I beg to move,
That this House
believes that the best possible education of its citizens is both a principal duty of, and an immeasurable benefit to, any civilised society, and therefore deplores the rising levels of student debt and the resulting disincentive to continue in education post-school;
condemns the failure of the Government to invest in Higher Education all the extra resources provided by the abolition of maintenance grants and the introduction of tuition fees;
regrets that the conclusions drawn from reviews of student finance in Scotland and Wales have been ignored in Westminster;
congratulates the Scottish Executive on abolishing tuition fees and restoring grants for students from low income backgrounds;
believes that part-time students and students in Further Education should be treated fairly in comparison with full-time students in Higher Education;
notes the recent decision by the Government to review student finance more widely;
and calls upon the Government to abolish tuition fees in England, Wales and Northern Ireland and to put in place a fully funded support system, which will encourage more students, particularly those from low income backgrounds, to go into higher education.
May I begin by saying how pleased I am that my right hon. and hon. Friends have chosen to debate student finance today and that they have asked me to move the motion in our names? May I make it plain that I have nothing to gain personally from the abolition of tuition fees, although I do have considerable personal experience of paying them? I share with my hon. Friend Mr. Willis, and, I understand, with the previous Secretary of State, the experience of having a child who was, unfortunately, involved in the first year of tuition fees. I have another son at university now, and my youngest son hopes to go to university in 2003, which, if all goes well, should be the last year of tuition fees.
So it is not for reasons of personal benefit that I am pleased that my party has given this issue the highest priority for debate today; rather it is because in June this year two issues stood out as being uniquely Liberal Democrat issues: free long-term care for the elderly and the abolition of tuition fees. We received massive support from the public on both issues, and they represent the two greatest errors that the Labour Government made in their first term in office. We said that tuition fees were "a tax on education", and we were right.
A sensible Government choose to tax things that they want less of; they avoid taxing things that they want more of. Liberal Democrats believe in education. We believe that education is one of the cornerstones of a civilised society. We believe that the best possible education for each individual in our nation is valuable not just for that individual, but for society as a whole. We also believe that education is not just about equipping the individual with the knowledge and skills that he or she needs for the jobs of the modern world, but about giving that individual the opportunity to make the most of his or her natural talents and abilities in every aspect of his or her life.
However, the student support system acts as a barrier to young people who want to go to university, particularly for the poorest students. First, there is the upfront payment of tuition fees—the tax on education. The Government have tried to argue that tuition fees are no disincentive. After all, they say, the poorest 50 per cent. or so of students will not have to pay them. But, of course, it is really nothing to do with whether the student is rich or poor. Almost all students are poor, and if it was only rich students who paid tuition fees, they would never have been worth collecting. No, the means testing is done, not on the student, but on the parent.
Some parents pay, but many see no reason why they should continue to subsidise their adult offspring, just because those offspring happen to be intelligent enough to be offered a place at a university. So the sons and daughters of comparatively well-off parents usually end up paying the tuition fees. Often such students end up even more deeply in debt than other students whose parents happen to be less well-off.
Where is the logic in a student finance system in which a graduate who enters a comparatively low-paid but socially useful job may have to pay off greater debts than a graduate who earns hundreds of thousands of pounds in the City, but whose parents happen to have been in less well-paid jobs? What is fair about that? Let there be no doubt that worries about debt are very real. Students can now expect to graduate with an average debt of £10,000, and often more. Of course, tuition fees make up only a part of that debt, and it is true that many students will not have to pay tuition fees.
I must confess that I too was at first taken in by the seductive argument that tuition fees cannot possibly be a disincentive to those who will not have to pay them. However, I visited Durham university recently, and there I spoke to a first-year student who had come up only a month or so before. She described herself as coming from a working-class background. She told me that no less than four of her friends had decided not to go to university because they did not want to get into debt. They had heard about tuition fees, and they were frightened.
It does not matter whether the fear of debt is soundly based; it is the fear itself that produces the disincentive. So will the Government now finally admit that tuition fees and the perception of tuition fees constitute a barrier to young people who want to go to university? How long before the Government stop monitoring and wake up to the crisis in our higher education system? Students are fed up with monitoring—they want tuition fees to be abolished. A sensible Government levy taxes for education and not on education.
Tuition fees are of course only a part of the debt problem. Students must also maintain themselves. The Government fought the election saying that there was not a problem. They apparently saw no contradiction between their target of 50 per cent. participation and the system of student support that they introduced in 1998. During the campaign, however, the Prime Minister apparently woke up to the fact that young people and their parents do see a problem.
In the review of student funding announced at the Labour party conference, one stated objective was to
"tackle the problems of debt and the perception of debt".
"I recognise that for many low income families fear of debt is a real worry and could act as a barrier to higher education. I want to make sure that our future reform tackles this problem."
"As we examine the financing of universities and the problems of student loans and fees, the test will be to break down the barriers that hold people back, so that all, and not just those who can afford it, have the chance to make the most of themselves and their talents."
If there is a direct relationship between cost and access, will the hon. Gentleman explain why, during the long period when there were no tuition fees and there was a 100 per cent. grants system, the proportion of young people from working-class backgrounds going to university did not increase? When such education was free, working-class people still did not go to university. Why was that?
I am delighted to answer that intervention, because the hon. Gentleman raises an important problem. There are clearly reasons other than the fear of debt that influence the question—one of which is the number of children who go on to post-16 education. That is a particular problem for the sort of children to whom he referred. I am sure that the fear of debt and especially of having to pay tuition fees—even if, in practice, such students will not have to do so—are at least part of the important problem that we face.
The facts speak for themselves. According to the Barclays student debt survey, since the 1998 reforms, average student debt has roughly doubled from about £3,000 to about £6,000, and average debt on graduation is expected to rise from £6,500 in 2000 to around £10,000 in 2001. The National Union of Students estimates that that figure is more in the region of £12,000. It points to a recent debt survey by the University College London student union, in which only 12 per cent. of respondents expected to be debt-free on graduation. Of those expecting to be in debt, 38 per cent. expected to owe up to £10,000, 50 per cent. between £10,000 and £20,000, and 12 per cent. more than £20,000. Of those surveyed, 18 per cent. had considered dropping out altogether as a result of financial difficulties.
Even before the new arrangements were introduced, the student income and expenditure survey for 1998–99 found that 87 per cent. of full-time students experienced financial difficulties, and that 60 per cent. thought that such difficulties had damaged their academic performance. So why has it taken the Government so long to reach the conclusion that debt and the perception of debt represent a barrier to access?
At least we Liberal Democrats can now welcome the Government's decision to conduct a review—and we do. At last the Government have recognised that a disincentive is built into the system. Until now, they have maintained that there was no disincentive. Students, they say, can look forward to higher incomes later, but many students never receive those higher incomes. Even for those who do so, the costs are up front, while the benefits are three or four years down the line.
I appreciate that the hon. Gentleman welcomes the review of student finance—we all would—but does he share my substantial concern and surprise that the review is being conducted entirely internally and cross-departmentally, so the very people who devised the system about which we are all complaining are devising the new one, too?
I am grateful to the hon. Gentleman for making that point. I certainly share that concern, and I shall make a small offer in relation to it in a moment.
It is not just those who see themselves going into low-paid jobs who fear mounting debts. A recent British Academy report of graduate studies in the humanities and social sciences made two points. First, the United Kingdom is failing to attract sufficient numbers of the best British students to take PhDs in the arts, humanities and social sciences, and, secondly, debt is a major deterrent to potential PhD students.
Sadly, debt causes damage not only as a disincentive. It is clear that student finance has an impact on the quality of the university experience. The experience is valuable not just because it improves career prospects, but because it offers wider educational benefits—the pursuit of knowledge for its own sake, the coming together of people from different backgrounds, exposure to new ideas and ways of thinking and, of course, the gaining of greater personal independence and freedom.
So what are the implications of the fact that close to two thirds of students take up part-time work to help fund their way through university, or of a growing number of students opting to live at home because it is cheaper? Clearly, those trends mean less time to engage in the wider experience of university life, with all the extra benefits that that can bring.
The central problem is that the Government are committed to expansion but not to providing the money to pay for it. If they are serious about widening participation, they must address the funding issue. We know that that can be done. How do we know that? We know because it has been done. In Scotland, tuition fees have been abolished; grants for students from poorer backgrounds have been reintroduced. We Liberal Democrats are delighted that our Scottish colleagues were able to persuade the Scottish Executive to make those changes. The Liberal Democrats and the Labour party in Scotland have jointly proved that a better system is possible and can be afforded.
The hon. Gentleman referred to the value of higher education and the Government's desire to increase participation in and access to it. Do he and his party agree, therefore, with the target of 50 per cent. of young people having access to higher education? Is he committed to that, as his party should be?
The important issue is that students must have a quality university experience. There is no point in a target that results in more and more people going to university if the Government fail to meet the need to maintain unit funding for those students. If funding can be maintained, we would of course like the maximum number of students to go through university—if possible, even more than 50 per cent. of young people. If they can derive some value from their university experience, let us do that. However, without such valuable experience, doing so would be a waste of money.
I have taken enough interventions for the time being.
In replying to the debate, perhaps the Minister will take the opportunity to confirm or deny the rumours that the following options are under consideration in her review: first, the abolition of tuition fees; secondly, a graduate tax; thirdly, the restoration of maintenance grants, at least for students from less well-off backgrounds; and, fourthly, whether student loans will still be made available.
I hope that the Minister will also assure us that universities will not receive less money if extra resources are to be directed towards student support. The Government delude themselves if they believe that they can expand student numbers and deliver a world-class higher education system without a substantial boost in funding
The Secretary of State rightly said in her speech on
"Universities are not a birthright for the middle classes."
However, wider access to a bargain basement higher education system would be a betrayal of the young people the Government say they want to support. Just as higher education should not be a birthright of the middle classes, we must ensure that quality is available to all.
Our country needs a world-class system of higher education; our students deserve it. We need to provide grants, at least for students from less well-off backgrounds. However, tuition fees have no part to play in such a system.
I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
'welcomes the approach the Government has taken to higher education since 1997, particularly the extra investment the Government is making in Higher Education, meaning an extra £1.7 billion of publicly planned funding in the six years to 2003–04;
further welcomes the Government's commitment to widening participation so that half of under-30 year olds will benefit from the opportunities of higher education by the end of the decade;
supports the Government's reforms of student support, introduced in 1998, which have increased the resources available to higher education establishments;
agrees with the principle, underlying these reforms, that those who benefit from the considerable advantages that higher education can offer are asked to contribute when they can afford to;
recognises that the Government has always been committed to monitor and to review the impact of these reforms;
and further welcomes the Secretary of State for Education and Skills' recent announcement of this review.'.
I am not surprised that hon. Members were not sure whether Mr. Rendel had given way. It was not clear whether he had finished his contribution or, indeed, what he was talking about. However, I am delighted that the Liberal Democrats have given us the opportunity today to engage in a short debate on higher education. It gives me the opportunity, early in the lifetime of the Parliament, to set out the Government's vision for expanding higher education.
I shall have to ignore much of the Liberal Democrat contribution because, in my simple little way, I do not understand the difference between a Scottish graduate endowment of £2,000 and payment towards the cost of education in a tuition fee. They may be called different names but they are the same.
If the hon. Gentleman will allow me, I shall make my second attack.
It was interesting that the Liberal Democrats did not make a commitment to widening participation in and access to higher education. That is the basis for everything on our agenda for universities.
What is the difference between paying an endowment at the end of an undergraduate's course of study and a graduate tax, which would be paid into the same pot?
All the systems reflect a contribution from the student—as a student or a graduate; directly or through the family—towards the cost of higher education. That principle is accepted by all parties.
I thank my hon. Friend for giving way, unlike Mr. Rendel. Does she agree that it is disingenuous of a party that campaigned on honesty in taxation to talk about getting rid of student tuition fees without mentioning the fact that the policy was to be financed through graduate endowment payments? Where is the honesty in taxation in that policy?
I completely concur with my hon. Friend's views. Liberal Democrat policies show little honesty, rigour or ability to add up.
The Minister clearly does not understand the system in Scotland. It is therefore vital to place on record the fact that the money that students in Scotland pay after they have graduated is used as a contribution to increase maintenance support for students. It is not used to pay for tuition.
With great respect, the hon. Gentleman is being rather too clever. Students are worried about the total cost of their education, which comprises tuition and maintenance: simply renaming the contribution from individuals before or after they have graduated is beside the point.
I should like to set out our ambitions to try to give the debate some coherence. We have said that by the end of the decade we want half of our young people to have the opportunity to benefit from higher education by the time they reach the age of 30. That is a tough and challenging ambition, but that target is part of our wider policies for higher education. It encapsulates many of the values that underpin our general approach to government. If we are to maintain and enhance capability and competitiveness in our economy, we need to improve the skills and capabilities of individuals in the labour market.
Expanding higher education is not, as has been suggested by some, about dumbing down degree standards. Far from it; it is about raising attainment and qualifications levels so that we enjoy the appropriate and necessary skills that we need in the labour market to boost growth and prosperity. Indeed, it has been calculated that a 10 per cent. increase in the proportion of the labour force in higher education would raise the gross domestic product per person by about 3.3 per cent.
The Government reformed the student finance system only three or four years ago. Why, therefore, does the Prime Minister feel the need for a review?
I can answer that easily. The hon. Gentleman focuses on one element of a much broader policy, which I shall discuss. Any sensible Government would monitor their policies to ensure that they work precisely as they envisaged. I believe that the Liberal Democrats agree that it is appropriate for students or their families to make a contribution towards the cost of higher education because of the benefits that they gain through it. That did not happen before we introduced our reforms.
Our economic goal is closely linked with our social objective. We do not perceive economic prosperity and social inclusion as competing ambitions. On the contrary, we shall achieve our economic objectives only if we ensure opportunity for all our young people to develop their full potential. Nowhere is exclusion a harsher reality than in higher education. The facts make grim and stark reading.
Despite the rapid expansion in student numbers in the past decade, the proportion of young people from lower-income backgrounds who go to university has remained stubbornly low. My hon. Friend Mr. Chaytor rightly made that point earlier. Those whose parents come from an unskilled or manual working background have just over a one in 10 chance of getting to university. Those whose parents happen to prosper in the professional classes have a three in four chance of getting to university. It is a 13 per cent. chance for those who are less well-off, but a 73 per cent. chance for those who are better off. That is the measure of the challenge that we face and the inequality that we are considering. That is the enormity of the gap in opportunity that we are trying to tackle.
Closing that gap is at the heart of our determination to widen participation. Our aim must be to challenge all the barriers that inhibit access to higher education and to create an intellectual élite, who have access to higher education through their ability.
Does not evidence show that removing the maintenance grant has had a greater impact than the abolition of tuition fees on less well-off students? The National Union of Students has produced evidence to show that the average debt for less well-off students has increased from £6,000 in 1997 to £12,000 in 2000.
The proportion of people from lower-income backgrounds who participate in higher education has not altered since the introduction of the new student arrangements. I wish that the matter was as simple as the hon. Gentleman suggests.
We must deal with every barrier that prevents children from lower-income backgrounds from enjoying the experience and benefits of higher education.
That challenge is particularly important to me. I know from my constituency how huge a mountain we have to climb. In Barking, only 3.5 per cent. of my adult constituents have a degree or equivalent qualification. The constituency has a lower participation rate than any other constituency in the country. I therefore understand how difficult it is to tackle the complex barriers that inhibit participation.
I also know, however, what a difference higher education can make to the lives of individuals, as well as to their communities and the economy. A degree does buy a better income. Indeed, all the evidence shows that, despite a rapid growth in the number of graduates, the graduate premium in earnings has been maintained. A graduate will, on average, earn 35 per cent. more than the work force as a whole. A graduate is half as likely to be unemployed as someone without a degree. Moreover, a graduate is likely to stay healthy for longer than a non-graduate.
I am delighted to hear that we are keen to ensure that those who formerly encountered barriers are given an opportunity to enter higher education, but are not good further education sectors particularly important in that regard?
Further education can certainly make an important contribution to ensuring that young people obtain prior qualifications, and, perhaps, spend the first years of their higher education in an environment to which they are accustomed. As we expand higher education, much of it is indeed being delivered through further education.
Liberal Democrats are delighted to learn that the Government are to conduct a review of student finance. What perceived deficiencies in the existing system will it seek to remedy?
As I told the hon. Member for Newbury, it is sensible and good practice to review whether one's policies are working properly.
I must get on with my speech. If the hon. Gentleman has a new point to make, no doubt it will arise later.
Higher education remains a very good investment for students, which brings me to an important principle that we have already discussed today. Given the personal financial benefits that accrue to graduates, it must be right for them to contribute to the cost of their higher education. That principle was courageously established by my right hon. Friend Mr. Blunkett when he introduced his radical reforms of student funding and support in 1998. We will not shift from it as we conduct our review—properly and responsibly—to establish whether the reforms are working effectively.
It might be helpful to recall the context of the 1998 reforms. In 1997, when Labour took office, there had been a massive 36 per cent. cut in unit funding for students; the previous Conservative Government—whose members are not listening very carefully at the moment—had imposed a cap on student numbers; and our universities had been starved of proper resources for their infrastructure, teaching and research.
Will the Minister acknowledge that, over the 18 years of Conservative government, the opportunities to attend university that she considers so important expanded dramatically? In 1979, only about 10 per cent. of young people went to university; by the time Labour took office, the figure had risen to about a third.
I acknowledge that there was a rapid expansion of student numbers under the Conservative Government. My point is that that expansion was appallingly funded, which has created difficulties in regard to the quality of education. The last Government caused their own difficulties by capping student numbers.
I pay huge tribute to the higher education sector. Despite that enormous underfunding, it managed to expand numbers while maintaining quality. We are still punching well above our weight in terms of research, and the university sector is in good health.
I do not accept that. I do accept that unit funding declined until, during the last comprehensive spending review, we injected a further £1.7 million of publicly planned resources into the higher education sector. That has enabled us to achieve a 1 per cent. increase this year, for the first time in more than a decade.
During the last Parliament, did not the amount given to primary and secondary education increase dramatically, thereby enabling far more young people to go to university after leaving school?
Indeed—and what underlies that is the fact that, during our first term in government, we focused additional resources on schools in particular. It was important to get that right.
Our reforms of student funding enabled us to start tackling the unholy mess that we had inherited. We have lifted the cap on student numbers, and every individual capable of undertaking higher education now has the opportunity to do so. We are investing an extra £1.7 million of publicly planned expenditure—18 per cent. in real terms. For the first time in a decade, we have financed a 1 per cent. increase in the funding of each student, and, together with the Wellcome Foundation, we have invested £1 billion on the research infrastructure in our universities.
That investment is supporting our participation agenda. This year's figures continue to show a buoyant demand for places. The latest figures from the Universities and Colleges Admission Service show a 5.5 per cent. increase in the number of people allocated a university place this year, and a particularly pleasing increase of more than 10 per cent. in the number of mature students who have managed to enter higher education. Having achieved those considerable advances in the first term of a Labour Government, we are considering what further action we need to tackle all the existing barriers.
I applaud the Government's focus on higher education and the increase in participation rates, but is it not important for the review to examine the possibility of more up-front support for students with less advantageous socio-economic backgrounds?
Support for students throughout post-compulsory education is crucial. We have introduced an education maintenance allowance, albeit on a pilot basis applying to only 30 per cent. of the country. That is a very good way of increasing participation. I accept, however, that we must bear in mind the link between the perception of debt and lower-income families.
Let me now deal with what I consider to be equally important issues. Perhaps our most important and difficult task is to increase the number of young people who obtain level 3—A-level—qualifications. At present, nine out of 10 of those who obtain A-levels go on to university. Our challenge is to stop the haemorrhage of young people who leave school at 16 after their GCSEs, and to increase the number who remain in full-time education. That is what our secondary school reform proposals are about, and that is what will be addressed by the strategy on 14 to 19-year-olds that we will publish in the new year. That is why we have introduced the education maintenance allowances, which have achieved a dramatic increase, and that is why we are introducing the ConneXions service. That is our key task.
Equally challenging is the task of raising aspirations among young people.
Does my hon. Friend agree that year 8 is a particularly important year? It is the year before students take their GCSE options, and a year in which universities and secondary schools could work much more closely together to ensure that students' aspirations are raised. I commend the work that Staffordshire university does in terms of widening access and working with local schools.
I completely agree with my hon. Friend about ensuring that we raise students' aspirations at an early enough age. There has, possibly, been a tradition of thinking that if we can capture students at 15 or 16, before they take their GCSEs, we will achieve that increased participation. I agree with my hon. Friend that we need to reach them at a much younger age. Again, access to the 14 to 19-year-old agenda is all about ensuring those raised aspirations.
One of the most shocking statistics that I discovered when I first took over this portfolio was that 44 per cent. of children from the lower socio-economic groups—nearly half—never hear about the opportunities of higher education during their school years. Abandoning such a huge number of potentially talented young people cannot be right. That is why we are funding a range of programmes to widen participation among non-traditional groups of students. Our £190 million excellence challenge will work with children from the age of 13 in excellence in cities areas and education action zones to raise their aspirations.
The Minister has referred to arrangements in Scotland. Is she aware of the Rees report on student finance, which also examined the issue of support for further education students? It suggested introducing a maintenance grant in Wales for further education and higher education students. Will the Government allow diversity to flourish in FE and HE, as they claim to do in other areas?
The hon. Gentleman will be happy to note that that is entirely a matter for the Assembly in Wales.
Let us look at what we are trying to do. We are introducing programmes to do more, with mentoring, out-of-school support and master classes. We are introducing programmes to get universities and further education colleges to do more, with access courses and summer schools. We are also encouraging them to look at how they recruit their students, because we want to tackle the disadvantage faced by children from schools in disadvantaged areas in gaining access to our best universities. We are introducing foundation degrees, which are both relevant to the labour market and attractive to the uncertain student, for whom we hope they will provide a passport to a job.
We are introducing programmes to encourage universities to change the way in which they work, to form closer links between further and higher education, so that they can give support to students from schools in disadvantaged areas. We are introducing programmes to target support on those for whom the financial burden is the greatest, with our opportunity bursary scheme, our child care support programme, our support for students with dependants and our support for disabled students. All those crucial initiatives should support our objective of widening access.
The Government are now reviewing the system of student finance. The hon. Gentleman presses me again on an issue on which I have given endless replies, and which his party is patently not addressing properly. If all his solutions are going to come out of the 1p that his party wants to put on income tax, that 1p will have to stretch a long, long way. I was trying to stress that the issue of widening participation is much more complicated than the hon. Gentleman suggests, and that if the Liberal Democrats will not address that wider agenda they will fail to achieve the basic purpose of a student funding system, or anything else.
One of the issues that I believe affects participation is the visual aspect of having a university within a community. Has any research been carried out into whether the location of a university in a deprived area has an impact on the community, not necessarily in terms of young people going to the university on their doorstep, but of their at least thinking about universities elsewhere? In South Yorkshire, I believe that there is a case for building on the great higher education developments that we have achieved and having a university in Doncaster.
As we widen participation, no doubt we shall want to extend access for students right across the country.
I strongly believe that if we can get more young children to go into a university at a young age, just to get a feel of what life there would be like, it would be one way of raising their aspirations. We shall experiment with that through our excellence challenge programme.
I turn to the way in which we are monitoring and evaluating our student funding reforms. The principle that the beneficiaries should contribute to the cost of higher education was right when we introduced the reforms and it remains right now. Having said that, it is worth remembering that not all full-time undergraduates pay a contribution to their tuition fees. Fully half of those students have all their fees paid by the taxpayer, and only one third pay the full fee. We must also remember that the fee covers only about a quarter of the full cost of providing tuition.
I accept that some real issues have emerged from the reform. The system is extremely complex and difficult to understand. There are concerns about the up-front payment of a fee. There is some evidence, although it is not extensive, that debt and the perception of debt are deterring people from lower-income backgrounds from going to university and might be having an impact on students staying the course once they get to university. We have established the review of student funding to examine these issues.
We are, quite sensibly, working across government to look at whether we have got the balance right, and properly profiled, between contributions from the student, their family and the state. The review is now in place, but at this stage it would obviously be absurd to speculate on the outcome. Nothing has been ruled in or ruled out.
What is clear is our aim. For too long, access to higher education has been a privilege for the few. We are determined to make access an opportunity for the many, because it is socially just and economically sensible. At the same time, we want to nurture and enhance the excellence that exists in so many of our universities—an excellence that enhances our productivity agenda, enriches our lives and strengthens our communities. Our ambitions for higher education reflect our ambitions for Britain: delivering on those ambitions is the task that we face in our team. That is precisely what we are doing.
I am grateful to have the opportunity to contribute to this debate on student financing. The debate was ably begun by Mr. Rendel. I am not quite sure how many Liberal Democrat education spokesmen are present. I can count two or three. We are having a short debate, which may be shorter because I am not sure how many Liberal Democrat Members wish to speak. It would be strange if few did speak. We will wait to see how many catch your eye, Madam Deputy Speaker.
It is a great pleasure to shadow the Minister for Lifelong Learning, whose work I observed when she was Minister with responsibility for disabled people during the previous Parliament. Where she is working genuinely to expand opportunities for young people, to encourage and to inspire them to achieve more, she will find me a friend and colleague. Many of those aspirations are shared by hon. Members on both sides of the House. However, I shall look critically at some of the things that she does, one or two of which may come up during my remarks. I am not sure whether the rosy picture that she paints, particularly of the university sector, would necessarily be accepted in every campus, but perhaps we can come to some of the details later.
Conservative Members welcome the opportunity to contribute to the debate on student finance. Our record on higher education is strong. It was a Conservative Government who between 1979 and 1997 drove forward wider access to higher education: from one in eight to one in three of the population—no quota, no fuss, just progress. Nor was that expansion confined to an elite of traditionally higher educated families. The number of school leavers from poorer families entering higher education roughly doubled in the 10 years to 1997, although sadly, as the Minister pointed out, it has remained somewhat static since. UCAS figures quoted in a recent Select Committee report on access show that the number of students in higher education from less well-off backgrounds fell between 1997 and 1999.
Kenneth Baker, now Lord Baker of Dorking, whose Parliamentary Private Secretary I was proud to be, ended the divide between polytechnics and universities, recognising the thrust and energy in the poly sector. He was one of the first to appreciate the need to match wider access to a change in student funding, realising that a redrawing of the balance between student and taxpayer had to take place. That debate was not easy. It remains a difficult area for politicians, in which the easy answer is not likely to be a serious one, but I will come back to the Liberal Democrats in a moment.
Let us be in no doubt why we are here. The Government's review of student finance—the prompt for today's debate and the first U-turn of the new Parliament—has an undistinguished parentage. The first promise reneged upon, at the very beginning of the previous Parliament in 1997, was that by Labour politicians not to introduce tuition fees. The Prime Minister, the title we used to know him by before he was elevated beyond normal politics, had said clearly during the election campaign that
"Labour has no plans to introduce tuition fees".
Within months, that promise to students, their parents and families was conveniently forgotten.
Both arrogance and complacency, with which the country is becoming wearily familiar, characterised the next announcement, which was to reject almost out of hand and extremely rapidly the conclusions of the Dearing committee. To remind the House, Dearing recommended the continuation of means-tested grants in order to ease access for students from a low-income background, and recommended against the introduction of means-tested fees. The then Secretary of State, Mr. Blunkett, chose to do the opposite to Dearing in both cases. Replying to an Opposition day debate on
That is not the only crisis in the sector, to remind the Minister of things that she may have forgotten while she was at the Dispatch Box. Universities acknowledge the impact that the crisis in student finance has on access and retention, but they have concerns in other directions. They are irked at being required to succumb to greater and greater regulation—it is estimated that quality assessment alone costs some £250 million—while expecting less and less financial support from Government. They are worried about a crisis in their own funding. They estimate that a gap now exists of some £900 million a year in respect of delivering as they would wish on their students' expectations. They are worried about the demographics of their teaching staff, which foresee them being remarkably short of lecturers in a handful of years. They are worried about recruiting their replacements and attracting students to do PhDs.
The crisis in student funding may not be the only one, but it has the most immediate impact on students of all ages and their families. If it was unexpected by the current Home Secretary and his party in 1997, it was not unexpected by others. It was not long before evidence of it began to accumulate. The Select Committee on Education and Employment published two reports earlier this year examining higher education: on access and on student retention. In both, student finance came under scrutiny, resulting from the growing perception that not only fear of debt but real hardship beyond the usual tolerance long experienced by students were having an influence on choices and destinations.
Professor Claire Callender co-authored a report for the DFEE entitled "Changing Student Finance" that was published in December 2000. She said that certain groups of students experienced severe financial hardship and her report found that one in 10 of full and part-time students had thought about dropping out for financial reasons.
Professor Diana Green of Sheffield Hallam university told the Select Committee that the number of student exclusions for debt had risen by 17 per cent. between 1997 and 1999. The NUS student hardship survey in 1999 showed that up to a third of full-time students had considered dropping out of studies at least occasionally.
Does the hon. Gentleman accept that we have the second best retention rate of students among all OECD comparator countries? Does he further accept that there has been no change in our position since the introduction of the reforms in student support?
My point is that we want to preserve and protect our very good retention rate. The evidence to the Select Committee shows that the Government's student financing package is putting that at risk. Even if the figures have not yet started to drop away, my quotations from those who are close to students show that it is a real danger. They are starting to see evidence of exactly what the Minister fears.
I am astonished to hear that. I understand that since 1993 participation of students from lower socio-economic backgrounds has remained pretty constant at 26 per cent. Perhaps one reason why it has not improved is the fact that the Conservatives cut funding per student by 36 per cent. We are trying to regain that position and improve it.
I have two points in answer to the hon. Lady's comments. First, as I said earlier, the number of school leavers from poorer families entering higher education approximately doubled in the 10 years to 1997, which include the years that she mentioned. That information is from table 1.1 on page 6 of the Dearing report. Secondly, the hon. Lady referred to the change in unit funding. She is quite correct, but unit funding was going down as the number of people in higher education increased considerably, at no loss of quality whatever, as the Dearing report commented.
We want more people to experience good-quality higher education. That was the record of the Conservative party when it left office.
The key figure is not the number, but the proportion of young people from lower socio- economic backgrounds who enter higher education. That has not changed. Does the hon. Gentleman believe that the mortgage-style loan scheme introduced by the Conservative Government was less inhibiting of students from lower income groups than ours, which is entirely income contingent?
I did not say that we are content with the proportion of those from non-traditional backgrounds who enter higher education now. However, we did change it and the numbers were increasing under the Conservative Government. The rapid stop appears to have come round about 1997. Therefore, I am simply asking the hon. Lady to acknowledge that, just possibly, it might have something to do with the new financing arrangements that she introduced.
I am grateful to the hon. Gentleman for giving way on this point. Given the Conservative party's new-found concern about increasing participation in higher education—[Interruption.] In the period 1992–97 when the hon. Gentleman and his colleagues were responsible for the system, I was one of those responsible for making it work, and our recollection of what happened is not quite the same as his. Does he not share the Government's target of 50 per cent. of young people going into higher education by 2010?
It is a pleasure to have given way to the hon. Gentleman, who, as the House knows, took my seat in 1997, but who has subsequently made some kind remarks about me, both in the House and outside, which I much appreciate. He certainly knows his education, too. I am a little disturbed that he should say that our appreciation of people going into higher education is newly found. I will not restate the figures yet again, but my point is that things improved markedly when we were in office, and the present Government should seek to continue that progress.
On targets, I have already said that we improved from one in eight to one in three, without quota, without target. The Minister's aspiration is much narrower: to go from one in three to one in two. I am a little puzzled about what might constitute higher education, following the Secretary of State's remarks yesterday in the Education and Skills Committee. She is reported to have said that one may not need a degree to qualify for what she called the "higher education experience", but that all would become clear. I do not know what criteria the Government will use to meet the target: taking a degree, visiting the university for a course, or driving past on a wet Tuesday afternoon. When we know that, perhaps we can talk figures.
There is no change in the calculations. The Conservative Government also used to count a whole range of qualifications at sub-degree level—HNDs, HNCs—and we have the new foundation degrees, but we will not double-count, as the Conservatives did.
I am grateful for that clarification. Yesterday, the Secretary of State said:
"The nature of higher education has changed and I think people will go there at different parts of their lives to access that."
That is good. She continued:
"One of the things we are doing at the moment is looking at the length of courses and qualifications, at the out-turn.
When we've worked that out with the sector, we will want to tell you as well."
When asked how the Government would define the target as being met, she replied:
"It will be based on a good quality higher education experience".
That is what has puzzled people, but no doubt we will find out in due course precisely what she meant.
The impact of not completing a course of study is high. Least important, we all may think, is the financial cost, which some estimate to be about £200 million a year. Of greater significance, as we would all agree, is the cost in self-esteem to the undergraduate, who will have struggled to reach university, sometimes overcoming substantial obstacles in life, only to have to deal with a particular form of rejection.
The hon. Gentleman put his finger on one of the most crucial issues, which is dropout. In the United Kingdom, uniquely, we do not credit students for what they have achieved. For students to be able to go through the system and gain their qualifications should be an aspiration for us all. Does he agree that, rather than talking about dropouts, we should regard people as having taken one step on the ladder towards achieving their degree or other success? I welcome him to his post.
That is kind of the hon. Gentleman. Yes, I agree. I have read the debate that is taking place about what may constitute a credit for the degree or period of study, and I know that there is some concern about the current system. We need to find a new arrangement. I hope to explore that in my discussions with universities over the next few months.
The rejection felt when a course is not completed can be communicated to others, rebuilding barriers to education that we all want to dismantle. For every person who has failed to graduate as a result of Labour's failure to understand the problem, the Labour promise of a better tomorrow has, sadly, been broken.
Do not dropouts frequently occur for reasons other than student finance: for example, choosing the wrong course or not getting the right quality of teaching? I was a member of the Committee that produced the report to which the hon. Gentleman referred. Students told us that their main concern—although of course they were concerned about finance, as I was when I was a student—was the quality of teaching. We are doing a lot to improve that by putting extra investment into universities.
The hon. Lady is correct: several factors may contribute to a student failing to complete a course. I am strongly of the opinion—as I know is the Minister—that more information needs to be provided by schools for those who enter at that stage. I have cited the quotations from those close to universities because I wish to query the impact of the new financial arrangements on the decisions that students make on whether to complete a course. The changed nature of the financial circumstances since 1997 has led to the fears that university representatives—and students—have mentioned.
Universities UK told the Committee that perceptions of debt are critical to students' decisions to enter and remain in higher education, especially for students from poorer backgrounds and those without a tradition of higher education in their families. It seems common sense that the level of debt, rather than the simple existence of any sum owing, must be the crucial factor in perception of debt as it applies to access to higher education. Therein lies the biggest error in the Government's calculations. Professing an aim to widen access not only to bring more students into higher education but to ensure that they came from a wider social spectrum, the Government hit unerringly on the single most likely barrier to those students' entry. Families for whom significant debt had often meant real hardship and fear had little likelihood of coming to terms with the new arrangements, when all too often there was confusion about the precise financial repayment arrangements.
In the midst of the evidence that was building up from universities and others, Ministers either did not know what was going on or could not easily admit that they had got it wrong. In February 2001, Baroness Blackstone, then Minister with responsibility for higher education, told the Committee:
"I know of no evidence to suggest that more students have dropped out as a result of the changes in the student support system that we have introduced."
One wonders where the noble Lady was looking, because the evidence was all around her. The signature dish of this Government is high-handed arrogance and bare-faced denial of error. In those few words of Baroness Blackstone, it was set before us again.
In contrast, the signature dish of the Liberal Democrats is promising the earth in the knowledge that they will not inherit it. In this debate, they have taken full advantage of the fact that nobody ever bothers to ask where they would find the money to fund their policies. A hefty price tag is certainly attached to the measures advocated by the hon. Member for Newbury. A reply to a written question has shown, for example, that the abolition of tuition fees would cost the Exchequer some £270 million every year, even before the cost of restoring maintenance grants.
There is a proper debate to be had about the balance of contributions between the state and the student in further and higher education. However, it must be an honest debate. It is wrong to give students the impression that all their problems could be solved without talking about finance or through the now infamous 1p on income tax, about which we have heard so often.
Would the hon. Gentleman acknowledge that in Scotland, where tuition fees have been abolished, finance has been put in place to accommodate that change? Therefore, our proposal is financially solid and not unrealistic.
The hon. Gentleman will appreciate the difference between the jurisdictions in Scotland and England. It is not all roses in Scotland, because the threshold at which students begin paying the graduate tax is low—about £10,000—and the package of reforms introduced as a result of Cubie involved the reduction of loan entitlement for many students while they were studying, leading to greater hardship. Whatever the financing arrangements in Scotland, they do not begin to equate to the number of students in the rest of the country and we have heard nothing about financing from the Liberal Democrats today.
Is not it astonishing that the Liberal Democrats can talk about this issue without saying where they will get the money, secure in the knowledge that the Scottish arrangements discriminate against English students? Those arrangements discriminate against students from the Isle of Wight, while taxpayers from the Isle of Wight and other parts of England pay for Scottish students to get a better deal—because of the Liberal Democrats.
The hon. Gentleman challenged me on the point that we did not raise the financial issue. It is clear that, in practice, we have managed to make the new arrangements in Scotland work, in agreement with the Labour party, without resorting to any increase in income tax. In our last manifesto, we allocated a small part of the extra £3 billion that would be raised by a penny on income tax to the abolition of tuition fees. The figure that the hon. Gentleman himself has given demonstrates that only a small part of the £3 billion would be needed.
Do you remember, Madam Deputy Speaker, a wonderful game some years ago in which a child would ask a magic robot questions and it moved around to point at the answer? One might try to confuse it, but the magic robot always spun round to give the answer. I suspect that, upstairs in the Liberal Democrats' room, there is a magic robot and they ask it a different question every time. "How can we pay for improvements to the health service?" Unerringly, the magic robot replies, "A penny on income tax." "How can we pay for improvements to schools?" "A penny on income tax." "How do we pay for improvements to our universities?" "A penny on income tax." The remarkable way in which that one penny can be used so many times pays great testament to the number of times that the Liberal Democrats must play that game upstairs in their room.
No, I must make some progress.
It is vital that, as far as possible, we draw on the knowledge and expertise of those involved in higher education when we start to make decisions on changes to student finance. For that reason, I was particularly surprised that the Secretary of State said that she was reviewing the policy purely internally. She has disappeared back to the Department to produce another system devised by the same people who created the one about which we are all complaining.
I read this morning in The Guardian—my newspaper of choice—a number of things that No. 10 and the Treasury are concocting to foist upon the Department. I appreciate that the Minister will not comment on unsubstantiated newspaper stories, but this one has worried us all and has the ring of truth about it. We will look carefully at what comes out of the review, but it is disappointing that the public's participation in the Government's review of student financing is through the pages of the newspapers, rather than through a more open process.
That will not be the Conservative way. Over the coming months and years, we will go out and talk to organisations such as the National Union of Students, the Association of Colleges, Universities UK and others, and we will draw on the experiences of university vice- chancellors, lecturers and students. We will listen to the views of the people who matter in our universities and FE institutions.
Certain core principles will inform our policy-making process. First, we agree with bodies such as Universities UK that there is a real need to ensure that any system of student support focuses on those potential students from less well-off backgrounds. It is vital that we make a university education a realistic goal for every talented young person. It is also vital that young people from less well-off backgrounds are reassured that the financial cost of getting a degree does not put that beyond their reach. Access must not be prevented by cost.
Secondly, any additional provision for students must not come at the expense of university funding. There is a real funding crisis in our universities and they cannot be expected to bear the additional burden of bailing out the Government on student support. The Government must look at ways of giving universities more freedom and allowing them greater scope to harness funds from the private sector. Development must be helped and not hindered by any state involvement.
Finally, it is vital when looking at the entire sector that we do not become focused on higher education to the detriment of further education. The FE sector provides the kind of education that young people and employers want. Some of the more exciting and innovative courses, particularly vocational courses, are being offered by FE students. We must not allow FE to be squeezed out by the university sector, and the current crisis in teaching and recruitment—as revealed in this week's survey by the Association of Colleges—suggests another fine mess for the Minister to uncover to add to her burdens.
In entering post-school education, whether straight from school or later, prospective students deserve the fullest knowledge of what courses are available. They need to know where and how good the courses are, the true value of the qualifications and what society thinks of them, what financial support is available, and when that support needs to be repaid. In that way, they will make their choices on the basis of what is right and appropriate for them in a culture where there is parity of esteem between the vocational and the academic, and where their choice of course, place and sector will enable them to reach their highest potential and not simply to fulfil Government quota or the financial necessity of an institution.
The House knows that, with the best of intentions, any Government can go wrong. The alarms could not have been ringing louder in higher education over the past few years. The Government have ignored too many of them, at the cost of misery and disappointment to students and their families. It is time to listen and maybe—just maybe—to say sorry. 2.36 pm
I am in two minds about the debate. I welcome the fact that the Liberal Democrats have chosen this subject. The motion includes the important reference to student support outside higher education, although it is unfortunate that the focus so far has been almost entirely on the university sector. However, the issue has been presented in a way that exemplifies the worst forms of Liberal Democrat opportunism and hypocrisy. As long as Liberal Democrat Members continue to argue that there should be a massive expansion in the money available for student support without committing themselves in their spending plans to finding that money, the party's credibility will be zero.
Earlier, I discussed with my hon. Friend Diana Organ the Liberal Democrats' latest use of their proposed 1p increase in income tax. The Liberal Democrats have committed themselves to a radical increase in support for students in higher education, and the motion implicitly commits the party to some sort of expansion in support for students in further education. However, my hon. Friend told me that as recently as Friday the Liberal Democrat social services spokesman put in a bid for the 1p on income tax to fund in full the cost of residential social care.
Where will all the money come from? I have to agree with Alistair Burt that the proposition is no longer credible.
Does the hon. Gentleman consider that the commitment given by the partnership Government in Wales to £40 million in education maintenance bursaries and financial contingency benefits next year is opportunism, or that it will benefit Welsh young people from poorer homes by giving them the opportunity to enter further or higher education?
I welcome that commitment, although I am not familiar with the details. The hon. Gentleman had to consult his notes as he asked the question, which suggests that he is not entirely familiar with them either. However, we are talking about a comprehensive programme of reform of student finance, which must apply to students aged 16 and upwards. Whatever proposals the Government make will be funded, so whatever proposals other parties make must also be funded. The experience of the five years since 1997 is that the other parties will not say how that funding will be managed. Liberal Democrat Members believe that, one day, their party will be the second party in the House. I very much hope that that might happen, but I suspect that it will not as long as the Liberal Democrat party continues to promise the earth without putting its money where its mouth is.
The hon. Gentleman knows that I normally have great respect for what he has to say, but will he accept that we provided the British electorate with a costed list of all our proposals at the last election? If he does accept that, will he apologise to Liberal Democrat Members for his scurrilous remarks about uncosted proposals?
What the Liberal Democrats are arguing for now is not what they were arguing for on
If there is a clear distinction, will the hon. Gentleman explain in what respect it exists? Will he give us figures and details? He cannot simply allege that there is one.
The Liberal Democrats originally supported the Government's recommendations on reforming student support. Their only point of difference was on student fees, and they fought the election on the abolition of such fees. As the months go by, they are gradually shifting their position and calling for a more radical transformation of student finance. I am in favour of a radical transformation of student finance, but I am prepared to argue for it, as are the Government, only when the money goes with it.
There is no doubt that the Government's move in the last Parliament to grasp the nettle of student finance in the United Kingdom was brave and courageous. With the abolition of mortgage interest tax relief and the reform of company car taxation, the Government showed enormous courage in tackling the central planks of what is traditionally called the middle-class welfare state. They deserve credit for introducing their important policies to extend and redistribute opportunities for people in the United Kingdom.
A number of parents and students have written to me and visited me in my surgery over the past four and a half years, and although there is concern about the level of debt in which some students find themselves, I have also detected a complete understanding of the importance of the general principle that those who benefit from a university education ought to contribute to it. I am not surprised at the comparatively low level of objection to the fundamentals of the system.
Does the hon. Gentleman agree with me, a fellow socialist, that the easiest way to enact that principle would be through a progressive system of income tax?
There are many ways of enacting that principle. One difficulty with progressive income tax is that those who ought to have the greatest liability for income tax find it the easiest to avoid. There are deficiencies in an income tax system, however progressive it may be on paper.
There are many ways whereby the system can become more progressive and fairer and reduce yet further the barriers to participation that many young people experience. I am sure that the Government will explore all of them. I completely support what they have done. It is important that in the review we do not abandon the central principle that those who gain the benefit contribute their fair share.
We should focus on the details of the system. It is true that the perception of tuition fees has been a problem. However, 50 per cent. of university students do not pay tuition fees, and 15 per cent. pay only a part fee. That is not widely understood, so one of the details that needs to come out of the review is better communication regarding eligibility for tuition fees.
I find it incredible that people recommend abandoning the tuition fee. I cannot see how anyone who is concerned about equality and redistribution of opportunity in education can justify a system whereby every group of post-18-year-old students has to pay a tuition fee for their course, or is eligible to do so, whereas full-time undergraduates—the group that has the greatest benefit from their education—are not eligible. If young people who achieved zero GCSEs at school go to night school at 19 or 20 to improve themselves, they pay a tuition fee. If people in their 30s or 40s who work full time or look after a family do an Open university degree, they pay a tuition fee. How can it possibly be right that undergraduates, who, to have got where they are, have by definition had the greatest benefit from, and the highest investment in, their primary and secondary education, should not pay tuition fees?
That is the key principle behind the payment—or rather, the contribution to the payment. Let us remember that the £1,075—I think that that is right; I have just written the cheque for my youngest daughter, who is starting her second year at university—represents about 25 per cent. of the average cost of providing the course, so we are not asking people to pay the full fee.
Let us focus on the details in the review—information for parents, for example. The Government have taken heroic steps to mitigate some of the potential problems and perceptions among young people going to university for the first time; have introduced all kinds of new systems of support—for child care and transport, for instance—and have expanded the access funds in universities. There is now a plethora of additional forms of support. There is too much confusion and not enough information about the various special schemes that have been introduced.
The system needs reforming and streamlining, so that any additional support that may come through can be focused on the needs of those whom we loosely term non-traditional students, or students from working-class backgrounds. The key criterion, surely, is that a student has non-graduate parents, and is the first to go to university in his or her family. That is the barrier that we have to break through. The prospect of someone whose parents did not go to university going to university themselves is far less likely than for those with graduate parents. I therefore hope that, in addition to better communication about the realities of the system of support, there will be clarification and streamlining of the various forms of support that already exist.
I have praised the Liberal Democrats for including in their motion a reference to the support of post-16s in further education. The Government, and possibly the Welsh Assembly, are to be congratulated on having taken steps towards a form of education maintenance allowance for 16 to 19-year-olds. We have pilot schemes in the United Kingdom, and the evidence is variable, but by and large the schemes work and achieve participation.
We know that rolling out education maintenance allowances nationally will be hugely expensive, but I urge the Government to think carefully and not to back off from a national scheme of support for 16 to 19-year-olds. As was said earlier, one of the key factors in participation is not so much the cost of going to university, so long as the cost is reasonable and students perceive that the higher earnings in their subsequent careers will cover the initial costs. The key factor is not having the right qualifications at the age of 16 or 18.
The education maintenance allowances in Doncaster have had a profound effect in the short time that they have been operational; staying-on rates have increased by 6 per cent. I agree with my hon. Friend that despite the financial issues that they raise, EMAs are a crucial way in which to roll out the programme to encourage more young people to stay on, and give them the chance to achieve the qualifications to get into university.
I am delighted to hear that. I only wish that we had EMAs in my constituency. They have them in Rochdale, Bolton, Manchester and Salford. Indeed, one of the problems with the pilot schemes is that we now find that students taking the same course at the same college are funded in different ways.
If we are to roll out EMAs nationally, we must consider the relationship with child benefit. The Government deserve enormous credit for grasping the nettle of reforming student finance in the last Parliament, and there is perhaps an even pricklier nettle to be grasped in this Parliament: the relationship between EMAs and child benefit. There are so many anomalies in the way in which our existing welfare state funds 16 to 19-year-olds, in and out of education. I make a plea for the extension of the definition of student financial support away from HE to include FE.
I also ask for some special consideration for students attending London universities and colleges. Normally, I am wholly opposed to any enhancement of educational investment in London as, by and large, it is at the expense of poorer, northern, metropolitan districts such as mine—[Interruption.]—and those in other parts of the country. I draw the attention of my hon. Friend the Minister for Lifelong Learning to early-day motion 308, which I tabled this morning and which refers to London weighting. There is no doubt in my mind that living costs for students in London are far in excess of the current weighting provided in student support. Given that students from all over the country attend London universities, the issue must be tackled.
I hope that the Government will stick firmly to the principles. I hope that they will listen to the comments made by the Conservatives. I welcome Alistair Burt—my former adversary—to the Opposition Front Bench. I congratulate him on his appointment and hope that he will bring a new approach to the Conservative party and wish him well on his tour of United Kingdom universities to find out what people have to say. He did not say that he was making a European tour to learn from European capitals what should be done to improve public services in Britain. When those Members of the shadow Cabinet who are going to Europe have their interviews with Mr. Jospin and Chancellor Schroder and ask why British public services are often poorer than those in western Europe, the answer will be simple: "We did not have 20 years of Tory Government." That is the obvious message that the shadow Cabinet will receive on their European tour. However, I am sure that the hon. Member for North-East Bedfordshire will bring a constructive and reasonable approach to the formulation of Conservative post-16 policy.
The key point is that we must focus on the detail. We must consider London weighting. We must give better information to parents to get rid of the fear factor—that is urgent. We must streamline the existing additional support schemes so that extra effort is directed towards the needs of poor students, especially those who are going to university for the first time.
I am delighted to have the opportunity to speak in the debate. The subject is of great importance and the House should address it. This is the second Opposition day that has been devoted to a discussion of education. That marks the importance attached to education by Members on both sides of the House.
During the past four years, we have seen the flawed introduction of a new approach to financial support for our students. Even the Secretary of State, in her decision to review the steps taken four years ago and to reconsider the whole system of student finance, has admitted that what was done was not right; that it caused genuine hardship for far too many students; and that, increasingly, it provides a disincentive for students from less well-off backgrounds to enter further education—as my hon. Friend Alistair Burt pointed out. The Government made a wrong decision and I hope that the current review will result in a more workable and acceptable system that is more attractive to would-be students.
None the less, in choosing this subject for debate, the Liberal Democrats are chasing headlines, while failing to address the real issues relating to student finance. The problem for students, and the one that causes so many financial difficulties, is not tuition fees. To call for the scrapping of tuition fees just makes a cheap headline. It is not tuition fees alone, or even in large measure, that build up debts of between £10,000 and £15,000, but the huge repayment burdens—the burden of cost-of-living expenses built up over a three-year course, or four years in Scotland. That debt burden remains with students through the early years of, and often well into, their professional life. It is that debt burden, far more than tuition fees, that causes the fears that have been discussed.
Twenty years ago, in the days when we had full grants and when I was a student, it was generally estimated that a student needed a little over £2,000 a year for living expenses in London—about £1,500 elsewhere. Obviously, given the changes in the cost of living, those amounts are hugely greater today, yet it is worth noting that the maximum amount available under the student loan system is only £4,000 a year. Today, students are left with huge debts. We need to address that issue for today's students, not tomorrow's.
We could have a huge debate about how student finance should be constructed, but will the hon. Gentleman at least concede that, after the student loans system had been introduced under a Conservative Administration, when Labour came to power in 1997 it introduced ways in which the burden of debt could be paid over a longer period, starting at a higher rate of earnings than was relevant under the Conservative Administration?
I am interested in the issue for today's students, and the reality is that, whatever the history of student finance, today's students face a debt burden that is a disincentive and a huge problem for many of them. It is right and proper that the House, the Government and all parties with an interest in the area should be addressing that issue today.
For that reason, at the general election the Conservative party said that our first priority should be to change the burden on today's students, to make it possible for students leaving education and entering their first jobs not to face a huge burden in their pay packets from day one—and a burden it is. A newly qualified nurse earns £15,355 a year. A newly qualified house officer—a young doctor—earns £17,935 a year. A newly qualified teacher earns a little more than £17,000 a year. Newly qualified social workers and other public servants all earn similar amounts.
Currently, that newly qualified nurse, on £15,355 a year, must pay £481 a year in repayments from day one. Even if the proposals put forward by the Liberal Democrats at the general election were implemented, that nurse would pay more than £200 a year in debt repayments. That is why the Conservative party said, at the general election, that we needed a quantum leap in the threshold for repayments. We should not be looking to young, newly qualified public servants to start paying their debts until they have reached a reasonable salary level and start to have the cash that will enable them to afford those repayments.
The hon. Lady obviously did not read the detail in the manifesto. It said that market rates of interest would be offset by tax allowances that would enable us to securitise the student loan book to provide a significant cash investment in our universities, while ensuring that students paid no more money in repayments. That would have made a huge and real difference to our universities.
We cannot let the hon. Gentleman get away with that, because the policy of the previous Government, when they left office, was to sell the student loan portfolio, and the Minister and her colleagues had to pick up that problem. No one would buy it. It is no good saying that the Conservatives would underpin universities with extra resources from a portfolio that no one would buy. It was not commercially attractive to anyone unless it was written down by at least 50 per cent.
I think that in today's world one has rather more chance of securitising the student loan book than of encouraging further bondholders in Railtrack.
We move on to what the Government are proposing. If we are to believe the apparently authoritative leak in The Guardian today, we shall see a return to a maximum grant. However, it will be a maximum grant that will go nowhere near what is needed by today's students to live a life in full-time education. The suggested figure is £2,600 a year. I will be intrigued when the Minister sums up at the end of the debate if she can give us a hint of whether that figure is even in the ball park. If it is, it is profoundly worrying.
If a poorer student is going to be entitled to a grant that represents a fraction of what is needed to live on, and if the student loan structure is to disappear, what about the rest? Are we saying that students from less well-off backgrounds will have to borrow large amounts from their bank and repay it at much higher rates of interest than the present student loan? The consequences will be serious indeed.
Professor Alan Smithers of Liverpool university has offered some initial analysis of the report, saying
"For many students it will be a poor deal as it would actually be better for them to pay the money up front and not to incur debts at market rates of interest . . . It is a very untidy solution and it is hard to see who is going to benefit. The financial consequences for a number of students are going to be quite serious . . . It is an attempt by the Government to put a sticking plaster over a self-inflicted wound."
When the Minister replies, I hope that she can reassure us that the plans that are being discussed behind the scenes will not impose the potentially enormous financial burden that such an approach could represent for our students.
At the end of the day, the family will be expected to pay. The Government's view is, and seems always to have been, that a family with an income of £35,000 a year is rich and can well afford to pay tuition fees—to pay a little extra here or support maintenance grants there. In reality, some Ministers have privately admitted that they are placing too many burdens on middle-class families with mortgages and other children to support. The present threshold of £35,000 is not such a vast amount of money that it leaves a huge amount of disposable income to support a student.
We also hear that there may be a graduate tax, repayable over 25 years. What will be the threshold for the repayment of that tax? Will it apply in full measure to the newly qualified nurse, doctor or teacher I mentioned? Will they start paying in full from day one? If a graduate tax is to be the approach, it should not be structured in a way that will affect the least well off—the newly employed graduate.
I thank the hon. Gentleman for giving way a second time. Does he agree that we want to expand the opportunities for most young people, so that they can get the best out of their education? We must recognise that graduates can earn four times as much in their lifetime as someone without a degree. There is no doubt about that fact. Therefore, there is a social justice to a graduate tax—they should pay something back for the benefits that they have gained from their education.
At a time when the public services in my constituency and many others are crying out for people and simply cannot get the new entrants they need, it is the height of folly simply to pursue a political dogma, increase the financial burden and make it less easy still for graduates to move into jobs that are less well paid than those in the private sector. We need to deal with the problems of today's students going into today's public services. Trying to expand numbers just to achieve a target while failing to recognise the potential impact on those people would be foolhardy in the extreme.
Why the rush? The Prime Minister made a speech two or three weeks ago and we are already hearing detailed leaks of what the Government are planning. If they got it wrong four years ago, surely now is the time to step back, think about the matter carefully, talk to the organisations involved, have widespread consultation and then reach a conclusion. They should not cobble something together in three weeks.
Many hon. Members referred to Liberal Democrat education policy—the magic 1p. I will not attempt to satirise it. My hon. Friend the Member for North-East Bedfordshire has done a far better job than I ever could. Year after year, election after election, the magic 1p returns, each time with a different spending commitment attached.
I flicked through the detail of the Liberal Democrat manifesto to see what came under the heading of that 1p this time. There are some startling figures. The range of potential spending commitments is enormous. The one that particularly caught my eye was the commitment to reduce class sizes to 25 pupils, on average, for children aged five to 11—an admirable desire in theory, but if fulfilled would require the construction of the equivalent of 3,000 new primary schools and the hiring of 30,000 new teachers. Schools cannot find teachers to fill today's vacancies, let alone find 30,000 more. The possible capital cost alone of pursuing that policy would gobble up a huge chunk of the magic 1p.
Does the hon. Gentleman agree that it is rather more realistic to promise improvements in public services and help for students by accepting that taxes may have to rise, than by pretending that they will be cut?
A responsible political party should make commitments on a basis that can be substantiated, not on the basis of promising all things to all people all the time, with no genuine financial backing to support them.
It is also noticeable that little is said about grants and financial support for students in the Liberal Democrat manifesto. Tuition fees make the headline-grabbing political point, but the detail of how to tackle the debt burden is important. As I said in citing the example of the small threshold increase for repayments that was included in the manifesto, in reality little has changed in the huge debt burden placed on today's students.
I have given a specific example, taken from the hon. Gentleman's manifesto, involving a newly qualified nurse, to show that a significant repayment burden would still be placed on newly qualified members of staff in a key part of our economy where we desperately need more people. We should not provide disincentives to people to join those professions. The danger is that if we use our student finance system to penalise new entrants to the public services that are crying out for people, we will not get the people needed to populate those public services in the future.
Mr. Rendel referred to what has been done in Scotland, but my hon. Friend Mr. Turner mentioned the Barnett formula. The truth is that while the Barnett formula exists, it will always be possible to do more in Scotland than in the rest of the country, because taxpayers in all other parts of the country—including those in the less well-off areas of the north of England, such as that represented by Mr. Chaytor—will continue to subsidise taxpayers in Scotland. While the Barnett formula exists, the Administration in Scotland will continue to be able to do things that are not possible in other parts of the country.
I believe strongly that the magic 1p policy is hugely disingenuous. During the election campaign, I heard a senior member of the Liberal Democrat party say on the radio, "If we could only put 1p extra on income tax and charge a higher rate overall for high earners, we could solve the problems of our public services once and for all." Well, if Liberal Democrats really believe that they are genuinely fit only to be a minor party, that is how they should remain.
As I have just said, the hon. Gentleman is a member of a party that proposed a capital programme for schools that could not have been achieved without spending huge sums. That policy is simply not credible.
The No. 1 priority is to reduce the repayments burden in the early years for today's students. I emphasise the phrase "today's students", because this issue concerns students who are in education today and who will leave with substantial debts in forthcoming summers. We need to find a better way to deal with that in future—not through the rushed review that the Government are carrying out and not through policy made on the hoof at the party conference, but through a long, substantial, real review that delivers a workable solution that will endure, not simply last another four years until people discover that it has not worked either.
We need to do other things. There are plenty of anomalies in the way in which student finance is handled. A constituent contacted me a few weeks ago to ask, "Why do I have to pay a separate licence fee for the television in my room because the four of us who share the house just happen to have four different tenancy agreements?" Such anomalies in the financial framework surrounding our students must be addressed. We need to deliver the support, get rid of anomalies and find a better way of doing things.
Let us not forget that it was a Conservative Government who expanded participation in higher education from 10 per cent. of young people to more than 30 per cent. Let us also not forget that it was a Labour Government who ended the principle of free higher education for all. 3.10 pm
I am very pleased to have an opportunity to contribute to the debate, and to debate with my hon. Friend the Minister for Lifelong Learning. She kindly invited me—along with one or two colleagues on the Labour Benches—to a private meeting a few weeks ago to discuss these matters, and I put my view to her. I thought that I was alone at that meeting in expressing the dangerously radical view that we needed to reconsider abolishing fees and paying for the restoration of maintenance grants from general taxation.
I was therefore absolutely delighted when the very next day an apparently well-sourced leak appeared in the newspapers suggesting that the Government were to conduct a review and might restore grants and abolish fees. I cannot tell my hon. Friend how pleased I was about that. I hope that the review will, indeed, come up with such policies. I have no doubt that during the review there will be certain pressures from the Treasury. I shall do everything that I can to support my hon. Friend in her struggles with the Treasury on those matters.
I was one of 33 Labour Members who opposed the decision three years ago to impose fees and abolish grants. I did that with great reluctance; clearly, rebelling in the Lobby is very difficult and painful for everyone, and it certainly was for me. However, I had a view at that time, which I have held consistently, that the Government's decision was wrong. The fact that we are to have a review shows that the Government have listened, are listening and are going to change their policies, which is very welcome.
Sadly, I disagree with my hon. Friend Mr. Chaytor. I agree with him on almost everything, but I find him unconvincing on the subject of higher education student finance. However, I hope that we shall always remain friends in other respects.
Students are often portrayed as fortunate in enjoying the advantage of a university education. Indeed, I had one myself and feel fortunate as a result. However, students forgo several years of employment—certainly three years, often four and sometimes as many as six years, especially if one includes education from the age of 16—and the income that they could derive from that.
I happen to have twin daughters, one of whom went to university and one of whom worked. My hon. Friend can imagine the fertile debates in our household as the one in work paid tax in order to pay for her sister at university. Does that seem fair?
Provided that taxation is progressive and redistributive, taxation is fair. I should like to think that my hon. Friend's daughter who went to university will pay considerably more tax in her lifetime because she will receive a higher income.
My hon. Friend disagrees, but the fact is that graduates earn more than non-graduates once they have made the sacrifice in those early years. Financing people through that period so that they can attain qualifications and therefore pay higher taxes later in life that meet the cost of their education is a fair deal.
Those students are privileged in the sense that, in general, they will have a better life because they have a degree than someone who does not. Of course, that does not apply in all cases. However, students pay higher taxes and they are vital for our economy. We must have well-qualified people throughout our economy; indeed, we are seriously worried about skill shortages. Recruiting people with the right skills and qualifications is proving difficult. Although unemployment is much lower than when the Conservative party was in power, we are suffering from skill shortages that must tackled.
The Prime Minister was right to suggest that we should increase the number of those who go into higher education to 50 per cent. of the population, because it is good not only for those people but for society and our economy. To achieve that, we must guarantee students financial security while they are in higher education.
Many people say that it is good for students to work while they are studying. That is not always so. In the past, when only the scions of the upper class went to university, they did not have to work. They were dilettantes, who lived the life of Riley while they were at university. Perhaps they would drop in to the odd lecture and talk to the odd tutor, but, by and large, they drifted through university and into one of the well-paid professions. Doubtless some of them drifted into the House.
That was the life of the upper class; we now live in a more democratic, egalitarian age when many more people go into higher education. That is essential for them and our economy. We must find ways of supporting students because they do not have the resources that the rich enjoyed in the past. It is right for the state to support them while they are studying.
We should regard students not as privileged youngsters but people who do a job for themselves and society, which therefore pays them an income while they do that job of studying. If students saw matters in that light, I believe that they would concentrate better on their studies. It is preferable to following the traditions of the dilettante upper class of the 18th century.
Students who have education maintenance allowances in my local sixth form college show greater diligence and a tendency to turn up to classes more often. They believe that their EMA might be taken away if they do not turn up. All the tutors there strongly favour EMAs because they have encouraged students to work harder and to turn up. I ask my hon. Friend the Minister to extend that pilot scheme to the rest of the country. It will cost money, but reap dividends. As my hon. Friend the Member for Bury, North said, if we are to increase participation among post-16 students, we must encourage more marginal students to stay on in education.
There are many families with non-traditional backgrounds in my constituency. Some are from ethnic minorities and others are from working class backgrounds with no tradition of going into higher education. Remaining in education beyond the age of 16 was perceived as strange. Indeed, when my wife wanted to become a teacher, her father said, "What do you want to do that for? Get out and get yourself a job, love." She persisted, went to teacher training college and became a school teacher, but it was a struggle because she came from a background that was culturally unused to higher education.
We are overcoming that barrier; more students are staying on, but we remain a long way behind competitor countries. We must make it easier for students from the sort of backgrounds that I have described to go into post-16 education and on to higher education. The 50 per cent. goal will be achieved if we can persuade people to stay on at 16 and undertake pre-university studies.
We are considering a big issue, which is important for our future. That is recognised on the doorstep. In Luton, North, it was the second biggest issue after the health service, about which everybody was worried. I was surprised that education was the second biggest issue because the number of people in Luton, North who go to university is below average. It is a working-class area and fewer people go to university, but the feeling on the doorstep was strong. That applied to the less well off in some of the council estates and to some of the middle-class areas; people who had previously voted Conservative but swung to Labour perhaps because they had been enlightened in middle age. However, they realised that our traditional approach of state funding for public services was vital for a civilised society. They voted for us on that basis in 1997, and they were a bit shaken when part of it seemed to be taken away in the legislation on grants and fees.
I said on the doorstep that I felt strongly that we must change that policy, and I am delighted that the Government are now reviewing it. I look forward to the restoration of maintenance grants, the abolition of fees, and the achievement represented by 50 per cent. of students entering higher education.
I pay tribute to the candour and honesty of Mr. Hopkins. I also declare an interest. I have three children at university—who, I hope, are working assiduously even as I speak—and I am very familiar with the telephone requests for extra money and the constant need to reach for the cheque book. My problems, however, are nothing compared with the problems of those on low incomes. Many have testified to that, and the evidence, such as it is, is not contested in any part of the House. We all agree that there is a high drop-out rate, that there is a high cost, and that there is high debt. Those are statistical facts, and statistical facts are not really open to argument.
What I will say, however, and what I will blame on both Conservatives and Labour and their disastrous systems of student finance, is the radical change that has taken place in the whole atmosphere of universities. The relationship between university and student has changed—the line is often "If you cannot pay on time, get out"—as has the relationship between students and all the other people with whom they have to deal. Imperious demands from landlords are part and parcel of student life, as is working in cafes late at night and working at weekends.
The Government's policy is an acknowledged disaster. It would have been welcome if the Minister had said "Yes, there are glaring flaws in the system as it stands. Yes, we have established focus groups and spoken to people on the doorstep, and we have found that this is a very unpopular Labour policy". For that is what it is, as research shows. The Minister, however, pretended that things were otherwise. She said that this was part of good practice. She was not altering things because things were wrong; she was simply embarking on a procedure of good practice.
If that is Government policy, and if good practice means revising each piece of legislation every three years, may I ask what other examples of good practice will be forthcoming? How many other pieces of legislation will be subject to the same treatment? Will every education policy now have a dust-over every three years?
The hon. Gentleman speaks of good practice, implying that there is some kind of bad practice. Is he suggesting that it is wrong for students to work in cafes or bars occasionally in the evenings?
I am not suggesting that it is morally wrong. I am suggesting that it imposes an extra burden on them, which they might not need to bear if they were adequately financed. That is, I think, pretty evident.
Let me be fair to the Minister; I might otherwise be accused of being a little unfair to her. Towards the end of her speech—having delivered the form of words, and said that this was just good practice—she read out a litany of flaws and errors in the current system, to which I listened very carefully. That is something that the Minister can own up to. It is not surprising: Governments make mistakes, and Governments can admit to them. It is also not surprising that there is to be a rethink, which I welcome. As I said, I was grateful for the honesty and candour displayed by the hon. Member for Luton, North. I wish that the Minister would show the same degree of honesty and candour, and I wish that we could agree on a review that would advance the position significantly and produce a better dispensation for students.
It has been said that students with low-income parents are worse off than their counterparts. It has always been true that those with better-off parents receive better Christmas presents, and get the backhanders. I spent summers working in a baked-bean factory when I was at university while some of my more affluent fellow students were touring Europe, and I found that hard; but that is life. We must have a fair funding system, but we cannot constantly compensate for inequalities that we face every day. I would like to feel that my experience in the baked-bean factory had stood me in good stead in terms of character building, and understanding how others worked outside the ivory towers of university.
I am not in favour of sending all students off to baked-bean factories. The hon. Lady has identified a fault—a social inequality—and a problem that we have in society. I rather thought, however, that the object of the Labour party was to do something about social inequality.
Does the hon. Gentleman agree that working in a baked-bean factory through the summer vacation is an admirable thing to do, but having to work nightly in a bar when one should be studying is a very different matter?
I quite agree; the hon. Gentleman has hit the nail on the head with his usual candour and refreshing insight.
I do not want to talk at length about the Scottish experience, but whatever has been decided in Scotland will not be followed by this Government. They will do anything but that, basically because they did not think of it themselves. Whatever the Government may say about the Scottish experience, there are three hard facts that I do not think anyone here will dispute. Fact No. 1 is that the take-up of students in Scotland is better than it is in England. That is indisputable.
No, I want to make three points, and I will give way after that.
My second point, to which Mr. Chaytor might also want to respond, is that his colleagues in Scotland voted for the proposals. Unless Labour Members are going to argue that their colleagues in Scotland are either particularly dim or weak willed, it must be the case that their colleagues see some serious merit in that system. The third fact about the Scottish system is that it is financed, because it is impossible in Scotland, as in any corporate or Government body, to set an illegal budget.
By all means, let us have the rethink. Let us have the review. At the end of the day, the battle might not be between anyone here in the Chamber but between the Minister and the Treasury. That is where the serious aggravation might begin. However, if we are to have a review, and some serious consideration of how things are going—I think we would all be up for that—it would be helpful in clearing the ground if the Government would say to the universities, to the parents and to the students, "Sorry."
Thank you for the sound effect.
I am delighted to see that the House has been so consumed by the Liberal Democrats' election manifesto. It is quite rewarding that people have taken it to their hearts, and that Chris Grayling actually takes it to bed with him and reads it in such detail that he can memorise so much of it.
The debate affects every Member's constituents, irrespective of which part of the United Kingdom they represent. Those of us who represent English constituencies sense that we have been left out of any real debate about student finance over the past two years. Whatever we might think about what has happened in Scotland, the reality is that the devolved Scottish Parliament grasped a fundamental issue and dealt with it. Whether MSPs dealt with it rightly or wrongly is clearly a matter for them and not for this House.
It was interesting to see Conservative Members display the politics of envy about the Barnett formula. If the Conservatives' new policy is to abolish the Barnett formula, they ought to tell their friends in Scotland, who would find it very difficult to determine their policy in those circumstances.
I thank the Minister for the candid way in which she exposed the real inequities experienced by students from poorer backgrounds when they try to get into our universities. It is refreshing to hear a Minister expose the real problem in detail, and Barking is clearly no different from many other parts of the country, especially areas such as Leeds and parts of the north-east where I worked as a teacher.
What emerged from the debate was the sad fact that, unless we tackle the issue of post-16 youngsters staying on at school or college, we shall have this debate in 10 years' time and nothing will have changed at all. It was therefore incredibly sad when on
That statement undermined every further education facility and sixth form college in Britain. How can we possibly expect to encourage young people to go into forms of education other than school when the chief executive makes such comments? If nothing else comes out of the debate, I hope the Minister will do all she can to take the chief executive to one side and make it clear to him that he owes every FE college in the country, other than those that have been inspected, an apology. Only five colleges were inspected, and that was the basis on which he made his remarks. I hope that, in her usual candid way, the Minister will respond to that directly in her winding-up speech.
My hon. Friend Mr. Rendel made a powerful and convincing case, as did other Members, about the effects of student support arrangements following the Teaching and Higher Education Act 1998. There is no doubt that the level of student debt and poverty is beginning seriously to damage not only participation but the fabric of our university system.
I should choose my words carefully. I apologise profusely if I got the hon. Member's orientation wrong.
The hon. Member for North-East Bedfordshire spoiled his contribution by making an unresearched attack on Liberal Democrat policies, especially costings. He may deride the fact that we went into a general election with a costed manifesto, but the Institute for Fiscal Studies examined it and made it clear that every costing stood up to scrutiny. It was disingenuous of him and other Conservative Members to attack the cost of our policies when the Conservatives went into the general election without a costed manifesto, but with a commitment to cut public expenditure by £20 billion. That is the declared objective of the new leader of the Conservative party: in time, the Conservatives want to cut public expenditure. There has to be some honesty about the way in which the new Conservative Front Benchers tackle student debt and poverty.
In his passionate defence of further education, as ever, the hon. Member for Bury, North spoke a lot of sense. We will disagree about tuition fees. He has always held that position; we have always held a principled view and will continue to do so.
Mr. Hopkins hit the nail on the head: it is investment that is needed, and the most effective and fairest way to provide it is through a direct tax system.
Valerie Davey made an uncharacteristic intervention. She said that those who do not go to university do not benefit from those who do. That is wrong. We all benefit from the skills of people who go to university, irrespective of whether we have had that opportunity ourselves.
I appreciate the hon. Gentleman recalling my comment and I would like to clarify what I said. It has to be recognised that those who do not go to university pay tax, to the advantage of those who do. I said not that people at university have all the benefit, but that the contribution to our society of people who are working should be recognised, as the tax they pay benefits those at university.
The hon. Member for Luton, North answered that point. First, graduates pay significant additional taxation throughout their lives and, secondly, the whole of society benefits from graduates.
I should also mention Chris Grayling, who demonstrated a real commitment to resolving the issue. I was interested in the way in which he pursued the Tory party's proposal to raise the threshold immediately. Perhaps the financial ramifications of that proposal should be made clear. As the hon. Gentleman knows, the costings calculated by the House of Commons Library show that a medical graduate leaving university with a debt of £27,000 would have a debt of more than £50,000 after five years. I am sure that was not what the hon. Gentleman had in mind.
The debate has shown that the House is committed to resolving the problems—Liberal Democrats certainly are. That contrasts with the uncharacteristically puerile remark by the Secretary of State to the vice-chancellors on
"Universities are not a birthright for the middle classes . . . Richer kids are not brighter than poorer kids."
That is a disingenuous statement. It is not an either/or situation. We are not fighting a class war over whether some kids should go to university and others should not. We want a meritocracy in which everyone, including students from poorer backgrounds, has the chance to go to university.
The facts speak for themselves. The Government, like their predecessors, have failed to attract students from poorer backgrounds to university. The significant difference is that the present Government admit it. Between 1994 and 1999 only 870 additional students from the lower socio-economic group went to university. The fact that we have been unable to break down that barrier is a huge slur on our education system and our society.
In Labour's first two years in office, the number of students from poorer backgrounds declined. I believe that that was a direct response to the 1998 Act and the furore over student finance.
Other factors also affect poorer students, most of whom go to local universities, which inevitably are cheaper. That is wrong: students should be able to choose the course that is right for them at the university that is right for them. They should not always have to consider the local option. UCAS statistics show that students from more affluent backgrounds are prepared to travel an average of 82 miles to university, whereas those from poorer backgrounds travel an average of 42 miles. An analysis of the mosaic database reveals that students from poorer backgrounds tend to apply for low-cost courses—those that do not require a large supplementary income.
Medical students are a special problem because they cannot earn additional income. The point about whether it is good for students to go to work is academic for medical students, because most of them are on their course for 50 weeks a year. They cannot exist at university without huge parental support. The sad fact is that 80 per cent. of all medical students are from the top two socio-economic groups, and virtually none from the poorer groups. That is not right and we need to tackle it.
A recent analysis of the funding of medical students shows that 48 per cent. of those who come from semi-skilled or unskilled backgrounds receive no parental support at all. People cannot exist at medical school without significant extra support. Once the loans have run out, where do they go?
The Minister and the hon. Member for North-East Bedfordshire laughed at the work done in Scotland and the post-Cubie arrangement. I found that, and the response to the Reece report, rather sad. Not once in the debate did the Minister cite any of the research undertaken in Scotland following Cubie or Pamela Reece's research in Wales. We achieved a coalition with our colleagues in Scotland to do something about student finance. We achieved consensus when the Deputy First Minister, Jim Wallace, and the late Donald Dewar buried the hatchet and reached a compromise. The blind obstinacy of a Government who say that Andrew Cubie's findings and the Reece inquiry have no part to play is staggering.
Now there is to be a review. Interestingly, it was announced on a fringe of the Labour party conference. It was not announced to the House, there is nothing in the Library about it and no hon. Member knows any details. What are its terms? Can any of us become involved? Can we present evidence? Surely we all have a part to play.
We know that the hon. Member for Luton, North is a key player, because he has influenced the review. How long will it take? The papers say that it might conclude in December or January. Will Parliament have a say? Will there be a debate? Will the Education and Skills Committee be asked to undertake an inquiry? Ministers are asked to speak to the Committee but it is not currently undertaking any inquiries. Surely there is an opportunity there.
No doubt when Conor Ryan and Andrew Adonis decide the outcome and report to No. 10, the details will be revealed to the House—sorry, I mean to the "Today" programme or The Guardian, which today informs us that the matter has already been resolved. The Prime Minister and the Chancellor have had a meeting with their political advisers, to which the Minister and the Secretary of State were not invited—and neither were you, Mr. Deputy Speaker—and suddenly The Guardian is called in and, in order to trump us, all is revealed on the day of the Liberal Democrat debate on student finance.
What is the truth? Is the story in The Guardian today absolute nonsense? Is it true that the Secretary of State's plan for a grant and a graduate tax for everybody was her preferred option, but that it has been kicked into touch?
What a way to run a review. It was announced at the Labour party conference, but there has been no debate in the House on a matter of such importance and with such a consensus of view. The policy for the whole country has been decided by a little coterie of friends late at night at No. 10 and then leaked to The Guardian. Do the Government ever learn? The Secretary of State told me that it was pointless to speculate about specifics, but The Guardian has revealed the whole policy for the next 15 or 20 years.
We will sign up to the principle that students have to pay for part of their stay at university. In fact, in 1995 at our party conference in Nottingham, my hon. Friend Mr. Foster ensured that it became party policy that students had to make some repayment because they benefit from that education, as do employers and the state. That remains our position. We accept that students should make a significant contribution to maintenance costs. That is what Cubie said, and we do not have a problem with it, but we will not compromise on our principles about tuition fees.
The state invests in its people through the tuition fees. If the state is not prepared to do that, the Government cannot be serious about creating a knowledge economy. We have to make that investment, and that is our bottom line. This debate has revealed a consensus in the House to make progress. We will willingly take part in the Government's review: will they have us?
With the leave of the House, I wish to respond to the debate.
We have had an interesting debate and some hon. Members have chosen to address some of the real challenges that we face in developing a strategy and policy to meet our ambitious targets for higher education. The debate was initiated by the Opposition—
They are both the same. Either way, we do not have much to learn from the their contributions today or from their actions outside the House. I remind the House, for example, that the Conservatives slashed the unit funding by 36 per cent., put a cap on student numbers and starved our institutions of the money that they needed to retain their global status.
The Liberal Democrats, on the other hand, do not have a clue. The infinite elasticity of their 1p on tax is the stuff that dreams are made of. For example, they have responded to every plea on higher education. They would abolish fees, restore grants for poor students, and open access to benefits for students in the holidays—[Hon. Members: "No."] I have read it all in Liberal Democrat manifestos and other documents. They would raise the threshold for repaying loans, put up salaries in higher education institutions, give universities more money for taking working-class children, give more money to universities for every student that they take, solve the equal pay issue in higher education, extend generous student support to part-time students and bring in student support for all students in further education. Then the Liberal Democrats would spend the change from the extra 1p tax by cutting class sizes, recruiting more teachers and spending more on equipment for our schools. Who do they think they are kidding?
I welcome Alistair Burt to his post and I look forward to engaging in debates with him. As I understand it, he will consult on subsidies for poor students by the introduction of maintenance grants and on top-up fees to give our universities some money. As I see it, the only outcome of that will be taxing the very rich, the only people who still occasionally support the Conservative party. Given the hon. Gentleman's record at the Child Support Agency, we should not have expected much more from him today.
The Minister is trying to draw conclusions that simply are not there. I made no specific reference to any particular partner group. We are having an open consultation with all the parties involved in higher education. That is in total contrast to the closed review that the Minister started, but which now seems to have been completed by the Chancellor and the Prime Minister.
I was simply drawing to the House's attention the spending implications of some of the suggestions that the Conservatives have put on the table.
My hon. Friend Mr. Chaytor asked us not to abandon the principle that those who gain from education contribute towards it. I can give him the assurance that we will not. I also recognise my hon. Friend's support for early-day motion 308, and I recognise the additional financial pressures that exist for students in London. I hope that he recognises that their entitlement to loans is 23 per cent. higher than elsewhere, but we will keep that under review.
Chris Grayling showed more concern for today's students than for our ambition to increase participation to half of all people under 30 in Britain today. The financial burden imposed on today's students by the mortgage-style loans system introduced by the Conservative party in government creates far more difficulties for today's graduates than our proposal, which is based on the ability to repay because it is income-contingent.
My hon. Friend Mr. Hopkins is right that we are a listening Government. We are listening to him and to all other hon. Members. I agree that providing support to enable people to participate post-16 is one of the key issues that we must address.
Mr. Willis also referred to post-16 participation. I agree entirely that if we cannot get that right, we will not achieve the ambition that we have set ourselves. Part of our task is to ensure that those students who go through further education—most of the 16 to 19-year-old cohort is in that FE sector—should receive high-quality education. We must work to improve the retention and attainment rates of those students who go through the education system. The attention that we are placing on raising quality and standards in the FE sector—a matter addressed by the chief executive of the Learning and Skills Council—is important. The matter may not have been raised in the most appropriate way, but the issue is important. I hope that the hon. Gentleman will join me and the Government in what we are trying to do to raise standards.
Only the Government have the credibility, the energy, the commitment and the bottle to tackle the tough and challenging issues that need to be tackled to achieve real change. Getting more people through higher education will not be easy. We have to keep more young people in full-time education beyond school-leaving age. We must raise attainment levels at level 3. We must lift young people's aspirations, especially those from the lower socio-economic groups. We must change attitudes in schools, universities and colleges.
As my right hon. Friend the Secretary of State said in her speech to the universities on Monday, we want universities to put down roots in schools and colleges so that the presence of someone from higher education in our schools becomes the norm. We want young people's ambitions to be raised so that they are persuaded that university is for people like them.
We must also ensure that the student funding systems are right to support our policies. I should like to make three brief points.
First, we should not get the issue out of proportion. The UCAS figures for this year, far from showing a decline, show a healthy increase in the number of people seeking and securing a place in higher education. The exception, interestingly enough and in contradiction to an earlier claim, is Scotland. That goes for mature students, who belong to the group that many have claimed were the most fearful of debt and most likely to reject university because of the new funding regime.
Secondly, we need to be clear about what is in place already. The tuition fee is means tested. This year, more than half of students will pay no fees at all. There is a range of specifically targeted schemes to support those students most likely to face most financial difficulties. That range includes opportunity bursaries, grants for disabled students, grants to students with dependants and child care grants.
Thirdly, I believe that all hon. Members share and accept the important principle that it is right that those who benefit from the investment in higher education should contribute to the costs of it. The issues that we need to address have to do with the balance between the contributions from graduates, their families and the state, and about how and when repayments occur.
That is why we have established our review. Now is the right time to take stock. We want to look at the concerns that have been expressed about student debt, especially among students from lower-income families. We want to maintain and enhance the standards of excellence in our universities, and we want to make sure that we can reach our target of widening access.
Despite speculation to the contrary, nothing is ruled in, and nothing is ruled out. This is a complex and difficult area, and the debate has shown that we will need to consider it carefully.
I reassure hon. Members that the Government will want to consult widely on the options that we develop, but our ambition is clear. We want to open up opportunity for many more young people. We want them to have the opportunity to widen their horizons by engaging in further and higher learning, and to develop their intellectual skills, imagination, confidence and understanding.
We want young people to be able to enhance the qualifications that they gain so that they can contribute more to the world of work, and to be able to earn more through their adult lives. We want them to have the opportunity to contribute fully to our country's economic, social, cultural and political life. Our agenda is about widening opportunity for individuals, and enhancing the potential for the economy.
Higher education has a vital contribution to make to that agenda. It is our task to deliver, and we will.
Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to
Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
That this House welcomes the approach the Government has taken to higher education since 1997, particularly the extra investment the Government is making in Higher Education, meaning an extra £1.7 billion of publicly planned funding in the six years to 2003–04; further welcomes the Government's commitment to widening participation so that half of under-30 year olds will benefit from the opportunities of higher education by the end of the decade; supports the Government's reforms of student support, introduced in 1998, which have increased the resources available to higher education establishments; agrees with the principle, underlying these reforms, that those who benefit from the considerable advantages that higher education can offer are asked to contribute when they can afford to; recognises that the Government has always been committed to monitor and to review the impact of these reforms; and further welcomes the Secretary of State for Education and Skills' recent announcement of this review.