Tuition Fees

Part of Opposition Day — [7th Allotted Day] – in the House of Commons at 7:59 pm on 30th November 2010.

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills 7:59 pm, 30th November 2010

In the context in which we are now operating-an extreme financial crisis-I am introducing a policy that is a great deal more progressive than the one Labour left behind.

There is a problem, and before I move to the specifics, I shall deal with where the Opposition are coming from, particularly their new leader. Last week, he told the press that he was "tempted" to join the student demonstrations. He has had three days praying in the wilderness, dealing with the devil and deciding whether he wants to succumb to temptation. I do not know whether he has, but if he does, and if he addresses the students, I have been trying to imagine what he will tell them. I think the narrative would go something like this: "We feel your pain. We feel your sense of betrayal by the Government and the Liberal Democrats. We have applied our socialist principles, and we are going to produce a fairer system and lead you to the promised land. What are we offering you? What is our policy? Our policy is delay." The policy is delay-procrastination. There is a new mantra for the National Union of Students executive: "What do we want?" "Delay." "When do we want it?" "Well, maybe next year-probably." That is the alternative on offer.

I shall now deal with the core issue-the right hon. Member for Southampton, Itchen himself identified it: how do we finance higher education? The last line of his motion is the only one with any substance; it relates to money and the 80% cut in the tuition grant. That is a serious issue, so let us try to deal with it.

The right hon. Gentleman was an education Minister so he knows perfectly well that there are three separate funding streams for higher education: student support, research and tuition. When we look at the picture as a whole, we see that at the end of the Labour Government about 60% of all student funding came from the state and the other 40% came from the private sector, from graduates and overseas students. As a result of the changes we propose, approximately 60:40 will become 40:60. It is a mixed economy and the state contribution is being reduced.

The question is whether that number is right. Should it be more or should it be less? If the state is to contribute, where should the money come from? The issue we all have to face is this: when we came into government, and I came into this job, I knew that my predecessors were going to cut the Department that I lead by between 20% and 25%. That was the Institute for Fiscal Studies' analysis, which has never been denied. It is clear from the logic of not having protected Departments that that would have happened. That was in a Department, 70% of whose funding goes to universities. If the Labour Government were not going to cut the tuition grant for universities, we have to ask where the money would have come from.

I shall set out the range of alternatives. A 50% cut in further education was one possibility; another was a 40% cut in science and another was a 45% cut in the innovation and enterprise budget. We know that the previous Government would not have gone down several of those routes; they committed themselves to increasing the science budget by even more than us. I think the Labour spokesman on science made that very clear at our Question Time last week. The Opposition were not happy that we had maintained the science budget; they want to go even further. At BIS questions, they constantly raise the issue of regional development agency funding-they want to spend more money on that. Where will the money come from? Is it from the cuts they were committed to?

There is a choice. We understand that. What could have happened, although the Opposition have been very quiet on the subject, is that instead of raiding the universities, they could have made drastic cuts in the further education budget. That was the real choice: the further education budget for vocational training for young people who do not go to university. It is almost certain-indeed, it was being put in place when I joined the Department-that cuts in further education were already in train. The right hon. Member for Southampton, Itchen has quite properly spoken of the substantial increase in funding for universities under his Government, but he did not point out that the further education budget did not increase at all. I think it actually fell in real terms. That reflects Labour's priorities.