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Department for Business, Innovation and Skills

Volume 711: debated on Tuesday 9 June 2009

Private Notice Question

Asked By

To ask Her Majesty’s Government what were the reasons for, and the benefits that will flow from, the merger of the Department for Innovation, Universities and Skills with the Department for Business, Enterprise and Regulatory Reform, and the consequential ministerial responsibilities.

My Lords, the department will help the economy come through the recession stronger, more competitive and able to grow in the future, fostering our world-class system of higher education to help this objective and enrich our society. The merger expresses the commitment promised in our strategy set out in the document, New Industry, New Jobs, aligning government policies to support UK competitiveness, productivity and excellence. We will provide help to businesses, universities and colleges, and to UK workers and students through training, skills, lifelong learning, first-class science and technology, further education and research policies.

My Lords, is this not an astonishing combination of power in a mega department? Universities and further education colleges have always been in the Department of Education. As the Minister knows, there is a close relationship between industry and universities through beneficial research, but universities are not basically about improving competitiveness or building industrial strategy. They are essentially custodians of scholarship, intellectual rigour and world-class teaching. Where will his priorities come in his department? He is going to have to save Vauxhall, which will cost hundreds of millions of pounds. Do the universities come before, alongside or after Vauxhall? The Prime Minister said that there are 13 priorities for his department. Universities are fifth, FE colleges seventh. When he talks of expanding education, does he realise that this year we will see the largest number of applications by students to go to university in our history and that 50,000 will not go there because of education cuts in his department?

The major Bill affecting his department before the House at the moment is the Apprenticeships, Skills, Children and Learning Bill. The Bill has 300 clauses and I do not expect him to be familiar with it. But if he could glance at one or two clauses it might be helpful, because the Bill changes the whole of our further education system. Last week, at Second Reading, the Bill was introduced by the noble Baroness, Lady Morgan, who is not a Minister of his department. She is involved in education and children in the department of his close and now recent friend Mr Balls, so a Minister from another department is carrying through major legislation for his department. Where is the join-up? Who is in charge of this rattling train? May I ask one personal question before I sit down? I see that he has become Lord President of the Council. This was a post held until Friday by our present Leader of the House of Lords. With scant regard for her eloquent defence of the Prime Minister on “Question Time”, this must be the first example of window undressing. Will he say whether the Prime Minister is entirely aware that the noble Lord is not only a Secretary but also a President?

My Lords, it is rather difficult to know where to start in picking from the noble Lord’s extended question. All I can say is that this new department is not the first to have more than one priority, and this is not the first Government to experience a reshuffle. The noble Lord will remember his personal experience of many reshuffles in previous Governments. As a liberal arts university graduate, of course I fully appreciate the role played by universities in building up not only our country’s competitiveness but its character and its scholarship. I am committed to all of those things.

My Lords, will my noble friend affirm today and repeatedly in the future, and demonstrate consistently in his policies, that the Government value research, teaching, knowledge and ideas as goods in themselves, as aspects of civilisation, and not just as means to advance material prosperity?

My Lords, I fully concur with my noble friend’s remarks. I am very proud of this Government’s exceptional record on higher education, and I will certainly defend it. Investment in higher education is now at record levels, with more than £7.5 billion this year, an increase of 24 per cent over the past decade. It will not only be I who is defending that record and expenditure. It will be my colleague Pat McFadden in the other place as well, who will support me across the range of the department’s responsibilities. He will lead for the department in the Commons as well as being the department’s Commons Minister, attending Cabinet weekly.

My Lords, I first congratulate the Lord President of the Council and First Secretary of State on his remarkable accumulation of responsibilities, titles and junior ministers, of whom he can boast no fewer than 10, which is surely a record. I understand that he has also now added outer space to his portfolio. His ambition indeed knows no bounds. I have always understood that in the business world there is said to be no such thing as a merger; there are only takeovers. Does he agree that it is a shameful and retrograde development that further and higher education have been subsumed in this way, to be judged not worthy even of a single letter in the new departmental acronym? Also, in a country desperately in need of enterprise, when are we going to meet the so-called enterprise tsar? When will the sorcerer’s apprentice make his debut in this Chamber, or is he already a falling tsar?

My Lords, I am sure the sorcerer’s apprentice will be winging his way towards your Lordships’ House in due course.

The new department will combine BERR’s strengths in shaping the enterprise environment and analysing the strengths and the needs of the various parts of British industry, and DIUS’s expertise in maintaining world-class universities and expanding access to higher education, and its responsibilities and skills in developing our further education sector. We have a new phoenix in this department, which will take flight from the merger of two previously excellent departments and will be able, I hope, to extend its reach to outer space and beyond.

My Lords, is the Minister aware that there is a famous book about mergers called Disappointing Marriage, which points out that diseconomies of scale come in very quickly on such occasions? Does he think that his department may not encounter diseconomies of scale?

My Lords, no, I do not expect that to happen. In so far as there is a risk, I shall be on my guard to ensure that it does not. It became clear in the production of the Government’s framework policy statement, New Industry, New Jobs, which both departments and both Secretaries of State were responsible for bringing forward, that the two departments have completely complementary roles and even some duplication of expertise. The importance of a single, coherent government vision on building our capabilities and investing in productivity in a global economy means that this merger makes sense. If in addition it enables us to bring down some of the rather expensive overheads in government, so much the better for the taxpayer.

My Lords, should not my noble friend be taking over from the Treasury its interest in banking, given that the relationship with business is so important at the present time?

My Lords, my noble friend will be pleased to hear that both the Chancellor and I chair the lending panel, which brings together the Government and the banks. I am exercising that responsibility in the way that he suggests, but incorporating it fully into my department might be a move too far.

My Lords, I declare an interest as a graduate in dead languages, and a graduate in what some people regard as dead ideas, whose holy book has the words,

“be as cunning as serpents and as innocent as doves”.

I would not want to plug anyone in particular, but none of us would question the undoubted managerial abilities of the Secretary of State, nor the fact that we have to say from these Benches that higher education has fared in rather different ways under different Governments over the years. However, I am not sure that the Secretary of State has provided a philosophy for the merger of higher and further education with the rest of the departments. I go further and suggest, perhaps in the interests of creative facetiousness, that we might look forward to further mergers, such as a merger of the Exchequer with health.

My Lords, I appreciate the points made by the right reverend Prelate. In the Prime Minister’s view—it is a view I share—to compete in a global economy and to create the jobs in the future that we want to see, Britain requires an environment that encourages enterprise, skilled people, innovation and world-class science and research. The merger of these two departments puts the policy levers for these requirements in one place with one strategic commitment to building Britain’s future economic and educational strengths. I hope that the right reverend Prelate and other noble Lords will judge both the department and me not only by the philosophy that we deploy but by the results that we are able to achieve.