New Clause 5 — Abolition of tuition fees chargeable to qualifying student

Higher Education Bill – in the House of Commons at 2:21 pm on 31st March 2004.

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'(1) This section applies to fees charged by a relevant institution in respect of a qualifying course in connection with the undertaking of that course by a qualifying student.

(2) No fees to which this section applies may be charged in respect of any academic year unless regulations under section 22 of the 1998 Act (new arrangements for giving financial support to students) make provision in the case of all qualifying students for authorising a grant in respect of that academic year to be paid directly to the relevant institution the amount of which is equal to the amount of the fees.

(3) In this section—

"academic year", in relation to a course, means an academic year applicable to the course;

"qualifying course" means a course which is—

(a) a designated course within the meaning of the student support regulations, and

(b) provided by an institution in England within the meaning of section 62 (7) of the 1992 Act;

"qualifying student" means a person who is of the class specified in Schedule 1 to the student support regulations other than—

(a) persons who are not eligible for support under the student support regulations by reason of regulations 4(2) of those regulations, and

(b) persons who are not eligible for a grant for fees under the student support regulations by reason of regulations 10(2) of those regulations;

"relevant institution" means an institution specified by the Secretary of State in a condition under section 68(1) of the 1992 Act or section 7(1) of the 1998 Act;

"the student support regulations" means the Education (Student Support) (No. 2) Regulations 2002 (S.I., 2002/3200).'.— [Mr. Collins.]

Brought up, and read the First time.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I beg to move, That the clause be read a Second time.

Photo of Michael Lord Michael Lord Second Deputy Chairman of Ways and Means

With this it will be convenient to discuss the following:

New clause 6—Condition by English funding bodies in relation to fees of prescribed amount—

'(1) A condition under this section requires the governing body of the relevant institution—

(a) to secure that, in respect of any qualifying course, the qualifying fees in respect of any academic year which begins during the grant period at a time when an English approved plan is in force in relation to the institution are equal to the prescribed amount,

(b) to secure that, in respect of any qualifying course, no qualifying fees are charged in respect of any academic year which begins during the grant period at a time when no English approved plan is in force in relation to the institution, and

(c) to comply with the general provisions of any English approved plan that is in force in relation to the institution during any part of the grant period during which it is in force.

(2) For the purposes of subsection (1)—

(a) an academic year which begins at the same time as the grant period is to be taken to begin during the grant period, and

(b) an academic year which begins with the day on which an English approved plan comes into force is to be taken to begin at a time when the plan is in force.

(3) A condition under this section must provide—

(a) in the event of a failure by the governing body to comply with the requirement specified in subsection (1)(a)—

(i) where the qualifying fees are equal to the prescribed amount, for the imposition by the funding body on the governing body of any financial requirements required by a direction under section 35(1)(a), and

(ii) where the qualifying fees exceed that amount, for the imposition by the funding body on the governing body of any financial requirements required by a direction under section 35(1)(a) and of other financial requirements determined by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22,

(b) in the event of a failure by the governing body to comply with the requirement specified in subsection (1)(b), for the imposition by the funding body on the governing body of financial requirements determined by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22, and

(c) in the event of a failure by the governing body to comply with the requirement specified in subsection (1)(c), for the imposition by the funding body on the governing body of any financial requirements required by a direction under section 35(1)(a).

(4) Any financial requirements imposed by virtue of subsection (3) must relate to one or more of the following—

(a) the repayment, with or without interest, of the whole or any part of any sums received by the governing body in respect of the grant, loan or other payment in question,

(b) the withdrawal or reduction of any amount that has been awarded but not yet paid in respect of the grant, loan or other payment in question, or

(c) the refusal to award (or to award to the extent expected) any other grant, loan or other payment under section 65 of the 1992 Act or (as the case may be) section 5 of the 1994 Act in respect of the grant period or any subsequent period.

(5) Where—

(a) a condition is imposed under this section in connection with any grants, loans or other payments made to the governing body of a relevant institution, and

(b) those payments are to any extent made in respect of persons undertaking a course which is provided in whole or part by any other institution, then, for the purposes of this section, fees payable by such persons to the other institution are to be regarded as fees payable by them to the relevant institution.

(6) The first regulations to be made under subsection (11) prescribing the prescribed amount shall prescribe a single amount, except where subsection (8) applies, in which case a lower amount may be prescribed.

(7) The Secretary of State may not make the first regulations under subsection (11) prescribing the prescribed amount unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament.

(8) This subsection applies where the qualifying fees are for—

(a) the final academic year of a course where that academic year is normally required to be completed after less than 15 weeks' attendance;

(b) a sandwich course where during an academic year any periods of full-time study are in aggregate less than 10 weeks;

(c) a course of initial training of teachers, including such a course leading to a first degree, where during an academic year any periods of full-time study are in aggregate less than 10 weeks;

(d) a course provided in conjunction with an overseas institution where during an academic year the periods of full-time study are in aggregate less than 10 weeks;

(e) a sandwich course or a course provided in conjunction with an overseas institution where the periods of full-time study at the institution in the United Kingdom are 10 weeks or more, but in respect of the academic year and any previous such academic years the aggregate of any one or more periods of attendance which are not periods of full-time study at the institution (disregarding intervening vacations) exceeds 30 weeks.

(9) Where regulations under subsection (11) have been made prescribing the prescribed amount no regulations under that subsection may be made increasing that amount unless the Secretary of State is satisfied that the increase is no greater than is required to maintain the value of the amount in real terms.

(10) For the purposes of subsection (9) the Secretary of State is to have regard to such index of prices as may be specified in, or determined in accordance with, regulations made by him under this subsection.

(11) In this section—

"academic year", in relation to a course, means an academic year applicable to the course;

"funding body"has the same meaning as in section 22;

"the grant period"means the period in respect of which the grants, loans, or other payments to which the relevant condition under section 22 relates are made;

"prescribed" means prescribed by regulations made by the Secretary of State;

"the prescribed amount" means the amount prescribed by regulations in accordance with this section;

"qualifying course" means a course of any description prescribed for the purposes of this section;

"qualifying fees", in relation to a relevant institution, means the fees payable to the institution by a qualifying person in connection with his undertaking a qualifying course;

"qualifying person" means a person falling within any class of persons prescribed for the purposes of this section;

"relevant institution" has the same meaning as in section 22.'.

New clause 7—Condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount—

'(1) A condition under this section requires the governing body of the relevant institution—

(a) to secure that, in respect of any qualifying course, the qualifying fees in respect of any academic year which begins during the grant period at a time when a Welsh approved plan is in force in relation to the institution are equal to the prescribed amount,

(b) to secure that, in respect of any qualifying course, no qualifying fees are charged in respect of any academic year which begins during the grant period at a time when no Welsh approved plan is in force in relation to the institution, and

(c) to comply with the general provisions of any Welsh approved plan that is in force in relation to the institution during any part of the grant period during which it is in force.

(2) For the purposes of subsection (1)—

(a) an academic year which begins at the same time as the grant period is to be taken to begin during the grant period, and

(b) an academic year which begins with the day on which a Welsh approved plan comes into force is to be taken at a time when the plan is in force.

(3) A condition under this section must provide, in the event of a failure of the governing body to comply with any of the requirements specified in subsection (1), for the imposition by the Higher Education Funding Council for Wales on the governing body of financial requirements determined by the Council in accordance with principles specified by the Assembly in the condition under section 25.

(4) Any financial requirements imposed by virtue of subsection (3) must relate to one or more of the following—

(a) the repayment, with or without interest, of the whole or any part of any sums received by the governing body in respect of the grant, loan or other payment in question,

(b) the withdrawal or reduction of any amount that has been awarded but not yet paid in respect of the grant, loan or other payment in question, or

(c) the refusal to award (or to award to the extent expected) any other grant, loan or other payment under section 65 of the 1992 Act or (as the case may be) section 5 of the 1994 Act in respect of the grant period or any subsequent period.

(5) Where—:

(a) a condition is imposed under this section in connection with any grants, loans or other payments made to the governing body of a relevant institution, and

(b) those payments are to any extent made in respect of persons undertaking a course which is provided in whole or part by any other institution, then, for the purposes of this section, fees payable by such persons to the other institution are to be regarded as fees payable by them to the relevant institution.

(6) In this section—

"academic year", in relation to a course, means an academic year applicable to the course;

"the grant period" means the period in respect of which the grants, loans, or other payments to which the relevant condition under section 25 relates are made;

"prescribed" means prescribed by regulations made by the Assembly;

"the prescribed amount" means the amount prescribed by regulations in accordance with this section;

"qualifying course" means a course of any description prescribed for the purposes of this section;

"qualifying fees", in relation to a relevant institution, means the fees payable to the institution by a qualifying person in connection with his undertaking a qualifying course;

"qualifying person" means a person falling within any class of persons prescribed for the purposes of this section;

"relevant institution" has the same meaning as in section 25.'.

New clause 8— Condition that may be required to be imposed by English funding bodies (No. 2)—

'(1) A condition under this section requires the governing body of the relevant institution—

(a) to secure that, in respect of any qualifying course, no fees are payable to any relevant institution by any qualifying person, and

(b) to comply with the general provisions of any English approved plan that is in force in relation to the institution during any part of the grant period during which it is in force.

(2) For the purposes of subsection (1)—

(a) an academic year which begins at the same time as the grant period is to be taken to begin during the grant period, and

(b) an academic year which begins with the day on which an English approved plan comes into force is to be taken to begin at a time when the plan is in force.

(3) A condition under this section must provide, in the event of a failure by the governing body to comply with the requirement specified in subsection (1), for the imposition by the funding body on the governing body of any financial requirements determined by the funding body in accordance with principles specified by the Secretary of State in the condition under section 22.

(4) Any financial requirements imposed by virtue of subsection (3) must relate to one or more of the following—:

(a) the repayment, with or without interest, of the whole or any part of any sums received by the governing body in respect of the grant, loan or other payment in question,

(b) the withdrawal or reduction of any amount that has been awarded but not yet paid in respect of the grant, loan or other payment in question, or

(c) the refusal to award (or to award to the extent expected) any other grant, loan or other payment under section 65 of the 1992 Act or (as the case may be) section 5 of the 1994 Act in respect of the grant period or any subsequent period.

(5) In this section—

"academic year", in relation to a course, means an academic year applicable to the course;

"funding body" has the same meaning as in section 22;

"the grant period" means the period in respect of which the grants, loans, or other payments to which the relevant condition under section 22 relates are made;

"prescribed" means prescribed by regulations made by the Secretary of State;

"qualifying course" means a course of any description prescribed for the purposes of this section;

"qualifying person" means a person falling within any class of persons prescribed for the purposes of this section;

"relevant institution" has the same meaning as in section 22.'.

New clause 9—Condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)—

'(1) A condition under this section requires the governing body of the relevant institution—

(a) to secure that, in respect of any qualifying course, no fees are payable to any relevant institution by any qualifying person, and

(b) to comply with the general provisions of any Welsh approved plan that is in force in relation to the institution during any part of the grant period during which it is in force.

(2) For the purposes of subsection (1)—

(a) an academic year which begins at the same time as the grant period is to be taken to begin during the grant period, and

(b) an academic year which begins with the day on which a Welsh approved plan comes into force is to be taken to begin at a time when the plan is in force.

(3) A condition under this section must provide, in the event of a failure of the governing body to comply with any of the requirements specified in subsection (1), for the imposition by the Higher Education Funding Council for Wales on the governing body of financial requirements determined by the Council in accordance with principles specified by the Assembly in the condition under section 25.

(4) Any financial requirements imposed by virtue of subsection (3) must relate to one or more of the following—

(a) the repayment, with or without interest, of the whole or any part of any sums received by the governing body in respect of the grant, loan or other payment in question,

(b) the withdrawal or reduction of any amount that has been awarded but not yet paid in respect of the grant, loan or other payment in question, or

(c) the refusal to award (or to award to the extent expected) any other grant, loan or other payment under section 65 of the 1992 Act or (as the case may be) section 5 of the 1994 Act in respect of the grant period or any subsequent period.

(5) In this section—

"academic year", in relation to a course, means an academic year applicable to the course;

"the grant period" means the period in respect of which the grants, loans, or other payments to which the relevant condition under section 25 relates are made;

"prescribed" means prescribed by regulations made by the Assembly;

"qualifying course" means a course of any description prescribed for the purposes of this section;

"qualifying person" means a person falling within any class of persons prescribed for the purposes of this section;

"relevant institution" has the same meaning as in section 25.'.

New clause 10— Access to student loans—

'In determining eligibility for student loans age may not be taken into account.'.

New clause 12—Fee repayments for graduates employed in public sector professions—

'The Secretary of State shall make provision for fee repayments to be met out of public funds for graduates employed as—

(a) teachers in state maintained schools,

(b) public law enforcement officers,

(c) staff in the National Health Service,

(d) social workers by local authorities, and

(e) any other public sector worker specified by regulations who is required to have a graduate level qualification to enter that profession.'.

New clause 13'Repayment of student loans through voluntary service or prescribed employment—

'(1) The Secretary of State may make regulations allowing any borrower to repay any student loan, in whole or in part, through the performance of voluntary service or employment in a particular occupation.

(2) Any such regulations may prescribe the type of voluntary service or the occupations which are eligible for such repayment, and the minimum period for which the eligible service or employment is to be performed.

(3) Any such regulations may make different provision for different circumstances.

(4) Any such regulations shall be laid before Parliament at least two calendar months before they are due to take effect, and shall be subject to scrutiny in such form as both Houses of Parliament may prescribe.'.

New clause 17—Government interest rate and fee deferral—

'(1) All fees shall be deferred, to be repaid on an income contingent basis at a government rate of interest.

(2) A government rate of interest shall also be charged on all student loans.

(3) All monies raised from interest payments shall be used to finance loans to students, to be repaid on terms set out by the Secretary of State, which must take into account a student's personal and household financial circumstances.'.

New clause 19—Commencement of liability for repayment of loans—

'(1) The Education (Student Loans) (Repayment) Regulations 2000 (S.I., 2000/944) are amended as follows.

(2) After regulation 11(1), there is inserted—

"(1A) A borrower shall not be liable to repay any of his student loan before the first day of the first year of assessment which falls more than fifteen years after the date on which his eligibility terminates under regulation 8 or 35 of the Education (Student Support) (No. 2) Regulations 2002.".'.

New clause 20—Commencement of liability for repayment of loans (No. 2)—

'(1) The Education (Student Loans) (Repayment) Regulations 2000 (S.I., 2000/944) are amended as follows.

(2) After regulation 11(1), there is inserted—

'(1A) A borrower shall not be liable to repay any of his student loan before the first day of the first year of assessment which falls more than ten years after the date on which his eligibility terminates under regulation 8 or 35 of the Education (Student Support) (No. 2) Regulations 2002.".'.

New clause 21—Commencement of liability for repayment of loans (No. 3)—

'(1) The Education (Student Loans) (Repayment) Regulations 2000 (S.I., 2000/944) are amended as follows.

(2) After regulation 11(1), there is inserted—

"(1A) A borrower shall not be liable to repay any of his student loan before the first day of the first year of assessment which falls more than five years after the date on which his eligibility terminates under regulation 8 or 35 of the Education (Student Support) (No. 2) Regulations 2002.".'.

Amendment No. 128, in page 8, line 37, leave out clauses 22 to 27.

Amendment No. 129, in page 8, line 38, clause 22, leave out from beginning to 'a' in line 40 and insert

'The Secretary of State must, when making any grant to a funding body under section 68 of the 1992 Act or section 7 of the 1994 Act, impose under subsection (1) of the section concerned'.

Amendment No. 32, in page 8, line 41, leave out '23' and insert

'[condition by English funding bodies in relation to fees of prescribed amount]'.

Amendment No. 53, in page 8, line 41, leave out '23' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)]'.

Amendment No. 33, in page 9, line 11, leave out clauses 23 and 24.

Amendment No. 19, in page 9, line 25, clause 23, at end insert

'(d) to ensure that, in respect of any qualifying course, the qualifying fees charged to any eligible student who has received an unconditional offer of a university place through the UCAS system prior to 1st April 2006 shall not exceed the basic amount.'.

Amendment No. 20, in page 10, line 31, at end insert—

'"eligible student" means a student eligible for a grant under regulations made under section 22(2)(a) of the 1998 Act;'.

Amendment No. 130, in page 11, clause 24, leave out lines 19 to 21 and insert—

'(ii) each House of Parliament has at any time after 1st January 2010 passed a resolution that, with effect from a date specified in the resolution, the higher amount should be increased to an amount specified in the resolution, and the increase is an increase to the specified amount with effect from the specified date.'.

Amendment No. 34, in page 11, line 30, clause 25, leave out '26' and insert

'[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.

Amendment No. 54, in page 11, line 30, leave out '26' and insert

'[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.

Amendment No. 35, in page 11, line 37, leave out clause 26.

Amendment No. 36, in page 13, line 11 clause 27, leave out '23 or 26' and insert

'[condition by English funding bodies in relation to fees of prescribed amount] or [condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.

Amendment No. 55, in page 13, line 11, leave out '23 or 26' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)] or [condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.

Amendment No. 37, in page 13, line 18, leave out '23(6) or 26(6)' and insert

'[condition by English funding bodies in relation to fees of prescribed amount](11) or [condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount](6)'.

Amendment No. 56, in page 13, line 18, leave out '23(6) or 26(6)' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)](5) or [condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)](5)'.

Amendment No. 38, in page 13, line 32, leave out '23 or 26' and insert

'[condition by English funding bodies in relation to fees of prescribed amount] or [condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.

Amendment No. 57, in page 13, line 32, leave out '23 or 26' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)] or [condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.

Amendment No. 98, in page 13, line 33, at end insert—

'(4) The Secretary of State shall make provision for fee repayments to be met out of public funds for graduates employed as—

(a) teachers in state maintained schools,

(b) National Health Service staff,

(c) civil servants,

(d) law enforcement officers,

(e) any other profession which the Secretary of State may, from time to time, determine to be appropriate.'.

Amendment No. 71, in page 13, line 37, clause 28, leave out

'Director (as defined by section 29(1)' and insert

'funding body (as defined in section 22(2))'.

Amendment No. 72, in page 13, line 38, leave out 'person' and insert 'body'.

Amendment No. 73, in page 13, line 42, leave out 'person' and insert 'body'.

Amendment No. 74, in page 13, line 45, leave out 'person' and insert 'body'.

Amendment No. 75, in page 14, line 1, leave out clause 29.

Amendment No. 76, in page 14, line 7, clause 30, leave out 'Director' and insert

'relevant authority in relation to England'.

Amendment No. 77, in page 14, line 8, leave out 'his' and insert 'its'.

Amendment No. 22, in page 14, line 16, clause 31, leave out subsection (1).

Amendment No. 110, in page 14, line 20, at end insert—

'(1A) A plan under this section relating to an institution must set out the policy which the institution will observe when determining the level of fees to be charged to qualifying persons.'.

Amendment No. 23, in page 14, line 21, leave out 'also'.

Amendment No. 24, in page 15, leave out lines 6 to 14.

Amendment No. 39, in page 15, leave out lines 6 to 10.

Amendment No. 40, in page 15, line 12, leave out '23' and insert

'[condition by English funding bodies in relation to fees of prescribed amount]'.

Amendment No. 58, in page 15, line 12, leave out '23' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)]'.

Amendment No. 41, in page 15, line 14, leave out '26' and insert

'[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.

Amendment No. 59, in page 15, line 14, leave out '26' and insert

'[condition that may be required to be imposed by the Higher Education Funding Council for Wales (No. 2)]'.

Amendment No. 25, in page 16, line 9, leave out clauses 35 and 36.

Amendment No. 78, in page 16, line 10 clause 35, leave out 'Director' and insert 'relevant authority'.

Amendment No. 79, in page 16, line 10, leave out from 'institution' to 'has' in line 12.

Amendment No. 42, in page 16, line 11, leave out '23' and insert

'[condition by English funding bodies in relation to fees of prescribed amount]'.

Amendment No. 60, in page 16, line 11, leave out '23' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)]'.

Amendment No. 43, in page 16, line 12, leave out '23(1)(a) or (c)' and insert

'[condition by English funding bodies in relation to fees of prescribed amount](1)(a) or (c)'.

Amendment No. 61, in page 16, line 12, leave out '23(1)(a) or (c)' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)](1)'.

Amendment No. 80, in page 16, line 12, leave out 'that requirement' and insert

'a condition under section 23'.

Amendment No. 81, in page 16, line 13, leave out 'Director' and insert 'relevant authority'.

Amendment No. 82, in page 16, line 14, leave out from beginning to 'impose' in line 15.

Amendment No. 44, in page 16, line 16, leave out '23(3)' and insert

'[condition by English funding bodies in relation to fees of prescribed amount](3)'.

Amendment No. 62, in page 16, line 16, leave out '23(3)' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)](3)'.

Amendment No. 83, in page 16, line 17, leave out 'he' and insert 'the relevant authority'.

Amendment No. 84, in page 16, line 21, leave out 'Director' and insert 'relevant authority'.

Amendment No. 45, in page 16, line 30, clause 36, leave out '26' and insert

'[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.

Amendment No. 63, in page 16, line 30, leave out '26' and insert

'[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.

Amendment No. 46, in page 16, line 31, leave out '26(1)(a) or (c)' and insert

'[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount](1)(a) or (c)'.

Amendment No. 64, in page 16, line 31, leave out '26(1)(a) or (c)' and insert

'[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)](1)'.

Amendment No. 47, in page 17, line 3, leave out '26' and insert

'[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.

Amendment No. 65, in page 17, line 3, leave out '26' and insert

'[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.

Amendment No. 48, in page 17, line 5, leave out '26(3)' and insert

'[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount](3)'.

Amendment No. 66, in page 17, line 5, leave out '26(3)' and insert

'[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)](3)'.

Amendment No. 85, in page 17, line 7, leave out clause 37.

Amendment No. 26, in page 17, clause 38, leave out lines 18 and 19.

Amendment No. 86, in page 17, leave out line 20.

Amendment No. 27, in page 17, leave out lines 22 to 37.

Amendment No. 122, in page 19, line 3, clause 40, at end insert—

'(2A) After subsection (2) there is inserted—

"(2A) The maximum amount of a living cost grant available to any person prescribed by regulations under subsection (2)(b) in relation to an academic year shall not be less than 90 per cent. of the higher amount in relation to that academic year.

(2B) In subsection (2A) 'the higher amount' has the same meaning as in section 23 of the Higher Education Act 2004.".'.

Amendment No. 125, in page 19, line 3, at end insert—

'(2A) After subsection (3) there is inserted—

"(3A) The provision which may be made by virtue of subsection (2)(g) in relation to loans under this section may not include provision—

(a) for a borrower to be liable to make any repayment in respect of such a loan before the first day of the first year of assessment which falls more than fifteen years after the date on which his eligibility for a grant under regulations under subsection (2) terminates, and

(b) for such loans to bear interest before the day specified in paragraph (a).

(3B) In subsection (3A), 'year of assessment' means the period that begins with 6th April and ends with the following 5th April.".'.

Amendment No. 126, in page 19, line 3, at end insert—

'(2A) After subsection (3) there is inserted—

'(3A) The provision which may be made by virtue of subsection (2)(g) in relation to loans under this section may not include provision—

(a) for a borrower to be liable to make any repayment in respect of such a loan before the first day of the first year of assessment which falls more than ten years after the date on which his eligibility for a grant under regulations under subsection (2) terminates, and

(b) for such loans to bear interest before the day specified in paragraph (a).

(3B) In subsection (3A), 'year of assessment' means the period that begins with 6th April and ends with the following 5th April.".'.

Amendment No. 127, in page 19, line 3, at end insert—

'(2A) After subsection (3) there is inserted—

"(3A) The provision which may be made by virtue of subsection (2)(g) in relation to loans under this section may not include provision—

(a) for a borrower to be liable to make any repayment in respect of such a loan before the first day of the first year of assessment which falls more than five years after the date on which his eligibility for a grant under regulations under subsection (2) terminates, and

(b) for such loans to bear interest before the day specified in paragraph (a).

(3B) In subsection (3A), 'year of assessment' means the period that begins with 6th April and ends with the following 5th April.".'.

Amendment No. 13, in page 21, line 16, clause 43, leave out paragraph (a).

Amendment No. 49, in page 21, line 16, leave out

'24(1) or (2)(a)(ii) or (b)(ii)' and insert

'[condition by English funding bodies in relation to fees of prescribed amount](7)'.

Amendment No. 14, in page 22, clause 48, leave out lines 7 to 18.

Amendment No. 28, in page 22, leave out lines 8 to 10.

Amendment No. 50, in page 22, line 8, leave out '23(6)' and insert

'[condition by English funding bodies in relation to fees of prescribed amount](6), (7) and (11)'.

Amendment No. 68, in page 22, line 8, leave out '23(6)' and insert

'[condition that may be required to be imposed by English funding bodies (No. 2)](5)'.

Amendment No. 51, in page 22, leave out line 9.

Amendment No. 15, in page 22, leave out lines 22 to 25.

Amendment No. 16, in page 22, leave out lines 30 and 31.

Amendment No. 17, in page 22, line 42, leave out from beginning to 'and' in line 45.

Amendment No. 30, in page 22, leave out line 42.

Amendment No. 52, in page 22, line 42, leave out '26' and insert

'[condition by Higher Education Funding Council for Wales in relation to fees of prescribed amount]'.

Amendment No. 70, in page 22, line 42, leave out '26' and insert

'[condition that may be required to be imposed by Higher Education Funding Council for Wales (No. 2)]'.

Amendment No. 31, in page 22, line 45, leave out 'section 36'.

Amendment No. 7, in page 31, line 1, leave out Schedule 5.

Amendment No. 8, in page 32, line 18, schedule 6, leave out paragraph 1.

Amendment No. 9, in page 32, line 35, leave out from 'Council' to end of line 36.

Amendment No. 10, in page 33, line 11, leave out paragraphs 7 and 8.

Amendment No. 11, in page 33, line 25, leave out from 'Council' to end of line 26.

Amendment No. 12, in page 33, schedule 7, leave out lines 34 to 36.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

We come to the heart of the Bill. There is only one place that the debate can commence, and that is with the words:

"We will not introduce 'top-up' fees and have legislated to prevent them"— the clear, categorical, unequivocal manifesto pledge on which all Labour Members were elected and which their Government are proposing to strong-arm them into breaking.

New clause 5 and various amendments in this large group attempt to draw out the issue of fees. The new clause would prevent the introduction of top-up fees and tuition fees. Let us consider some of the views expressed about the proposed legislation by outside organisations— [Interruption.] We will come to universities, as the Secretary of State seems to be saying something about them.

The British Medical Association

"strongly opposes the introduction of top up fees for any students, including medical students."

The Secretary of State and others will no doubt say that they are introducing the fees to raise money in part to pay for university lecturers and university employees. The National Association of Teachers in Further and Higher Education has said:

"Critics of the Bill should hold their ground."

It goes on:

"We know that when the lid comes off fees, all hell will break loose."

The Association of University Teachers opposes the proposals.

The Secretary of State and Labour Members—or at least some Labour Members—may claim that the package on offer is in the interests of students and that they should welcome it. Presumably they believe that the National Union of Students has organised today's lobby at the House to say how delighted it is with the Government's proposals. I have to disillusion them: it is here to encourage hon. Members to vote not in support of the Bill, but against it.

The NUS has helpfully compiled considerable evidence from overseas on the attitude of students in other countries. We heard much in Committee, as we have at other times, of the Government's proposals for top-up fees modelling those in other countries, and of how the glorious successes and widespread popularity of what has been introduced in Australia, New Zealand and elsewhere would be eagerly welcomed in the United Kingdom. The NUS has been in touch with its equivalents around the world, and that is not what they say.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I give way to the hon. Gentleman, who will no doubt know about legions of students who support his Government's proposals.

Photo of James Plaskitt James Plaskitt Labour, Warwick and Leamington

The new clause would remove the funding stream from universities. In Committee, the hon. Gentleman was unable to tell us how his party would replace that funding stream. Can he tell us now?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The hon. Gentleman is right in his characterisation of the new clause: it would prevent fees. There is no doubt about that; that is its intention and that is what it would achieve. He is also correct that it is the duty of Opposition parties to produce alternative proposals on how that vital funding for universities would be provided. We will do that, and we will do that earlier in this Parliament than the Government produced their final proposals on the subject in the last Parliament. The difference is that, whereas three months before the last general election the Labour party produced the final proposals that it now plans to breach, we will produce proposals earlier in the life-cycle of this Parliament, which we will implement on coming into office.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I give way to the hon. Gentleman, who, in a former capacity, may well have had a role in writing the manifesto, which he is cheerfully about to breach.

Photo of James Purnell James Purnell Labour, Stalybridge and Hyde

On the hon. Gentleman's policies, will he confirm that the envelope has been set for funding those policies by the shadow Chancellor of the Exchequer, Mr. Letwin, and that that is a cash freeze and therefore a real-terms cut in higher education funding? If the extra money that will come from tuition fees is to be removed, how will the hon. Gentleman do anything other than cut quality and student numbers?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I suspect that the hon. Gentleman was one of those who was disappointed when he found that the Opposition's proposals on the pupil passport did not turn out to be what he had hoped and expected it to be. He will be extremely disappointed when he learns of our proposals on higher education; I urge him to wait for them. We are debating the Government's proposals, which are in clear breach of the manifesto on which he stood at the general election.

The Conservative party made exactly the same pledge at the last election. We are keeping our promises and the hon. Gentleman is breaking his. Playing party political games will not help him explain to his constituents why they should believe anything that he says at the next general election, given that he has so cheerfully broken his word from the last one.

Photo of Tony Wright Tony Wright Labour, Cannock Chase

Does the grand total of nine Conservative Members on the Opposition Benches accurately reflect the commitment of the hon. Gentleman's party on this issue?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

Our attendance accurately reflects the eagerness of Opposition Members to allow Labour Members the maximum time for debate. We fully expect them to express more than one view, shall we say, on their happiness to break their manifesto pledge.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

I do not know whether the hon. Gentleman reached the end of his list of expert witnesses. What does he have to say to the Campaign for Mainstream Universities? Its statement today reads:

"The loss of the Bill would deny universities the urgently-needed funding to provide quality education and would cruelly remove the promised improvements in financial support for the poorest students. This would damage the sector as a whole and would be particularly damaging to the Government's aims of widening participation and social exclusion."

That message is borne out by Universities UK. What does he have to say about that?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

It is true—it has been throughout the debate—that the majority of vice-chancellors support the Government's proposals. They are the one and only category of people who do so. The hon. Gentleman should understand that there has been a shift of opinion in the vice-chancellor community in the past few months—from unanimous support of the Government's position to a significant number expressing profound opposition to their proposals.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

No, I will not give way; I am responding to the hon. Gentleman's point. He wanted to talk about the attitude of vice-chancellors, so we will talk about that. Let us consider the attitude of Professor Gillian Slater, the vice-chancellor of Bournemouth university, who said:

"We don't have faith that the cap of £3,000 will not be raised very quickly indeed".

That is what she believes, and it is what many other vice-chancellors believe. She was one of 15 vice-chancellors, alongside 12 university lecturers, who wrote to The Guardian yesterday to express their opposition to the centrepiece of the Government's legislation. I make no pretence of the fact that the majority of vice-chancellors support the Government's proposals. However, they are the only category of people who have taken that position, and even they are not unanimous. All other organisations, including the Association of University Teachers, the National Association of Teachers, the National Association of Teachers in Further and Higher Education and the National Union of Students, are opposed to the Government's proposals. If all the hon. Gentleman can do is say that about 90 vice-chancellors like the proposal, when 55 million people are opposed to it, bring on the election.

I was going through the important comments that had been brought to the attention of the House by the NUS as a result of its consulting its opposite numbers in other countries, on which the Government have modelled their proposals.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills) 2:45 pm, 31st March 2004

From the point of view of a vice-chancellor, is there any more plausibility in the Government's assertion about the firmness of their cap of £3,000 on tuition fees than there was about the Labour party's assertion before the last election that it would not introduce top-up fees? If those assertions are equally valid, does my hon. Friend think that the majority of vice-chancellors welcome the breach of the Government's undertaking or are appalled at it?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

My hon. Friend makes an important point. No doubt we shall consider the Government's minor concessions on the extent to which their word on the £3,000 cap should be taken. The entirety of the Government's concessions amount to this: "It would require primary legislation, taken through both Houses of Parliament, for us to breach our solemn pledge not to raise top-up fees above £3,000." What is this Bill if not primary legislation designed to breach a clear manifesto pledge? I am at a loss to understand why the Government should think that that should impress Labour Back Benchers or anybody else.

Photo of James Clappison James Clappison Conservative, Hertsmere

In the spirit of the intervention of my hon. Friend Mr. Boswell, does my hon. Friend recollect that, in its manifesto, Labour not only promised not to introduce top-up fees but said that the Labour Government had legislated to prevent them?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

My hon. Friend is entirely right. The second sentiment of that part of the Labour party manifesto is particularly interesting given the Government's attitude to amendment No. 128. The Government's line is that the amendment would remove the cap and allow universities to charge any top-up fees that they liked. Unfortunately, there is such a thing as the Teaching and Higher Education Act 1998, which was so important that it was mentioned in the 2001 Labour party manifesto. It enabled the Government to say in the manifesto that they had legislated to prevent top-up fees. That legislation, by which they set such store at the last general election, remains on the statute book, and it is therefore an entirely spurious argument that amendment No. 128 would remove the cap and that universities could charge whatever they liked.

I see that Mrs. Fitzsimons is in her place. Given her present and former capacities, I am sure that she will be delighted to know that the co-president of the New Zealand University Students Association is named Fleur Fitzsimmons.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

Perhaps it is. Fleur Fitzsimmons points out that the introduction of the scheme in New Zealand, which the Secretary of State says is in part the model for the proposals, has been

"an unmitigated disaster . . . Fees act as a significant barrier to participation. The increase in debt has forced a fifth of medical graduates overseas."

We hear similar stories in Canada.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I mentioned the hon. Lady, and I promise that I will give way to her in a moment, once I have finished this point.

We hear that, after 10 years of tuition fees in Canada, fees have jumped by an average of 99 per cent. That reflects precisely the fears expressed by students, the British Medical Association and even some vice-chancellors: once we start on the route of top-up fees, there will be strong, steady and substantial increases. That is justified by the very overseas experience to which Ministers try to turn our attention.

Photo of Ms Lorna Fitzsimons Ms Lorna Fitzsimons Labour, Rochdale

My name is Fitzsimons, which is different from Fitzsimmons; anybody who could spell would recognise that. I am not surprised that the hon. Gentleman exchanges assertions for facts. Does he accept that, year on year between 1997 and 2000, the participation of students from lower socio-economic backgrounds in New Zealand rose from 18 per cent. to 26 per cent? The number of Maori students—who, typically, are less advantaged and in lower socio-economic groups—rose by 46.1 per cent. between 1994 and 2000. I think that that is pretty impressive, does the hon. Gentleman not think so?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I apologise if I was wrong about the hon. Lady's name. I am delighted that she has made it abundantly clear that she regards New Zealand as a model for what the Government are seeking to do, because it has been reported in New Zealand that, after the introduction of precisely the sort of scheme that is proposed for this country, the result was as follows:

"Students from the richest schools are five times more likely to attend university than students from the poorest schools."

It has further been demonstrated that fees have impacted on where students have decided to go to university. New Zealand students therefore continue to oppose top-up fees, and I suspect that, if the hon. Lady was still an NUS office holder in this country—let alone running to become one—she might take the same attitude as all the current NUS office holders take.

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford

Can the hon. Gentleman tell the House how many universities there are in New Zealand?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

It was the hon. Member for Rochdale who said that New Zealand is a great model. I take the view that it is sensible to consider what is sensible for the United Kingdom and what UK organisations do. It is not the Opposition who have been saying, "Let's imitate New Zealand"; it is the Government and Labour Back Benchers, so the hon. Gentleman is only undermining his own side. [Interruption.]

Photo of Michael Lord Michael Lord Second Deputy Chairman of Ways and Means

Order. Jonathan Shaw must contain himself. There is little point in asking a question and not listening to the answer that is given.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

I am afraid that I cannot illuminate the House on the precise number of universities in New Zealand. One of the reasons why I cannot do so is that I cannot recall, when I was the Higher Education Minister in 1994 and Mrs. Fitzsimons was the president of the NUS, her ever coming to me, saying,"The New Zealand approach is exemplary and we should follow it."

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I am grateful to my hon. Friend for that intervention.

I was going through the list of organisations in the education sector that do not support the Government's proposals. Dr. John Brennan, the chief executive of the Association of Colleges, has said:

"After 2010, the Bill as it stands allows universities an essentially unlimited ability to increase tuition fees. We believe this freedom will seriously compromise the chances of young people from working-class backgrounds to attend certain universities."

As I said earlier, 15 vice-chancellors wrote to The Guardian yesterday to say that Government's measures would

"disadvantage the majority of students".

So I am afraid that it is simply not the case that the majority of those in the education sector enthusiastically endorse the Bill. On the contrary, the majority of those who work in education and the organisations that represent students are clearly, unequivocally opposed to the Bill and have called on Labour Members to stand by their manifesto pledges.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I shall give way to the hon. Lady, because I have given way to the hon. Gentleman already. [Interruption.]

Photo of Ms Lorna Fitzsimons Ms Lorna Fitzsimons Labour, Rochdale

The hon. Gentleman has mentioned me a tiny bit more than he has mentioned my hon. Friend Peter Bradley, but there is time. I thank the hon. Gentleman for giving way again, but he makes assertions about my leadership. It is on record that, when I was president of the NUS, I believed that students would have to pay and that we wanted the money to be end-loaded, so that we could increase the maintenance grant. As for what Mr. Boswell said about lobbying when I was president of the NUS, we were comparing a loans system introduced by his colleagues under which it would have been cheaper to give students the money than to administer the system, rather than comparing a variable system, which is what we are discussing now

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

It is very interesting that all those former presidents of the NUS believe that they can speak more for the interests of students than the current president of the NUS. I thought that I had made a flippant comment earlier, but Labour Members clearly believe that all those students have come to lobby Parliament today in support of the Government's legislation. I suggest that they go out to listen to them if that is what they believe.

Since the hon. Lady makes an important comparison about the cost efficiency of measures, let us consider the cost efficiency of the Government's proposals. To raise slightly less than £1 billion a year for universities, the taxpayer will have to spend about £1.2 billion. That does not strike most of us as remotely cost-efficient. In fact, it is an extremely inefficient way to proceed. That arithmetical link— the fact that it will cost the taxpayer about £1.25 for every £1 raised for the university—is clearly even more of a problem if, as is widely expected in the education sector, the £3,000 a year cap is only temporary and will be removed shortly. So the taxpayer will have an even worse deal as time goes on.

One of the most important aspects of the whole debate is the Government's assumption, which they have often repeated, that graduates will almost universally end up in a massively strengthened financial position compared with non-graduates. The figure of a £400,000 premium in lifetime earnings has been bandied around. That is simply not borne out by the latest evidence that is coming to light. Many hon. Members will have seen the report in The Times this Monday about a forthcoming book by Philip Brown of Cardiff university and Anthony Hesketh of Lancaster university, both of whom are leading political economists. They point out that even three years after completing their studies, 40 per cent. of recent graduates are in jobs that do not require degree-level skills. Their survey indicates that average starting salaries for graduates are falling. They have analysed American data—an example that Labour Members often cite—and they seriously query the Government's assumption that 80 per cent. of all new jobs will require degree-level qualifications. Ministers often cite the United States as an exemplar of graduate participation that we should follow. American data apparently show that just 20 per cent. of American workers—not 80 per cent.—make use of degree-level education.

Photo of Mr Harry Barnes Mr Harry Barnes Labour, North East Derbyshire

Very interesting information has been quoted and some of us would want to make use of it, but do the Conservatives therefore now entirely reject the road that they initially went down with the Education (Student Loans) Act 1990, which introduced the principle of student debt, and thus the problems of people being able to continue in education?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I am grateful to the hon. Gentleman for those comments. It is, of course, common ground among all the parties represented in the House that student loans remain the best way to provide for maintenance. They are not ideal, but no party proposes to get rid of student loans that underpin maintenance. The hon. Gentleman takes a different view, but he has not managed to persuade his Front-Bench colleagues about the issues. The view of both the Conservative and Liberal Democrat parties on that angle is that student loans should continue. We are talking about the principle of fees to pay for teaching itself. New clause 5 would strike out such fees, and we believe that the House would be very sensible to support that.

Photo of Brian Iddon Brian Iddon Labour, Bolton South East

I have been listening to the hon. Gentleman for a considerable time. The new clause is about abolishing fees altogether. However, as a former university teacher, I should be delighted if he could tell me how the Conservative party would find the money if not by introducing fees. This is an important debate, and it is right that the House is fully informed of the Conservative policy.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The hon. Gentleman basically repeats a question that one of his hon. Friends asked earlier, and I will not bore the House by giving the same answer. If it is the same question, it will get the same answer.

It is assumed that the Government's concessions on the Bill would ensure that students from lower-income backgrounds would not suffer adversely. Indeed, it is sometimes said that we can perhaps take a leaf out of the American experience and encourage students to work during their studies, because those who cite the American experience think that that is healthy. The Guardian has referred this week to unpublished research by Professor Clare Callender, who has indicated that those students who work for 16 hours a week in term time have an increased chance—of between 10 and 60 per cent.—of getting no better than a lower second-class degree or worse. Hon. Members on both sides of the House ought to reflect on that.

By all means, let us talk about the overall spending envelope towards which the Government propose top-up fees should contribute. The Red Book states that the Government

"will maintain per student spending levels in real terms over the 2004 Spending Review period."

Labour Members may not be aware of the fact that per-student spending levels are lower now than they were in 1997; that they are lower than they were before tuition fees were introduced in 1998, and that they have been lower every year of this Labour Government than they were any year of the preceding Conservative Government. So a commitment simply to maintain per-student spending levels is hardly an act of extraordinary political generosity.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge 3:00 pm, 31st March 2004

Is the hon. Gentleman aware that when the Conservative Government left office in 1997, the Government spending plans for the following two years involved a 6 per cent. decrease in university funding, and the Labour Government had to find the money to make up that deficit, having adopted the Conservatives' spending plans?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The hon. Lady knows that a large number of vice-chancellors are on record as saying that they felt they were duped—their exact word—by the Government when tuition fees were introduced, because the money was subsequently clawed back by the Treasury through lower than expected levels of public finance. That is why many vice-chancellors are not satisfied that, having done that once before when introducing fees, the Government will not do it again when introducing top-up fees.

Let us consider what the pledge means. The 2004 spending review period expires in 2007, which is just one year after the Government propose that top-up fees should come in. At that point the income from top-up fees will be well below the maximum levels that are usually quoted, because there will be only one year's cohort within the system paying top-up fees, yet at that point the Government's commitment even to maintain the present very low levels of student spending in real terms expires. So there is a very real reason for universities to fear that what the Government are giving with one hand, they may take away with the other—indeed, they may take away more than they give.

Photo of Kali Mountford Kali Mountford Labour, Colne Valley

Given his criticism of the alleged claw-back, how can the hon. Gentleman be sure that there will be finances into the future out of general taxation? Can he be sure that his own Government, should there ever be one, would be able to match spending as the present Government can?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

As I said earlier, the hon. Lady will have to wait for our proposals. If she has the genuine interests of universities, taxpayers and students at heart, she will have a pleasant surprise when she sees those proposals unveiled. If she merely has her party's interests at heart, I am afraid it will be a very unpleasant surprise indeed. I look forward to seeing her expression when she sees our plans.

Several hon. Members:

rose—

Photo of Barry Sheerman Barry Sheerman Chair, Education & Skills Committee

The hon. Gentleman is reluctant to tell us the plans of a future Conservative Government for funding for higher education, but having forensically examined some of the comments of vice-chancellors on our proposals, he has said nothing about what vice-chancellors with any memory at all say about the funding of British universities under Conservative Administrations of the '80s and '90s. Will he enlarge on that?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The hon. Gentleman is entitled to say, as I indicated earlier, that the majority of vice-chancellors support the Government's proposals. That is hardly surprising. What is surprising is that there is a significant body of vice-chancellors who do not, so the Government do not have unanimous support for their ideas from any section of the education community. Most other organisations and most other groups in education are unanimously opposed to the Government's proposals. With reference to funding under previous Governments, I am sure vice-chancellors would have liked to have more funding, but the record shows that funding per student under every year of the last Conservative Government was greater than it has been under any year of this Labour Government.

Several hon. Members:

rose—

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I shall give way one last time, as I am keen to make progress so that others can speak in this important debate.

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford

The hon. Gentleman makes some interesting comparisons. He said that there was no unanimity in the education field about the proposals from my right hon. Friend the Secretary of State. Can he recall a time when there was unanimity on any proposal to do with education put forward by a Conservative Government?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

It is rare indeed that the Association of University Teachers, the National Association of Teachers in Further and Higher Education, the National Union of Students and a large bloc of vice-chancellors all strongly in agreement and, as it happens, strongly in agreement that the Government should not proceed with the Bill.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I said I would not give way again, but of course I make an exception for the Minister.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

I am grateful to the hon. Gentleman. He has a former higher education Minister sitting behind him. Will he confirm that all those forces—the NUS, NATFHE, the AUT and everyone he mentioned—came together in absolute coalition when a previous Tory Government moved from student grants to student loans?

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The interesting point is that the Secretary of State is not proposing to reverse that, is he? So that argument goes both ways.

Several hon. Members:

rose—

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I give way to my hon. Friend Mr. Jackson, who I know will make a constructive contribution.

Photo of Robert Jackson Robert Jackson Conservative, Wantage

Part of the coalition that opposed us was the Labour party. I remember the speeches in the Standing Committee by the right hon. Gentleman who is now the Foreign Secretary, anticipating many of the speeches that have now been made from the Conservative side in the course of the current debate. With regard to Conservative alternatives, my hon. Friend is a great admirer of Baroness Thatcher, as am I. Does he remember TINA—there is no alternative? There is no alternative to fees.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

As is well known, my hon. Friend does not agree with our position on that. He is perfectly honourable about that and has set out his reasons cogently. We must beg to disagree on that point. Those on the Conservative Front Bench intend to invite my hon. Friends to stand by the manifesto commitments we made at the last election. I know that my hon. Friend the Member for Wantage feels, for honourable reasons, that he cannot join us in that, but that will not deter the rest of us from continuing to advance what we believe to be the right course for the future of higher education.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

I will not give way again. I have given way an almost unprecedented number of times, and Labour Members who have been intervening at such great length will no doubt start complaining that they do not have a chance to make their own speeches, so I am keen to bring my remarks to a close.

However, there are a couple of important aspects that need to be touched on. The first is debt. Why did the Government decide after the 2001 election that they needed to look again at student financing? One of the major factors was the reports reaching them about worries among students about how they would cope with the level of debt that they had. The Government thought carefully about how they could best address the issue of student or graduate debt, and came up with the proposal that the best way of doing that was to triple the tuition fees that students should pay. That seems an extraordinary way of dealing with debt.

However they slice it, the Government's proposals will result in future graduates leaving with unprecedented levels of debt, which will undoubtedly—academic evidence is unequivocal about this—have the effect of deterring some students from going to some universities to study some subjects. We on the Conservative Benches believe that we should have a system of access to university that proceeds on the basis of ability to learn, not ability to pay. That is why we will vote as we will on these matters.

I shall say a word or two about amendment No. 128. Our view is that new clause 5, which strikes out both top-up fees and tuition fees, is a powerful and important change to the Bill. Amendment No. 128 would strike out the five clauses that collectively not only provide for top-up fees, but provide the teeth for OFFA, the university access regulator, which rightly is strongly disliked in the university sector.

The Secretary of State may have a document from Universities UK in which it indicates—reluctantly, I suspect—that it is prepared to live with OFFA, but that briefing note from Universities UK makes it explicitly clear that it believes that admissions policies should be the responsibility of individual institutions of higher education. That is not what the Government have been saying. The higher education Minister has consistently said in Committee and elsewhere that he believes that admissions should be a matter for individual institutions, and admissions policies should be a matter for OFFA. That is not what Universities UK seeks. That is why we invite Members to support amendment No. 128, not least on the grounds that it would defang a very unpleasant piece of social engineering and interventionism.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

The hon. Gentleman has one last chance to give way.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The amendments and new clauses before us are, indeed, the last chance for the House to vote to uphold the promises all of us made at the last general election. They are the last chance for all of us to vote to give this and future generations of students the same opportunity of access based on the ability to learn, not the ability to pay, which many of us enjoyed when we were 18. They are the last chance for the House to vote for fairness for all classes and all students. We must say no to fees, yes to academic freedom, and yes to a better way forward for higher education than this dishonest and discredited Bill.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I wish to speak to amendment No. 128 in my name and those of my hon. Friends, and on which I shall seek to divide the House. It was recommended by the Public Bill Office as the only way to remove the introduction of variable fees from the Bill, and that is the position that I take. We can talk about OFFA in more detail later. It would be a functional organisation and its work with the Higher Education Funding Council for England would be important. If the amendment were agreed to, that would not be eliminated as an arena for discussion where we could ensure that universities had the right access policies.

Variable fees are a really bad idea because—

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I do not wish to take too many interventions because I wish to give others the chance to speak, but I give way to my hon. Friend.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

Is it not the case that the amendment would remove any incentive whatever for universities to get their access plans through OFFA, because it will remove OFFA's teeth and make it completely ineffective?

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I have much more faith in the university system than my hon. Friend appears to have. The universities try hard and they have new projects, with science ambassadors, and so on, and we are encouraging that. More and more people will be coming in and are coming in because of such projects initiated by the Government.

My concerns are not new; they have been voiced many times during the Bill's anguished course, but they have not yet been satisfactorily dispelled. Variable fees will tie students' choice of degree and career to price. The choice of those with the greatest aversion to debt and those who are likely to feel its burden most—those from lower-income backgrounds—will be affected most. It was pointed out in Committee, whose debate on this matter I have read five times—it was an excellent debate and many of these issues were well and truly discussed—that higher education will be seen as a financial investment and a route to a highly paid job, rather than something to be done for love of learning, and that a variable fee makes the student concentrate more on the marketability of the course that they are about to study. I am sure that my hon. Friend recognises those words, which I wholeheartedly endorse.

It was also pointed out in Committee and by at least 15 vice-chancellors yesterday who wrote to The Guardian—I am aware that others have contradicted this—that variable fees will further widen the difference in income between universities. Those with a higher profile and a smaller proportion of students from lower-income backgrounds, namely the Russell group, will be able to charge higher fees and generate much more income while others will be forced to charge less. There will be no redistribution of income among institutions.

Photo of Ms Lorna Fitzsimons Ms Lorna Fitzsimons Labour, Rochdale

Will my hon. Friend accept from someone who as president of the National Union of Students campaigned for him in the seat that he now represents, that it has been an historical anomaly that those people from the lowest socio-economic background have never achieved more than a maximum of 15 to 20 per cent. representation during the past 40 years in higher education, and that 51 per cent. of students studying in higher education institutions—postgraduate, overseas, mature and part-time students—are subject to variability, and none of the matters that he is addressing and which amendment No. 128 will remove, will address the fact that variability has not done what he claims for the 51 per cent. of people studying in higher education, and will not address the issue of getting better representation in higher education for the people whom he and I came into politics to represent?

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I thank my hon. Friend for her creative work in Norwich during that election. She may or may not think it was valuable looking down at me now, but she is absolutely right about this issue in other areas of higher education. I do not particularly endorse that, but I noticed in the Committee proceedings that some Members said that in those areas that my hon. Friend mentioned, there may not be as much variability as one might think. I see much effort being made to try to eliminate that in terms of part-time students, and others, to try to make it easier for them with bursaries, and so on.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I really do want to allow others time to speak, but I shall give way one last time.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

My hon. Friend made a point about the differential income of universities that he believes would arise from variable fees, and that was my concern before the Government agreed to take responsibility for the cost of the disbursements in grant that the university would have to make. Because of that adjustment, it now seems likely that some of the modern universities, which are teaching-led, will gain up to a 50 per cent. increase on their current income, whereas universities, such as Oxford and Cambridge, that are basically research-led, will have increases in the order of 10 per cent. or less. Therefore, the statistics show that the modern universities, which we all seek to support because they are doing most to widen access, are the ones that will benefit from the new income regime.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

That is a fair point, but if one looks at the whole picture, some universities are enriched, with all the extra money for research from their colleges, and so on, while others do not have such a privileged financial background.

Photo of Barry Sheerman Barry Sheerman Chair, Education & Skills Committee

My hon. Friend chairs the Education and Skills Committee as I do, and we usually work well together, but what does he say to the general criticism that his amendment has been construed as a wrecking amendment, because he is a bad loser, having lost on Second Reading. [Interruption.] Is that a fair criticism?

Photo of Ian Gibson Ian Gibson Labour, Norwich North

Those are really kind words. [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. Will hon. Members try to contain themselves when others are on their feet so that we can all hear what is being said? I am afraid that I could not hear most of that intervention.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I shall treat that intervention with the disdain that I and many other hon. Members believe that it merits.

Part of the argument for variability has been that there are real differences between courses, which should be reflected in their fees. I do not know how we will quantify those differences. Do we match some arbitrary notion of quality to a figure, or do we measure courses against their potential financial pay-offs for the student? Do we judge it by reputation of the institution? How do we think that it will work? The market is unpredictable, and once we further extend the market principle into higher education, we do not know how things will turn out.

Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

Is it not already well documented by Universities UK research that young people from the lowest socio-economic groups invariably attend the modern universities and stay at home because that is the cheapest way that they can study? Is it therefore not clear that such students will always attempt to achieve the lowest cost to themselves and the lowest debt on leaving university? That is the iniquity of variable fees. The Russell group universities will charge much higher fees.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I do not particularly subscribe to my hon. Friend's conclusions, but I admit that there is a problem there that needs addressing. I am sure that other Labour Members will be glad to take up that issue. I want to bash on to give others a real chance to speak.

The need to attract students to under-subscribed courses, say in the sciences—others may deal with that—may lead to such courses being offered at a lower price that neither reflects the cost of running the course or what a graduate might earn in the future. If lower fees are to be used as an incentive, can we reasonably argue that higher fees will not act as a disincentive? I welcome the aid packages that have been put in place to reduce the deterrence factor, but I am not convinced that they will be enough.

Photo of Robert Jackson Robert Jackson Conservative, Wantage

On a point of order, Madam Deputy Speaker. I quite understand why the hon. Gentleman is addressing his own Benches, but some Opposition Members would like to hear what he has to say.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I explained on Second Reading that I had to watch where I turned my back, and nothing has changed much since then.

I welcome those aid packages, but many students who do not qualify will be basing their decisions primarily on price. Even those who do qualify will still be looking for the so-called best deal—a phrase that has been used often.

One of the more seductive arguments for variability has been that while it allows universities to charge higher fees, it also allows them to charge less. I have already spoken about why universities might charge less. The argument concerns me because I can see it being used in the not-too-distant future in favour of raising the cap. Universities are already arguing that £3,000 is not enough to close the funding gap. I know that it is some way down the line and that there have been attempts to restrict that, but it is not ruled out for ever. Once that door is opened, it will happen. Those words are not mine, but those of esteemed vice-chancellors who have supported the Bill.

The same arguments will no doubt be rehearsed again, although the intensity of the debate will depend on which Government are in power. The cap will rise and divisions between rich and poor institutions and students will widen further. The money from the new legislation will only just have begun to reach the universities when the promised review of the system takes place. By then, it will be both too late and too soon to turn back, and we will, most likely, have no option but to continue down the same path, which we still have a choice about embarking on today. Can we honestly expect that the other funding models that we have not been able to debate openly will be considered if top-up fees do not appear to be working?

Amendment No. 128, which I and colleagues have tabled, has aroused lots of confusion and controversy. I firmly resent the allegation that I have been colluding with the Opposition in an attempt to derail my own Government. I regret that this issue has been turned into a matter of loyalty; it is a matter of principle that strikes at the very core of what Labour Members stand for. The amendment was tabled in good faith by those who wish to keep intact the positive aspects of the Bill, but prevent the introduction of variability as a matter of principle and for the reasons that I have outlined.

The effects of the amendment were checked with the Public Bill Office. If the amendment is passed, section 26 of the Teaching and Higher Education Act 1998 will remain and prevent universities from raising fees. That will be the case unless the Government themselves repeal section 26. It will be open to the Government to introduce amendments in the Lords to change the level of the current fee should they so desire.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

I am grateful to my hon. Friend for giving way. I accept, because he is an honourable man, his assurance that he has not colluded with the Conservative party and does not consider the amendment as seeking to wreck the Bill. Did he hear Mr. Yeo, the Opposition spokesman, say on the "Today" programme of the amendment:

"I think it was quite rightly described yesterday morning . . . by the Higher Education Minister . . . as a wrecking amendment. It undermines the Government's whole policy."

He said that it takes away the powers that the regulator has to impose any kind of sanction on universities. Does he accept that that is the view of Her Majesty's official Opposition?

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I thank my right hon. Friend for that contribution. I am very glad that I am not associated with that particular view. I do not agree with that view at all, as that is not my reason for tabling the amendment.

Photo of Clare Short Clare Short Labour, Birmingham, Ladywood

Does my hon. Friend agree that, in Parliament, we are supposed to respond to proposals that come from the Government, and we often find ourselves voting with the Opposition on issues such as peace in Northern Ireland? It also happened on the war in Iraq. The suggestion that those of us who want to adhere to our manifesto commitment and ensure equity in access to higher education are playing games with the Opposition is a dishonourable attack.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I thank my right hon. Friend for that intervention.

I am told that the restoration of student grants and the proposed repayment scheme that will be introduced by secondary legislation" again, this comes from the Public Bill Office—would not be affected by the amendment and should not be dependent on the introduction of variable fees. I am told that the office for fair access would still be able to monitor access. These are progressive measures that only our Government, a Labour Government, could put forward. The already rising amounts of student debt and increased hardship, as well as widening access, all need to be addressed. I feel that introducing variable fees is a heavy price to pay for these measures that counteracts any improvements that can be made.

I am told that the Bill would not have to be withdrawn if the amendment were passed. That would be a travesty because of the positive things that it contains. The issue of variability has been presented as non-negotiable from the start. If any issue needed and was crying out for negotiation, variable fees would be it.

Ultimately, a decision needs to be made on whether variable fees are essential for developing our universities into a truly national system based on excellence where innovation and scholarship flourish. On balance, I believe that the Government would be making less of a compromise if they were to support the amendment, scrap variable fees and prevent a divided and divisive university system.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

It is a pleasure to follow Dr. Gibson.

I wish to speak to a series of amendments. In particular, new clause 8 would remove all fees in exactly the same way as new clause 5, which Mr. Collins tabled. New clause 9 is consequential on new clause 8 and would remove fees in Wales. Amendments Nos. 53 to 58 and 71 to 86 are also consequential on new clause 8 and new clause 9. New clause 10 deals with age discrimination, and new clause 12 relates to public services.

One of the saddest sights in the past few weeks since the conclusion of the Committee stage has been the witch hunt that has been conducted against the hon. Member for Norwich, North because he happens to disagree with those on the Government Front Bench. For any member of the Government party to be called disloyal for supporting his own manifesto seems the most absurd piece of skullduggery from those on the Government Benches that one could imagine.

May I also say to the Secretary of State and the Minister that the disingenuous comments made on yesterday's "Today" programme, which have been repeated today, suggesting that amendment No. 128 would open the floodgates in allowing universities to charge fees in excess of £10,000, are absolute nonsense. In reality, two amendments have been tabled—[Interruption.] The Minister will have to contain himself. Amendments Nos. 10 and 12 would restore to the Bill those elements of the Teaching and Higher Education Act 1998 that the Government wish to take out and replace. Nevertheless, the Minister and the Secretary of State should be honest enough—I believe that they are honest gentlemen—to say that there is no evidence to show that, before 1998, any university in the United Kingdom charged either tuition fees or differential fees. They did not do so, because measures in the Education (Schools) Act 1992 and the Education (Student Loans) Act 1990 prevented them from doing so. Of course, the Higher Education Funding Council for England and its predecessor bodies had powers allowing them not to give grant funding to universities that misused their charter. Those powers were put into the 1998 Act primarily as a result of Labour Back Benchers' concerns that there was nothing in the measure to limit the powers top-up fees or further fees. That was the reason for it. I suspect that HEFCE's powers will be exactly the same as those before 1998, and I expect the Minister to address that specific issue when he winds up the debate.

New clause 10 addresses age discrimination, which was briefly addressed in Committee, and many organisations that work with older people such as Age Concern and the National Institute of Adult Continuing Education support it. The Government have recognised that, for a variety of reasons, people will work longer in the workplace than was assumed 10 or 15 years ago. When I was working in the late 1980s and early 1990s, we all assumed that we would have so much leisure time that we would scramble around and not know what to do with it. In reality, many people will certainly work until the age of 65 and beyond, and to deny them access to the same conditions as under-55s is fundamentally wrong.

In October 2000, the UK Government signed the EU directive on equal treatment for older people, and they are committed to implementing age legislation by 2006, but if the Bill is enacted in its current state, it will directly contradict that intention. The Government have moved on supporting students over 55 years of age, and I hope that they agree to examine that issue in their review of the funding arrangements. Although I will not ask for a separate vote on new clause 10, I trust that the Minister will address that issue in his winding-up speech.

New clause 12 is Mr. Brown new clause, and it is the direct response to what he claimed he had achieved when he decided not to support those who oppose top-up fees by voting for the Second Reading of the Bill. On Second Reading, he said:

"My fear is for the next poorest, particularly those who wish to make a career in the professions and public service and are therefore likely to incur above-average expenses while studying"—[Hansard, 27 January 2004; Vol. 417, c. 191.]

In the round of broadcasts conducted by him, it was assumed that he had received a concession from the Secretary of State that there would be legislation, or certainly regulation, to allow those people going into the public sector to have preferential treatment on fees and the interest paid on those fees.

The issue is serious: however income-contingent repayment of debt is presented, we want many of the students who graduate from our universities—the Government anticipate that 75 per cent. of universities will charge the maximum top-up fee—to go into the public services. We want graduates to become policemen, social workers, teachers and health professionals, which is right and proper. As an employer, the Government are right to ask, "What should we put in place to support those people?"

If somebody who works in the public sector moves into the private sector, however, it is not the taxpayer's responsibility to support them by contributing to their fees and associated costs, which private sector employers should support. The Secretary of State was bold to state in the White Paper that he and his colleagues must get to grips with that issue. Whether the Home Office pays the costs of graduate policemen, whether other Departments pay or whether the Secretary of State for Education and Skills pays, is not an issue for this debate, but it must certainly be addressed.

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford 3:30 pm, 31st March 2004

Does the hon. Gentleman acknowledge that the Government support people who go into public service? For example, teachers engaged in postgraduate training receive £6,000. Indeed, support for the public services in the south-east has been enhanced, and there has been a further announcement on the keyworker initiative, which assists front-line public sector workers with the expensive cost of housing in the south-east—it is all money.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

Before the hon. Gentleman gets excited, I have always conceded that the Government assist in many of those areas, but that is not the point of my argument. My point is that after the Bill is enacted, top-up fees will result in significant debt from 2006 onwards, which will be a whole new ball game. We should not cherry-pick the way in which we support people who take certain subjects—

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

I will tell the hon. Gentleman why not. The housing costs for a teacher of religious education or music in London are exactly the same as those for somebody teaching mathematics. The idea of giving one of them a £6,000 golden hello—

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

I will not give way to the hon. Gentleman; I am answering his question, for goodness' sake. [Laughter]. I am sorry—I sometimes forget that I am not a head teacher any more. [Hon. Members: "You will be."] No, they would not have me.

The new clause would ensure that once someone has become a key public sector professional such as a teacher or a nurse, where a degree is an entry requirement, the 9 per cent. of disposable income payable and the interest on any remaining debt is paid for by the state, and if that person leaves the profession after two years, as they are entitled to, they pick up the costs. I hope that hon. Members will see that as a simple and positive mechanism for supporting public sector workers. I intend to press new clause 12 to a vote.

I turn to new clause 8 and amendment No. 128. We support Conservative Front Benchers' basic principle on the removal of fees, as stated in new clause 5, as well as the removal of top-up fees. We certainly support the amendment tabled by the hon. Member for Norwich, North, and we will vote with him on that.

In his speech, the hon. Member for Norwich, North mentioned the notion of generous grants. That was picked up by Mr. Allen, who accused the Liberal Democrats and the Conservatives of scaremongering. Let us at least understand the basis on which we are having this debate. At the moment, poorer students pay no fees at all. It was a Labour Government who in 1998 introduced up-front fees. Labour Members are now railing against them and saying what a wonderful job they are doing in removing them.

Photo of Kali Mountford Kali Mountford Labour, Colne Valley

The hon. Gentleman has made many points about fees and debt. Does he accept that the fees and costs combined will be repaid at a gentler rate, which equalises the situation between students and makes the whole situation much easier for them all?

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

With the greatest respect to the hon. Lady, I have never denied that. The reality is that the debt will be no smaller as a result of the new proposals; graduates will simply repay it for a lot longer. The hon. Lady fails to understand that. In fact, a person's debt gets bigger if over a number of years their income does not qualify them to pay the 9 per cent. of disposable income, because the interest is added every year after that.

I was responding to the hon. Member for Nottingham, North. At the moment, the poorest students pay no fees and get a maintenance loan of £4,000. They pay nothing up front, and when they have graduated they start to pay it back. I can see that the new system is more generous in terms of paying the money back over a longer period.

In future, poorer students who go to a top university will pay a fee of £3,000, which will be deferred because they get a loan to cover it. They will therefore not have to pay it up front and they will get another £3,500 in grant. At the end of their time at university, they will have not £4,000 of debt but £6,500 for every year. That is £19,500 of debt for the poorest students. I accept that they have had the money as disposable income during their time at university, but they will be worse off and have a bigger debt than current students. If Professor Callender is right and every study that the Government have carried out is right—

Several hon. Members:

rose—

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

My goodness—I should like to make some progress.

If every single item of research is right, the Government will know that debt deters poorer students—the very students whom the hon. Member for Nottingham, North and I want to encourage to go to university.

Photo of Ms Lorna Fitzsimons Ms Lorna Fitzsimons Labour, Rochdale

Given that the hon. Gentleman is making a great effort to be sincere, will he deal with a genuine point about Liberal Democrat representation on the streets of Rochdale about current provision? It bears no resemblance to his comments. Liberal Democrats in Rochdale claim that all students have to pay up-front fees. Will he disassociate himself from rank-and-file Liberal Democrats who misrepresent policy? Does he accept that students do not have to pay back the grant? His calculations are simply wrong.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

The hon. Lady's first comment was unacceptable and I hope that she will withdraw it.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

What happens on the streets of Rochdale, God only knows. I have never claimed that the £2,700 plus the £300 bursary has to be repaid. I do not believe that any hon. Member has ever heard me say that. However, students will have to repay the loan of £3,500 plus the tuition fee of £3,000. That makes £6,500 every year. So much for generous grants.

Amendment No. 122 tabled by Jon Trickett hits the nail on the head. When we began the debate, the £3,000 in grant and bursary was roughly equal to the top-up fee of £3,000. However, that sort of balancing equation will not occur in the future. The Minister will correct me if I am wrong, but by 2010, top-up fees may increase to £5,000 or £10,000 but there is no commitment in the Bill to increase grants and bursaries commensurately. The hon. Member for Hemsworth said that he wants a 90 per cent. link. I would be happy with any sort of link to ensure that students get that support in future.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

The hon. Gentleman is making a case for no fees, whereas my hon. Friend Jon Trickett presents a rational argument in his amendment. As my hon. Friend knows, because I have spoken to him, the only problem that we have with it is inscribing in legislation a percentage that we might want to change more beneficially. If we were to accept the amendment, we would always be stuck with 90 per cent. That is why we prefer to leave percentages out of primary legislation and put them in regulations.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

I accept that there are difficulties, but will the Minister accept later an amendment to include in the measure an affirmative resolution to cover the £3,000 and any cap on the fee above inflation after 2010? It is right to establish mechanisms to ensure that students at the top universities, which charge the highest fees, get commensurate grants.

Photo of Jon Trickett Jon Trickett Labour, Hemsworth 3:45 pm, 31st March 2004

I have been listening carefully to the hon. Gentleman's speech, and I hope to speak later if I can catch your eye, Madam Deputy Speaker. The point of my amendment is to probe the Government. By 2010, a higher rate of fees might well have let rip: the upper limit could be £10,000 or even £15,000. What would then happen to the £3,000 grant and bursary? There is no linkage in the Bill, or in anything that Ministers have said so far, to provide for working-class kids and kids from poorer homes to get the £10,000 to £15,000 that might be being charged by then. That is the point of my amendment, but, so far, the Government have given no indication that any such linkage would exist.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

I am grateful to the hon. Gentleman for that intervention. If he does not get the opportunity to speak, at least he has put that point on record. I hope that my description of his amendment was accurate.

Those Labour Members who intend enthusiastically to support the Bill and oppose the amendments tabled by Dr. Gibson and others must understand that the only way that poorer students will gain any advantage in 2006 will be if they take their £2,700 grant and go to the cheapest university offering the cheapest course. That is the only way in which they will be better off under the Government's proposals, unless they invest the whole £3,000 on the stock market and hope that they make some money.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

No, I want to make some progress because I appreciate that a lot of people want to speak.

The hon. Member for Norwich, North rightly said that the Government's proposals would create a market in higher education. We have had many debates on this issue, and I conceded in Committee that there is currently a social market in higher education. Given that students from the lower socio-economic groups make up only 9 per cent. of those who go to Oxford and Cambridge, we should ask whether that is because the lower socio-economic groups are intellectually inferior, as has been suggested.

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford

Will the hon. Gentleman welcome the £3,000 bursaries—[Hon. Members: "£4,000."] They have gone up already. Will he welcome the £4,000 bursaries that Cambridge will make available to poorer students? That move has come in on the back of this Bill. The Bill is changing the whole atmosphere, and more and more universities are proposing similar schemes.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

May I suggest that the hon. Gentleman spends a little time in the Library and consider the wealth that many of the Oxford colleges have at their disposal? He should consider the £4,000 bursaries in relation to that wealth. He might then like to consider the wealth of Wolverhampton university, 47 per cent. of whose intake is from the three lowest socio-economic groups, or of the universities in Hull. He would see a totally different picture there. If he is saying that every university in the land, even the least endowed ones, will give all students a £4,000 top-up to their grant, then heaven has arrived here in the House of Commons. The reality, however, as he knows, is that that is arrant nonsense.

Photo of Mr David Rendel Mr David Rendel Shadow Minister (Higher Education), Education & Skills

Does my hon. Friend recall that the vice-chancellor of Cambridge university recently came to this place and was asked what proportion of Cambridge students come from the lowest socio-economic groups now, and what proportion she expects to come from those groups under the new scheme? She said that the proportion from those groups on which Cambridge is budgeting in order to be able to give this £4,000 bursary is just 11 per cent., and that if the proportion exceeds that, it will not be able to afford any more bursaries.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

My hon. Friend makes a most telling point. That is the reality. If a cash-rich university such as Cambridge cannot afford more than a 2 per cent. increase, what chance is there across the piece?

Photo of Robert Jackson Robert Jackson Conservative, Wantage

The hon. Gentleman has been comparing endowments. He should consider the matter more broadly, rather than just what happens in this country. If he compares the endowments of Oxford and Cambridge not just with Harvard, Stanford, Princeton or Yale but with American state universities, which have been building up endowments, he will find that they pale into significance, and yet those are the universities with which Oxford, Cambridge and a few other universities in this country must compete.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

As ever, I am grateful to the hon. Gentleman for his intervention. Harvard and Yale, which are the two best-endowed universities in the world—not just in America—achieve through all their glorious endowments and bursaries 4.7 per cent. of students from the lower socio-economic groups in the United States. If that is the vision for the United Kingdom's higher education system, there is no point any of us being here, because it is a travesty in terms of ambition. I want the students whom I have taught for most of my life, who come from very poor backgrounds, to be able to get into the top universities, rather than choosing their course or university on the basis of how much they can afford.

Fees and top-up fees will create a financial market that will be ruinous to our higher education system. If the Secretary of State were proposing variability that was uncapped, his argument would have real integrity. Some people argue that those who spend £10,000, £20,000 or £30,000 educating their sons and daughters in the sixth form of a private school should not receive tuition for nothing when they go to university. That is not what the Government are proposing, however. They are proposing a cap on variability, which is a contradiction in terms. I said that on Second Reading, and I say it again, because that is the reality. By 2010, that cap, by the Government's admission, will starve universities of the cash that they need now—[Interruption.] Labour Members must not believe all the rhetoric that comes out of fairy house down at Millbank—[Interruption.] That was a Freudian slip.

In the first year of variable fees, the maximum additional income that universities will get—all our universities, given the Government's figures—is about £300 million—[Interruption.] That is so. In that first year, only one year of students will pay top-up fees. It will take three years before three cohorts are in and the universities get the maximum amount of money.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

The hon. Gentleman's proposal would remove £800 million that the universities currently get from fees. He cannot argue that they will have to wait a few years for an extra £1 billion while proposing that they should immediately lose almost £1 billion in revenue, which they receive at the moment.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

The Minister has been characteristically honest, but that is not what I am proposing at all. The Liberal Democrat position is clear: we want to raise the higher rate of tax to 50p in the pound. That would apply to incomes of more than £100,000 a year.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

I am trying to reply to the Minister. The hon. Gentleman should not get so excited.

According to the Treasury, what we propose would raise £4.7 billion. The £2 billion that we would spend would give universities £1.1 billion immediately, and would replace the fees now paid by students. The Conservative Front Benchers who tabled the new clause would not give universities a penny extra. They would do no more than decimate the number of university entrants, and they would use the additional resources elsewhere. Please let them not accuse the Liberal Democrats of not having a solution.

Several hon. Members:

rose—

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

I want to finish my speech, as many other Members wish to speak.

We support the removal of fees and top-up fees, as an issue not of popular politics but of principle. We opposed the introduction of tuition fees in 1997 and 1998, and we stated in our 1997 manifesto that we opposed both top-up and tuition fees. I have here a copy of the Labour party manifesto, entitled "Ambitions for Britain". It states on page 19:

"We will not introduce 'top up' fees and have legislated to prevent them."

What is in that document is nothing but a deception of the British public. Page 19, like the rest, needs to be ripped out and torn up.

NOTHING

NOTHING

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I shall speak to new clauses 6 and 7 and the consequential amendments Nos. 32 to 52. I shall also speak to amendments Nos. 129 and 130. I understand that the Government are prepared to accept amendment No.129, and I am happy to allow the Minister to speak to it. I am pleased and grateful that the Government have made such an important concession.

Let me explain what my new clauses are all about and why I cannot support amendment No.128. New clauses 6 and 7 and the consequential amendments would remove the provision for variable fees and replace it with a provision for a fixed fee. To that extent they are similar to amendments that I tabled in Committee that were defeated, although they were supported by the Liberal Democrats.

My new clauses and amendments would strengthen OFFA, the regulator. They would remove the basic fee altogether. In order to charge fees at all, universities would have to draw up credible plans to improve access, which would have to be passed by the regulator. Having negotiated that hurdle, they would be able to charge a fee; but it would be a fixed fee. I have not specified the level of the fee, but I would expect it to be set somewhere between £2,500 and £3,000. Once fixed, it could be raised only with inflation. I stress that my proposal would leave the Bill intact.

Photo of Mrs Valerie Davey Mrs Valerie Davey Labour, Bristol West

I congratulate my hon. Friend on her cohesive new clauses and amendments, which offer a constructive alternative to variable fees. Does she agree that the possible polarisation of universities, which variable fees could allow to develop, is an element that is not addressed in the Bill?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge 4:00 pm, 31st March 2004

My hon. Friend makes a valid point, about which I have great concern. I represent a city constituency with two universities: Cambridge university and Anglia polytechnic university. I am aware of the wide differences between those universities and I should certainly not want to see them become wider.

I want to emphasise that mine are not wrecking amendments, and if the Government wished to, they would be able to operate within the regime defined in the amendments. In proposing my new clauses and amendments, I believe that I am carrying out the wishes of the majority of my constituents. Although in the constituency survey that I conducted there was considerable support for the student support package in the Bill, many people, particularly students, said that they did not want a variable fee. It is true, of course, that some of those people did not want a fee at all. Most students, when asked, say that they would prefer not to pay fees and for all the funding to come from general taxation. However, that is not the view of the rest of my constituents, and I must also take their views on board. I believe that it is right for students to make a contribution towards the cost of their education, which is the only realistic way of getting the extra money that is so desperately needed into universities.

I do not like variable fees because I do not like the prospect of introducing a market into higher education.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

Does my hon. Friend believe that there are lessons to be learned from the United States of America, whose marketisation of higher education began in 1979? In that year, four times more undergraduates from the top 25 per cent. by income of the population attended university than their less-well-off compatriots. After 25 years, that ratio has now grown to 10:1. Is that not the real risk of marketisation?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

My hon. Friend makes a valid point, but I do not think that the Government's proposals are as damaging as the provisions in the US. Although marketisation might bring some damaging effects, I do not believe that the damage here will be as great as in the United States.

I am worried, however, that students might choose courses because they are cheap, rather than because they are really suited to those students' aptitudes and abilities. I am also concerned that some universities might decide to charge a lower fee because they cannot attract enough students with a high fee. They will not then have the cash to pay for good quality staff and equipment, and standards will begin to spiral downwards.

I am also concerned that the modern universities take by far the highest proportion of lower-income students, and that their ability to pay generous bursaries is compromised to some extent by sheer numbers.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

Does my hon. Friend agree that she has just set out the case for why it is highly unlikely that a market will develop in higher education? That is precisely because no university, whether Cambridge, Oxford, Wolverhampton or Huddersfield, can afford to forgo the income that it would secure by charging variable fees—top-up fees or, as they now are, top-down fees, and fixed fees with discounts. Does she have any evidence that a market will develop in higher education?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

That remains to be seen. If my new clauses and amendments are not successful this evening, and if the Bill goes through, there will be a review after a three-year period so that we can examine the situation that has developed. I have set out the fears, however, and my hon. Friend David Taylor has just pointed out the damaging situation that there has been in the US. The worry is that the same situation, to a lesser extent, might develop here, although, as I have said, I do not think that the proposals will be as damaging here as the United States provisions have been.

Photo of Tony Wright Tony Wright Labour, Cannock Chase

Will my hon. Friend consider the fact that the Bill offers a highly regulated market in higher education? The consequence of a highly regulated market model failing is a cutting-loose by those parts of the system that want to create an unregulated market. If that happened, we would get not the status quo, but an unregulated market.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

That is the very thing that my amendment is trying to avoid. I hope that by replacing the variable fee with a higher fixed fee, it will give the universities extra money, which they so badly need, and would at the same time prevent marketisation from developing.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

I just want to probe whether my hon. Friend's amendment is a probing amendment or whether she intends to press it to a Division. If she does press it to a Division, and if the amendment is successful, have the Government already given any indication of what would happen to the Bill? Have they, for instance, indicated that they might withdraw the Bill if the amendment is passed?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I would like to press the amendment to a Division and I have said that already. I believe that the Government have made some indications to other people about what would happen in the event of the amendment being passed, but I am afraid I have not had any indication so far of what would occur. However, I stress that the amendment is not intended to be a wrecking amendment. It is a very carefully constructed amendment, which would leave the Bill intact.

It has already been mentioned that Cambridge university has proposed paying bursaries of £4,000 to students from lower-income backgrounds. That means, of course, that with the £2,700 that is available from the Government, lower-income students in my constituency would have £6,700 per annum available without any need to take out a loan. I believe that that is very generous. However, students who are fortunate enough to get a place at Cambridge are likely to do much better for financial support than those who go to one of the ex-polytechnics.

I should like briefly to discuss my amendment No. 129 and then give my support to amendment No. 130, which was tabled by my hon. Friend Dr. Whitehead. Amendment No. 129 is very important as it changes the powers of the Secretary of State into an obligation. Under both the current legislation and the proposed legislation, the Secretary of State has the power to prevent universities from charging more than the cap, but he does not have a duty to do so. This means that if the legislation passes tonight without the amendment, a Secretary of State who does not wish to enforce the legislation has no need to do so and the House could not compel him to do so. If for instance, Dr. Richard Sykes comes along in a few years' time and says, "I cannot manage with a fee of £3,000 so I am going to charge £5,000", we may have a Secretary of State at that stage who thinks that that is probably correct, but does not wish to go through the burdensome process of either secondary or primary legislation or even the affirmative resolution process. That Secretary of State could say, "I do have the power to stop you, but I am not going to exercise that power, so go ahead." There is nothing at that stage that Parliament could do because we have left it to the discretion of the Secretary of State.

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford

My hon. Friend is making an excellent speech, as she did in Committee. But is it not the case now that universities can charge as much as they want? Obviously, they would not receive any money from HEFCE, so is there not a real danger that unless universities of the type that my hon. Friend is describing receive a steady income stream now and for the future, some universities might decide to go it alone and charge enormous fees, and the type of access to which we all aspire would simply go out of the window?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

That is the situation that the amendment is intended to address. My amendment would make it very clear that the Secretary of State is obliged to prevent the university from charging the higher fee—not just having the power to do it, but an obligation to do it. I therefore consider this to be an extremely important amendment—without it, the debates that have raged on the cap and on variability and whether to charge fees at all simply fade into insignificance. It is an important amendment and I hope that hon. Members will support it this evening.

I also wish to support amendment No. 130, tabled by my hon. Friend the Member for Southampton, Test and others. It would mean that the cap could not be raised above inflation before 2010 without primary legislation, and beyond that point only by amendable resolution on the Floor of both Houses of Parliament. I tabled similar amendments—Nos. 123 and 124—but I have withdrawn them in favour of amendment No. 130. A new higher education Bill would not be the best way to raise the cap, but that would have been the effect of my amendments. I congratulate my hon. Friends on finding a way that makes the condition much stronger than the secondary legislation would have done, because the resolution would be amendable and would give rise to a debate on the Floor of the House. I strongly urge all hon. Members to support that amendment.

I shall now explain why I cannot support amendment No. 128. As it stands, the amendment would remove clauses 22 to 27, which impose the conditions under which fees can be levied. That would mean, for one thing, that amendment No. 129 would fall, because it relates to clause 22 and the powers and duties of the Secretary of State. I understand that my hon. Friend Dr. Gibson believes that if we passed his amendment we would revert to the current legislation as defined in the 1998 Act. He suggests that the Government would have to introduce further amendments in the House of Lords to raise the fee to a more realistic level. However, given the current state of relations between the two Houses, I do not share his optimism that their Lordships would play ball.

There is a more important objection. Without any further amendments to remove the repeal measures of the 1998 Act, as defined in schedule 6, the effect of my hon. Friend's amendments would be to deregulate fees completely, because that schedule will repeal the parts of the Act that refer to the current fee regime. The Conservative spokesman pointed out that amendments have been tabled that would remove the repeal of the provisions in the 1998 Act, but they were not tabled by my hon. Friend. To my surprise, they were tabled by the hon. Members for South Suffolk (Mr. Yeo) and for Westmorland and Lonsdale (Mr. Collins). Are those amendments really intended to be consequential amendments to amendment No. 128? If so, how come they were tabled by the Conservatives and not by my hon. Friends? I have to ask what is going on there.

Photo of Clare Short Clare Short Labour, Birmingham, Ladywood

The purpose of the amendment tabled by my hon. Friend Dr. Gibson, and supported by so many of us who wish to adhere to our manifesto commitment, is to take variability out of the Bill. We would like the Government to accept that principle. If some consequential amendments had to be made in the other place, they would be easily carried, given how the different parties line up there. We are talking about a principle, not the technicalities of amendments. Let us be straightforward with each other.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I accept what my right hon. Friend says, but those consequential amendments appear on the amendment paper tonight and they were tabled by the Conservatives. I accept that my hon. Friend the Member for Norwich, North has not colluded with the Conservatives, but I find it extraordinary that the consequential amendments have been tabled by them.

Photo of Ms Lorna Fitzsimons Ms Lorna Fitzsimons Labour, Rochdale

I know that my hon. Friend has many years of experience lobbying the other place on higher education—as have I—and we have discovered that it has its own mind on that subject and peers often buck the Whip. Therefore, any assurances or blandishments that suggest that the Opposition might co-operate should be viewed with scepticism.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

Given the present mood of the upper House, I find it inconceivable that any measure that was not passed successfully by this House could be moved successfully there.

If any of my hon. Friends are tempted to support amendment No. 128, I hope that they realise that to complete the ends that they are supposedly trying to achieve they will have to vote for amendments tabled in the name of Conservative Members. No Labour Member's name is put to those amendments—there are not even any Liberal Democrat or Plaid Cymru Members' names, only Conservative Members' names. I wonder what local constituency parties would think of that.

F

I'm quite baffled by this. If it is a good amendment, who cares a cotton stick the party of the MP who tabled it? What strange criteria Anne is using here.

Submitted by Francis Irving

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme 4:15 pm, 31st March 2004

On the point of principle, does my hon. Friend accept that the effect of her amendments would be exactly the same as that of amendment No. 128, because they would remove variability from the Bill? If either were accepted, the effect would be the same—the Bill would be withdrawn.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I spent a great deal of time carefully constructing amendments that would leave the Bill intact. They would not only leave the Bill intact, but strengthen the role of OFFA, the regulator. I would have thought that many Labour Members would want to achieve that, rather than taking the teeth out of OFFA completely.

Photo of Ian Lucas Ian Lucas Labour, Wrexham

Has my hon. Friend received any indication from the Government of what their attitude to her amendments would be if they were accepted? Have they said that they would withdraw the Bill?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I answered that question earlier. The Government have not given any indication to me, but I understand that the Whips have been talking to people about the consequences of their support for my amendments, although I do not know what that might be.

A further problem for Labour Members is that the consequential amendments to amendment No. 128 would turn OFFA—the mechanism by which we will increase access for students from non-traditional backgrounds—into a toothless tiger. We would keep OFFA, but there would be no incentive for universities to increase access, so what would be the use of that?

Let us suppose that sufficient Labour Members vote for amendment No. 128 and then the Conservative amendments relating to schedule 6. What would happen next? I know that my right hon. Friend the Secretary of State has threatened to withdraw the Bill if that happens, and I take his threat seriously. However, he probably would have no need to do that. Given that he would have the powers but not the duty, all that he would have to do would be to make it known that he would not exercise his powers to require universities to charge a regulated fee. Universities could thus charge whatever the Secretary of State deemed acceptable—irrespective of what the House thinks. Hon. Members should also remember that OFFA would have no bite and remain totally immobilised, so universities could thus charge huge fees, have no effective access plans and take all their students from the well-off classes so that they would have no need to dispense bursaries. Is that really what my hon. Friend the Member for Norwich, North is trying to achieve?

Photo of Gordon Marsden Gordon Marsden Labour, Blackpool South

My hon. Friend is outlining a doomsday scenario that she envisages if amendment No. 128 were passed, so it is only fair to ask whether she shares the touching faith that my hon. Friend Dr. Gibson seems to have that certain universities would play ball and go ahead with an access programme, not least given that many in the Russell group take an alternative view.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I am heartened by the way in which universities have responded to even the mere mention of OFFA by introducing much better access and outreach plans than they have ever had. I know that that applies to my own university as well as many others. Removing the teeth of OFFA would not lead to an immediate withdrawal of such plans, but I believe that they would wither on the vine in time.

Photo of Ms Annabelle Ewing Ms Annabelle Ewing Spokesperson (Social Security (SNP Shadow Scottish Minister); Education & Skills; Home Office; Law Officers; Work & Pensions)

Given what the hon. Lady said earlier this afternoon, if next year's Labour party manifesto contains a commitment or undertaking not to introduce primary legislation to lift the cap on top-ups, does she expect anyone to believe it?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I understand the Liberal Democrat position—[Hon. Members: "She is not a Liberal Democrat."] I apologise; I meant the Scottish nationalist position. The hon. Lady has to accept that the situation is difficult. Universities are in severe financial straits. In those circumstances, it is necessary to look hard at what we can do to raise finance for them. As someone who has been in opposition, I can say with confidence that it is easy for Opposition parties to say anything and promise everything. She will never be put in the position of delivering on her promises.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I am about to finish.

I cannot possibly support amendment No. 128 and I hope that my hon. Friends will not do so either. I hope that amendments Nos. 129 and 130 will receive support, and that if there is a chance to vote on new clause 6 that it, too, will be supported.

Photo of Robert Jackson Robert Jackson Conservative, Wantage

I want to explain briefly why I shall vote with the Government to secure the Bill's passage, which in contrast to the hon. Lady and Dr. Gibson, I want to succeed.

I do not want to rehearse the arguments, which have become familiar. Instead, I want to address a word or two of explanation to my party—[Hon. Members: "Where are they?"] I am sorry that so few of my hon. Friends are in the Chamber. My interpretation of their absence is that this is a case of bad conscience.

Both as a democrat and a Conservative Member of Parliament, I am delighted by the renewed will to win that we have seen in the Conservative party since the change of leadership. I salute the leadership of my right hon. and learned Friend Mr. Howard. Our two-party system requires both an effective Opposition and a serious alternative Government. However, I am concerned about the collateral damage that will arise from too bald-headed a pursuit of that will to win, which in itself is a good will to have. I am reminded of a remark by Stanley Baldwin about Lloyd George. He said that he was a dynamic force, and a dynamic force is a terrible thing. What I have is a choice between party interest and national interest. It is right, in such a situation, to take the national view.

Let me say a few words about the collateral damage that will arise if the amendments are carried and the Bill collapses. The effect on universities would be the postponement of the issue until after the next general election, which gives us two possible hypotheses. The first is that the Conservative party wins. In the process of trying to score points against the Government, it has got into a position from which it cannot escape making a manifesto commitment to oppose the principle of paying university fees. That would be the basis on which it would have to conduct its policy in government. There could be no question of a Conservative Government introducing fees in the next Parliament, and it is likely that it would not happen in the Parliament after that. So we would have at least 10 years in which university fees would not be possible.

We do not know anything about the alternative policy of the Conservative party. I do not think that there is a serious alternative, for reasons that I set out on Second Reading. What we do know about Conservative policy is what my right hon. Friend Mr. Letwin, the shadow Chancellor, has said, which is that universities are not a priority. They fall outside the priority for schools and health, and training and universities will be cut. We definitely know that about Conservative policy. I have to ask myself: what will be left of our university system after a further 10 years of starvation during which a Conservative Government forbid what are in law private institutions from charging fees to their customers?

I turn to my second hypothesis, and that is that the Labour party wins the next general election. I think that we can exclude the hypothesis of a Liberal Democrat win. I assume that the Prime Minister will continue to lead the Labour party. I assume also that the present Secretary of State for Education and Skills will be an important contributor to the Labour party manifesto. I think that the Labour party would commit itself at the next election to introduce fees. Incidentally, I think that it was a great mistake not to have been more honest with the public during the last election. But there is a saying in the Bible about the "sinner that repenteth".

If the Government lose today, I think that there would be such a commitment in the Labour party's next manifesto. Listening to the debate within the Labour party, it is clear that there is broad consensus for that. People have heard the arguments and have taken them on board. I think that Labour would probably enact such a reform after the next election, but that would mean either a two or even a three-year delay, and our universities cannot wait for that long. Concessions would probably be involved, which would constrain the future of our universities even more than this Bill would do. I regret those constraints but I accept them as being politically necessary. It would probably also lead to an increase in the cost of concessions and subsidies to students, which I and the Select Committee consider unnecessary. For example, there is the interest rate subsidy, which the Select Committee has said is not justified. I do not think that it is justified even though it was introduced by a Conservative Government.

Photo of Clare Short Clare Short Labour, Birmingham, Ladywood

Will the hon. Gentleman tell us whether he supports the proposal for a cap on raising the top-up fee or whether he supports the Russell group's position of allowing prestige universities to charge what the market will bear?

Photo of Robert Jackson Robert Jackson Conservative, Wantage

It is probably necessary that there should be a cap if the Bill is to get through Parliament. I think that in due course that cap should be raised. I believe that that experience will show that it will be possible to raise the cap without any of the adverse consequences that many Labour Members, and even Conservative Members, affect to fear.

My conclusion, based on the hypothesis that Labour wins the next election with a manifesto committing itself to this legislation, is that there would be a delay and there would probably be constraints and concessions that would make the deal for the universities rather less satisfactory than the deal that the Bill offers.

Photo of Gordon Marsden Gordon Marsden Labour, Blackpool South

The hon. Gentleman is even-handedly and fairly describing potential hypotheses. He rightly talks about the need of the universities for funding now. Has he heard Members on either side of the House at any stage advance a coherent and cohesive argument for an alternative form of funding that would ring-fence and guarantee the universities the money that they need over the next two to three years?

Photo of Robert Jackson Robert Jackson Conservative, Wantage

This is a problem of any system of co-payment, but we must start facing it because co-payment is part of the future of our public services. Co-payment involves co-operation between the private and public sectors. It can be objected to any system of co-payment, that as private income rises, public income will be cut. But we must find a way of trusting one another to make such systems work. They work perfectly well in many countries throughout the world and there is no reason why they should not be able to work in Britain.

I turn to a second area of collateral damage. I am also concerned—some people may say it is a bit above my pay grade—about collateral damage to the interests of the Conservative party. If the amendment is carried, I think that it will be bad news for my party because it will mean that its behaviour will be noticed. If it is not carried, I rather hope that people will soon forget what we have been doing.

It is generally agreed that the battleground at the next election will relate to public services. Speaking with a certain detachment as someone who does not propose to stand again, I am struck by the enormous convergence of views in these matters that has emerged between the parties in this place. All or most are agreed on the need for reforms in our public services and the way in which they work. All or most are agreed that these reforms should involve decentralisation and that they should, above all, involve more choice and more tailoring of the service to individuals who use the service. There is also a general consensus about levels of taxation, and that we are reaching the limits of the tax burdens that we can put on people. Even the Liberal Democrats now accept that.

The Government's proposals for universities draw the logical conclusions from those facts and this convergence of views. What depresses me is that the Conservative party, which makes all the arguments for reform, decentralisation and tailoring services more to users' needs, flinches from drawing the appropriate conclusion. That will not go unnoticed by serious people.

We are living in a post-ideological age. The ideological mountain ranges have collapsed. We have a flat political landscape. People are much interested in competence, leadership and consistency. There will be collateral damage to the Conservatives' reputation among many thinking people because of the line that we are taking on this matter, which a lot of people regard as simply disreputable. I salute the animal spirits and the revived will to win in my party. I like to see the Conservative party with its head down and its dander up, rushing at the goal. The trouble is that today it is rushing at its own goal.

Photo of John Grogan John Grogan Labour, Selby 4:30 pm, 31st March 2004

It is a life of ups and downs as a so-called Labour Back-Bench rebel trying to stick to the manifesto. It is important not to become paranoid. When I saw the headline in The Guardian this morning—"the Government cracks down on persistent offenders; surveillance will be used"—I was momentarily alarmed and, in preparing my defence, was anxious to say that I have rebelled against the Government on only one other issue. I was then mightily relieved to see that the Home Secretary was planning to crack down on violent criminals, rather than Labour rebels.

There are carrots as well as sticks, and the night before the House previously voted on the Bill, I was invited to dinner by three Cabinet Ministers. That has not happened before. Seriously, I thank my right hon. Friend the Secretary of State for the way that he has conducted this whole debate. I have tried to attend as many of his seminars as possible. I now appreciate a little better how Maoist re-education worked all those years ago, but I thank him for his courtesy throughout this process.

I want to talk briefly about a deal about which the House may be interested. We have heard a lot about deals, but only one deal matters in this process: the deal that we all solemnly made with the electorate at the last election. All three major parties said in their manifestos that they were against variable top-up fees. We said that for very good reasons.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

As I understand the logic of my hon. Friend's argument, a fixed fee set at a level that we choose—let us say £3,000—would not break the manifesto commitment. Indeed, we would be welcomed with open arms on the streets. However, if we say that less than £3,000 can be charged, it is somehow a great betrayal. I am confused by that argument.

Photo of John Grogan John Grogan Labour, Selby

I have never said that I support £3,000 fees. I am glad that my right hon. Friend is thinking about the circumstances if amendment No. 128 is passed, because I always suspected that there is a plan B. He is obviously putting his considerable intellectual powers into considering what will happen if that amendment or those tabled by my hon. Friend Mrs. Campbell are passed. I am pleased that, under those circumstances, as a responsible Minister, he will not throw the toys out of the pram and that he will return with proposals on what the fee should be.

Why have we gone back on that pledge? Some interesting arguments have been advanced. On Second Reading, my right hon. Friend the Secretary of State referred to the rapid pace of economic change since the last election. We have heard an awful lot about the increased number of Korean students. None of those are fundamental reasons why we should change our mind on this very important issue.

We have heard a lot about concessions, but let us remember that some concessions have not been made. I well remember my right hon. Friend the Secretary of State saying on television—I think that it was on "Newsnight"—that he would bet his mortgage that fees would not rise above £3,000 for 10 years. We are now told that it is a marvellous concession that fees will not be raised beyond that level until 2009—three years after the system begins. We were told at one point that there would be a universal bursary scheme, which would apply to every university equally. That offer was made to Universities UK, apparently. Throughout this process, Universities UK has made the parliamentary Labour party look like a great democracy. Ivor Crewe and the leaders of Universities UK have suppressed dissent. They did not even put that offer to the rest of the universities.

The grants are welcome. Under the amendments tabled by my hon. Friend Mrs. Campbell and amendment No. 128, the grants would remain. Let us not forget that the son or daughter of a postman and a nurse would get no grant or fee remission. Those are the very people whose choices would be distorted if the fee level were raised, as it inevitably would be. All the Russell group of universities are not talking about £3,000 or £4,000. The logic of the system is that fees would rise rapidly to £9,000 or £10,000 by 2009.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

Does my hon. Friend not accept that the only way the cap can be lifted to any amount—£9,000, £10,000, £6,000 or £7,000—is if he and his colleagues in the House consent that it should be changed? Does he not have any confidence in himself and his colleagues to control the cap?

Photo of John Grogan John Grogan Labour, Selby

I have seen how the debate has gone over the past three or four months. I assume that in 2009 we will have an intellectual debate and we will all be able to make up our own mind. There will be no talk of supping with the devil, colluding and so on. We all know what sort of atmosphere the debate would take place in. We have only to listen to the Russell group and Professor Nicholas Barr.

I do not want to take up too much of the time of the House. I end by appealing to my colleagues. We are discussing a matter of principle. If the amendment of my hon. Friend the Member for Cambridge is called, I urge support for it. However, it is unlikely to be put to the vote because of the absence of parliamentary support, so we shall be down to amendment No. 128. It is spurious to argue that because the consequential amendments were signed by a particular person, we should not vote for the main amendment. Either we are colluding or we are not. On a matter of principle, I urge all hon. Members who have spoken so long and so loud from the Labour Benches against top-up fees to take courage and vote with their convictions. Vote for amendment No. 128 if it is put to the House tonight by the Speaker.

Photo of James Clappison James Clappison Conservative, Hertsmere

I shall speak to the amendments tabled by my right hon. and hon. Friends and on student support in general, particularly the way in which the variable fee structure is being introduced by the Government and the effect that it will have on many families.

I am concerned about the impact on middle and lower-middle income families and those with modest levels of income. Students from those families will be adversely affected by the proposals. I want to take a little time—not too long—to consider the detail of what the Government propose to do to families on a wide range of incomes. In the previous debate, we spent some time discussing how to encourage students from non-traditional backgrounds into higher education. I do not believe that background should determine whether someone goes into higher education; that should depend upon academic ability.

The last thing that I want is for someone from what is described as a non-traditional background with the appropriate level of ability to be deterred from going into higher education by the disincentive of the prospect of a mountain of debt for years to come. Labour Members will have to recognise that many students from non-traditional backgrounds are precisely those students from the levels of income that will be adversely affected by the proposals and find themselves faced with just that dilemma.

For all Labour's intentions with regard to OFFA, and all OFFA's supposed good works and encouragement—much, if not all, of which is already done by the universities themselves—students will be faced with, on the one hand, what they are told by the universities, OFFA and whoever else, and on the other with the prospect of substantial levels of debt for years to come, which they will have to repay over their working lives and during their most productive period of life when they have so many other responsibilities—buying a home, starting a family and so on. I want to speak out on behalf of those students and families today because their voice should be heard. I fail to see just what imposing those debts on those families will do to encourage students into university.

Yes, it is right that under the Government's proposals there will be help for families on lower incomes. There is help now. But to benefit from the help that the Government are offering in future, students must come from families with very modest incomes indeed. There is help for the poor, but it is fair and accurate to say that it is help for the very poorest. Those who come from families with incomes just a little above that level will lose out. I invite Labour Members to pay a little more attention—

Photo of James Clappison James Clappison Conservative, Hertsmere

If the hon. Gentleman will just allow me to finish that point, I will happily give way.

I should like Labour Members to pay attention to the thresholds at which help is available for students under the Government's proposals, because it is a material factor in this debate that has not yet been sufficiently addressed. When hon. Members hear the Government talk of help and promises for the future, they must remember—to echo Mr. Willis—that, today, students from families with joint incomes of £20,970 pay nothing at all. All of their fees are remitted. It is only above that level that they start to pay fees. To be fair to the Government, it must also be borne in mind that at present fees are paid up front, but in future they will be paid upon graduation, and I make that distinction. However, taking that into account, it is appropriate to look at the comparison between the help that is available now and the help that will be available in future, and the very much higher costs that students will have to pay as a result of the £3,000 fee.

The Government have talked a lot about the full higher education grant and getting that into the hands of students. It is right that that help will be there, but—I will give way to the Minister if he wishes to confirm this—the threshold for the full higher education grant is £15,970, substantially below the present level at which fees are remitted altogether. Between those two amounts there will be help, but it is on a sliding scale and it will diminish. That means that unless university bursaries fully compensate students, which they are not required to do under the Government's proposals, students from families with joint incomes of between £15,970 and £20,970 will pay for the cost of their education for the first time, unless university bursaries are given to help to bring them up to the full amount.

Even more serious than that, because help is now available below £20,970, in future, beyond a new threshold of £22,270, support for students under the Government's proposals falls off a cliff edge. The support goes down and down and the amount that students have to pay through the tuition fees remains the same. Therefore, a big gap opens up and students are faced with a real prospect of substantial debts way into the future. The Government give a small amount of help now for incomes above £22,270, but expect students to pay an awful lot more on graduation.

To take one example—it is apposite because it comes from the Government's own document on the grant system—under the present system, a student from a family with a joint income of £25,000—which might comprise a manual worker with a wife who works part-time, and they would soon reach that income level—will over three years pay £1,500 for that student's education. That is an up-front figure; it is the current total figure for three years. As soon as the new system of tuition fees is introduced, a student from a family with a £25,000 income will pay—this is the net figure, taking help into account—£6,300 on graduation, which is a more than fourfold increase. [Interruption.] It is on graduation, but in comparison with the current £1,500, a payment of £6,300 on graduation is not a very good deal. As the Liberal Democrat spokesman mentioned, anyone putting the money in the bank would have to find a pretty wonderful rate of interest to help them.

Photo of James Clappison James Clappison Conservative, Hertsmere

I shall give way first to Mr. Lepper, as I indicated I would do.

Photo of David Lepper David Lepper Labour/Co-operative, Brighton, Pavilion

I thank the hon. Gentleman for remembering that I attempted to intervene on him. He suggested that very few people would benefit from the student support system that the Government are introducing. The figures that I have from the Library suggest that 40.86 per cent. of families with youngsters in my constituency will qualify for the full grant, while some 77.67 per cent. will qualify for a full or partial grant. Has he done similar research in respect of his constituency, and does he agree that the figures that I have quoted are by no means negligible?

Photo of James Clappison James Clappison Conservative, Hertsmere

The hon. Gentleman needs to look at the help that is now available—I hope that I have made this point sufficiently well; I may not have made it clearly enough—as compared with the debts that will be incurred later. The figures that I have given are net figures. I know that a £25,000 joint income in the south of England in a commuter-belt constituency just outside London is modest indeed. Families at that income level are struggling to house themselves and pay for the cost of living. Students from such families are far from coming from well-off backgrounds.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

The hon. Gentleman says that he would like more generous repayment terms than the Government are offering in the Bill. May I remind him that the last Conservative manifesto said:

"With us, graduates will not have to pay anything unless and until their income tops £20,000 per year"?

Is that still Conservative party policy? If so, how will it be financed, given the party's commitment to reduce expenditure on higher education?

Photo of James Clappison James Clappison Conservative, Hertsmere

As I said, the present position is that families on just above £20,000 do not pay anything at all. With all respect to the hon. Gentleman, I do not think that going back over previous manifestos is the strongest suit for the Labour party today.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I think that, perhaps slightly unintentionally, the hon. Gentleman misled the House in his claims about what students get at the moment over the course of their student careers. They are remitted £1,125 a year, but under the new arrangements they will receive a maximum of £3,000 up front a year. He rightly said that that still requires the payment of some debt, but has he taken into account the fact that that debt will deteriorate in relative value over a period, whereas the up-front money is valued at current rates? I am sure that he has taken that into account in his calculations, as it makes a 40 per cent. difference in his figures.

Photo of James Clappison James Clappison Conservative, Hertsmere

My calculations were based on a written answer given to me by the Minister, who told me that, under the present arrangements, there is a fee remission of £656 from the student each year. Aggregating the balance produces a figure of £1,500 over three years. The other figure that I used came from the Government's own document seeking to illustrate the position under its proposals. It said that for a family with a joint income of £25,000, there would be a grant for fees in future of £900. Over three years, that amounts to £2,700, but the cost of the education is £3,000 each year, which amounts to £9,000, so on the Government's own figures provided in written answers, the final total is £6,300. The fee system is there for everybody to see, and it costs more than four times as much as the current system. It is a fair point that that sum will be repaid in the future rather than its being an upfront fee, but I have taken account of that. Any Labour Member who tries to persuade a student that paying £6,300 in three years' time is better than paying £1,500 now has a promising future career on daytime television selling debt consolidation.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

Does my hon. Friend agree that the total debt that must eventually be repaid will be inflation-linked? Labour Members may argue that that represents a discount against the commercial rate of interest and is therefore attractive on those grounds, but the real resource cost to the Exchequer of supporting students in the future will rise even more—they cannot have it both ways.

Photo of James Clappison James Clappison Conservative, Hertsmere

My hon. Friend is absolutely right. Although it has been said that the weekly repayments will be modest, the sum itself is substantial. If the repayments are modest, the debt will extend over years and years, which is a point that students will take into account.

Labour Members must face up to the point made by the hon. Member for Harrogate and Knaresborough that students who go into important lower-paid public service jobs will spend much longer repaying their debts than those who go into higher-paid employment, which will disincentivise students from taking on socially useful jobs such as teaching on graduation. That depends on students graduating, because facing such debt in future will be a substantial disincentive to students from such families to go to university.

Photo of James Clappison James Clappison Conservative, Hertsmere

No, I will not. The hon. Gentleman has only come into the Chamber recently, and if he had been here a little bit longer he would know that I have been generous in giving way.

The amount of help given by universities is an important point that has been referred to and must be taken into account, and I tabled a written question about it to which the Minister responded. Bursaries will be available to students, and some universities will award bursaries to students from families with an income level greater than that required by the Government, which is £15,970. Universities are not required to pay bursaries to students from families with incomes above that level—the Minister will correct me if I am wrong—but some universities say that they will do so, which is all well and good.

Relative to other UK institutions—I say that for the benefit of my hon. Friend Mr. Jackson—Cambridge university has put forward the most generous scheme, which accords with the fact that it is an extremely wealthy institution. Looking across the list of other institutions—again, the Minister will correct me if I am wrong—no university other than Cambridge has made a clear commitment to give bursary help to students from families with incomes above the £22,000 threshold. I have not seen any specific commitments in the literature that I have received from the Minister, but even if there were a specific commitment to provide some help, it would have to be substantial help indeed to make up for the huge extra debts.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

The hon. Gentleman is wrong on the threshold limit. All universities must give at least a £300 bursary to students from families with incomes up to the threshold limit at which we set the £2,700 grant, which is £33,000 a year. Cambridge, Imperial, Exeter and Surrey universities say that they will give bursaries up to that level, and not the £22,000 level that he quoted. I believe, although I am not certain, that Exeter and Imperial universities have gone beyond that, and Surrey is the latest university to announce that it will go down the same route.

Photo of James Clappison James Clappison Conservative, Hertsmere

I am sure that the Minister is right, but his written answer in February stated that Government proposals do not require a bursary to be given to students from families with incomes of more than £15,970. It is not clear from my correspondence with the Minister or from what has been set out by Universities UK that there will be automatic help for students up to those levels. I will not read out the letters, but no university other than Cambridge has spoken about the threshold going above £22,000. The Minister is nodding. I accept that he has made it clear that help will be available up to the amount of £15,970—in some cases £4,000, or at least the £300 that is required by the Bill.

However, that is not my complaint. My complaint is on behalf of families on lower and middle incomes of between £22,000 and £33,000. In my constituency, or anywhere in the country, £22,000 is a modest joint family income on which people may struggle. Students from those families will be daunted by the prospect of a debt of this order of magnitude—thousands of pounds stretching into the future. In response to Mrs. Fitzsimons, if we gave students—certainly, students in my constituency—a choice between the new system and the old system, they would not queue up to take the new one. It will cost students an awful lot of money, and it will be a particularly hard blow for middle-income families.

The Government have got it wrong. The introduction of variable fees is oppressive to such families and I am afraid that it will act as disincentive. I do not like discrimination, but I do not like disincentives either. I hope that Labour Members will exercise their consciences over that question. I hope that they will also consider the loss to the country that will result if those students respond to the blandishments that they are receiving from German and American universities to go abroad, where they may receive more generous help or not have to pay any fees at all. The House should seriously consider the fact that this measure will be a substantial blow to a huge wedge of families on middle incomes.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

Like many other, but not all, Members of this House, I had a privileged education, and I have been privileged ever since in the salaries that I have earned and the jobs that I have done. Having been one of the 6 per cent. of young people who had the opportunity—although many more had the ability—to go to university in the early 1970s, I want my privileges to be other people's rights. That is why I joined my party and why I welcome the Bill, or rather what it has become.

I make no pretence about variability. A free market in higher education would indeed entrench privilege—that is why I originally opposed the concept. My hon. Friend Dr. Gibson is right. Under a free market model, the elite universities would get richer at the expense of the poorer universities. If that were still the position, I might be attracted to amendment No. 128, but what is now on offer is a firmly regulated market, if it is a market at all. We are no longer talking about top-up fees, but about top-down fees. We are no longer talking about variability, but about a fixed fee with a discount. In my view, which I believe is shared by others, most, if not all universities, across most, if not all their courses, will charge £3,000. There will be no meaningful market in higher education. The variability, such as it is, is likely to be in hundreds of pounds, not thousands of pounds. It will be an issue for school leavers when they consider which university to attend, but in no way a decisive issue.

The manifesto commitment must be taken seriously, but it was written before we went out on the doorstep at the last general election. Perhaps my hon. Friends will contradict me, but I cannot think of an issue that was raised more frequently, especially in middle-class areas in my constituency, than the resentment, especially of parents, of having to pay an up-front fee to send their children to university. The up-front contribution makes parents wonder whether they can afford to send their children to university. The Bill abolishes the up-front fee and we should celebrate that. It shows the way in which we have listened and responded to our constituents.

The language of the debate in the past year or so has been misleading, and we are all responsible for that. We should talk not about student debt but investment in the future. A mortgage is a debt; for many people, it is a lifetime debt. The rights and privileges that the previous Government extended to people under the right-to-buy policy gave them an opportunity to contract a debt, which many regretted when boom turned to bust. That problem will not confront graduates, who, if they lose their jobs in future or take a dip in salary, will no longer have to repay their tuition fee contribution. That is in stark contrast to the debt that the Conservative party invited hundreds of thousands of people to enter into. Those people came to regret it when they found themselves in mortgage arrears and their homes were repossessed.

Photo of Mr Harry Barnes Mr Harry Barnes Labour, North East Derbyshire 5:00 pm, 31st March 2004

It is certainly a question of investing in the future, but another question is: who should do the investing? Should it be done by society as a whole or individual students?

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

My hon. Friend is right. Society as a whole should make the investment, and that is what we are doing. The taxpayer bears 75 per cent. of the cost of sending a student to university. However, we must choose whether we are content for 6, 10, 20 or 30 per cent. of the young people in our communities who are academically qualified to take up university places to do that. Are we content to cap ambition at 10 per cent. or at 20 per cent.? Should we have a quota, as the Conservatives suggest? Or should we want the best for most of our young people? We should not cap their ambition, because they have a right to university education if they are qualified for it, and our economy needs their skills.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

Before the hon. Gentleman abandons the point about mortgages, does he believe that mortgage providers will take an interest in whether the applicant holds a student loan, with its obligations to repay? If they take no interest, will they not be acting irresponsibly in offering money?

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

A leading mortgage association has already confirmed that it has no problem with the proposal. Mortgage providers will take an interest in the earning capacity of those who wish to have a mortgage, and a degree significantly advances that capacity. Data suggest that graduates who enter employment have an immediate advantage of £4,000 a year over those who do so without the benefit of a degree.

My hon. Friend the Member for Norwich, North suggested that variability would discriminate against the modern universities. I challenged him about that in an intervention. The Government have reintroduced maintenance grants, which is a huge step forward, not only for 33 per cent. of students but especially for those from low-income backgrounds. The Government are now taking responsibility for paying those grants and not obliging the universities to do that. That has lifted a difficult burden from the universities with the highest intakes of students from low-income backgrounds and allowed them to keep substantially more of their income from tuition fees than was originally intended. Thus the very universities that contribute most to the widening access agenda will keep most of that new income. The figures that I have seen suggest that, for example, Bournemouth will have a 50 per cent. uplift in its income from student fees, Middlesex will enjoy a 37 per cent. increase, and my nearest university, Wolverhampton, will benefit from a 20 per cent. increase. That is in contrast to the uplift for Cambridge, Oxford and the London School of Economics—which are not known for their contribution to the widening access agenda—which runs at less than 10 per cent.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

I shall give way to the hon. Gentleman in a moment, but I want to address a point made by the Liberal Democrat spokesperson about Cambridge being an asset-rich university. Mr. Willis will have heard my right hon. Friend the Minister citing other examples, including Surrey, Exeter and Imperial college, not all of which are cash-rich institutions, and there will be more to follow. They are offering students paying top-up fees a further £4,000, on top of the £3,000 available from the Government. That will give those students an income over three years of £21,000, and a repayment to make on graduation—on an income-contingent basis—of £9,000. That is a pretty good deal. When students and school leavers understand what is on offer in the Bill, they come to very different conclusions from those suggested by Mr. Clappison.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

Does the hon. Gentleman accept that, under the current system, a student from a less well-off background will end up with student loan debts of about £10,000? After the introduction of top-up fees, even taking grants into account, that same student will end up with debts of about £10,000. So, at the end of their university career, their financial position will be no different.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

We could trade mathematics, but let me tell the hon. Gentleman why the reintroduction of maintenance grants makes such a huge difference. Although the idea of debts, mortgages—whatever we choose to call them—is an issue for everyone, our society is not half so debt averse as we might think from listening to this debate. Most of us have debts, whether through hire purchase agreements, bank overdrafts or credit cards. Debt is an issue, I grant the hon. Gentleman that, but one of the principal reasons why young people with academic qualifications from low-income and working-class backgrounds have not taken up places at university, even when they are available—which, under the Conservatives, they certainly would not be—is that they cannot afford the up-front student living costs. They have no savings, and their parents have no savings with which to sub them through university.

The return to the maintenance grant is therefore a measure of which all Labour Members should be proud. It is radical, progressive and empowering, and it will allow universities to welcome those students into higher education, provided that the places that we can pay for through the tuition fees are available. It will also enable people to whom the privilege of going to university has been denied for decades to take up the opportunity to enrich their lives, to enhance their earning capacity, and to underpin our economy for generations to come. That is why the return of the student grant is a crucial part of the Bill.

Photo of Mr David Rendel Mr David Rendel Shadow Minister (Higher Education), Education & Skills

I want to return to the point about whether the new universities or the more privileged ones will gain the most. The hon. Gentleman says that, as a proportion of their income, the new universities will gain more than the richer ones. That is simply because the richer ones currently have a much greater income. Some universities will, by the hon. Gentleman's own admission, charge less per student and therefore bring in less in fees per student. I would suggest that those will tend to be the poorer universities, and because they will bring in less per student, the gap will widen in terms of the amount of money per student that universities have to spend.

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

There is a fundamental misunderstanding on the Liberal Benches. [Interruption.] I was just inviting colleagues to imagine what, among many misunderstandings, that could be. On this particular issue, the reason why modern universities will benefit disproportionately from the steps that the Government have taken to relieve them of the responsibility to pay out in grants what they receive in income is that they are undergraduate teaching led, whereas other universities, principally those in the Russell group, if they are not research led, at least have a high proportion of their funding vested in research. Universities that specialise in educating precisely those young people to whom I have been referring should and will benefit, and will be rewarded by their contribution to widening access.

Photo of Gordon Marsden Gordon Marsden Labour, Blackpool South

My hon. Friend has rightly drawn attention to the mainstream universities, which are precisely those that are most likely to attract first-generation students. Does he agree that that is why the Campaign for Mainstream Universities has issued a note today saying that any vote that risks the withdrawal of this Bill will be a vote against widening participation and social inclusion?

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin

My hon. Friend is right to draw attention to that important statement. He also gives me an opportunity to use a line that I would have used on the Conservative Front-Bench spokesman if he had allowed me to intervene. He talked about divisions of opinion among vice-chancellors. Of course, he is right: there is no unanimity among vice-chancellors on this issue. Vice-chancellors are unanimous, however, in their contempt for the Conservative party's policy on higher education when it has one, and in their contempt for its opportunism when it has not. That is the unanimity that the Conservative party has managed to engender in the higher education community.

The benefits that I have outlined are those of a Bill that is radically different from the White Paper, which was rightly and roundly criticised until more or less the new year. I want to pay tribute to Ministers and give them credit for the fact that they have not only listened but responded to constructive criticism from colleagues. They recognised the argument that the real disincentive to working-class school leavers is not debt but upfront fees and living costs. The support package of £3,000 is therefore extremely welcome. Colleagues argued about the adverse impacts of modern universities bearing those costs, and the Government are now bearing the cost of those grants. We argued for the conversion of fee remission to grant, and we had an undertaking from Ministers. That was a brave step, as it meant changing a publicly held position. It was the right decision and I am grateful for it, as future generations of undergraduates and their families will be. We argued that elite universities must broaden their student base, and it is OFFA's task to ensure that they do.

The Liberal Democrat spokesman contrasted the £4,000 bursaries that Cambridge and other universities will offer with the situation at Wolverhampton. He said that Wolverhampton university would not be able to afford the bursaries. He is probably right. But Wolverhampton's intake, depending on what statistic one reads, is either 47 per cent. or 75 per cent.—or somewhere between those two figures—lower-income students. It will not be required to pay those bursaries, and it will not need to do so. The need and pressure should be on the Russell group of universities, which year on year have signally failed to embrace the broadening access agenda—the latest figures show a reduction in working-class students with academic qualifications being allowed to study at those institutions.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

Under the Bill, if Wolverhampton university, 47 per cent. of whose students are from the three lower socio-economic groups, charges the full £3,000 fee, those students will each be eligible for a £2,700 grant from the state, and the university will have to provide £300. Given that it will have to find grants for 47 per cent. of its intake, compared with Oxford, which will have to find grants only for the 9 per cent. of its students who are from those socio-economic groups, how on earth will that benefit Wolverhampton?

Photo of Mr Peter Bradley Mr Peter Bradley Labour, The Wrekin 5:15 pm, 31st March 2004

The hon. Gentleman makes an important point about the Liberal Democrats' fitness for government. In an ideal world, Wolverhampton would not have to bear the cost of the £300. What the hon. Gentleman does not seem to appreciate is that it now has a very high ratio of income that it can keep, certainly compared with what was originally proposed, which will boost its funding—I gave him the figure of 20 per cent. That is why, despite its reservations about variability, Wolverhampton supports the Bill. It will be good for the university, good for its current intake of students, and good for students who are yet to go there. OFFA's task will be to ensure that universities that are not meeting the objectives perform better and achieve more, which is why I support amendment No. 129.

We have argued for a three-year review. As the Government have conceded, that is incredibly important. Three years after the new arrangements are introduced, we shall be far better placed to judge whether they have delivered the benefits that we expect them to deliver. If we decide that they have not, it will be up to us to do something about it. I cannot understand why some Members do not have enough confidence in themselves and their colleagues to change, or to endorse, policy if that is the right thing to do. This measure is no different from any other in that regard. Both sides of the House will be whipped, just as they are in the case of other Bills. It is an insult to say that—it would also be unlawful—we will fetter the discretion of a future Parliament because we do not have enough self-confidence to believe that we can either sustain or, if need be, change our own thinking. That is a specious and dangerous argument.

We will have a debate in both Houses, and for that reason I strongly support amendment No. 130. We must be able to take account of the three-year review and all the other information that comes our way. We need a motion that we can debate, amend and vote on.

The amendments that the Government have suggested they will accept, along with the huge gains made on Second Reading, have significantly strengthened the Bill. They have strengthened Parliament's control over the future of tuition fees, they have strengthened the Government's obligation to police those provisions in the "duty and power"amendment tabled by my hon. Friend Mrs. Campbell, and they have strengthened the regulator's powers to enforce the widening of access not just to universities already subscribing and contributing to that principle, but to all universities, no matter how grand they think they are.

The Bill is not perfect. No one wants to pay the additional taxes proposed by the Liberal Democrats; no one wants to pay the additional charges that we propose. This, however, is not just the best package on the table, or the only package. It is a good package—a radical, progressive set of measures that will help to boost standards in our universities, underpin their competitiveness, and create opportunities for working-class school leavers who never had such opportunities before and, without this package, would not have them in the future. I am not just prepared to vote for the Bill; I shall be proud to do so.

Photo of Ms Annabelle Ewing Ms Annabelle Ewing Spokesperson (Social Security (SNP Shadow Scottish Minister); Education & Skills; Home Office; Law Officers; Work & Pensions)

On behalf of the Scottish Nationalists and Plaid Cymru, I rise to support amendment No. 128, which would delete what I believe to be iniquitous proposals to introduce variable top-up fees. In my view, they are wrong in principle. They will create a two-tier system, and will treat university education as if it were just another commodity in the marketplace. I think that my opinions reflect widespread concern among parents, students and university principals throughout Scotland. Those people have a great fear of the negative impact of the proposals on the university sector in Scotland. That issue was highlighted in the report of the Scottish Parliament's cross-party Enterprise and Culture Committee, which was produced in December 2003. The committee had spent three months taking evidence from all relevant parties and sectors, and the report's conclusion was that the top-up fee proposals in the Bill would have an adverse impact on Scottish higher education.

That conclusion has been echoed by the majority of university principals in Scotland, and has even been admitted, although very late in the day, by Scotland's Labour First Minister. The key issue is that because of the Barnett formula, if more private money is levered into the university sector south of the border, that will create in the longer term a chronic funding gap in Scotland because there will be no Barnett consequentials for the Scottish university sector. That is widely accepted in Scotland and is the view of the majority of university principals there, so I do not know quite why the Minister is shaking his head. Perhaps he has not been in communication with the university principals in Scotland.

The report's conclusion is that there will be a significant and detrimental impact on research in Scotland's universities, which at the moment have an excellent reputation, and deservedly so. There will also, of course, be a significant impact on recruitment. Those facts are incontrovertible. Notwithstanding that, on Second Reading, we saw 46 Scottish Labour MPs troop into the Lobby to support the Government and vote against Scotland's interests. We also saw the solo Scottish Tory MP sit on his hands, although he has managed to vote on some measures that have no impact whatever on Scotland, such as the Mersey Tunnels Bill. The key issue is what the Scottish MPs will do today.

We have heard much in the debate about international examples, and I asked the Prime Minister at about the time of Second Reading why on earth, if a country such as Ireland could use its powers to abolish all tuition fees, as it did in the 1990s, and secure a participation rate of more than 50 per cent., he could not secure such a result in England. In his answer, interestingly, he pointed to the example of New Zealand, but as we have heard today, that was perhaps not a good example to use in seeking to strengthen the Prime Minister's case.

I shall keep my intervention brief, because I appreciate that other Members want to contribute, but the key issue for Scotland today is whether the Scottish Labour MPs will put Scotland's interests and their constituents' interests ahead of the political interests of the UK Prime Minister. Is the solo Scottish Tory MP once again going to sit on his hands and abstain? Vital Scottish interests are at stake, and it is noteworthy that not one Scottish MP has even sought to listen to any part of today's debate, with the notable exception of the Father of the House. The House might not know that he is the only Scottish MP to be a university rector—he is the rector of Edinburgh university, and chairs its court. The Father of the House, well knowing the views of the university sector in Scotland, took the principled position on Second Reading of voting against the Bill.

Given that vital Scottish interests are at stake tonight, I hope that the Scottish MPs who voted with the Government last time will reflect a little further, and will put Scottish interests ahead of those of the Prime Minister. If they fail to do so, their betrayal will not be forgotten or forgiven in Scotland.

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford

My hon. Friends have discussed matters of principle relating to manifesto commitments, and we need to reflect on that. We must reflect on the argument about top-up fees put forward at the time of the manifesto, which referred to fees on top of up-front fees. We are in a very different situation now, so I have no problem at all on that. My conscience is clear.

I am sorry to speak against my hon. Friend Dr. Gibson, whom I like enormously. He is a fine fellow. He has had a glittering career both politically and academically and, perhaps more importantly, is a football star as well. We have spoken about the principles of widening access, of increasing numbers—that is, Labour and Liberal Democrat Members have, rather than the Conservatives, who do not believe in increasing numbers—and of providing more student support. It is vital that we bear those principles in mind and make choices for individuals, for the institutions and, very importantly, for our country.

We must make those choices for our country. Recent figures from the Institute of Employment Research show that of the 13.5 million jobs that are expected to be filled by 2012, 50 per cent.—6.8 million—will be in occupations likely to demand graduates. If we look across the world, India is churning out 1 million graduates, who at the moment are doing a lot of back-office work, but in future they will be doing development work as well, so yes they will have—

Photo of Patrick Hall Patrick Hall Labour, Bedford

My hon. Friend is making an important point about the future estimated need for people with higher education skills. Does he not agree that those who deny the need for 50 per cent. of people to go to university are actually doing down the economy of this country, never mind those individuals who should go to university who have the ability?

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford

My hon. Friend is right. So we are talking about the individual, the institution and the country. From the individual's perspective, it is not just a 50 per cent. target; as we have heard, it is a 50 per cent. projection. We are seeing more young people achieve and we know that if a young person gets two or more A-levels they go to university. Show me the queue of parents who will line up and say, "I do not want my young son or daughter to go to university." There will not be one. We all aspire for our sons, for our daughters, and for all the young people. We have continuously increased access in recent years, and that is what we need to continue to do for the individual and for our country. Jobs that require few qualifications will not exist in future. Foundation degrees will be a very important component of the increase to 50 per cent., providing the vital technical skills for our economy.

The issue about debt has naturally been central to our discussions in the Chamber, but we may not have discussed the fact that if a person takes on a debt to purchase a product, they want the product to be of quality. There has been a decrease in investment in our universities, and class sizes have risen. There have also been difficulties in the recruitment and retention of lecturers, whose pay is appalling. By increasing the revenue stream to universities, this measure will allow them to increase lecturers' pay to assist with recruitment and retention. That is vital because if you are graduating from university and want that qualification, you want the course to be a good quality product. We talk about the fear of debt. We know what we are talking about—

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

If a golden dawn is indeed emerging for those who work in higher education, why is it that Association of University Teachers branches throughout the country are so vigorously opposed to what is proposed in the Bill and the financial arrangements that surround it?

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford

Perhaps when that dawn, as my hon. Friend describes it, does appear, they will not be so against them. Once people see increases in their salary they will not be quite so against them, but we must take those decisions now, or we stay where we are, or we find finance from somewhere else. If my hon. Friend believes in raising taxes that is fine, but I remind him that we have had issues about our manifesto commitment. We stood on a promise not to raise the top rate of tax, so where would the money come from? After all, we would be asking for a reasonable contribution—a graduate earning £18,000 a year would be asked to pay £5.19 a week. Most of my constituents would think that that was a reasonable starting point.

If we want to invest in our young people and widen access, this is the right proposal for the country, the individuals and the institutions, which need it for their lecturers. It will provide opportunities for so many young people in our constituencies. However, it is not only the proposals on student finance that will achieve that. It will also be achieved through the Sure Start programme, investment in primary schools, and investment and improvements in secondary schools. The Bill is right for the country, the institutions and the individuals, and I hope that the House will support it.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills) 5:30 pm, 31st March 2004

I shall speak in favour of new clause 5, because it would remove the possibility of charging for tuition fees, which would have an unacceptable impact on students and would be unstable in prospect—as I shall make clear later. My immediate concern is to welcome one aspect of the change in the Labour party. It has begun to take on board some of the principles of a market system. Nor does it wish to put up taxes—as has just been pointed out—at least not by the front door. However, that is not a debate for today.

I find it odd, however, that the Labour party dissociates itself completely from the impact of the price mechanism. The Bill will impose a charge for the tuition of students, and the fact of that charge—however moderated or explained away—will have an impact on students. If a charge is levied for something, it is less attractive as a result.

Photo of Robert Jackson Robert Jackson Conservative, Wantage

My hon. Friend, for whom I have great admiration, congratulates the Labour party on its conversion to market principles, but it is a little strange to do so at a time when the Conservative party is abandoning them.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

I thank my hon. Friend for his comments and I hope to have the chance to advert briefly to alternative means of finance, although of course this is not a Second Reading speech.

I make the point about price in relation to disadvantaged students and the discussions they have with their parents and siblings. Any imposition of fees is likely to act as a deterrent, at least for some of them. However much the charge is removed from the time of tuition and applied to graduate level, and however much it is attenuated or made more acceptable by maintenance grants—which the present Government abolished, of course—there will be a disincentive effect.

Before Ministers pat themselves too much on the back for their generosity, it should be remembered that some of that generosity will be financed by other students. The Government have improved the Bill, but parts of the package remain to be hammered out, with great difficulty and political angst. It will require the imposition of a charge on the universities that will have to be put back into bursaries, and they will in effect be financed by the less indigent students.

Photo of Mr Harry Barnes Mr Harry Barnes Labour, North East Derbyshire

New clause 5 would remove fees for students. Is the hon. Gentleman aware of my amendments, which have not so far been debated? They also try to tackle the student debt problem and are more radical in some respects, in that they would apply to all debt, and less radical in other respects, in that they would not get rid of all the fees in one fell swoop. They would provide for a holiday from debt. What are his feelings about those amendments?

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

The hon. Gentleman has introduced his argument without having to make a speech to it. The short answer is that I am aware of his ingenious proposals. They deserve consideration, but I do not, on balance, come down in favour of them. However, at least they encourage discussion on the matter.

There will be problems for less privileged students, and I am equally concerned about the problems faced by people whose families are on a moderate income, which were set out eloquently and expertly by my hon. Friend Mr. Clappison. There will be an impact on such people's families. Their parents may continue to make a contribution, but if they do not, it will add to the student's debt on graduation.

Photo of Angela Watkinson Angela Watkinson Opposition Whip (Commons)

Does my hon. Friend agree that, when graduates' salaries reach the point at which the repayment of student debt is triggered, they are likely to be taking on other commitments such as marriage, a family and a mortgage? The collective effect of the debts is likely to create a disincentive to enter a college course in the first place.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

I strongly endorse what my hon. Friend says. Her point was enshrined in an intervention that I made on Peter Bradley in which I pointed out that mortgage providers must take account of the overall package of debt.

Photo of David Lepper David Lepper Labour/Co-operative, Brighton, Pavilion

Is the hon. Gentleman aware of a statement made by the Council of Mortgage Lenders? It says that it

"recognises that many graduates will still be paying off their student loans at the time they consider buying their first home. On the basis of the current repayment schedule for student loans, the existence of an outstanding student loan is unlikely to have any negative bearing on the graduate's ability to obtain a mortgage."

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

I accept that the council does not wish to discourage people from applying for a mortgage, but whether lenders will be prepared to make well-founded offers on that basis is a different matter. The debt will be a debt that must be serviced by somebody.

Photo of Mr David Rendel Mr David Rendel Shadow Minister (Higher Education), Education & Skills

I do not know whether the hon. Gentleman was in the Chamber when I asked the Prime Minister a question on that matter. I pointed out that one of my constituents who has a debt of a mere £12,000, which is much lower than the likely debts of the future, has been turned down for a mortgage simply on the ground of student debt.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

I am grateful to the hon. Gentleman for pointing that out.

I do not think that enough has been said about the Bill's implications for students on long courses, which I am worried about. Not all those people will go on to be in the private sector, and their burdens will be substantial.

Let us consider alternatives. It is a matter of record—I do not want to debate it with my hon. Friend Mr. Jackson, for example—that when we were in government, we ran a system that did not charge fees, but that was open to fees. There was a slight disagreement with Mr. Willis about that, but the issue did not arise except on one brief occasion. At that time, we were still able to expand the higher education sector substantially. That approach would provide for significant access to higher education and I shall defend it on another occasion.

An alternative heroic approach, which is not ruled out by the Bill, would be to go for an all-private system—some universities occasionally talk about that. A university that was prepared to forgo all public funding could go private and rely exclusively on fees or other forms of private income. It could introduce needs-blind support if that could be financed. It is highly questionable, however, whether that would meet the access concerns of the Minister and Conservative Members and whether it could be introduced, because there would undoubtedly be consequences for the student body. However, I emphasise that that approach would not be ruled out by the Bill.

If universities find themselves in difficulties, despite the package, the Minister does not rule out the possibility of them moving towards unregulated parts of the sector—similar to the way in which public utilities buy businesses that are unregulated, if I may put it that way. I am thinking about part-time students—we had a constructive debate about that in Committee—postgraduates and overseas students. There is nothing to stop a university rebalancing its intake, which some have suggested they might do.

I was sorry not to be in the Chamber to hear the speech of my hon. Friend the Member for Wantage. Some important avenues could be explored in relation to the contribution that future employers and graduates can make to stimulate alumni contributions and endowments more generally.

One of my major concerns about stability is not simply the financial stability of the system and whether it will deliver. I am entitled to be at least slightly sceptical about Labour Members' claims. It is interesting that they inherited a system from us that was delivering a more than one-third participation without fees. They announced that it was necessary to make changes, so they introduced tuition fees and abolished maintenance grants. They came up with a system that was supposed to solve everything, yet six years later they are back to the drawing board with a repeat solution, as if the system was never viable in the first place.

Apart from the financing costs of the system, there will be a heavy regulatory price to pay. The fees regime will come unstuck because of the huge public expenditure cost, which exceeds the value of the fees available to universities. Equally, the regulatory system will not work and will pave the way for further interference in the admissions policies of universities.

My essential concern on the substance of the matter, as enshrined in new clause 5, is that the fees regime will break down and what has been put in by way of public expenditure to sugar the pill exceeds the amount that universities get. More to the point, the ratio will worsen over time as the level of student debt for most students increases and, ipso facto, the level of subsidised loan outstanding for each student, or for the generality of students, itself increases. Eventually, a future Chancellor will conclude that the promised loan subsidies will be unsustainable and the cost will be excessive. At that point, all bets are off.

Another pressure that may develop—the Minister will realise that this has been implicit in the debate—is that most universities will charge the market rate. As the Select Committee explained, if they do that there will not be a free market in any substantial sense of the term. A few fees will be discounted, but universities will be subject to a growing pressure to have a higher rate so that they have a greater level of differentiation.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

Does the hon. Gentleman accept that amendment No. 130 would enable the House to decide, with a debate and by resolution, and with the possibility of amendment, how to deal with a ceiling on the fee charged after 2010? His concerns that the ceiling may well disappear and that we have much higher fees in the near future should be allayed, and I invite him to support that amendment.

Photo of Tim Boswell Tim Boswell Shadow Spokesperson (Business, Innovation and Skills)

I was about to conclude my remarks, and the hon. Gentleman in a sense anticipates my argument. The Government's safeguards up to 2010 are a clause thick. If they were so minded, it would take only a very short Bill to remove the cap, and I think that the pressures to do that would be irresistible. It makes no sense within the Government's own terms to have a cap of such a nature because it neither contributes enough to universities to bail them out of their financial problems nor does it drive the agenda of social justice. It fails on both counts. It would take legislation only a clause or two thick to change things. I accept the Minister's good faith on the matter; he handled the Committee with panache and made an unacceptable brew a little more acceptable. Nevertheless, Ministers' assurances are about as convincing as they were last time we debated this.

The path will be clear irresistibly for future increases in top-up fees, which in a sense are beyond the immediate concern of present students but will form the next tranche of concerns that future students will have. That is the basis, in my view, on which the Bill is founded. If it has any supporters or friends, they are probably to be found among the 100 or so vice-chancellors, not all of whom agree but they are giving the Bill their support, fingers crossed, in the hope that it might do some good and that it will not break down while they happen to be in charge, any more than the Minister is, of this difficult and sensitive sector.

We need to examine higher education funding but we do not need to do so through the means of charging that the Government propose in the Bill.

Photo of Mr Jon Owen Jones Mr Jon Owen Jones Labour/Co-operative, Cardiff Central 5:45 pm, 31st March 2004

I am grateful for the chance to speak for a few minutes in a five-hour debate on an England and Wales Bill on the Welsh aspects of the measure, which have not been discussed to date. So far we have had more discussion on higher education policy in New Zealand than we have had on that in Wales.

I intend to support the amendment of my hon. Friend Dr. Gibson, who, appropriately for this debate is my former lecturer. I do so because I take the Government at their word. I have been told by many Government sources that if I support the amendment and it is agreed to, it will wreck the Bill. That is why I am supporting it.

Many of my right hon. and hon. Friends will not understand my point of view because there are many good things in the Bill. If they listen, I will tell them why I am doing what I am. If the Bill falls as a result of my vote, I hope that it will be a salutary lesson. The Government and Parliament have abrogated their responsibility to Wales during the passage of the Bill so far.

I oppose the idea of variable fees, in particular because of their effect upon Wales. This is an interesting test case for the limits of devolution. To what extent can we have policies that are different from the context of English policies? There will be different issues from policy to policy. On some issues, because of the effect of the market on a particular issue—this is one such issue—it is not possible to devolve effective powers, which would be implemented differently in Wales from how they would be implemented in England. I shall explain why.

We have an extremely integrated system. About half the students in Wales are English and about half of Welsh students are in English universities. That is because there is a market already, but the Bill will increase the level of marketisation. Students have a right to move from whichever constituency they are in and from whatever side of the border. I note already that, because I am speaking about Wales, there has been a loss of interest in the Chamber. If anything, variable fees will increase marketisation, but just as price differentials between universities will influence the choices of students as between universities, price differentials between England and Wales will influence the decisions that students take in England and in Wales.

Wales is extremely vulnerable to distortions that will come about through divergent policies. In the 2006 cohort of students, Welsh universities will be charging a £1,250 up-front tuition fee. English universities will be charging up to—the better ones will mostly be charging—£3,000. That will be a variation of £1,750 per student per year.

If we do the mathematics, the cost to the Welsh Assembly is £48 million a year in total to subsidise its institutions for not charging the variable fee, but they will not be able to charge it for three years, so the cost is £146 million. That money must come from the Welsh block, which is the money for schools and hospitals in Wales. The assumption is that there will be no market distortion, but there clearly will be a market distortion. If Cardiff university—a Russell group university—charges the £1,250 up-front fee, whereas Bristol university charges £3,000, there will be a £5,000 difference over three years. Naturally, Cardiff university will be more attractive to those who need to pay the full amount, so there will be a distortion and English students who have to pay the full amount will move to Wales.

Given the size of the market—690,000 students in England and 40,000 students in Wales—[Interruption.] No, sorry, I will make these points because they have not been made so far. I have to disappoint the Whips. There will be a distortion and people will move, but about half the students in Wales are already English. The number will rise, so the Welsh Assembly will be put into the perverse position of subsidising the education of the better-off English students—who would otherwise have to pay the full rates but prefer to go to Welsh universities to avoid doing so—from the money that would otherwise be spent on schools and hospitals in Wales.

What a perverse and ridiculous position to be in, and it could be worse because Welsh universities will not be able to pay the £2,700 bursary grant, which should go to the clever, poor students who can get into university. Poor Welsh students will be unable to find places in Welsh universities because they will suffer increased competition as more English students are tempted into Welsh universities. The Welsh students will have a big incentive to try to get into English universities because that is the only place where they will be paid the grant.

I put it to Parliament that that consideration is worthy of debate and discussion, and that the Ministers would have some comfort for me if they could explain how the Bill, which will devolve the power that causes that to happen, will work in Wales without resulting in the ridiculous position that I have tried to explain in my shortened speech.

Photo of Mr Jon Owen Jones Mr Jon Owen Jones Labour/Co-operative, Cardiff Central

I will give way once because the hon. Gentleman is another Welsh Member who has not spoken so far is this debate.

Photo of Mr Simon Thomas Mr Simon Thomas Chief Whip, Spokesperson (Agriculture; Culture; Environment; Heritage; International Development; Sustainable Energy; Transport)

I am grateful to the hon. Gentleman for giving way. He is making a cogent argument. Although it is strange for me as a Welsh nationalist to say this, he is not quite correct to suggest that those arguments were not debated in Committee—they were debated. However, he is nevertheless right to make these arguments on the Floor of the House. I hope that the Minister listens carefully to what he is saying, but I wonder whether the hon. Gentleman has factored something into his consideration that he has not yet mentioned. He refers to the market distortion, but there is surely a further distortion, given that the money that, in effect, will be added to the English university block grant will come directly from the fees raised in England. That will not be reflected in the Barnett formula, thus further distorting the situation.

Photo of Mr Jon Owen Jones Mr Jon Owen Jones Labour/Co-operative, Cardiff Central

That point was made by an SNP Member during the debate, so the hon. Gentleman did not need to make it a second time.

The Bill applies to England and Wales. Every piggyback Bill applying to England and Wales has had the same problem. Ministers and Members believe that it is not their responsibility to discuss Welsh issues. It is their responsibility because the issue is not devolved and Parliament must find a better way to debate such matters.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

May I intimate at the outset that the Government are prepared to accept amendments Nos. 129 and 130, with the permission of my hon. Friends who have put their names to those amendments? I shall say a little more about that in the course of my remarks.

Photo of Mr Harry Barnes Mr Harry Barnes Labour, North East Derbyshire

My right hon. Friend mentioned the amendments that he will accept. Presumably, therefore, he does not accept the other amendments, including those that I tabled. It is important for me to know that, so that I can look for a procedural device whereby I can move one of the three sets of amendments in my name, which call for a student holiday from debt of 15, 10 or five years. I hoped that the Minister might be tempted by the five-year provision. I may now seek to move the amendment specifying 15 years and press it to a Division, but I will need to understand the procedural devices available to me.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

I cannot help my hon. Friend with that, but as I said that the Government are prepared to accept amendments Nos. 129 and 130, he can assume that we are not willing to accept any of the other amendments. My hon. Friend argued his case on Second Reading. I doubt whether any party in government could accept it. It involves not just fees, but a loan, and calls for a holiday of five, 10 or 15 years before any money comes back to the Government. The problem with that is that it would cost us £100 million to £200 million—money that we could use elsewhere in a student support package. I do not have time to go into detail, but I assure my hon. Friend that we considered the idea carefully and we are not attracted to that amendment.

New clause 5 is an attempt by the official Opposition—this was not much mentioned when it was moved—to take us back to the period pre-Dearing and pre-1998 when colleges could charge, but when every student had a non-means-tested grant to meet the charge. It is a back-to-the-future proposal. I am amazed at what is going on with the official Opposition. I very much respect their Front-Bench spokesmen. Throughout this debate on the future of higher education, there has been only one Back Bencher on the official Opposition Benches. [Interruption.] Well, Mr. Jackson is facing the right goal in this match.

No one has mentioned Dearing or the national committee of inquiry that the previous Government set up. The Opposition say that we should go back to the period pre-Dearing and that there should be no fees whatever. They support amendment No. 128, as well they might—it was originally their amendment No. 21—but they were not always in favour of the position pre-Dearing. When the Dearing report was published, the Conservative party supported its principles. Mr. Dorrell, who was then shadow Secretary of State for Education, said that the Conservative party supported all the principles laid out in the Dearing report.

Some time between that and the 2001 election, that turned into a pathetic statement that the answer to the funding problem in higher education was endowments. Mr. Taylor pointed out on Second Reading that £30 billion of endowment capital would be needed to raise the amount of money that we are providing for in the Bill.

So we move from support for Dearing, whose report the Opposition commissioned when they were in government, to a frankly pathetic policy of endowments to solve the problem, to this debate on the future of higher education. To be fair, the Liberal Democrats have a principled stance, although I do not agree with it. I accept that the Government's stance is mildly controversial, but at least it sets out how we intend to tackle higher education. But Her Majesty's official Opposition tell us that they are in a hiatus, with absolutely no policy whatever. That is poor form, to use words that Opposition Members sometimes use.

If that were not bad enough, we have the five principles that will guide Her Majesty's official Opposition when they do come up with a policy: to increase income for universities; to improve the financial position of students in respect of debt; to increase universities' freedom from central Government; not to increase taxes; and not to increase fees. It is no wonder that it is taking the Opposition a bit of time to come up with a policy when those are their guiding principles.

Mr. Collins asked us to look across the waters at the system in New Zealand, and I am grateful to my university-educated hon. Friends who know that there are six universities in New Zealand. But since this form of university funding was introduced in New Zealand—albeit with a real rate of interest, which we are not introducing, on which it has had to backtrack participation among those from lower socio-economic backgrounds rose from 18 to 26 per cent. in three years, and participation among Maori students, the poorest of New Zealand's citizens, rose by 46.1 per cent. in six years. There is a clear record that if this policy is introduced properly, with a balanced package, it will not damage widening participation. Indeed, I would argue, as many Labour Members have argued, that it will support widening participation.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale 6:00 pm, 31st March 2004

The Minister will know that in New Zealand there was a 38 per cent. drop in the number of working-class males attending the most expensive courses. But on consistency, which the Minister seemed to be urging on Her Majesty's Opposition, if we unveil a policy that meets each of the five tests specified earlier, will he undertake to support it? Given that he refers to Dearing and to 1997 and 1998, why is one of the centrepieces of his argument in favour of this legislation the proposal to remove the up-front fees that his Government introduced in 1998?

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

I undertake, on the record, to present the hon. Gentleman with a Dan Dare badge if he comes up with such a policy. For ex-Eagle readers, there can be no greater accolade.

While we are considering new clause 5, which goes back to the position pre-1998, let us spend a second discussing the Dearing inquiry. It is easy in a debate such as this to say what the problems are and what is wrong with our proposals if there is no alternative. Dearing looked studiously at the problem. An NUS representative who served on the national committee of inquiry that looked at all the options said that we could not continue to under-fund our universities as we had done in the past and that we must close the funding gap and tackle widening participation. It was Dearing who pointed out that in 40 years of free higher education with generous maintenance grants, the social class gap widened rather than narrowed.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

Does my right hon. Friend recognise that the capped variable system in Australia has not really improved access because it has had the common-sense result: higher fees have worked one way while improved grants and maintenance have worked the other? For our policy to be generally progressive, we must take access seriously, and all the access measures that my right hon. Friend has introduced must be at the heart of the legislation, not just an add-on.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

I agree with my hon. Friend. I would argue that they are at the heart of the Bill, and I shall come to that in a moment.

Dearing said that there were no easy options. He looked at graduate tax and different ways of proceeding. New clauses 8 and 9, tabled by the Liberal Democrats, provide that there would be no fees anywhere in the UK apart from Scotland. That would be the result of those new clauses: there would be no fees apart from in the one place where the Liberal Democrats are in coalition government. They say—I love to listen to this, because it is a really good line— "Ah, but that contribution of £2,000 is actually for the grant"—

Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

Order. I am sorry to interrupt the Minister, but I remind him that he should be addressing the Chair. When he turns to address his side of the House, he is largely cut off from my hearing.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

I apologise, Mr. Deputy Speaker.

The Liberal Democrats argue that the contribution in Scotland goes towards a grant, not towards teaching. We are giving the grant free and putting the money towards teaching, but graduates still make a contribution. However, Dearing said that the real problem with underfunding in higher education is that relying on the taxpayer alone means that underfunding will always materialise. He said that, as well as the taxpayer putting in the lion's share—let us not forget that we are putting in an extra £3 billion of taxpayers' money, which is a 34 per cent. increase—universities need a substantial stream of funding that should be paid for by those at universities contributing once they have graduated. That is the essence of what Dearing recommended.

Photo of Phil Willis Phil Willis Shadow Secretary of State for Education and Skills, Education & Skills

Does the Minister accept that, after the introduction of the Teaching and Higher Education Act 1998, the Government removed grant funding pound for pound with what students paid in fees? In the United States, which has a similar system to the one that the Government propose, as soon as there is an economic downturn—the latest is in California—the state removes funding and increases fees to compensate.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

That is wrong. We explained this issue in Committee. When we came into government, Dearing was told that, for the next two years, there would be a further 6.5 per cent. reduction in university funding thanks to the previous Government. Dearing recommended that it should be a 1 per cent. reduction and said that that was all that universities could take. Given that we had the same spending commitments as the previous Government, it was as a result of our using fees that we managed to meet the Dearing recommendation of a 1 per cent. reduction. Since then, in this spending review and the next one, there will be a considerable increase in funding per student.

The other point that I want to address relates to amendment No. 128. My hon. Friend Dr. Gibson said that he believed—I accept that this is his belief—that what the amendment would ensure is in effect a fixed fee, deferred. What he means to ensure, and what he argued for, is that we should have no extra money for universities and that we should put in a huge amount from the taxpayer to defer just £1,000, rather than nought to £3,000, as we propose. There would not be a penny extra for universities and, in a sense, we would stay where we were and remain neutral in terms of the higher education funding gap.

It does not take a Philadelphia lawyer to look at what the amendment would do. It would do what the official Opposition originally intended—take away every aspect of control over fees, as set out in clauses 22 to 27. That would be fine if we were not also repealing under schedule 6 the current rules in the Teaching and Higher Education Act 1998. Her Majesty's official Opposition have tabled two other amendments seeking to retain those provisions, but in the absence of those two amendments, the result of amendment No. 128 would be an unregulated higher education market with top-up fees in their true sense. That is the first crucial point.

The second crucial point is what the result would be if my hon. Friend's amendment were carried with the support of the Conservative party and we also put back the two provisions that we would otherwise repeal from the 1998 Act. The result would be that we could not have the £2,700 maintenance grant that Labour Members, primarily, have convinced us to introduce by rolling up fee remission with grant. Under the 1998 system, fee remission must always equal the fee, which leaves no money for a grant. It would be possible to increase the fee and the fee remission, but extra taxpayers' money would have to be put in—there is a lot of taxpayers' money in there already—otherwise there would be no single, non-repayable maintenance grant of £2,700.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

Whatever happens to the amendment tabled by my hon. Friend Dr. Gibson, he intended to get rid of the principle of variability. I, too, am worried about variability, although I am heartened a little by the New Zealand experience. I worry that access for students from low-income families will be damaged and that students may not take long courses, such as medicine. If the independent review comes up with proposals to change the system to improve access and overcome problems with long courses, will the Minister guarantee that the Government will accept them?

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

We have set up an independent commission reporting directly to Parliament because we want to listen to its recommendations. My hon. Friend does not want me to come out with platitudes, and I cannot say what the Government will do in three years' time or that we will accept any recommendation made by an independent commission. However, I assure my hon. Friends that the commission will make its recommendations to Parliament, and any Government that ignored them would be foolish.

I shall go further: we are setting up an independent commission because we understand some of the concerns expressed by my hon. Friends the Members for Norwich, North, and for Cambridge (Mrs. Campbell) and other Labour Members about variable fees. If variable fees have a negative effect, the review will have happened early enough to change from variable fees to fixed fees.

Photo of Geraldine Smith Geraldine Smith Labour, Morecambe and Lunesdale

Will the Minister accept that it is morally wrong for students from identical backgrounds who have equal ability and who study the same subjects at different universities to pay widely varying fees? That cannot be right—it is not fair.

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

New clause 6 was tabled by my hon. Friend the Member for Cambridge, and new clause 7 argues the principle of variability without the technical deficiencies of amendment No. 128. New clause 7 also contains a technical deficiency, however, because it does not outlaw anyone charging less than the fee, which would result in the introduction of variable fees.

Part-time students, who are mainly adults, pay unlimited variable fees, which are not deferred and there is no cap. The majority of part-time students come from working-class backgrounds, and they are looking to get into higher education having not been successful the first time round.

We say that if universities all want to charge £3,000, they can. It is up to them to set their fees between nought and £3,000, rather than the Government insisting that every course at every university must be priced at £3,000, even if universities say, "We cannot run that course because we cannot attract enough students." Universities could introduce variable fees through the back door by giving discounts, so what is wrong with our saying openly that it is down to universities to decide fees?

On the principle of fixed fees against variable fees, I presume that the Liberal Democrats will vote against new clause 6 if it comes to a vote. Their Treasury spokesman said in the Financial Times on 22 December, that Professor Giddens, to whom he was replying,

"is absolutely right in his criticism of flat-rate fees. This is the worst of all worlds: a poll tax on students totally unrelated to the quality of higher education provided or the preferences of students."

I presume that that is still the Liberal Democrat position.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield

May I take my right hon. Friend back to his comments about the commission? On Second Reading, he gave an assurance that if the commission came up with a proposal to change the rate of variability after 2010, that would require primary legislation, but I do not see that in the Bill. Will he define what he would see to be such a change to the rate of variability?

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education) 6:15 pm, 31st March 2004

I have only three minutes left. I have spoken to my hon. Friend about this before. I still say that if the commission recommended a change to the rate of variability, that would require primary legislation, and I am writing to him to tell him why I believe that to be the case. Other hon. Members have expressed agreement on the issue, but my hon. Friend and I have developed a misunderstanding. I am absolutely convinced that such a recommendation by the independent commission would require primary legislation post-2010, as well as pre-2010.

We are prepared to accept amendments Nos. 129 and 130 because we have listened throughout to the concerns that my hon. Friends have expressed about ensuring that the £3,000 cap has a proper grip. We gave an assurance that it would be changed in the course of the next Parliament, and we have added that to the Bill. We gave an assurance that any change thereafter must be subject to an affirmative resolution in both Houses, but we could not see how to guarantee that it would be taken on the Floor of the House. My hon. Friends provided that by tabling amendment No. 130, which proposes an amendable resolution. We are therefore prepared to accept it.

My hon. Friend the Member for Cambridge is absolutely right on amendment No. 129, which also touches on an important issue in relation to amendment No. 128. Even if that amendment's technical difficulties were resolved, the Bill would still give the Secretary of State a power, but not a duty, to insist that the fee cap is maintained. Amendment No. 129 rightly turns that power into a duty, which is why we are prepared to accept it.

We have had a long argument, and no one can say that we have not listened. We spent 11 hours in Committee on the issue of fixed fees versus variable fees. In three years, the independent commission will specifically consider that. We are introducing the grant, fee deferral, a much more benign system of repayment for students, and—for the first time—help on fee remission and a grant for part-time students. The extra £2 billion that we are providing to universities on top of the £3 billion that we are making available from the taxpayer will fund not only expansion and extra investment, but, at the centre of our proposals, the ability, through the regulator, genuinely to close the obscene social class gap in our higher education system. I urge hon. Members on both sides of the House to support the Bill.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The Minister gave the game away when he said, "I cannot say what the Government will do in three years' time", because indeed he cannot. He is trying to persuade his Back Benchers that the commission that he promised them on Second Reading will make all the difference. He cannot promise to abide by its conclusions. He cannot promise a level of Government support at the end of the comprehensive spending review, although the Government will spend less per student in every year throughout that period than the last Conservative Government spent in any year. He cannot guarantee that the £3,000 cap on top-up fees will stay for long; indeed, most vice-chancellors expect it rapidly to become not £3,000 a year, but £6,000, £9,000 or even £15,000 a year. New clause 5 is the only mechanism, alongside amendment No. 128, whereby all the Members of this House who stood on the manifesto pledge,

"We will not introduce 'top-up' fees" can keep their word of honour to the electorate.

It is no good any of us complaining of public cynicism about politicians if Labour Members vote cynically to break in the most outrageous way a clear manifesto pledge.

The Government's proposals do not have the support of students, university teachers or further and higher education lecturers. They do not even have the support of all vice-chancellors. They are bad proposals that rightly divide the House. They are in clear breach of open and honest pledges to the House of Commons and the electorate. We commend new clause 5 as the way to restore trust in public life.

Question put, That the clause be read a Second time:—

The House divided: Ayes 227, Noes 378.

Division number 122

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Question accordingly negatived.

Mr. Speaker then proceeded to put the Questions necessary to dispose of the business to be concluded at that hour, pursuant to Order [this day].

Amendment proposed: No. 128, in page 8, line 37, leave out Clauses 22 to 27.—[Mr. Grogan.]

Question put, That the amendment be made:—

The House divided: Ayes 288, Noes 316.

Division number 123

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Question accordingly negatived.