Jul202017
The MoU establishes cooperation arrangements, including the exchange of information, regarding Central Counterparties (CCPs) which are established and authorised or recognised in India, and which have applied for EU recognition under EMIR.
EMIR provides for cooperation arrangements between ESMA and the relevant non-EU authorities whose legal and supervisory framework for CCPs have been deemed equivalent to EMIR by the European Commission.
The MoU is effective as of 21 June 2016.
Jul202017
The MoU establishes cooperation arrangements, including the exchange of information, regarding Central Counterparties (CCPs) which are established and authorised or recognised in India, and which have applied for EU recognition under EMIR.
EMIR provides for cooperation arrangements between ESMA and the relevant non-EU authorities whose legal and supervisory framework for CCPs have been deemed equivalent to EMIR by the European Commission.
The MoU is effective as of 21 June 2016.
Jul202017
Customs Union: EU customs seized over 41 million fake goods at EU borders last year
New figures released by the European Commission today show that customs authorities detained more than 41 million fake and counterfeit products at the EU’s external border in 2016. The goods had a total value of over €670 million. Everyday products which are potentially dangerous to health and safety – such as food and drink, medicines, toys and household electrical goods – accounted for over a third of all intercepted goods. Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “A high level of protection of intellectual property is crucial to support growth and create jobs. Fake goods pose a real threat to health and safety of EU consumers and also undermine legal businesses and state revenues. Studies show that the EU is particularly exposed to imports of counterfeit products. I want to pay tribute to the hard work of customs authorities in combating these fake goods. They need support and resources to enable them to protect us all from the dangers that they can pose. Cooperation between law enforcement authorities should be strengthened and risk management systems upgraded to protect the EU from goods infringing on intellectual property rights.” Cigarettes were the top category (24%) for articles detained and toys the second largest group (17%), followed by foodstuffs (13%) and packaging material (12%). The number of intercepted articles rose by 2% compared to 2015. The Commission’s report on customs actions to enforce IPR has been issued annually since 2000 and is based on data transmitted by Member States’ customs administrations to the Commission. The data provide valuable information which supports the analysis of intellectual property rights infringements and helps other institutions such as the European Union Intellectual Property Office and the OECD to map economic data and the most common routes for counterfeiters. A more detailed press release is available here. The full report can be consulted here. (For more information: Vanessa Mock – Tel.: +32 229 56194; Patrick McCullough – Tel.: +32 229 87183)
Juncker Plan backs upgrades to the University of Latvia’s campus and enhanced access to finance for SMEs
The Juncker Plan has backed European Investment Bank Group loan agreements with the University of Latvia and ProCredit, a bank which specialises in lending to small and medium-sized enterprises (SMEs). Both agreements, made in two separate transactions, were made possible by the European Fund for Strategic Investments (EFSI), the central pillar of the Investment Plan for Europe, the so-called “Juncker Plan”. The loan to the University of Latvia will finance the construction of new state-of-the-art facilities for the University’s science, social and humanities faculties. The agreement with ProCredit is expected to generate some EUR 450 million in financing for SMEs. Commenting on the agreement with the University of Latvia, Vice-President of the European Commission, Valdis Dombrovskis said: “Investing today in the facilities our students need to realise their full potential is an investment in our future economic growth. Today’s agreement demonstrates that the Juncker Plan can deliver for jobs and growth whilst also contributing to wider objectives, such as ensuring that Europe maintains its competitiveness in research and innovation. I trust that these new facilities will serve generations of Latvian students and will help them to excel.” As of June 2017, the Juncker Plan is expected to trigger over EUR 390 million in investments in Latvia and EUR 209 billion across Europe. For the latest figures country-by-country, see here. Full press releases are available here. (For more information: Vanessa Mock– Tel.: +32 229 56194; Enda McNamara – Tel.: +32 229 64976)
L’Union européenne apporte un soutien de €100 millions à la Tunisie
La Commission européenne, au nom de l’Union européenne (UE), a versé aujourd’hui à la Tunisie un prêt de €100 millions, dix jours après avoir donné le feu vert à ce déboursement. Il s’agit de la troisième et dernière tranche du programme d’assistance macrofinancière (AMF-I) à la Tunisie d’un montant total de €300 millions, adopté en mai 2014. Ce financement fait partie des efforts globaux de l’UE visant à aider la Tunisie à faire face aux graves difficultés économiques que le pays rencontre et à l’instabilité politique qui persiste dans la région. Il soutient le processus de relance économique de la Tunisie tant par l’octroi à ce pays de financements à des conditions préférentielles que par l’encouragement de la mise en œuvre de plusieurs mesures importantes de politique publique convenues dans un protocole d’accord entre l’UE et la Tunisie. Les fonds nécessaires ont été levés par la Commission européenne sur les marchés financiers grâce à l’émission d’une obligation de €100 millions avec une échéance de 15 ans et un taux d’intérêt de 1,3%. Ce prêt a été alloué à la Tunisie sous les mêmes conditions. Pierre Moscovici, Commissaire pour les affaires économiques et financières, la fiscalité et les douanes, a déclaré: « Ce versement est une autre démonstration du soutien fort de l’UE à la Tunisie dans la poursuite de ses efforts de réformes. L’UE est déterminée à soutenir le peuple tunisien, ainsi que le processus de transition démocratique du pays.» Le deuxième programme d’assistance macrofinancière (AMF-II) s’élève à un montant de €500 millions sous la forme de prêts. Cet octroi de fonds a été approuvé par le Parlement européen et le Conseil le 6 juillet 2016 et le versement devrait avoir lieu au cours de l’année 2017 ainsi qu’au premier semestre de 2018. (Pour plus d’informations: Vanessa Mock – Tel.: +32 2 295 61 94; Barbara Ochotnicka – Tel.: +32 2 291 37 54)
EU steps up humanitarian assistance in Libya
The European Commission has today announced an additional €10 million in humanitarian aid for those most in need in Libya as violence and instability continue to affect vulnerable populations. This is part of the EU’s broader support for Libya to address the ongoing crisis in the country, which includes funding of €220 million allocated through various support programmes, including the EU Emergency Trust Fund for Africa. “The European Commission is stepping up support for the worrying humanitarian situation in Libya. Our new funding aims to help humanitarian organisations respond to urgent needs, especially in terms of access to emergency health services and essential medicines. We urge all parties to the conflict to ensure immediate, safe and unrestricted humanitarian access so all in need receive lifesaving assistance. We stand by all those suffering as a result of the conflict and are committed to pursuing our impartial and neutral humanitarian response to help those that need it most.” said Commissioner for Humanitarian Aid and Crisis Management Christos Stylianides. A full press release is available here. (For more information: Carlos Martín Ruiz de Gordejuela – Tel.: + 32 229 65322; Daniel Puglisi – Tel.: +32 229 69140)
La Commission lance une consultation publique sur les soins de santé dans le marché unique numérique
Aujourd’hui, la Commission européenne lance une consultation publique sur la manière dont l’Union européenne devrait promouvoir l’innovation numérique dans le secteur des soins de santé, au profit des citoyens et des systèmes de santé en Europe. La consultation contribuera à l’adoption d’une nouvelle communication d’ici la fin de 2017, comme annoncé dans l’examen récent de la stratégie pour un marché unique numérique de la Commission. En accueillant l’initiative, le vice-président Andrus Ansip et les commissaires Vytenis Andriukaitis, Mariya Gabriel et Carlos Moedas ont déclaré: “Nous sommes engagés dans l’amélioration de la qualité de vie des citoyens européens en améliorant les systèmes de santé, de soins et de recherche en Europe en utilisant le plein potentiel des technologies numériques. Cette consultation nous aidera à identifier les moyens d’offrir aux citoyens, aux professionnels de santé et aux chercheurs un meilleur accès aux données sur la santé, à la prévention, aux réponses rapides face aux menaces pandémiques, aux traitements et soins personnalisés. Nous envisageons de nouvelles initiatives numériques visant à assurer la libre circulation des patients et des données, à soutenir la modernisation des systèmes de santé nationaux et à agréger des données et des connaissances novatrices de toute l’Europe. Au cœur de nos politiques, les citoyens et leur bien-être restent notre première priorité“. Un communiqué de presse est disponible en ligne. Plus d’informations ici et la page principale consacrée à la consultation ici. (Pour plus d’informations: Anca Paduraru – Tel.: +32 229-91269; Nathalie Vandystadt – Tel.: +32 229 67083; Iris Petsa – Tel.: + 32 229 93321; Mirna Talko – Tél.: +32 229 87278)
EU reinforces its strong partnership with Colombia, focussing on rural reforms
Commissioner for International Cooperation and Development, Neven Mimica, reaffirms the EU’s strong and long-standing partnership with Colombia during an official visit to Colombiatomorrow, where he will meet with President Juan Manuel Santos. At the heart of this partnership stands the EU’s commitment to support the implementation of the Colombian peace agreement, with a particular emphasis on comprehensive rural reforms. In this context, Commissioner Mimica said: “Restoring rural areas that were affected by the prolonged armed conflict is at the heart of Colombia’s peace agreement, and an important priority for our development cooperation with the country. Together with the Food and Agriculture Organization of the United Nations, we will support Colombia’s efforts to build lasting peace by strengthening rural communities and agricultural productivity”. Commissioner Mimica, together with the Food and Agriculture Organization of the United Nations, will launch a joint initiative for Colombia. Through this initiative, the EU will support the Colombian government institutions that are involved in food security, nutrition and sustainable agriculture by means of targeted policy assistance and capacity building. These actions will help to implement the comprehensive rural reform, which is one of the priorities of the Peace Agreement signed in November 2016. The initiative can be considered a significant step forward towards achieving sustainable development in the country, as it focuses in particular on improving the situation of the poor in rural areas, the capacity of the State in conflict–affected areas, and rural development. Commissioner Mimica will also participate in the fair AgroExpo in Bogota. Read the full press release here. (For more information: Carlos Martin Ruiz De Gordejuela – Tel.: +32 229 65322; Christina Wunder – Tel.: +32 229 92256)
Nouvelle proposition visant à réduire les substances cancérogènes dans les aliments
Les représentants des États membres ont voté hier en faveur de la proposition de la Commission européenne visant à réduire la présence d’acrylamide – une substance cancérogène – dans les denrées alimentaires. Une fois mis en œuvre, le nouveau règlement exigera des exploitants du secteur alimentaire (ESA) qu’ils appliquent des mesures obligatoires, proportionnées à la taille et à la nature de leur établissement, afin de réduire la présence d’acrylamide. Le commissaire pour la santé et la sécurité alimentaire, Vytenis Andriukaitis, s’est félicité de ce vote: «Nous avons franchi un pas important dans la protection de la santé et du bien-être des citoyens. Le nouveau règlement permettra non seulement de réduire la présence de cette substance cancérogène, mais contribuera à sensibiliser l’opinion publique à la manière d’éviter l’exposition à ladite substance, qui est souvent liée à la cuisine domestique.» La Commission a également l’intention d’entamer des discussions sur des mesures supplémentaires, telles que la fixation de teneurs maximales en acrylamide dans certaines denrées alimentaires. Le texte approuvé va maintenant être transmis au Conseil et au Parlement européen avec un délai d’examen de trois mois avant son adoption finale par la Commission. Un communiqué de presse dans toutes les langues est disponible en ligne. (Pour plus d’informations: Anca Paduraru – Tel.: +32 229-91269; Iris Petsa – Tel.: + 32 229 93321)
Agriculture: Commission launches crops’ market observatory
The Commission launched today a market observatory for crops to ensure more transparency and increase availability of market data for European farmers and traders. A range of market information and short-term analysis will be made available on a new dedicated website. The observatory consists of 14 organisations representing various stages of the grain supply chain. A board of 23 market experts will meet twice a year, chaired by the Commission. Speaking at the inaugural meeting, Commissioner for Agriculture and Rural Development Phil Hogan said: “Today’s meeting is the fulfilment of a commitment to extend to the crops sector the successful story of the Market Observatories for Milk, Meat and Sugar. The EU Crops sector plays a key role for the global competitiveness of European agriculture. It is therefore our ambition for the Observatory to become an additional and useful tool to manage the market more effectively“. Crops production is an essential part of the EU farming activity, with over 300 million tonnes of cereals, 30 million tonnes of oilseeds and five million tonnes of protein crops produced every year. (For more information: Daniel Rosario – Tel.: + 32 229 56185; Kinga Malinowska – Tel.: +32 229 51383)
Mergers: Commission clears the creation of a mobile payments joint venture by Bitė, Tele2 and Telia in Lithuania
The European Commission has approved, under the EU Merger Regulation, the creation of a joint venture by UAB Bitė Lietuva (Bitė), UAB Tele2 (Tele2) and Telia Lietuva AB (Telia), all of Lithuania. The joint venture will provide mobile payment services to businesses and consumers in Lithuania. Bitė is controlled by the US investment firm Providence Equity. Tele2 is part of the Tele2 Group, ultimately controlled by the Swedish investment company Kinnevik. Telia is part of the Swedish Telia Company AB. Bitė, Tele2 and Telia are active in the supply of retail mobile telecommunications services in Lithuania. In addition, Telia provides colocation services in Lithuania, hosting other companies’ servers in its data centers. The Commission assessed the impact of the transaction on the nascent market for mobile payment services in Lithuania.The Commission concluded that the transaction would raise no competition concerns given the minor overlap between the joint venture’s envisaged activities and the parents’ potential activities in the supply of mobile payment services. Moreover, the Commission found that the joint venture’s parents would not have the ability, or incentive, to shut out rivals, in particular due to the presence of alternative means for competitors of the joint venture to securely store information and to authenticate users. The transaction was examined under the normal merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.8251. (For more information: Ricardo Cardoso – Tel.: +32 229 80100; Maria Sarantopoulou – Tel.: +32 229 13740)
Concentrations: La Commission autorise l’acquisition de GE Water par Suez
La Commission européenne a autorisé, en vertu du règlement européen sur les concentrations, le projet d’acquisition de GE Water and Process Technologies, basée aux Etats-Unis, par SUEZ S.A., basée en France. GE Water est actif dans la fourniture de produits chimiques et d’équipement de systèmes de traitement des eaux pour des clients industriels ainsi que des municipalités. Suez fournit des solutions de gestion des eaux, de recyclage et de récupération des eaux usées, ainsi que des systèmes de développement urbain. La Commission a conclu que l’acquisition envisagée ne soulèverait pas de problèmes de concurrence car il y existe un nombre suffisant de fournisseurs alternatifs sur les marchés de la fourniture de services mobiles de traitement des eaux et de la fourniture de produits chimiques, où GE Water et Suez sont des concurrents directs. GE Water est aussi un fournisseur de membranes utilisées dans les usines de traitement des eaux et eaux usées que Suez produit. La Commission a conclu que les entreprises n’auraient ni l’incitation ni la capacité d’exclure les concurrents du marché des membranes. L’opération a été examinée dans le cadre de la procédure normale du contrôle des concentrations. De plus amples informations sont disponibles sur le site internet concurrence de la Commission, dans le registre public des affaires sous le numéro d’affaire M.8452. (Pour plus d’informations: Ricardo Cardoso – Tel.: +32 229 80100; Maria Sarantopoulou – Tel.: +32 229 13740)
Concentrations: la Commission autorise l’acquisition du contrôle conjoint de NextDoor par Bouygues Immobilier et Accor
La Commission européenne a approuvé, en vertu du règlement européen sur les concentrations, l’acquisition du contrôle conjoint de la société NextDoor par les sociétés Bouygues Immobilier S.A.S. et Accor S.A., toutes trois basées en France. NextDoor a pour activité la mise à disposition et commercialisation d’espaces de travail intelligents et collaboratifs destinés aux entreprises, assortis d’un ensemble de services d’affaires. Bouygues Immobilier intervient dans les différents domaines de la promotion immobilière et développe des projets de logements, d’immeubles de bureaux et de parcs commerciaux. Accor est actif dans le secteur de l’hôtellerie. La Commission a conclu que la concentration envisagée ne soulèverait pas de problème de concurrence compte tenu de son impact très limité sur la structure du marché. L’opération a été examinée dans le cadre de la procédure simplifiée du contrôle des concentrations. De plus amples informations sont disponibles sur le site internet concurrence de la Commission, dans le registre public des affaires sous le numéro d’affaire M.8534. (Pour plus d’informations: Ricardo Cardoso – Tel.: +32 229 80100; Maria Sarantopoulou – Tel.: +32 229 13740)
Eurostat: Comment l’Union européenne progresse-t’elle vers ses objectifs Europe 2020? – Un tableau contrasté
La stratégie Europe 2020, adoptée par le Conseil européen en juin 2010, est l’agenda de l’Union européenne en matière d’emploi et de croissance pour la décennie en cours. La stratégie s’est fixée comme but principal d’assurer des niveaux élevés d’emploi, de productivité et de cohésion sociale dans les États membres, tout en réduisant l’impact sur notre environnement naturel. Afin d’atteindre ce but, l’UE a adopté des objectifs, à atteindre d’ici 2020, couvrant cinq domaines: l’emploi, la recherche & développement (R&D), le changement climatique & l’énergie, l’éducation ainsi que la réduction de la pauvreté. Ceux-ci ont été traduits en objectifs nationaux afin de refléter la situation et les possibilités de contribution de chaque État membre à l’objectif commun. Un ensemble de neuf indicateurs clés et des sous-indicateurs complémentaires, compilés par Eurostat, donnent un aperçu de la distance à laquelle se trouve l’UE dans l’atteinte de ses objectifs. Un communiqué de presse est disponible ici. (Pour plus d’informations: Christian Wigand – Tel.: +32 229 62253; Sara Soumillion – Tel.: + 32 229 67094)
Eurostat: Déficit public désaisonnalisé en baisse à 0,9% du PIB dans la zone euro
Au premier trimestre 2017, le ratio du déficit public par rapport au PIB, corrigé des variations saisonnières, s’est établi à 0,9% dans la zone euro (ZE19), en baisse par rapport au quatrième trimestre 2016 où il se situait à 1,1%. Dans l’UE28, le ratio du déficit public par rapport au PIB s’est établi à 1,0%, contre 1,2% au trimestre précédent. Un communiqué de presse est disponible ici. (Pour plus d’informations: Barbara Ochotnicka – Tel.: +32 229 13754)
Eurostat: Premier trimestre 2017 par rapport au quatrième trimestre 2016 – La dette publique en hausse à 89,5% du PIB dans la zone euro
À la fin du premier trimestre 2017, le ratio de la dette publique par rapport au PIB s’est établi à 89,5% dans la zone euro (ZE19), contre 89,2% à la fin du quatrième trimestre 2016. Dans l’UE28, le ratio a également augmenté, passant de 83,6% à 84,1%. Par rapport au premier trimestre 2016, le ratio de la dette publique par rapport au PIB a baissé dans la zone euro (de 91,2% à 89,5%) ainsi que dans l’UE28 (de 84,3% à 84,1%). Un communiqué de presse est disponible ici. (Pour plus d’informations: Vanessa Mock – Tel.: +32 229 56194; Barbara Ochotnicka – Tel.: +32 229 13754)
ANNOUNCEMENTS
High Representative/Vice-President Federica Mogherini travels to Kuwait
At the invitation of the Emir of Kuwait, EU High Representative/Vice-President Federica Mogherini will travel to Kuwait on July 23 to discuss the situation in the Gulf and mark the EU’s full support for Kuwait’s ongoing mediation efforts. The HR/VP will notably meet with H.H. the Emir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah of Kuwait, Foreign Minister Sheikh Sabah Al-Khalid Al-Hamad Al-Sabah and Sheikh Mohammad Al-Abdullah Al-Mubarak Al-Sabah, Minister of State for Cabinet Affairs of Kuwait and Emissary for the Gulf crisis, as well as withH.E. Marzouq Al-Ghanem, Speaker of the National Assembly of Kuwait. Photos and videos of the visit will be available on EbS. (For more information: Maja Kocijancic – Tel.: +32 229 86570; Lauranne Devillé – Tel.: +32 229 80833)
Central Mediterranean Route: Commissioner Avramopoulos in Tunis for Ministerial Meeting
Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos will be in Tunis on Sunday and Monday for the second Ministerial Meeting on the Central Mediterranean Route alongside interior ministers from Algeria, Austria, Chad, Egypt, France, Germany, Italy, Libya, Mali, Malta, Niger, Slovenia, Switzerland and Tunisia, as well as Estonia which holds the Presidency of the European Union. Discussions will focus on ways to strengthen cooperation between both sides of the Mediterranean as well as between Libya and all its neighbours with a view to saving lives at sea and in the desert, stemming irregular migration, fighting against smugglers and traffickers in human beings, protecting migrants and refugees’ rights, and increasing cooperation on border management along the Central Mediterranean Route. A press conference is scheduled to take place on Monday 24 July and will be broadcast on EbS. (For more information: Natasha Bertaud – Tel.: +32 229 67456; Markus Lammert – Tel.: +32 229 58602)
Le Commissaire Moscovici rencontre les autorités françaises à Paris demain
Pierre Moscovici, Commissaire aux affaires économiques et financières, à la fiscalité et aux douanes sera à Paris le vendredi 21 juillet. Il s’entretiendra avec le Premier ministre, M. Édouard Philippe; le ministre de l’Économie et des Finances, M. Bruno Le Maire; et le ministre de l’Action et des Comptes publics, M. Gérald Darmanin. Le Commissaire Moscovici a dit: “La France s’est engagée à corriger son déficit excessif dès cette année. C’est ce que ses partenaires européens attendent d’elle et c’est à portée de main. J’en discuterai avec les autorités françaises ce vendredi. Nous évoquerons également la préparation du projet de budget 2018 qui devra confirmer dans la durée la crédibilité budgétaire de la France en Europe.” (Pour plus d’information: Vanessa Mock – Tel.: +32 229 56194; Patrick McCullough – Tel.: +32 229 87183)
The Commissioners’ weekly activities
Upcoming events of the European Commission (ex-Top News)
Jul202017
Universities Minister Jo Johnson has today (20 July 2017) set out plans to provide better value for money from the higher education system for students and taxpayers.
In a speech to university leaders and representative bodies at the think tank Reform, the Minister outlined proposals for all universities to draw up stronger contracts with their students, which clearly set out what a student can expect from a university education.
Jo Johnson also called on the sector to put an end to the upward spiral in vice chancellor pay. He insisted that universities publicly justify any pay exceeding that of the Prime Minister. He said that the Office for Students – the sector’s new regulator – will be expected to address this issue.
Universities Minister, Jo Johnson said:
When students and taxpayers invest so heavily in our higher education system, value for money should be guaranteed. Yet, I am still hearing students say that their course is poor quality.
This is not good enough, especially when some vice chancellors take home a wage that in some cases exceeds that of the Prime Minister.
So, on top of the government’s reforms through the Teaching Excellence Framework, I am insisting on effective consumer protection for students and calling for an end to spiralling vice chancellor pay.
The minister also launched the next stage of the Teaching Excellence Framework (TEF). A pilot is expected to be launched in the autumn that will assess teaching at an individual subject level. These pilots represent the next phase in the TEF’s development, and will support students to make better informed decisions between courses and institutions.
He also set out that the next round of institutional TEF assessments will incorporate new analysis of graduate outcomes to help students decide where to study based on the careers of previous graduates.
Jo Johnson defended the current system of funding universities sustainably through subsidised, income-dependent loans which mean graduates only pay back what they can afford.
Jul202017
I’m delighted to speak at Reform, an organisation with a relentless commitment to improving public services.
In recent weeks, there has been an intense public discussion about the way we finance higher education in the UK.
Today I would like to look at some of the misconceptions in this debate.
Let us begin by reminding ourselves of the three goals of our student finance system. To be fair and sustainable, the system must:
Sustaining excellence is only possible if we have a system that delivers sufficient funding to meet increasing student demand and to invest in quality.
The 2012 reforms have delivered a 25% increase in university funding per student per degree. University funding per student is today at the highest level it has ever been in the last 30 years.
It is no wonder that the OECD described the English system as “one of the few countries to have figured out a sustainable approach to higher education finance”.
The international reputation of the UK’s university system, evident in our position in league tables and appeal to international students, has been hard-won, and we must protect it.
Our drive to secure greater value money for all students through the further steps I am announcing this morning will help our universities to maintain their global as well as their domestic standing.
Let’s turn to the second objective, which is to achieve a fair division of the cost of higher education between its beneficiaries.
We all gain from living in an educated society, not just culturally or intellectually, but materially. The nurses and doctors who staff our hospitals and the programmers who code our software benefit all of us with their degrees, as do the many graduates who enjoy a higher income and pay more tax as a result of their studies.
But at the same time, a degree confers a significant private benefit. Over a graduate’s lifetime, a degree is on average worth an additional £170,000 in salary for a man, and £250,000 for a woman.
It is fair that some of the costs associated with these significant benefits should be borne by graduates rather than by taxpayers, not all of whom will have had the opportunity to go to university.
Our system delivers just such a balance. Students pay on average roughly 65% of the cost of the system through fees, while the taxpayer bears around 35% of the cost, through teaching grants and loan subsidies, and a much higher share if we were to consider also the government’s £6 billion investment in research.
This is a fair split of the cost of higher education.
The third objective of our student finance system is to remove barriers to access to higher education, especially for prospective students from disadvantaged backgrounds.
Our finance system ensures that graduates only begin to pay back their loans if they are earning over £21,000. Unlike commercial loans, they are available to all students, regardless of background or financial history.
The result is they are now going to university in record numbers– last week’s UCAS application figures showed that the overall number of 18-year old applicants in the year to June 2017 is higher than it has ever been at the June deadline. UCAS data also shows application rates among BME 18-year-olds, and application rates among young people from disadvantaged backgrounds are at their highest recorded levels.
The application gap between most and least advantaged is still too wide, but thanks to our reforms to the student finance system young people from the poorest areas are now 43% more likely to go to university than they were in 2009/10.
Because we are committed to our goal of improving access, we continue to watch these data carefully for any areas where we are not seeing this welcome progress.
The same UCAS data showed a fall in older applicants.
Some of this fall is a direct result of the successes of the current system. Because more 18 year olds have had the chance to go to university in previous years, the stock of older potential applicants today has fallen. The buoyant job market has also reduced demand for study among older students.
But we recognise that older applicants wishing to study part-time need additional financial support, which is why we are introducing for the first time, starting next year, a maintenance support package for part-time students. The decline in nursing applications has also caused alarm.
We need to remember that our old funding model for nursing education, which asked the health department to fund these degrees from its budget, was failing to provide the NHS with the nurses it needs.
With arbitrary limits on numbers, it choked off supply of nurses to the NHS, denying thousands a shot at this rewarding career. In 2014 alone, we turned away 37,000 applicants to nurse training places, even though the NHS needed a great number of them.
Under the new system, universities will now be able to offer up to 10,000 more nursing, midwifery and allied health professional (AHP) training places over this parliament.
Applications remain high – with almost two applicants for every place. The new system will allow us to fill the training places we need and ensure that trainees who need the support most will receive at least 25% more funding support during their studies.
With the new masters’ loan in place, demand for which has been exceptionally strong in its first year of operation, with new doctoral loans on their way, and with legislation now passed that enables us to provide a new alternative student finance system compatible with Islamic principles, we are widening access to higher education to a broader range of people than ever.
Taken together, this is a transformation of our student finance system.
We believe its core principles are sustainable and fair.
They are:
We do not propose to abandon them.
So we have a system that delivers our three objectives. But three big misconceptions about it remain:
Let us start with the concern that interest rates ranging from RPI+0% to RPI+3% for the highest earners are too high.
We will of course continue to keep the system under review to ensure it remains fair and effective.
But it is important to remember when thinking about the interest rate that student loans are fundamentally unlike commercial loans in key respects.
So it is misleading to compare the headline interest rates with those of mortgages or personal loans.
Because the way that they are repaid is so different, student loans embed invaluable protections for borrowers that have proved impossible for commercial loans to replicate.
In fact, it is simpler to think of the system principally as mechanism for securing an income-linked and time-limited graduate contribution to the cost of a degree.
A graduate contribution is a better way of thinking about it because:
There are no commercial loans that offer this level of borrower protection. At 7.5%, the Bank of England’s reference rate for unsecured personal loans is materially higher.
We must also be clear that the fact many graduates do not repay their loans in full is not a sign of failure.
On the contrary, this is the result of a deliberate choice to share the costs and risks of university education between the student and the state.
Across the loan book, the government expects to write off around 30 per cent of the amount borrowed.
This is part of the government contribution.
It is a conscious investment in the skills base of the country, not a symptom of a broken student finance system.
Graduates go on to careers in many varied fields, with different salary expectations. Many will also take some time out of the workforce to raise families or care for others.
This is right for society.
We will of course continue to work to increase repayment rates,
But the fact that some students will not repay in full will always be a feature of the system – and in a world where society shares the costs of higher education with individuals, rightly so.
Students from disadvantaged backgrounds are going to university at a record rate: attendance has risen from 13.6% of the most disadvantaged in 2009, before the current fee system was introduced, to 19.5% in 2016.
Not only are application rates among 18-year-olds in England at record highs, but drop-out rates for young, mature, disadvantaged and BME students are all lower now than they were when the coalition government came to power in 2010.
So the claim that fees have led to a fall in students from disadvantaged backgrounds accessing or completing higher education is therefore simple nonsense.
The critical question now is not how we fund university, but how we ensure a system that is sustainably financed also delivers the highest quality teaching and graduate labour market outcomes for its students.
I want to turn now to value for money, an increasingly pressing issue in higher education.
For a second year, the Higher Education Policy Institute Student Survey has shown more students in England (37%) believing they have received poor value than good value (32%).
Employers are losing confidence in the signalling value of some qualifications, which are failing to hold their worth over time as degree inflation rips through the system.
While the average graduate earnings premium remains compelling, too many, perhaps a fifth to a third of students, end up with non-graduate jobs.
I recognise these concerns. I have heard them time and again – from students, parents and employers. And I share them.
Students taking out taxpayer-backed loans to attend university rightly expect the highest quality teaching and to secure good labour market outcomes that justify their investment of time and money.
This has been my focus since I took on this role in 2015, and it was a core theme of the new Higher Education and Research Act., which received Royal Assent in the last parliament.
Today I want to reflect on further steps we are taking to ensure we deliver value for money.
Improving student choice.
First of all, the new legislation improves choice available to prospective students.
We will be making it easier to set-up new high-quality providers, paving the way for more innovative institutions like the Dyson Institute of Engineering and Technology or the planned New Model in Technology and Engineering university in Herefordshire.
The act also makes it easier for universities to offer two-year degrees to students keen for a faster pace of learning and a quicker route in the workforce.
I can confirm today that the cost for a student taking an accelerated course, which will be subject to new fee caps, will never be more, overall, than that of the same course over a longer time period. And, in most cases, it is likely to be less.
Our clear intention is that accelerated degrees will cost students less than an equivalent degree, not least because students will certainly claim less overall in maintenance loans too.
Students undertaking an accelerated course borrow less money over a shorter period and forgo less in terms of missed earnings.
This should mean they are likely to repay a greater proportion of their loans than equivalent students on full length courses, meaning the costs should be lower for government as well.
Teaching Excellence Framework.
Second, the act promotes value for money by improving the quality of teaching and incentivising universities to focus on graduate outcomes, through the introduction of the Teaching Excellence Framework.
For too long, institutional incentives have led universities to prioritise research performance over teaching and learning outcomes.
The TEF puts in place new reputational and financial incentives to correct this imbalance, by assessing universities on the quality of the student experience, teaching standards and the role of providers in securing good outcomes for graduates.
We designed the TEF to be an evolutionary process – but we can already see it is having a positive effect on the value that students receive from their university education.
In the words of Simone Buitendijk, the vice-provost for education of Imperial College, the TEF has been “a godsend”, and has forced university leaders to “start paying close attention to the quality of the teaching”.
Dominic Shellard, the vice-chancellor of De Montfort University, predicts that the TEF will lead to a “culture shift” that prioritises “excellence in student experience and teaching”.
And the CBI has said that our “new emphasis on quality of teaching at universities together with transparency and openness to competition should also help in driving up standards among the graduates coming out of higher education.”
The time is right to build on these results.
Today, I am launching the next stage of the Teaching Excellence Framework (TEF).
The next iteration of the TEF will tackle head-on the uncomfortable questions that many young people are starting to ask about their university; that many taxpayers are asking about the support they are providing for the system; and that many employers are asking about the supply of graduates entering the workforce.
This will involve four major new developments.
Firstly, we will incorporate powerful new analysis of graduate outcomes, the Longitudinal Educational Outcomes data set, which looks at employment and earnings of higher education graduates 1, 3 and 5 years after graduation.
This will provides an important source of information for prospective students who are interested in knowing how likely it is that a particular course at a particular institution will lead to sustained graduate-level employment.
Secondly, we will move towards providing subject-level information. The first iteration of TEF has operated at institution level. But it is our belief that a subject-level TEF can provide even better information to students, and be an even more powerful driver of quality and value.
I am yet to meet a vice chancellor who is unaware of significant variations in quality between subjects and disciplines in his or her own institution. A subject-level TEF will empower them to make targeted interventions where they are most needed. Meanwhile students will be able to make better-informed decisions as they choose between courses and institutions.
Today I am publishing the specifications for how subject-level TEF will work in practice.
Thirdly, I can confirm that we will be piloting a new TEF metric that relates directly to one important aspect of value for money: the teaching intensity a student experiences. This will look at the contact hours students receive, including the class sizes in which they are taught.
Finally, I want to signal that we will be looking carefully at institutional participation in the TEF. To date, the TEF has been voluntary. The overwhelming majority of English institutions, including all English members of the Russell Group, have participated. With surveys showing the importance students attach to TEF judgments, it is essential that the sector continues to embrace the accountability it represents.
We want prospective students to make well-informed and meaningful choices between institutions offering innovative and flexible ways of learning.
It is vital that applicants understand that university is not the only option. We have produced clear pathways for non-academic students to follow, through the apprenticeship reforms and the streamlining of technical routes.
These pathways are of a high quality, with signalling value to employers. The days of degree or bust are long gone and we must celebrate the fact that many may gain more by honing their technical skills than by acquiring an undergraduate degree.
Office for Students.
This brings me on to the third way the act will deliver value for money, which is through the establishment of a new regulator, the Office for Students.
The OfS’s first chair, Sir Michael Barber, has made clear his unwavering commitment to the student interest. In contrast to the existing funding council system, the OfS will be a classic market regulator and Parliament has granted it a general duty to promote value for money in higher education.
I am pleased to announce that because of the good progress made in laying the foundations for the OfS, I am today laying an Order in Parliament to bring forward its legal establishment to January 2018, three months ahead of the full launch of the organisation.
This head start will enable the OfS board to begin taking decisions on the new regulatory framework which we will be consulting upon this Autumn.
One of the first things I will be asking the OfS to do in exercising its new powers is to consult on the system-wide introduction of student contracts between students and universities.
These would set out what students can expect from their providers in terms of resource commitments, contact time, assessments, support and other important aspects of their educational experience.
Although contracts do exist in various forms in some institutions, most of them do not provide enough detail to be useful, or to allow students to know what they can expect from their providers in terms of resource commitments, contact time, assessments, support and other important aspects of their educational experience.
I intend to consult on whether a systematic use of an improved student-contract would help ensure effective consumer protection for students paying what will for many be their third largest life-long expenditure after a home and pension plan.
By providing students with greater contractual certainty over these key aspects of their own experience, the OfS would help to address much of the dissatisfaction over seeming poor value-for-money of undergraduate education.
Vice chancellor (VC) pay.
Another area where I want to see further action to improve value for money is vice chancellor pay. There are vice chancellors earning nearer half a million pounds – in some cases more than three times the Prime Minister.
Swelling vice-chancellor salaries lift those of their deputies and other senior managers, diverting millions from universities’ core mission of teaching and research. There seem to be institutions in which over 100 people are earning more than £100,000.
Each year that I have been in my role, I have used my annual grant letter to the funding council to call on universities and their remuneration committees to exercise restraint on top pay.
I am calling on the sector to put an end to the accelerating upward ratchet in vice chancellor pay. Groups that claim sector leadership, such as the Russell Group, must lead the way.
I do not want or expect the OfS to cap VC pay, let alone to set pay levels. Our universities are autonomous and this is a job for them to undertake in a responsible manner.
Rather I want it to examine senior pay from a value for money perspective and to offer advice on the considerations to be taken into account by remuneration committees.
Performance against benchmarks in the TEF is a potential indicator of value-added that remuneration committees might consider before approving high pay awards.
The essential principle must be that exceptional pay can only be justified by exceptional performance.
Universities must justify the exceptional circumstances for pay awards that exceed the pay of the PM – and where there is no justification, they must exercise greater restraint.
And I can announce that I will be issuing new guidance to the OfS to use its powers to address this problem.
So, to conclude:
Make no mistake: if fees were abolished – we would almost certainly see the same dramatic fall in per student funding that we saw in the UK in the decades before fees – a fall of the order of over 40%. This would lead to the humbling of currently world-class institutions, and widespread closures of departments and even whole universities.
At the same time, receiving so much of their funding directly from central government at volatile annual government fiscal events would make a mockery of the concept of university autonomy, the key to our system’s success on the world stage.
With students numbers capped once again, the poorest and most disadvantaged would miss out, as they have done in many parts of Europe and in Scotland. Life chances would be irreparably damaged, social mobility thrown into reverse.
And all of this would come at eye-watering cost to general taxpayers, including those who have not had the chance to go to university, to subsidise degrees that will increase the income of what, under a student numbers cap, will be an increasingly privileged cohort of student.
Now more than ever, we look to our universities to help drive national prosperity and advance individuals’ life chances. But we will only succeed if the sector remains sustainably financed, adapts to meet the high expectations of its fee-paying students and retains the support of hardworking taxpayers.
We are part of the way on that journey.
The steps we have already taken on student finance are working. We have seen record participation rates and increased sector income, all while ensuring graduates only repay loans in line with their income. This is the progressive student finance system that enabled us to abolish the student number cap we inherited from Labour. We must not hit reverse.
Instead, we need to look forward. Our universities may top the global research rankings, but public unease over value for money for undergraduates across the system as a whole cannot be allowed to continue.
That is our focus as we implement the Higher Education and Research Act, establish the Office for Students, and deliver the Teaching Excellence Framework at subject level.
Students applying to university this year, and across this parliament, will have more information, more choice and more flexible ways of learning than ever before.
And underpinning all this will be a new contract between student and university – a contract that underpins their rights as consumers, and ensures value for money throughout their course and during their working lives.
Thank you