Clause 23 - Condition that may be required to be imposed by English funding bodies
Higher Education Bill
9:10 am
Mr David Chaytor (Bury North, Labour)
I have been instructed to take up the minimum amount of time in this morning's debate, so I would prefer to continue.
I return to the segmentation of the market. The currency of the market is largely A-level grades. The financial side introduces a new dimension. I do not think that it is a disaster, but rather that it has positive advantages. There is no reason why someone who has three or four grade As at A-level and is applying to Cambridge should be concerned about the costs. My hon. Friend has said many times that Cambridge is one of the cheapest universities and has one of the most generous bursary systems: the idea that someone in that position would suddenly decide to go to Wolverhampton, Bolton or Luton is not credible.
Anyone who has an offer of a place in one of our leading research universities knows full well the financial and career advantages that a course at that university will bring them. I do not take terribly seriously this idea that people will be deterred from courses and will choose on price rather than qualification.
The third issue that my hon. Friend raised was the widening gap between universities. I was grateful that she did not refer to the creation of a two-tier system as many have done. We have always had a multi-tiered system. The market is segmented: some universities recruit students largely with grade As and others recruit students largely with grades D and E. There is little that the Bill will or can do about that. Frankly, as
long as there are enormous differentials in human achievement, there will be enormous differentials between our universities.
Two points should concern us here. First, we should not oppose the concept of a hierarchy of universities. A small number of universities compete at a global level and a much larger number of universities operate in a local or regional market within the United Kingdom. I do not see anything terribly wrong with that. The issue is not the existence of the hierarchy but access to it. The virtue of the Bill is that it increases access for all young people, depending on their qualifications, to the leading research universities. That is the important point. The Bill opens up access to the very best universities. It does not somehow try to squeeze the best down.
The other point relates to the rigidity of the system. The Russell group comprises 19 universities. I always feel slightly sorry for the university that thought it would be the 20th. Twenty would have been a rounder figure and I am sure that there was some grief when it was decided that there would be 19. But, it will not always be 19. Look at what has happened to some of the modern universities established in the 1960s. Warwick is the classic example of a university that now has its place in the Russell group, and if people saw the research assessment results for York university, many would think that it would have a case for being in the Russell group. The important point is that there is dynamism in the system. The Russell group will not exist for ever. There is talk of an emergent smaller core group—a G5, G7 or G8—and it is important that the financial framework that the Government establish encourages such dynamism.
The great English disease is that we see diversity and immediately put things into a hierarchy. It is important not to do that. There are many excellent small, local, modern universities. They are not as high up in the pecking order as the Russell group universities, but that does not mean that they are worse. They are doing a different job for different purposes. We need to refine our views on diversity and hierarchy, and recognise that because a small, modern university is operating largely in its sub-regional context, that does not mean that it is worse, only that it is different.
My hon. Friend the Member for Cambridge also mentioned public sector workers and priority subjects. She tried to demonstrate that there was an anomaly in arguing that the case for variable fees was based on ensuring that those who did the most prestigious subjects leading to high-earning careers pay the full fee. She referred to the debate on zero fees for maths and physics and touched on people who graduate from courses for which the full fee is charged and subsequently go into modestly paid jobs in public services or charities.
On the public sector and charity issue, it is the responsibility of the state to ensure an adequate flow of public sector workers into health, education and other areas. As such, we are likely to see the state as an employer providing various forms of incentives, such as the golden hellos that the City has always provided to high-flying graduates in maths, economics and
business management. That will have to come from the public sector, but there are huge advantages in public sector employers providing such incentives and offering to pay fees. It can help to buy loyalty, and particularly for teaching in inner-city areas, an offer to repay course fees on the condition that the graduate stays in a particular school or local authority area for a number of years would be beneficial. It would certainly help the national health service maintain loyalty and stability in the work force, whether that is nurses, paramedics and, especially, junior doctors.
I want to correct one point on the question of maths and physics. I have not read Professor Smith's report on maths line by line, but I have read a summary. He is not suggesting that there should be a zero fee for mathematics as an incentive, but that the fee could be waived. That is an important point, because although the effect is the same, there would still be a fee for mathematics and, I suspect, physics. However, certain institutions may choose to waive the fee as a means of recruitment.
I do not believe that the way to boost our national total of physics graduates is simply to waive the fee. We should boost it by massively investing in improved science teaching in primary and secondary schools, and the same applies to maths. However, the waiving of the fee could influence a student with good A-level grades to choose mathematics rather than a different degree such as accountancy, economics, philosophy or social anthropology. Influencing students to choose a field in which it is in the national interest to increase recruitment would be a legitimate use of the potential in the variable fee system.
My hon. Friend's concluding point was that variable fees will lead to students making economic choices about their courses and seeing them as a financial investment. They will, and what is wrong with that? We, as middle-aged people—with the exception of my hon. Friend the Minister—are sometimes a little naive about young people's perceptions. It is reasonable that a young person should look at their future career in terms of a financial investment.
The staggering thing is that so few people can see the case for university education as a financial investment. People who will cheerfully borrow huge amounts of money to go on foreign holidays or who will buy their sons and daughters a car for their 18th birthday seem to have a mental block about seeing the value of university as a financial investment.
Some people have always seen university as a financial investment, although that is not the only factor that they take into account. The new system will not change that significantly. University is an important financial investment, and the more people regard it as such, or see the financial implications of it, the more we will generate a more discriminating group of young people, who will be in a position to make better choices for their future.
In the debate about variable fees—I do not refer solely to my hon. Friend's contribution in that respect—there has been much confusion and many issues have been blurred. The most obvious of those issues is the relationship between the student and the graduate. In one sense, the introduction of the repayment scheme and the variable fees scheme means that one's family circumstances at the point at which one becomes a student are irrelevant. If we were constructing a pure scheme from scratch, all other things being equal, it would matter not one jot what one's family circumstances were at the age of 18, 21 or 28—whatever age one became a student. The issue is how someone can repay the investment when they start earning.
The argument that the new scheme will be a deterrent because of the costs at 18 is unfounded. There are no costs at 18; the state pays the fees and it provides the loans. It is a tribute to my right hon. Friend the Minister and the Secretary of State that the loan has now been increased to reflect living costs a little more accurately, and that we have seen a huge increase in bursaries.
There is also the question of student choice. People say that the new scheme will determine students' choices. However, we should understand that students do not choose universities; the universities choose the students. Most students are reasonably realistic about which universities they are capable of entering; I believe that the new system will make them even more realistic about that, and also about the value of their degree and how it relates to their previous qualifications and aptitude. Students do not have a free choice of universities and, arguably, they should not have. The universities make the choice.
There is still confusion about the difference between the fee that is levied and the fee that will be charged. I am relaxed about levying a fee of £3,000, £2,500 or £2,000, but it is critical that the fee that is charged to particular groups of students should vary. It will vary according to the decision of the university and the level of the bursary available from the state and the university. I do not want to start a debate on what might happen beyond 2010, but we need to be clear that we can have a system that levies a higher level of fee, as long as the state intervenes appropriately so that the fee charged does not deter those who might otherwise be deterred.
One or two Opposition Members made the point about thresholds and the position of students from families who are just above the threshold for eligibility for a grant. That is a serious point, which I have raised with Ministers on several occasions. I believe that the thresholds are too low and that a range of things kick in just into the £30,000 income bracket, not just in relation to eligibility for university education, but other elements in our welfare state. However, in one sense the new system is not a financial means test. I see it more as a cultural means test, because the fee will be paid by the state at the point of entry.
Given that a loan is provided and will be repaid later, it does not matter, in theory, what the student's family income is, but there is a lack of cultural support from families with chronically low incomes. The value
of the grant system, which will be targeted at students from those families, is that it is not so much financial compensation as cultural compensation for the fact that, in many families with incomes of £14,000, £15,000 or £16,000 a year, there is no tradition of continuing education beyond the age of 18 and going to university. That is the real deterrent; that is what we have to crack.