—for example, the nuclear co-operation agreements currently being negotiated with the US, Canada, Japan and Australia, and the new safeguards agreements with the IAEA. Parliament will therefore have the opportunity to consider those agreements before they come into force.”––[Official Report, Nuclear Safeguards Public Bill Committee, 2 November 2017; c. 56.]

I think the progress document came about as a result of an amendment that was agreed to the Bill, so I am grateful for that. It says:

“Good progress has also been made in discussions with Canada and Japan…The UK has had”—

I emphasise the tense—

“a bilateral NCA in place with Japan since 1998. The UK and Japan have had detailed discussions on this, and have now commenced negotiations formally to put in place arrangements to ensure that this NCA remains operable following the UK’s withdrawal from Euratom. Given this progress, we are confident that all priority NCA arrangements will be in place to enable international cooperation in the civil nuclear sector.”

Although there appears to have been an NCA in place with Japan, it is clear, both from what the Minister said at the time of the Nuclear Safeguards Act 2018 and from what has been said in the progress document, that there are negotiations and that those negotiations are intended to end in arrangements being in place so that this NCA remains operable. There may be a very good reason why the NCA that was originally in place, but has been a subject of negotiations, is not before us now and has not gone through the process that, as I just mentioned, has now been completed for those other agreements, but it is certainly the case that there is no new treaty with Japan in place at the time of this SI discussion. Therefore, in principle, the definition of international agreements is not fully completed in time for the discussion tomorrow.

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Given the fact that the Minister has fulfilled every single one of the commitments he has given to the House and to the Business, Energy and Industrial Strategy Committee, of which I am grateful to be a member, should we not put some trust in the stated intentions that the Minister has given us in his speech in this Committee?

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Yes, I fully concur with the hon. Gentleman’s point; in overall terms, what was said would be done, has been done. I appreciate that it was quite a difficult effort to get that done, but it has been done and I am delighted to see that it is all there in the very obscure Journal Office book of treaties that I had to go and find in a corner somewhere to ensure that they were there.

I do not for a moment want to say that this is a dereliction by the Minister or that the sky will fall in because this is not complete, but I want to draw attention to the fact that there appears to be some doubt about whether the NCA we previously had in place with Japan is sufficient to get us over the line, or whether a new treaty needs to be sorted out in time for these new arrangements to come into place and to be within the definition of international treaties. I merely want to hear from the Minister which of those positions is the correct one, or whether there is some ambiguity between the two.

I do not intend to delay the Committee to any great extent—I think I have spoken beyond five minutes, but I have tried my hardest not to—nor do I think we need to divide the Committee on this particular point, but I want to hear clearly what the position is on Japan, why it is not there and what the circumstances are under which we can reasonably safely proceed, assuming that the previous NCA is good enough for our future purposes, or, if it is not good enough, what is being done to make it better.

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It is nice to see you in the Chair, Mr Sharma. I will not keep the Committee long. From the Government’s approach, especially given this legislation was announced in the Queen’s Speech, I recognise the importance that everyone gives the issue of leaving Euratom. I am sure the Minister appreciates that, from my perspective, that is not a good step. Nevertheless, it is a step that has to be made.

I recognise that the Government included specific stake- holder group workshops for the devolved Administrations. As that process continues in the implementation, whether the legislation is agreed tomorrow or we leave the European Union without an agreement, I hope the Minister will commit to continuing that discussion and engagement.

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I will be brief for two reasons: first, I would like not to ruin further the Labour Whip’s birthday; secondly, I would not like to keep Labour Members from attending the parliamentary Labour party meeting that I understand is going on. I am sure the leader of the Labour party will be delighted if you, Mr Sharma, attend in a different capacity from your chairmanship, and I am sure the hon. Member for Southampton, Test will be able to speak for longer than five minutes in that meeting.

Of the two points raised, I will deal with the Japan issue first. A bilateral NCA between the UK and Japan is already in place. It is not like the other one. I confirm that it will remain in place following the UK’s departure from the EU. It is not necessary to conclude a new NCA with Japan. We are having detailed discussions with the Japanese on this issue and negotiations to make sure that if any adjustments are needed, they will be made. Without doubt, that the agreements remain operable after our exit from Euratom is very important, but I really am not concerned about that.

In response to the hon. Member for West Dunbartonshire, we have every intention of continuing discussions with the Scottish Government. I thank him for saying that, but we have a series of meetings not just with the devolved Assemblies and Governments but with all interested stakeholders. That continues on a regular basis.

Question put and agreed to.

Committee rose.

Draft Higher Education (Fee Limits for Accelerated Courses) (England) Regulations 2018

The Committee consisted of the following Members:

Chair: Mr Laurence Robertson

† Abrahams, Debbie (Oldham East and Saddleworth) (Lab)

† Badenoch, Mrs Kemi (Saffron Walden) (Con)

Betts, Mr Clive (Sheffield South East) (Lab)

† Brereton, Jack (Stoke-on-Trent South) (Con)

† Fletcher, Colleen (Coventry North East) (Lab)

† Jones, Mr Marcus (Nuneaton) (Con)

† Loughton, Tim (East Worthing and Shoreham) (Con)

† McCarthy, Kerry (Bristol East) (Lab)

† Marsden, Gordon (Blackpool South) (Lab)

† Milling, Amanda (Cannock Chase) (Con)

† Moore, Damien (Southport) (Con)

† Phillips, Jess (Birmingham, Yardley) (Lab)

† Robinson, Mary (Cheadle) (Con)

† Seely, Mr Bob (Isle of Wight) (Con)

† Skidmore, Chris (Minister for Universities, Science, Research and Innovation)

† Thomas, Gareth (Harrow West) (Lab/Co-op)

† Turley, Anna (Redcar) (Lab/Co-op)

Laura-Jane Tiley, Committee Clerk

† attended the Committee

Second Delegated Legislation Committee

Monday 14 January 2019

[Mr Laurence Robertson in the Chair]

Draft Higher Education (Fee Limits for Accelerated Courses) (England) Regulations 2018

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I beg to move,

That the Committee has considered the draft Higher Education (Fee Limits for Accelerated Courses) (England) Regulations 2018.

It is a pleasure to serve under your chairmanship, Mr Robertson.

The draft regulations were laid before Parliament on 29 November 2018. They should be read alongside the wider fee limits regulations which set tuition fee limits to apply to all standard or non-accelerated degree courses from August 2019 and were approved by Parliament last summer.

The Higher Education and Research Act 2017 provided that regulations may be made to set different fee limits specifically for accelerated courses. The draft regulations set out various fee limits in respect of accelerated degree courses starting from August 2019. The limits cover both full-time study years and permutations matching those of standard degrees, for example where a student takes an accelerated course that incorporates a sandwich year. All accelerated degree annual fee caps at public providers of degrees are set as a multiple of 1.2 times the annual standard degree equivalents.

An accelerated degree is the equivalent of a standard degree in every sense but one: it is completed one year sooner than the same degree studied at the widely established pace of three years of 30 weeks’ study and 22 weeks’ vacation each year. By studying for more weeks each year—about 45 weeks for the year—and taking shorter breaks between terms, accelerated students can complete exactly the same teaching content of, for example, that typical three-year degree, but graduate in two years.

Accelerated degrees are not new. About 20 public universities and 11 private providers already offer accelerated degree courses, although the range of subjects and the number of providers of accelerated degrees have remained small in the context of all undergraduate enrolments. We estimate that fewer than 1,000 students are enrolled on accelerated degree courses at public universities, with about a further 3,000 studying with private university providers.

Good examples of providers successfully offering accelerated degree courses include the University of Buckingham, which has delivered two-year degree courses for about 40 years. Its students regularly give excellent feedback on the quality of teaching and on their study experiences. Staffordshire University has offered accelerated degree courses for more than a decade, with a high proportion of mature and commuter students among its cohorts.

I have only been Universities Minister for about a month, but I have visited two institutions that celebrate their accelerated degree course provision. It was fascinating to discuss with students at St Mary’s University in Twickenham the theatre-production technical course that they were taking. It used to be offered as a three-year degree, but it has now become a two-year degree, because many students were simply finding work after two years and not completing their three-year course. As a result, St Mary’s decided to institute a two-year degree programme to help students not only to enter work but to achieve their qualification.

This morning, I visited Middlesex University London, where I had another fantastic discussion with students. They were on the business administration two-year accelerated degree course. All the students mentioned that, while such courses were not for everyone, they meant something not only to those people who wanted to get on in life, ensuring that that they would enter the world of work earlier, but perhaps to students who started a foundation course and wanted to go on to further study with a shorter time limit.

I can see the benefits of such courses being offered at universities around the country. The problem is that the existing limits on the annual fees that public universities can charge have made it hard for most public providers to offer accelerated degrees. The tuition fee cap applies to all public universities on an annual rather than a per-course basis. That reflects the length of the total period of study, but not the substantive volume or cost of teaching delivered in each study year.

Condensing three years’ teaching into two, by reducing the number of weeks of vacation downtime throughout the course, has generally not been seen as financially justifiable under the existing arrangements. Public providers of accelerated degrees, however, attest to the wider benefits that make accelerated provision worth while, which include highly motivated undergraduates; a more intense and engaged teaching experience; and the incentive to shake up established teaching and working practices and to innovate in tuition delivery.

For students to complete their degree one year sooner than a standard degree means that they accelerate their graduation and have one year less of living costs, crucially, alongside lower total tuition fees.

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The Minister said that St Mary’s University in Twickenham already offered accelerated degrees, but he then said that the financial circumstances of other universities meant that they were not willing to provide accelerated degrees. Why does he think financially St Mary’s can offer two-year accelerated degrees, but other universities cannot?

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That is a good point. As I have said, Buckingham has had accelerated degrees for 40 years, and I have a list of publicly funded HEs that I could share with the Committee, but uptake has been limited due to the restriction on the ability financially to provide those courses—the difference between an £18,000-a-year degree course and a £27,000-a-year one. St Mary’s in Twickenham has a course that runs for two years, but for a very limited number of students; it is not able to expand that course. Having talked to providers who currently run two-year courses, we have learned that they, too, have a limited ability to extend the programme to meet current and possible future demand. That is why this provision is in the regulations that have been introduced on the Floor the House, to make sure that we can benefit not only institutions that are yet to take up accelerated degrees, but institutions that may want to create new courses with accelerated programmes. I stress again that accelerated programmes are not a silver bullet; we are not assuming that every student will take up a two-year degree instead of a three-year or four-year course. However, they provide flexibility and innovation, and crucially allow for the greater student choice that I hope the regulations will provide.

As a result of students being able to take an accelerated degree over two years, they will start full-time work one year sooner than their peers; they will potentially benefit from an average annual salary of £19,000 straight away. Customer surveys conducted by the Student Loans Company in summer 2018 show that both accelerated and standard degree students regard the year of time saved as the most valuable benefit of accelerated degree study. As I have said, accelerated degrees are not for everyone, but for some—mature students, for example, or young people with a keen appetite for learning who want to study more and take fewer breaks to secure a faster entry or return to the workforce—they are exactly the right choice, or the only possible choice. Some employers also like accelerated degrees, as they offer an early opportunity to recruit demonstrably ambitious, focused and motivated graduates.

Following a commitment that the Department for Education gave in late 2017 during the passage of the 2017 Act, we consulted on a proposed 20% uplift in the annual tuition fee for accelerated degrees. That uplift aimed to ease the financial barrier inhibiting the wider provision of accelerated degree courses while still offering students a saving of roughly £5,550 on their total tuition fees, compared with a three-year degree course. On top of that, we must add the savings on living costs—roughly £7,500 a year—and also take into account a possible extra year of earned income as a result of starting work early. That is effectively going to benefit those who embark on a two-year accelerated degree course; it will be a saving for students.

Last year, we published our response to that consultation. It set out our intention to proceed with the regulations, to enable a specific new annual tuition fee for accelerated degrees at 1.2 times the standard equivalent. We consider that this fee will better reflect the actual weight of teaching and support delivered in the accelerated degree year; with it, more universities will be able to expand their range of courses and offer students greater choice, with more flexible modes of study. Wider provision will in turn offer many more students the choice of applying for an accelerated course in their preferred subject at their preferred university, and even with the increased annual fee cap, accelerated degrees offer big overall savings for students. As I have said, the total cost of tuition will be 20% lower, alongside no final year living costs and the unique opportunity to graduate and begin full-time work a year earlier.

The UK is widely envied for the quality and vigour of its higher education system. Our universities regularly rank among the best in the world. Their doors are open to anyone with the potential to succeed, including more disadvantaged students than ever before.

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Would the Minister explain how the quality and academic rigour of these courses will be evaluated? Has there been an opportunity for pilot programmes? I know some concern has been expressed in various sectors about that.

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To take the hon. Lady’s point about quality and rigour, we would never want an accelerated degree course to be seen as a poor man’s degree— as somehow less rigorous and less beneficial. The standards that need to be maintained for those degrees must absolutely be the same as for full-time degrees. If we look at some of the institutions that have been offering accelerated degrees for a long time, they stand by their commitment that the teaching time and teaching intensity of those courses should remain exactly the same. Instead of about 30 weeks of study there are 45, and the number of tutors is the same. The point of the draft regulations is to provide for the extra investment in tuition staff that is needed to deliver an extended course across 45 weeks of the year. On the hon. Lady’s point about the teaching framework, I was at Middlesex earlier today talking to the vice-chancellor, Dr Tim Blackman, and he was absolutely insistent that this is still 360 credits of study. Whether over two or three years, 360 credits still need to happen.

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Where these courses have been offered, has there been any change in access, for different socioeconomic groups in particular?

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When it comes to access and participation, one of the Government’s key commitments is to ensure that, regardless of their background, people are able to go to university, if they wish to take that route. The two-year accelerated degree course provides people with the opportunity to see a destination, to not have to cover an extra year of living costs, and to then go into work.

One of the two students I spoke to at Middlesex today was a girl who had started out on a higher apprenticeship at the City of London Corporation, without the qualifications to get her into a position to take a degree. She realised she had hit a wall, and that if she wanted to go further in her profession she would need to reach degree level, but, effectively, she had already begun work. What I am keen to expound to the Committee is that the two-year degree is not a silver-bullet solution; it is part of a menu of options that enables us to break down the artificial wall between further and higher education for students who may not have had the best start in life, those who are not from the most advantaged backgrounds and who may not have achieved the qualifications they have the potential to achieve.

I am keen to explore how students may take a foundation year and then an accelerated degree course on top, accessing higher education in a way in which they may not initially have been able to. We need to take this under the whole umbrella of future qualifications that will allow for the increased participation of disadvantaged students.

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Further to the intervention by my hon. Friend the Member for Oldham East and Saddleworth, a number of years after the Government decided to put tuition fees up to £9,000, mature students were one of the groups in which significant numbers had been deterred from going to university. What discussions have the Minister and his Department had to check that the measure would not be a further discouragement to mature students?

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As the new Universities Minister, I am keen to be seen not just as a Minister for students. I am Minister for everyone in the HE sphere, and that covers mature students as well. It is crucial that we look at the decline in mature learners.

On mature learner provision, I hope that the expansion of the accelerated degree course will allow someone who has entered the world of work, or has a mortgage or other financial commitments, and who looks at a three or four-year degree course and thinks, “Maybe that’s just a bit too much of a time commitment”, to find that a degree of about two years, at an accelerated learning pace, will suit them. It is crucial that we look at things and outcomes through the eyes of the student, whether an 18-year-old or a mature learner. It is crucial that they have this option. We are not forcing two-year degrees on anyone; we are allowing an expansion to take place so that people can look at institutions and choose a course that will be tailored to their individual learning needs.

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If the Minister wants to be the Minister for students, presumably he has talked to student representative bodies. What is their assessment of the proposed 20% fees hike?

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I have been the Minister for a month, and I have been to about eight HE institutions so far. I have an ambition to reach them all. Whether I will be able to do that as a new year’s resolution I am not quite sure, but I am determined to get out and listen to the student voice and to concerns.

When I speak to students, I also want to ensure that they are getting the student experience and having the opportunity to build friendships as part of an HE community. What was really interesting in going to Middlesex was talking to some of the students who are doing the business administration course. They felt they had twice as much access to the student community because they got to meet different groups, including the peer group in the year above them, as a result of their accelerated course. They felt it was an advantage to be able to talk to both sets of peer groups in the course structure.

An evaluation was carried out before I became Universities Minister. It showed 92% support among students who take accelerated degree courses, but it raised the issue of public understanding of accelerated degrees—55% of students did not know they existed. There is a question about how we ensure that universities that want to investigate offering accelerated degree courses have the opportunity to do so, and the draft regulations will allow that expansion to take place.

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rose

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rose—

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I am coming to the end of my speech, but I will take one more intervention. I have been quite generous to the hon. Gentleman, and I am sure he will be able to come in again later, so I give way to the hon. Lady.

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The Minister has been incredibly generous. I would have quite liked to do my degree in two years. I am not sure it would have taken that long, actually—if I added up the hours of tuition, I could probably have done it in about five months. The Minister is presenting quite a good picture of access for mature students, people from different socioeconomic backgrounds and people who started through the apprenticeship route, but I fear there these measures may create a two-tier system. We can pretend that the university someone went to or the sort of degree they did does not matter, but we all live in reality, so are Oxford and Cambridge investigating offering two-year degrees?

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The hon. Lady makes an incredibly important point. When we look at the groups in our HE system, we have the Russell Group universities and groups such as GuildHE. I met representatives of GuildHE last week to discuss provision, and it supports accelerated degrees. I hope, by taking a bottom-up approach to allowing institutions to expand provision, we can ensure that no one is snobby about two-year degrees. I declare an interest: I went to Oxford University. A lot of my friends decided to study law, so they did a law conversion course and then the Bar vocational training to become a barrister or a solicitor. In effect, that is a two-year degree in law.

When we look at the reality, it is important that we champion accelerated degrees and make the case that they are an important provision. If the draft regulations pass, as I hope they will, one of the challenges I will have is going out and making it a key part of my mission as Universities Minister to say that we still need innovation in the HE sector. The Augar review will report shortly, but we must also level the playing field—I am sorry to use a horrible cliché—to ensure that FE routes and HE routes are synonymous and that no one can say going to an FE college, which may offer degrees or accelerated courses, is for other people’s children.

We need to raise standards across FE and to ensure that there is the ability for a crossover, almost like an education passport. There is also the question of people who start degrees being able to finish them at a time of their choosing. However, to start with, this measure passed into legislation through HERA 2017, and it will be incredibly advantageous if we can begin work to demonstrate how new course provision will help expand the market and increase student choice.

All our students deserve high quality and good value from their university education. As I said, the draft regulations are a key part of our wider work to make that an accessible reality for everyone. They align with the Government’s ambitions for a diverse and flexible post-18 education, which is currently being developed, and I hope that the Committee approves them.

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It is probably almost too late, but may I wish you, Mr Robertson, and the Committee—not least the Minister—a happy new year?

I am glad that we finally have the opportunity to debate the proposed changes, because over the years—I do not think it is down to any particular Government—the gap between something being passed and in some cases being implemented, and its reaching the backstop of parliamentary approval seems to have become longer and longer. I am glad we now have the opportunity to continue the significant debate we had on the Higher Education and Research Bill.

I welcome the Minister’s enthusiasm for the broader issues that he believes accelerated degrees may open up. We can all agree that there is a need urgently to address the lack of flexibility in our higher education system. With the emerging challenges of Brexit and automation, the world of work changing, and higher education, further education and online learning slowly merging, our education system urgently needs to adapt. I have said frequently that that will involve people, young and old, doing not only the traditional three-year degree model, but short, sharp training courses to help retrain and upskill, and being able to drop in and out of education to suit their life circumstances. Incidentally, these are all things that our party’s national education service and lifelong learning commission will focus on. We must develop a higher education system that will produce a high-skilled workforce to meet those growing demands and fit our local economies.

The essential question—where, I am afraid, I begin to part company with the Minister—is whether today’s proposals, which greatly expand and increase accelerated degrees on an annual basis, will help or hinder that process. I am grateful to my hon. Friends who have posed questions, as the Minister has already heard some concerns and about the need to nail down not just aspirations but facts about how this is will be taken forward and what its implications will be.

During all the stages of the Higher Education and Research Bill, in both Houses, we talked about the importance of making the current system fit for the 21st century. Accelerated degrees might play a useful part in a more flexible HE system for all ages. However—this is crucial to our misgivings about the regulations, not just about what they say but about when this will happen—as my colleague Lord Stevenson said in the debate in the Lords, it should only be as part of a wider overhaul in the sector. That overhaul is nowhere near happening yet.

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Would it be fair to say that today we are being asked to vote for a 20% hike in tuition fees, albeit for accelerated degrees, without any commensurate guarantees of an improvement or at least maintenance of quality of tuition and other provision from universities?

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My hon. Friend hits the nail on the head and echoes the other misgivings expressed by colleagues.

As the Minister pointed out, accelerated degrees—fitting three years into two—are not new, and have always been with us. He has quoted some examples. They have often been crafted closely to specific needs of individual HE institutions. I hear what he has to say about the various universities; they have clearly found that that is a good model, which they have wanted to take forward. The devil is always in the detail; it is the details and the firm focus on increasing the maximum fee cap to which we are vehemently opposed, because we do not believe that, at this stage, they will bring the wider benefits to universities and most importantly to would-be students that the Minister thinks they will.

It is not just us saying that; a large number of dissenting voices the demand for accelerated degrees in the form that the Government propose. It is all well and laudable for the Minister to talk about how we might see the effects that we would all like to, but at the moment that has not been the case. That is reflected in the comments of the various university groups. The chief executive of the Russell Group, for example, Dr Tim Bradshaw, said:

“Greater choice for students is always good but I would caution ministers against ‘overpromising’…The Government’s own projection for the likely take-up of these degrees is modest and we actually hear many students calling for four-year degrees, for example, to spend a year on a work placement or studying abroad.”

The group MillionPlus said something similar:

“Demand for accelerated degrees has been low for many years and is unlikely to increase significantly on account of these fee changes.”

Who therefore will the accelerated degrees benefit? The trade union that represents many of the staff in universities states that

“there is little evidence of solid demand for this type of course”,

and that—I am afraid to say that I agree with this, in particular because it is the thrust of what the Minister’s predecessor but one, the hon. Member for Orpington (Joseph Johnson), laid out clearly in the White Paper and the Bill that followed—

“this decision is being driven by the government’s marketisation agenda and the need to row back on the spiralling costs of university education, particularly in light of the withdrawal of maintenance grants.”

We await the Augar review, and lots of promises are floating around, but as of this moment nothing concrete is in place.

I have emphasised time and again that the Government’s need to facilitate changes for a better work-life balance and the progression needed to benefit our economy must include looking at credit transfers, flexible courses and urgent action to address the catastrophic fall in part-time learning since 2010. Unfortunately—which this is, because I wish we could have a consensus on it—the Government’s pitch for the accelerated degrees we are debating smacks simply of a PR initiative that has been fashioned for new HE entrants, often with narrowly focused HE objectives, which my hon. Friend the Member for City of Durham (Dr Blackman-Woods) and others were worried about during debate on the Bill.

The result of the Government’s 2012 HE funding changes, including the tripling of tuition fees—we cannot get away from this—is that the average debt for students in England is £46,000. The Institute for Fiscal Studies found that the removal of maintenance grants from students from low-income families meant they were graduating with the highest debt levels, which are in excess of £57,000. We therefore have clear evidence that the nudge factor, which the Government—or their predecessor—have been very keen to push, is actually operating to nudge people against participating in higher education. Yet the Government have chosen this time to introduce this statutory instrument, before the Augar report has even appeared.

During the passage of the Bill, we challenged them consistently about the way in which they wanted to use the teaching excellence framework to increase or remove the fee cap. The draft SI increases the higher amount to start a degree to £11,100 on an annual basis. We have to address the impact that that will have on less well-off students’, or would-be students’, ability or willingness to take places on those courses. Can we realistically expect all the people who might want to do such a course to ratchet up to the figure mentioned?

As the University and College Union has said:

“This is not about increasing real choice for students,”

but it could allow

“for-profit companies to access more public cash through the student loans system…Instead of gimmicks which risk undermining the international reputation of our higher education sector, the Government should focus on fixing the underlying problems with our current student finance system, which piles debts on students.”

The idea that accelerated fees only mean a cut in student debt is, I am afraid, knowingly or unknowingly, hiding another motive. Wedded as they still appear to be—I have heard no repudiation of the broad themes that the hon. Member for Orpington spelled out when the Bill was introduced—to an outdated market-driven view, the Government have pinned their hopes on a rapid expansion of new providers that charge the higher fees on a two-year basis. All that is all in the various secondary papers and instruments that were produced during the Bill. So far, we have seen no evidence of that expansion.

Do all the leaks that suggest that Augar is now under pressure from the Government to lower tuition fees per year make nonsense of the rhetoric and the introduction of this statutory instrument? Incidentally, will the Minister give us the latest estimate for when the Augar review is to report?

The draft explanatory memorandum lists the theoretical benefits for providers and students, but it also refers to the numerous concerns that have been expressed across the sector. It says:

“Students on existing accelerated degrees report a very high level of satisfaction, and highlight the opportunity to graduate and start or resume work a year sooner”—

the Minister talked about that—

“together with costs savings and academic benefits.”

How many and what sort of students, and with what financial background, were interviewed to reach that conclusion? It ignores the fact that those degrees would be available only to students able to study all year round. That has major implications for access and participation, which are already faltering for part-timers under this Government.

The total number of English undergraduate entrants of all ages from low-participation areas fell by 17% between 2011-12 and 2016-17. There were 12,600 fewer English undergraduate students from low-participation areas starting university courses each year than there were in 2011-12. We must ask ourselves what these accelerated degrees, on the basis on which they have been put forward in the statutory instrument, do for them, and the answer is relatively little. There has been a 54% fall in entrants from low-participation areas studying part time, who will not be able to access funding for accelerated degrees. How does the Minister plan to address that? Can he explain in any shape or form how accelerated degree will address the devastating fall in part-time HE study?

Critics have also pointed out the danger of squeezing three years into two for personal development opportunities or participation in extracurricular activities and volunteering. Does the Minister not value the important personal development that our universities provide outside the classroom, which could be denied by this acceleration? UCU also pointed out:

“Accelerated degrees...result in reduced opportunities for students to engage in part-time employment over the course of their studies. This limitation is particularly acute for students from disadvantaged backgrounds who are more likely to need to seek employment…to fund themselves through university.”

We would like a situation with fees in which students did not have to work part time as much as they do, but given that that is the case, perhaps the Minister will admit that the giveaway in the accelerated degree proposals is that they are not focused on those sorts of people, but in many cases on richer or employer-funded applicants. UCU also said:

“The lack of holiday time factored into these degrees also means that they could prove difficult to student parents; those with caring responsibilities; and students whose disabilities mean that they might benefit from low-intensity study. For this reason, there is a risk that take-up of these courses could have strong socio-economic stratification and that students from less advantaged backgrounds might have lower attainment on these courses.”

Incidentally, there is a reference in the draft explanatory memorandum to the impact of the statutory instrument on the Erasmus+ programme. Will the Minister tell us the situation regarding ensuring our continued participation in the scheme?

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I have listened very carefully to the hon. Gentleman for some time now. He seems to be talking an awful lot about accelerated degree courses and very little about fee limits, which is what this statutory instrument is supposed to be about. What he has not mentioned but might want to, because it was mentioned by one of his colleagues, is value for money.

I have two daughters, one of whom has just left university and one of whom is still at Cambridge, where she has intensive tutoring. The one who has just left was at another university, where she was lucky to get five hours a week. Even if that were doubled, it would not mean a shortage of time outside the lecture room. Does the hon. Gentleman think the proposals offer better value for money? Should not he really be getting at the question whether students get value for money? At the moment, in my experience, they do not.

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The hon. Gentleman’s comments are enlivened and enriched by his personal family experiences, but the difference of outcome in his family rather makes the point. It is not just a matter of what students get and do on courses, although I fully accept that that is important. It is also about how students are put off courses in the first place. I think most of my hon. Friends would, like me, find it difficult to see how a suggested 20%-a-year increase will encourage, rather than deter, people who already find it difficult to make such a decision.

The Open University says that

“there needs to be increased choice and flexibility for students to study at a time, pace, mode and place that they choose.”

One of the stated objectives of the 2012 funding reforms in England was to

“allow greater diversity of provision, which means more short two-year courses and more part-time opportunities”.

However, we know that the reforms have failed spectacularly to achieve that objective, with 59% fewer people in England entering part-time undergraduate higher education each year than in 2011-12, before the reforms. That is why it is vital to increase options.

However, the Government have failed to address the crisis for the OU and other adult learning providers. Another increase in tuition fees, which they are now presiding over, and which would allow higher education providers to charge more per year, will not help the process. MillionPlus agrees. It says that

“accelerated degrees are just one form of flexibility”

and that Government have missed out on the opportunity of creating

“greater flexibility in fee structures and loan availability to enable students to access financial support for periods of study of less than a year (for example to borrow by modules rather than by year)”.

The hon. Member for East Worthing and Shoreham prayed in aid his personal experience. My experience as a former Open University tutor—although somewhat long in the tooth—is that it is precisely the people, particularly adults, from disadvantaged backgrounds, who would like support for funding by module. That is what they do not get at the moment.

“True flexibility…can only come when students are not penalised for studying part-time, or for shifting between full and part time study.”

Those are not my words but the words of MillionPlus.

The Government have given little thought to the impact on staff workloads of accelerated degrees. UCU has rightly expressed concern that the changes could put yet more pressure on its members without much immediate or direct benefit to them, at a time when they believe—and we agree—that they are getting a raw deal on full-time contracts, pay increases and progression.

Despite the Minister’s enthusiasm and good intentions, there is no guarantee that existing university teachers will be willing or able to teach the new accelerated degrees as configured. There is a risk that the move to accelerated degrees will compromise time currently allocated by such teachers to research, and fuel—of necessity, if they are not prepared to do the relevant work—the use of even more casualised teaching staff to deliver provision during the summer months. With threats to our existing world-class higher education institutions and research piling up from the uncertainties of Brexit, should we be taking that chance?

Issues to do with short-term contracts, extra bureaucracy and guarantees of quality still need to be addressed. What steps have the Government taken to alleviate the pressures on staff that these courses may create? Ministers should focus not simply on accelerated courses for a market driven by untested new providers, but on protecting the global strength and reputation of UK higher and further education.

The proposal is irrelevant to the main priorities of the HE sector in 2019. It is irrelevant to the multiple threats that existing universities and providers face from a chaotic Brexit, and the collateral damage they face from lack of certainty about our participation in Horizon research programmes through the 2020s after we leave; lack of certainty that HE students, providers and staff will continue to benefit from Erasmus+ over the same period; and the withdrawal of European Social Fund and European Regional Development Fund funding, from which many community-focused universities and providers have benefited.

The proposals, cast as they are today, represent a developing market model that the hon. Member for Orpington left in the out-tray for his successors. They do nothing to strengthen our HE sector internationally or nationally. They do not address the important issues that Augar is supposed to be looking at. That is why we will not support the regulations.

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I thank the Committee for taking time to consider the regulations.

I will turn to points made by the shadow Minister in what was a rather wide-ranging speech. Turning to some of the broader issues around the Augar review, I am sure he will understand that it is an independently led review that will report in due course in 2019. I, as much as anyone else in this House, look forward to studying its conclusions carefully.

We agree on the importance of creating greater flexibility in post-18 provision. Putting party political hats aside, we all understand that we need to work harder on ensuring that those who are able to go to university have the opportunity to do so. The Government have put access and participation for the most disadvantaged communities right at the heart of our vision, and we have seen an increase of 52% in the most disadvantaged students going to university since 2009. We all know that more must be done to ensure that we open up the vocational and technical route for those students who deserve better, and for our economy and our industrial strategy, ensuring that we can increase productivity and develop a dynamic and modern economy.

It is in light of that that we have introduced the regulations. This is the beginning of what I hope will be a far greater flexible provision in post-18 education—[Interruption.] Would the hon. Member for Harrow West like to intervene?

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No—I was heckling.

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I will come to the hon. Gentleman’s heckle in a moment. I wanted to start on a point of agreement, which is that Members on both sides of the Committee share the ambition that we can and must do more for post-18 education. As for the regulations—the point on which the hon. Gentleman heckled—increasing the cost of fees by 20% must be seen in the round: this is a saving of £5,500 for a two-year degree as opposed to fees for a three-year degree. It is a saving of one year, or £7,500, on living costs and, crucially, potentially a gain of up to £19,000 of annual earnings if that student is able to access the workplace early. I stress that this is not a silver bullet. It is not the only part of a strategy that must deliver for students in higher education; it is opening up a menu of options that we hope to develop.

The shadow Minister talked about access for disadvantaged students. The Government want to ensure that the most disadvantaged students are able to access this provision. Our consultation on accelerated degree proposals asked higher education providers specifically about access arrangements, and 74% responded that they wanted accelerated degrees to be treated the same as any other higher course fees for the purpose of access. We have seen a revolution in the amount of funds spent on access and participation over the past four or five years, from £440 million to £860 million. We must look at how we can invest to ensure that we open those routes for the most disadvantaged students.

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I appreciate that I spoke at some length. Access and participation are absolutely crucial, but one question is whether the money is spent well in the first place. I am sure the Minister will look at that. He also talks about the financial details and all the rest of it. The truth of the matter is that many people, particularly adult students, for perfectly good reasons will not sit down with a three-year prospectus but will ask themselves what they can afford that year. That is the crux of it, and that is why we are concerned that this 20% increase will nudge people away from participating, rather than nudging them towards it.

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I politely disagree with the hon. Gentleman on discouraging access. The figures demonstrate that, when students have been asked about potential two-year degree routes—in the context of saving over an envelope of two years instead of three—60% responded that they would have considered it had it been on offer. It is important that we allow an opportunity for this course provision to be established. We are not forcing universities or HE providers to offer accelerated degrees as an option. We are just ensuring that we can incentivise it for the future.

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I thank the Minister again for his generosity in giving way. Will any review process be put in place, and what targets and standards will be used? We need to make sure that lots of people who go through these accelerated courses do not come out without demonstrably higher earnings, a better education or better options while still paying more money each year. How will we assess and make sure that people who do these courses end up with the same prospects as people who do a three-year course? We do not want to create a two-tier system for people who it is harder for—single mums and so on—and essentially charge them more per year.

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On the point around charging per year versus the overall charging mechanism across three years, they will still be charged £22,000 instead of £27,000.

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I am sure they will be thrilled with that reduction—£22,000.

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The hon. Lady’s point about a review mechanism is welcome, and I entirely agree with her that it is important. We have the ability to analyse data to a greater extent than in the past. The longitudinal educational outcomes—LEO—data has been tracking students, which I think began in 2008 under the previous Labour Government. That is now coming to fruition and provides a context in which we can weigh up value for money and return on investment.

With that data comes other issues around social value and making sure that we do not lose sight of courses such as nursing, for instance. That may be perceived to provide low value for money or return on investment, but we absolutely need more nurses and routes into nursing. The two-year degree provision allows for an extension route into nursing through nurse support workers, who may reach a certain level of qualification and may want to access a nursing degree. This is about breaking down those barriers. It is a social justice argument, saying to somebody who perhaps did not get the qualifications to access higher education when they were 18 that they can return to a degree and get that qualification. By having that degree, they are able to access that level of nursing that they may have wished to access. It is about fulfilling people’s dreams across a wide range of access measures, not only at the access points at 18.

An important point that I want to put on the record is that we will undertake to assess the effectiveness of accelerated degree funding and expenditure on access measures compared with their standard equivalents in the accelerated degree review, to be undertaken three years after the implementation of the draft regulations. I will take away the points made by the hon. Member for Birmingham, Yardley on the context of that review and what it will cover in its evaluation.

On the workload of university staff, as I have said, the provision of accelerated degrees is not mandatory. I put that point to Middlesex University staff today, and they felt that there was no diminution of teaching time. I asked the teaching professionals—the academics—directly whether it would compromise their ability to research, and the answer was no. They said that they had managed to structure a course that did not increase individual teaching time; the teaching time is spread across a range of individuals throughout the year. There is a learning opportunity, and I am keen for institutions that have successfully implemented two-year degrees to spread best practice about how courses might be structured so that academics do not lose their research potential across the year.

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I worked for 10 years at the University of Liverpool, and I spent my summers prepping new courses, reading and writing articles. We were compelled to do that to make sure we had the appropriate ranking—it was the research assessment exercise at the time. It would have been absolutely impossible to do the stuff we did during the summer and prepare for a truncated course.

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What Middlesex and other institutions have done is to say that those who are working in the summer months have the opportunity to find their research time elsewhere in the year. They have been successful in ensuring that there is no diminution in the ability to conduct research; it just takes place at a different time. We have seen flexibility in academic research. Not everyone decides to book off the summer. Some people work in the summer but have what is effectively a mini-sabbatical elsewhere in the year, with other people taking up their teaching time.

Some universities provide accelerated degrees, which ensure that they have more study weeks per annum than the mainstream 30 weeks a year. They have managed to budget effectively, innovatively and flexibly with their academic and administrative staff to deliver more demanding in-year courses, including accelerated courses.

In summary, these regulations will encourage and enable existing providers to expand their accelerated offers, and new providers to offer accelerated degrees and discover the realities, challenges and benefits for the students and themselves. I commend the regulations to the Committee.

Question put.

Division 1

14 January 2019

The Committee divided:

Ayes: 9
Noes: 7

Question accordingly agreed to.

View Details

Resolved,

That the Committee has considered the draft Higher Education (Fee Limits for Accelerated Courses) (England) Regulations 2018.

Committee rose.

European Committee

Eurojust

The Committee consisted of the following Members:

Chair: Joan Ryan

† Dakin, Nic (Scunthorpe) (Lab)

Davies, Geraint (Swansea West) (Lab/Co-op)

† Green, Chris (Bolton West) (Con)

† Hair, Kirstene (Angus) (Con)

† Hopkins, Kelvin (Luton North) (Ind)

† Hurd, Mr Nick (Minister for Policing and the Fire Service)

† Lewer, Andrew (Northampton South) (Con)

† McDonald, Stuart C. (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)

† Masterton, Paul (East Renfrewshire) (Con)

† Maynard, Paul (Lord Commissioner of Her Majesty's Treasury)

† Smith, Eleanor (Wolverhampton South West) (Lab)

† Thomas-Symonds, Nick (Torfaen) (Lab)

† Tomlinson, Michael (Mid Dorset and North Poole) (Con)

Jeanne Delebarre, Committee Clerk

† attended the Committee

European Committee B

Monday 14 January 2019

[Joan Ryan in the Chair]

Eurojust

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I will briefly outline the procedure. First, a member of the European Scrutiny Committee may make a five-minute statement about that Committee’s decision to refer the document for debate. The Minister will then make a statement for no more than 10 minutes; questions to the Minister will follow. The total time allowed for the Minister’s statement and the subsequent question and answer session is up to one hour. Once the questions have ended, the Minister will move the motion and debate will take place. We must conclude our proceedings by 7 pm.

I call Kelvin Hopkins to make a brief explanatory statement on behalf of the European Scrutiny Committee.

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It is a pleasure to serve under your chairpersonship this afternoon, Ms Ryan.

Eurojust is an EU agency based in The Hague that provides practical support for member states that are investigating or prosecuting crimes with an international dimension. The UK has participated in Eurojust since its creation in 2002.

In 2014, the Government opted out of a number of EU police and criminal justice measures, but decided that the UK should remain part of Eurojust, stating:

“The complex nature of cross-border cases can involve obstacles (including differing legal and procedural systems and languages) but Eurojust provides the facilities, language skills, legal expertise and goodwill required for effective cross-border cooperation. Eurojust also provides expertise and support to law enforcement agencies and prosecutors wishing to set up JITs”—

joint investigation teams. They therefore concluded that bilateral co-operation outside the Eurojust framework would be more costly, time-consuming and inefficient in complex cross-border cases.

Despite that positive assessment of Eurojust, the coalition Government decided not to opt into the European Commission’s proposal for a new Eurojust regulation in 2013. They feared that proposed changes to the powers given to Eurojust national members, seconded by member states, would cut across the separation of powers between the police and prosecuting authorities—a fundamental feature of the UK’s criminal justice system. They were also concerned that provisions on co-operation between Eurojust and the proposed European public prosecutor’s office might undermine their decision not to take part in the EPPO.

The Government made it clear, however, that they would review UK participation in Eurojust once negotiations had concluded. A motion agreed to by the House in October 2013 stated that the UK should not opt into the proposed Eurojust regulation, but

“conduct a thorough review of the final agreed text to inform active consideration of opting into the Eurojust Regulation, post adoption, in consultation with Parliament”.—[Official Report, 29 October 2013; Vol. 569, c. 892.]

Following five years of negotiation, the new Eurojust regulation was adopted last November. The Government consider that the concerns that prevented the UK from opting into the Eurojust proposal in 2013 have been addressed; they now wish to opt in, even though the regulation will apply only from 12 December 2019. Given the imminence of the UK’s exit from the EU and continued uncertainty about the terms of the UK’s withdrawal, as well as the risk that the UK might leave without a deal, the European Scrutiny Committee considers that the House should have the opportunity to question the Minister on the Government’s reasons for recommending that the UK opt in at this late stage in the Brexit process.

The report agreed by the European Scrutiny Committee in December raises several questions. Can the Minister tell us whether the Government’s assessment of the operational value of Eurojust has changed since they published a detailed impact assessment on police and criminal justice measures in 2014? What views have the UK law enforcement and prosecution authorities expressed about the Government’s opt-in recommendation? Will the UK be at risk of ejection from Eurojust if it does not opt in? What impact would that have on cross-border operational capability to investigate and prosecute serious crime?

While opting in would secure the UK’s participation in Eurojust during a post-exit transition or implementation period, what type of relationship do the Government envisage with Eurojust after transition or in the event of a no-deal exit? How would operational co-operation on standard third country terms compare with the UK’s current level of co-operation with Eurojust? What assessment have the Government made of the impact on cross-border investigations and prosecutions?

I look forward to hearing the Minister’s response and to an informed and lively debate.

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It is a great pleasure to serve under your chairmanship, Ms Ryan, and I welcome the opportunity to debate this issue, despite competing attractions in the main Chamber. I will do my best in my opening remarks to try to address the specific issues raised by the hon. Member for Luton North.

As the hon. Gentleman said, Eurojust is the EU agency for judicial co-operation. It enables member states to do that—co-operate—by co-ordinating investigations and prosecutions in specific cases, encouraging the agreement of a unified approach to tackling criminal prosecutions, including decisions on where to prosecute and, where appropriate, supporting the establishment of joint investigation teams.

I can confirm that the UK continues to value the role of Eurojust in helping law enforcement and prosecution agencies to co-ordinate investigations into cross-border organised crime and terrorism, and is an active contributor to the work that Eurojust undertakes to tackle transnational crime that affects all EU citizens.

To give the Committee some flavour of our participation in Eurojust, in 2017 UK support was requested 290 times —the second highest number of requests to a state after Germany—and the UK desk requested support from other EU member states 82 times. We are a very active participant in this co-operation platform and agency, and we value it highly.

We are a member of the agency by virtue of the 2009 Council decision establishing Eurojust. The coalition Government decided to opt back into the 2009 Council decision as part of the Protocol 36 decision in 2014. The Commission brought forward a proposal to replace the existing Council decision with a new Eurojust regulation in 2013. At that time, the Government decided—as the hon. Gentleman made clear—not to opt in pre-adoption, due to concerns about the original proposed text, but they also indicated that they would consider opting in post-adoption if those concerns could be met during negotiations.

The original text of the regulation retained Eurojust’s key roles and functions but included new provisions about which the UK Government had significant concerns. First, it made granting certain powers to direct operational activity mandatory for all national members, which removed the discretion available in the existing legislation to not apply certain powers where to do so would conflict with fundamental aspects of a member state’s criminal justice system. For example, the proposals included the power to order investigative measures and the ability to issue or execute mutual legal assistance or mutual recognition requests, such as a European arrest warrant.

Secondly, there were many operational, management and administrative links with the parallel proposal to create a European public prosecutor’s office, or EPPO. There was no clear articulation of the effect on member states that will not or cannot participate in the EPPO. The UK was concerned that some elements of this proposal could undermine the discretion of non-participating states to decide how they chose to work with the proposed new body. Thirdly, the requests and decisions of Eurojust acting collectively as a college would be binding on member states’ law enforcement and prosecution agencies.

These concerns were shared with several other member states. The UK Government were active participants in the negotiation process and we are now satisfied that our concerns have been addressed in the final text and that the regulation in its adopted form is acceptable to the UK. Specifically, the regulation addresses the concerns of the UK and other member states about the powers of national members, by stating that national members can only act to the extent they are competent to do so under their national law. Furthermore, Eurojust cannot order that member states begin investigations.

Additionally, the regulation provides the desired clarity about the relationship between Eurojust and the EPPO, providing—as we see it—a clear separation of functions between the two institutions. We are satisfied that the EPPO will not be funded by UK Eurojust contributions, and that the work of the two institutions will not become interdependent. That is reinforced by the EPPO being based in Luxembourg while Eurojust remains in The Hague.

Given that our concerns have been sufficiently addressed, the UK Government believe that it is right that we opt into the Eurojust regulation. To be clear, if we decided not to opt into the regulation, we believe that we would be unable to participate in Eurojust. We believe that it would be impossible for the EU to have an agency set up under two sets of rules—voting rules, funding mechanisms and so on—one for the UK under old legislation, and one for other member states under the new regulation.

We therefore believe that the UK would be unable to participate in Eurojust during the proposed implementation period if we do not opt in. As I have said, the UK values the role of Eurojust. Not opting in would jeopardise current investigations that the UK is involved in and mean reverting to time-consuming and expensive processes of judicial co-operation through bilateral channels.

Furthermore, the decision over whether to opt into the Eurojust regulation must be seen against the backdrop of EU exit. Although the UK will leave the EU on 29 March 2019, until exit negotiations are concluded, the UK remains a full member of the European Union. The Government will therefore continue to implement and apply EU legislation until that date, and beyond into any implementation period, including considering the operational, political and legal benefits of opting into new EU legislation.

That approach aligns with the UK’s unconditional commitment to European security in the future. The Government are clear that in any scenario, effective co-operation with EU member states on security and policing will continue to be a top UK priority. In a modern, interconnected world, crime is increasingly international and does not respect borders. After the UK exits the EU, it is a priority for the UK both to preserve the capabilities currently offered by Eurojust and to maintain our current level of contribution to the agency.

Opting into the Eurojust regulation will ensure that we continue to work in line with our European partners in the lead-up to exit day and into the planned implementation period. If we do not opt in, we would drop out of Eurojust, and we judge that negotiating a new model of co-operation as outsiders trying to gain access would be significantly more difficult than remaining active members of Eurojust. It puts the UK in the strongest possible position for beginning negotiations, and positively signals our intention to continue practical law enforcement co-operation with EU partners after we leave.

In conclusion, it is the Government’s view that opting into the regulation is the right thing to do. The regulation as it stands means that remaining in Eurojust continues to be in the national interest while we are still in the EU. In the implementation period, it will bolster our negotiating position for the future security partnership, and will help to support a smooth transition as we leave the European Union.

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We now have until 5.35 pm for questions to the Minister. I remind Members that questions should be brief. It is open to a Member, subject to my discretion, to ask related supplementary questions.

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It is a pleasure to serve under you as Chair, Ms Ryan. With your leave, I will ask the Minister a number of questions. First, I thank members of the European Scrutiny Committee for their observations, the hon. Member for Luton North for opening the debate, and the Minister for not only his remarks today but the letter dated 11 January, which talks about the interrelationship between this opt-in decision and the withdrawal agreement as it stands.

I agree with the Minister that it is very important to send a signal that Britain is determined to maintain a very strong, mutually beneficial security relationship with the EU27 whatever the outcome of the next few weeks. I would like the Minister to deal with three matters specifically. Paragraph 88 of the political declaration states:

“The Parties recognise the value in facilitating operational cooperation between the United Kingdom’s and Members States’ law enforcement and judicial authorities, and will therefore work together to identify the terms for the United Kingdom’s cooperation via Europol and Eurojust.”

First, can the Minister confirm the progress that has been made on that? What planning has been put in place for our position in Eurojust beyond the transition period? Secondly, more specifically, can the Minister identify the model of co-operation for the UK’s participation in Eurojust that the Government are seeking to emulate? The EU’s chief negotiator, Michel Barnier, has made it clear that the UK would be a third country in such circumstances. How exactly do the Government intend to reconcile that with participation?

To give a specific example, an executive committee is created in the measure. Do the Government want to maintain full voting rights on that committee? Do they want observer status? Do they want to be on the committee without voting rights? It would be good if the Minister gave some sense of what the Government are looking to do about those kinds of practical questions, even if he cannot specifically answer them at this stage.

Finally, Eurojust, Europol, the European arrest warrant and data collaboration all form the ecosystem—or the tools, to change the metaphor slightly—of the security apparatus available to us, yet neither the Schengen information system, SIS II, nor the European criminal records information system even appear in the political declaration. Can the Minister set out the Government’s plans to streamline the process by which data can continue to be exchanged in a secure and expedient manner for the safety of people here and in the EU27?

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It is a pleasure to serve under your chairmanship, Ms Ryan. I, too, 100% welcome the Government’s decision to opt into Eurojust, but I have a couple of quick questions. The first is a simple, practical one: has the Minister had any indication about when we might expect a decision from the European Commission? In particular, will it be before or after the proposed Brexit date?

My second question might seem like a bit of a lawyer’s question, but it arises from what the European Scrutiny Committee has said, if I understand it correctly—forgive me if I have not. In its report, the Committee posed a question about whether the terms of the withdrawal agreement would prevent the UK from opting in, if a decision on the opt-in was eventually made after Brexit, because it would amount to enhanced co-operation. If I understand the Minister correctly, however, he said in his letter that he does not think that it would be enhanced co-operation. Could he say more about how the Government distinguish between enhanced co-operation and something that is essentially different?

If the Committee is right about that, or if, during the two-year transition or implementation period, a new justice and home affairs measure amounts to enhanced co-operation, do the Government believe that the terms of the withdrawal agreement will indeed preclude the United Kingdom opting into those measures? If so, what do the Government have planned to try to get around any difficulties that that might cause—for example, the ejection of the UK from existing measures if it cannot opt into enhanced measures?

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I am struck that there appears to be a level of cross-party consensus on this matter that I have yet to witness in the main Chamber on Brexit. I welcome that. Underlying that is, I think, a recognition that no party or Member of Parliament wants to risk losing capability when it comes to security and the No. 1 priority of any Government, which is the enforcement of the law and the protection of our citizens. I welcome both sets of questions and the recognition of the positive decision to opt in and of the wider agenda to try to secure a security partnership that, as far as possible, maintains our existing capabilities. That is our explicit objective.

The hon. Member for Torfaen asked about planning for the next phase. At the moment, as he would expect, the immediate priority is planning for a no-deal scenario, because the risks have risen and the consequences are potentially severe in terms of loss of capability. He will understand and I hope appreciate that the priority of the Government is to prioritise no-deal planning, not least an agreement on Eurojust or any of the other co-operation mechanisms on security, so that we have more time to establish that. A green light and a signal from the Commission is also required to start to engage in the negotiations, and, for reasons we understand, that has yet to materialise. It is fair to say, if the starting point is a standard third country agreement, that we would hope to do better than that.

I make the same point as I do in the context of Europol, for example, where there are some parallels by virtue of our long history inside the agencies and our weight within them. I gave data that made it clear how important we were in Eurojust, in terms of both requests for support and requests for support from other states, and in Europol we are the second biggest contributor of data. We start those conversations with, “What does the deal look like after we leave? Are we third country or third country plus?” We will argue for third country plus. I have spoken to a number of interior Ministers on this journey, and it is clear to me, certainly in the case of Europol, that there is a clear desire for as much continuity as possible, in recognition of the weight and the important value that the UK adds to those agencies.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East raised an extremely important point about whether we can do this and how consistent it is with the withdrawal agreement. Our position is that we can. As noted by the Committee, article 127(4) provides that the UK,

“shall not participate in any enhanced cooperation in relation to which authorisation was granted after the date of entry into force of this Agreement”.

However, article 4 of the opt-in protocol provides that the procedure for approval set out in article 331 of the treaty on the functioning of the European Union on enhanced co-operation applies mutatis mutandis to the UK opt-in request. Therefore, the UK may only opt in if the Commission or Council approves the request. Here is the essence of it: article 4 uses the process set out in article 331, but this does not in itself constitute enhanced co-operation. We therefore consider that article 127(4) of the withdrawal agreement would not affect the operation of article 4 of the opt-in protocol. That is our understanding and we believe that is the understanding of the Commission; we are just waiting for that in writing, but it forms the basis of why we are proceeding as we are.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East asked about timing. Assuming there is an implementation period, our interpretation is that the Commission has four months to confirm the UK’s request to participate in the Eurojust regulations. That would obviously take us into the period after 31 March, but, for the reasons that I have set out, we think that what we propose is entirely valid, and that, in our view, is the view of the Commission as well.

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It is a pleasure to serve under your chairmanship, Ms Ryan. I want to pick up points raised by all three contributors, and especially to echo my colleague on the European Scrutiny Committee, the hon. Member for Luton North, and to pick up two of the points made by the Committee in the summary of its conclusions on page 5, paragraph 1.18.

I am grateful to the Minister for his letter, which arrived over the weekend. First, how will operational co-operation differ in practice once we have left? How will it compare with the UK’s current level of co-operation with Eurojust? He has touched on that point, but if he can expand on his comments, I would be grateful. Secondly, will opting in make it more likely that we will secure better terms than other third countries once EU law ceases to apply? If he could address those two points, I would be grateful.

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I thank my hon. Friend for those additional questions. I welcome his contribution and, indeed, the Committee’s scrutiny of the process and the calling of the debate. It is extremely important that these decisions and processes are scrutinised properly and that the Executive are held to account, particularly at this pivotal, highly emotive stage of the negotiations and the reshaping of our relationship with our European partners.

The key word here is “co-operation”. We are seeking to maximise continuity, and these are co-operation mechanisms that work. They are valued by our partners and are an integral part of our collective effort to protect our citizens and pursue justice. We have invested a lot of time and money over the years in building these mechanisms, and it is our shared desire to continue them. That is my experience from direct conversations with other interior Ministers. I have yet to meet one who does not want to continue the way we are. Obviously, politics might override that in the short term; none of us can know how this will work out. In seeking to opt in, the UK Government’s primary motive is to seek continuity in the existing arrangements. We recognise that if we opted out, we would be out, and we feel that the opportunity costs of that are too high.

My hon. Friend and others asked about operational co-operation on standard third country terms and about what that might look like in the future. Our White Paper, published in July 2018, outlined that if the UK’s participation in Eurojust were limited to the existing third country terms, there would be a reduced capability for the UK and the EU to co-operate in tackling serious cross-border and organised crime. We would have a reduced role in operational activity at Eurojust, and there would be limitations to the extent to which Crown Prosecution Service and Crown Office prosecutors could work with and at Eurojust.

It would not be a disaster—other areas of our security participation toolkit would be more damaged by our being limited to third country status—but our starting point is that we should try to maintain, as far as possible, the capabilities that we have, because that is where we have a mutual interest with our European partners. We will therefore go into these negotiations with a determination to move beyond standard third country status. We are not a standard third country: we helped to build these platforms, we helped to fund them and we are core to their success. That will be the core of our argument to the Commission as and when we get to that point.

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I am not a lawyer, but we pick up some understanding of these things from our lawyer friends over time. In reading the European Scrutiny Committee statement, I touched on some of the differences between the legal and policing systems across the EU. There are some fairly profound differences in the history of our legal systems: ours derives from common law, and continental systems derive largely from Roman law, which is quite different. How helpful has Eurojust been in bridging that cultural gap?

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My understanding is that Eurojust has been extremely valuable. The value of having 28 representatives of criminal justice agencies of member states in the same building, working together, with access to the files and the ability to co-ordinate prosecutions and criminal justice processes, cannot be underestimated in an age in which the crime that we are pursuing and investigating is becoming increasingly complex—crossing borders and requiring that degree of co-ordination. The simple virtue of having people in the same building, sharing information and working together in that way, has been extraordinarily valuable.

The proof lies in the facts and figures, our participation, the volumes of requests for support and the levels of co-ordination meetings. As of 6 July 2018, the UK desk had 544 live cases. As of January 2019, the UK was participating in 50 live joint investigations—the highest number of any desk at Eurojust. It is a mechanism that a lot of information and co-ordination is flowing through in the increasingly complex world that we are trying to police. Therefore, as a nexus of co-operation it has already proved its value. That is why the Government have reached a very clear view that that co-operation is a capability that we want to maintain.

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I thank the Minister for his answer. I have another question. Does he agree that entering an international arrangement voluntarily is very different from having an arrangement imposed by a supranational body, and that if one can voluntarily join something one could choose to leave if it did not suit over time? Does he agree that there is a profound difference, and that one is much more democratic than the other?

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As the hon. Gentleman framed it, it is hard to disagree. I sound cautious. Being a bear of limited brain, I am not quite picking up the undercurrent, but I know that there is one.

Coming back to the hon. Gentleman’s earlier comments, I would say that the British Government did have some profound reservations about what was being proposed before, because it crossed some borders as far as we were concerned in terms of the power at national level versus the power at pooled level. We were very uncomfortable about losing operational autonomy, not least for our police service, so we pushed back on that in a way that I hope he agreed with. We got support from EU member states and got the changes that we wanted, not least in a very clear separation of duties with the EPPO proposals.

Having made those arguments and, frankly, won those arguments, we are now comfortable with opting in to regulations, the primary motivation being to maintain the continuity of the existing arrangements, which work well.

Motion made, and Question proposed,

That the Committee takes note of Regulation 2018/1727 of the European Parliament and of the Council on the European Union Agency for Criminal Justice Cooperation (Eurojust), and replacing and repealing Council Decision 2002/187/JHA; endorses the Government’s decision to request to opt in under Protocol 21 on the Position of the United Kingdom and Ireland in respect of the Area of Freedom, Security and Justice annexed to the EU Treaties; and supports the Government’s assessment that Eurojust provides a valuable service to the UK and that opting in would enable us to maintain operational continuity and minimise disruption for UK law enforcement and prosecution authorities during the proposed Implementation Period.—(Mr Hurd.)

Question put and agreed to.

Committee rose.