Higher Education Fees

Consolidated Fund Bill – in the House of Commons at 12:21 pm on 9 December 2010.

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Votes in this debate

  • Division number 150
    A majority of MPs voted to raise the UK's undergraduate tuition fee cap to £9,000 per year.

Photo of Nigel Evans Nigel Evans Deputy Speaker (First Deputy Chairman of Ways and Means) 12:21, 9 December 2010

With Mr Speaker standing next to me, I have to inform the House that he has not selected any of the amendments on the Order Paper.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills 12:25, 9 December 2010

I beg to move,

That, for the purpose of section 24 of the Higher Education Act 2004, the higher amount should be increased to £9,000, and to £4,500 in the cases described in regulation 5 of the draft regulations in Command Paper Cm 7986, and that the increase should take effect from 1 September 2012.

Photo of Nigel Evans Nigel Evans Deputy Speaker (First Deputy Chairman of Ways and Means)

With this we shall discuss the following motion on education:

That the draft Higher Education (Basic Amount) (England) Regulations 2010, which were laid before this House on 29 November, be approved.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

The terms of the statutory instrument are narrow, but I think you ruled yesterday evening, Mr Speaker, that you would like us to entertain debate on the wider issues involved, because they arouse very strong feelings inside and outside the House. The instrument represents a central part of a policy that is designed to maintain high-quality universities in the long term, that tackles the fiscal deficit and that provides a more progressive system of graduate contributions based on people's ability to pay.

I shall briefly go over the sequence of events that has led to this debate. I became Secretary of State in May, when the Browne report was being conducted. It had been commissioned by the previous Labour Government last November. They had asked the former chief executive of BP to conduct a report in order to prepare the way for an increase in tuition fees following the earlier introduction of fees, and then top-up fees, by the last Government.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I will take interventions later. You have asked, Mr Speaker, that both Front Benchers should keep their introductions brief. [Interruption.] As hon. Members know, I am very happy to take interventions, but I will take them when I have developed an argument. [Interruption.]

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission

Order. The Secretary of State should resume his seat for a moment, and I apologise for having to interrupt him.

There are strong opinions on this matter, and passions are aroused. That is understood and accepted. What is not accepted by any democrat is that the Secretary of State should not receive a fair hearing. The right hon. Gentleman will be heard, and if Members are making a noise and then expecting to be called, I fear that is a triumph of optimism over reality.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

When I became Secretary of State, I invited Lord Browne to make two adaptations to the terms of reference that he had undertaken under the previous Government. The first thing that I asked him to do was to see how we could make the existing system of graduate payments more progressive and more related to future graduates' ability to pay. He undertook to do that, and we have done further work to develop the progressivity of the system. As a result, the Institute for Fiscal Studies was able to conclude that the package that we have produced is more progressive than the existing system and more progressive than the Browne report. Concretely, what that means is that just a little under 25% of all future graduates will pay less than they do under the current system that we inherited from the Labour Government.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I will give way in a moment.

The second request that I made of Lord Browne was to ask him to look thoroughly at the alternatives, and particularly at the alternative of a graduate tax. Like many people coming fresh to the issue, I thought that the graduate tax was a potentially good and interesting idea, and I wanted it to be properly explored. He reached the same conclusion that the Dearing report reached under the Labour Government and the same conclusion that the shadow Chancellor reached when he had responsibility for this policy. The conclusion was that the pure graduate tax has many disadvantages: it undermines the independence of universities and, most seriously, it is, in the words of Lord Browne, simply unworkable. I am surprised, therefore, that the Leader of the Labour party, after all this experience and independent analysis, has chosen to drive his party down the cul-de-sac of this policy.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I will take the hon. Gentleman's intervention after reading to him a comment from someone whom I would have thought would have been one of his political allies. The education editor of the New Statesman-that publication is normally favourably disposed to the Labour party-commented on Labour's current position:

"Labour has been seduced into sentimental, sloppy thinking that defends the interests of the affluent, not the poor... To describe students as facing a lifelong "burden" of "crippling" debt is simply bizarre, particularly for a Labour leader who wants to replace the debt with a graduate tax that the rich would avoid".

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Business, Innovation and Skills), Party Chair, Co-operative Party

On sloppy thinking, crucial to the Government's case has been their advocacy of the national scholarship fund, but since the weekend when he announced further details, have the Secretary of State's plans not been unravelling rather fast? Vice-chancellors are criticising it left, right and centre, and yesterday, the Institute for Fiscal Studies told us that it provides a financial incentive for universities to turn away students from poorer backgrounds. How is he going to fix it?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

The consultation on the national scholarship scheme is still open to representations from the hon. Gentleman, vice-chancellors and others in order to achieve an objective that I hope he shares, which is to ensure that people from disadvantaged backgrounds achieve access to higher education. That is something the Labour Government failed miserably to do in relation to the Russell group universities. As it happens, the IFS looked at one of a series of options, but did not take account of the fact that, under our proposed scheme, those universities that wish to progress beyond the £6,000 cap will be obliged to introduce the scholarship scheme without the detrimental effects he described.

Photo of Jack Straw Jack Straw Labour, Blackburn

I am grateful to the Secretary of State, but he knows that the central issue is the fact that the teaching grant is to be cut by 80%, the burden of which is to be transferred to students. That is justified by the Government's assessment of the scale of the deficit. Yesterday, in evidence to the Treasury Select Committee, the Chancellor of the Exchequer admitted that he is anticipating tens of billions of pounds of receipts from privatisations not included in the comprehensive spending review. What estimate does the Secretary of State put on those receipts, and to what extent have they been taken into account in his calculations of the scale of the deficit and the cut to the grant?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I am glad of that intervention from the right hon. Gentleman, who, given his history in the previous Cabinet, is-I think-a co-author of the package of measures we inherited, and which lacked progressivity. His intervention is helpful in directing us to the heart of the debate, which is the question of how we fund universities and where the money comes from. That is exactly what I now wish to deal with.

Several hon. Members:

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I will take other interventions later. The Browne report-

Several hon. Members:

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Several hon. Members:

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

For the funding of universities, Lord Browne recommended-in a report that the then Labour Government endorsed, I think, in their manifesto-that there should be no cap on university fees and a specific proposal for a clawback mechanism that gave universities an incentive to introduce fees of up to a level of £15,000 a year. That was the report given to the Government. We have rejected those recommendations and proposed instead that we proceed as the statutory instrument describes. That involves the introduction of a fee cap of £6,000, rising to £9,000 in exceptional circumstances.

I will now explain the basic economics of that problem in the light of the intervention from Mr Straw.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

No, I will not. I will give way later, when I have finished my point.

Mr Denham, who is the Opposition spokesman on this matter, rather helpfully sent a circular letter to MPs yesterday in which he sketched out the basic economic framework within which these decisions have been made. He said that

"MPs have been asked to vote on increasing the fee cap to £9000"- he did not mention the £6,000, but never mind-

"because the Government is choosing to make a disproportionate cut to the university teaching budget...in a spending review with an average cut of 11%".

Several hon. Members:

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I will finish my point.

As the right hon. Gentleman knows, the Government, like the previous Government, are not making average, across-the-board cuts of 11% in every Department. We have chosen, as did the previous Government, to have some protected Departments-health, schools, pensions and aid. The logical consequence of that is much higher cuts in unprotected Departments. I am sure that he remembers the IFS analysis that told us, in the wake of the March Budget, that a Labour Government were planning to cut unprotected Departments by 25.4%.

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

The right hon. Gentleman has been good enough to refer to my letter. He knows full well that the IFS analysis carried out after the Budget does not stand up to scrutiny, and reflects neither the decisions taken by the Chancellor in the comprehensive spending review nor the speech made by my right hon. Friend Alan Johnson setting out our approach. However, will the Secretary of State help the House by identifying which other major spending programmes have been cut by 80%?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

The 80% fact-and it is a fact-derives from the following: most major Departments have had to take spending reductions of about 25%, as they would have done under a Labour Government. I wish to take the right hon. Gentleman and his colleagues in opposition through what that has meant for the teaching grant to universities and university funding in general.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I shall develop this point and then take an intervention.

What were the options for a Department facing 25% cuts of the kind that the right hon. Member for Southampton, Itchen himself was going to introduce? Some 70% of all spending in the Department is on universities. He could-and I could-have chosen to make the cuts elsewhere, the largest category would have been in further education. We could have made the choice to cut apprenticeships and skill-level training by a modest amount, but we need to deal with the problem we have inherited of 6 million adults in this country without the basic literacy of a 12-year-old. We could have cut that, but we chose not to. So we were left with the question of how to make cuts in the university budget of about 25%. There were various options-

Several hon. Members:

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I will finish this section and then take an intervention.

There were various options for cutting the university budget. We could have reduced radically the number of university students by 200,000, but all the evidence suggests, as the previous Government used to argue, that increasing university participation is the best avenue to social mobility. We therefore rejected that option and did not cut large numbers of university students.

We could have made a decision radically to reduce student maintenance, which would have been easier, less visible and less provocative in the short run. We could have done that, but the effect of that would have been to reduce the support that low-income students receive when they are at university now. We rejected that option. We could have taken what I would call the Scottish option. We could have cut funding to universities without giving them the means to raise additional income through a graduate contribution. The certain consequence of that would have been that in five to 10 years, the great English universities-Manchester, Birmingham, Bristol and the rest-would still be great, world-class universities, whereas universities such as Glasgow, which I used to teach at, and Edinburgh would be in a state of decline. We rejected-and rejected consciously-all those unacceptable options.


Whilst Vince Cable has´nt put limits on the amount of people in University education, many universities are now reducing the amount of applicants they accept

Submitted by Hareen Potu

Several hon. Members:

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Photo of Pete Wishart Pete Wishart Shadow SNP Spokesperson (Culture and Sport), Shadow SNP Spokesperson (Constitution)

I am very grateful to the Secretary of State. Does he even begin to understand or appreciate the potentially disastrous impact that trebling tuition fees in England will have on Scottish universities? What will he do to mitigate that?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I most emphatically will not be following the advice of the Scottish nationalists in government, who are starving Scottish universities of resources and reallocating priorities to cut schools. That is what has happened in Scotland.

Photo of John Baron John Baron Conservative, Basildon and Billericay

I am sure that we can all agree that all students who would benefit from a university education should be entitled to do so, regardless of their financial situation. My concern is that by increasing the tuition cap, participation levels among lower and middle-income students will fall away. What assurance can the Government give that the situation will be monitored closely and that corrective action will be taken, should participation levels fall away?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Yes, of course I can give my hon. Friend that assurance. Of course the policy will be monitored, and it will reflect the evidence that emerges. We have put in place not merely a series of measures to protect low-income graduates, which we have done through the threshold, but a series of measures designed to help children from low-income families to go to university, notably by increasing the maintenance grant from its level under the previous Government, giving access to an extra 500,000 pupils.

Photo of Andrew Selous Andrew Selous Conservative, South West Bedfordshire

I am extremely grateful to my right hon. Friend for giving way. I wonder whether he could say something about how he sees the future position of English students relative to Scottish and Welsh students. Should we not be looking to secure a degree of fairness between families of similar economic circumstances across the United Kingdom in years to come?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I believe, as the Government as a whole believe, in devolution. We believe that the devolved Administrations in Scotland, Wales and Northern Ireland have got to make their own decision, but the inevitable consequence of the tightening of public finance-a tightening that is happening under this Government, but which would happen under any Government-was bound to be a system of graduate contributions, which is what will happen throughout the UK. However, that is for those Administrations to decide.


Answer the question, Vince.

Submitted by alan winter

Several hon. Members:

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Photo of Rushanara Ali Rushanara Ali Shadow Minister (International Development)

Despite this talk of supporting people on low incomes, I find it quite hard to stomach what I am hearing, because in my constituency, for example, the vast majority of young people come from low-income backgrounds, yet they will be losing support through the education maintenance allowance, from which 88% of Bangladeshi children across England benefit. That one ethnic minority group, along with white working-class children, will be prevented from going on to higher education. Coupled with that are the cuts in the future jobs fund-£1 billion, and we are still waiting to hear-so please think again.


If 88% of Bangladeshi children are on EMA, isn't it time attention was given to that disproportionate number of parents who wont work? Don't tell me that it's just hard luck.

Submitted by ian mckenna

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Yes, of course I hear what the hon. Lady says about the education maintenance allowance. What I would say is that the existing system that we inherited was enormously wasteful. Large numbers of pupils received the EMA who did not need it to stay on at school. However, she is quite right to stress the fact that there are large pockets of deprivation in Britain, and her constituency in the east end of London is one of them. We understand that. The purpose of the pupil premium, which is being introduced into the school system, is precisely to address that problem of giving support to schools and pupils in areas of high deprivation.

Several hon. Members:

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I will take an intervention later, if my hon. Friend does not mind.

We have eliminated, I think, most of the other alternatives to raising funding for universities. I hope that nobody on the Opposition Benches is seriously arguing that we should drastically reduce the number of students, that we should drastically reduce maintenance or that we should simply withdraw funding from universities. The only practical alternative was to retrieve income for universities from high-earning graduates once they have left. That is the policy that we are pursuing, and today, 50 university vice-chancellors have come forward and endorsed this approach to the strengthening of university funding in the long term.

Several hon. Members:

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Opposition Members who follow these arguments closely have often made the following argument. "We acknowledge," they say, "that universities will continue to have high levels of income, but you're replacing public funding with private funding, and this is"-in some sense-"ideological." [Hon. Members: "It is!"] That is a debating point, and I am happy to take it on. At present, roughly 60% of the income of universities comes from the public sector, through different funding streams. The rest comes from private sources-something that the previous Government were trying to encourage. That will be reversed: in future, roughly 40% of university funding will come from the public sector and 60% will come from the private sector. I am keen to encourage more private funding of universities, which is why I have spoken to the director general of the CBI. He is approaching all his members to ensure that we have a significantly higher level of employer support for apprenticeships, sandwich courses and other- [ Interruption. ]

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I hope that not too many Opposition Members would regard additional funding from employers as somehow ideologically contaminated, because we will need more resources going into universities, not less, and that is what we are doing.

Photo of Simon Hughes Simon Hughes Deputy Leader, Liberal Democrats

Under the fees scheme introduced by the Labour party, all universities ended up charging at the highest rate. One of the worries out there is that all universities might end up being allowed to charge £9,000. What assurance-what rules, what guarantees-can my right hon. Friend give that "exceptional" will mean "exceptional", and that £6,000 will be the limit for most universities in the country?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

That is a highly pertinent question in the light of the experience of the last Government, who had a two-tier system. There was a migration of all universities to the top of the range. They operated, in effect, like a cartel, and that must be stopped. It must not happen again, and there are several means by which that will happen. First, any university that wants to go beyond £6,000 will have to satisfy very demanding tests of access for low-income families, including through the introduction of the scholarship scheme. Newer institutions, particularly further education colleges providing accredited courses, will drive down the cost of high quality basic teaching. If universities defy the principle of operating on a competitive cost basis, it may well be necessary to introduce additional measures to observe the principle that my hon. Friend has correctly summarised, which is that-

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I am simply saying that there are potentially other mechanisms by which universities that exceed the £6,000 level will not be allowed to behave in the way that they behaved under the last Government.

Several hon. Members:

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Let me proceed. Of course increasing the graduate contribution is bound to have an effect-it is an additional cost-to graduates. I therefore want to summarise the steps we are taking to make sure that this happens in a fair and equitable way. First of all, no full-time students will pay upfront tuition fees and part-time students doing their first degree will for the first time-unlike under the last Government-have the opportunity to obtain concessional finance under the student loan scheme arrangements.

Yesterday, after discussing the issue with the Open university and others, I made a further announcement that we will increase the range of that access from students spending a third of their time in education, as originally proposed, to those spending a quarter of their time in it. That will widen enormously the number of part-time students who will have access to supporting finance in order to pursue their education.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Thirdly, we will introduce a threshold for graduate repayment of a £21,000 salary-a significantly higher level than before-and it will be uprated annually in line with earnings. It is important to emphasise that point because under the Labour Government, there was a threshold of £15,000, but it was never uprated on any basis whatever. I wish to communicate what I said yesterday-that students who were pegged at that £15,000 threshold under the current arrangements established by the Labour Government, will in future have annual uprating in line with inflation. Those existing students whom the last Government did absolutely nothing to protect will have inflation-proofing in future.

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

Furthermore, we are introducing variable interest rates so that those on high incomes pay relatively more to ensure the progressivity of the scheme, as a result of which a £30,000 salary will carry a monthly payment of approximately £68, which is far lower, incidentally, than it would be under a graduate tax system. Under that system, people would have to start paying much earlier and at much lower levels of income.

Several hon. Members:

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Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

As well as the measures we have taken to improve access for low-income families, as opposed to the separate problem of low-income graduates, we have made it clear that additional grant provision will be made, as I said in response to an earlier intervention. In addition, universities wishing to move to a higher threshold will have demanding tests applied to their offer requirements in respect of access.

It is worth recalling the situation that we have inherited. There are a lot of crocodile tears from Labour Members, so let me remind them that social mobility, judged by the number of people from disadvantaged backgrounds getting into Russell group universities, has deteriorated over the last decade. There are currently 80,000 free school meal pupils, of whom only 40 made it to Oxbridge -40 out of 80,000. That is fewer than from some of the leading independent schools. That is a shameful inheritance from people who claim to be concerned about disadvantaged backgrounds-and we intend to rectify it.

Let me conclude in this way. I do not pretend-none of us pretends-that this is an easy subject. Of course it is not. We have had to make very difficult choices. [Interruption.] Yes, we have. We could have taken easier options, but we were insistent that at the end, we would make a substantial-

Photo of Brian H Donohoe Brian H Donohoe Labour, Central Ayrshire

On a point of order, Mr Speaker. Did not the Secretary of State say that he was going to give way? Why is he not doing so?

Photo of Vincent Cable Vincent Cable The Secretary of State for Business, Innovation and Skills

I have given way to several of the hon. Gentleman's colleagues and several of my own, and I now wish to summarise where we are.

As I was saying, there have been difficult choices to make. We could have made a decision drastically to cut the number of university students; we could have cut student maintenance; we could have cut the funding to universities, without replacing it. Instead, we have opted for a set of policies that provides a strong base for university funding and makes a major contribution to introducing the deficit, while introducing a significantly more progressive system of graduate payments than we inherited. I am proud to put forward that measure to this House. [Interruption.]

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission

Order. [Interruption.] Order. [Interruption.] Order. I understand the passions, but the more noise, the greater the delay and the fewer the number of Members who will have a chance to contribute. I want Back Benchers to have the chance to contribute and I appeal to right hon. and hon. Members to help me to help them.

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

On a point of order, Mr Speaker. On Monday, I tabled three named day questions relating to the evidence underpinning Government policy. They were about what studies the Government have commissioned about the potential impact of these higher fees on participation, particularly on longer courses such as languages, medicine, law and architecture and on post-graduate teaching courses. Those questions were due for answer at noon today, but answer has come there none. What can the House do, Mr Speaker, to ensure that Government better inform us with vital information so that we can properly debate subjects like this, which are of interest to the whole nation?

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission

The hon. Gentleman knows that I am in favour of timely replies to parliamentary questions. He is an experienced hand in this House and must pursue these matters through the Table Office and in other ways; we cannot be detained now by what he has just said.

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills 12:57, 9 December 2010

I note that the Prime Minister and the Deputy Prime Minister have already walked out of the debate. It is a shame that the two architects of this policy do not have the courtesy to stay and listen to both sides of the debate.

I fear I may have to lower Opposition Members' expectations. Those of my hon. Friends who have come here expecting some good party political knockabout-U-turns, broken promises and fees policies described by the Deputy Prime Minister as a "disaster" that he now claims to believe in-need to know that I am not going to do that speech. So much of the media coverage of this issue has been dominated by Liberal Democrat splits that we could be forgiven for thinking that today's vote is about the future of the Liberal Democrats. It is not about the future of the Liberal Democrats; it is about something much more important than that. There are millions of parents and millions of current and future students who do not care about the Liberal Democrats, but who do care about the huge fee increase that we are being asked to decide today. Today's decision must be taken on the facts and on the merits. If this Tory measure goes through with the support or abstention of Liberal Democrats, that party will forfeit the right to call itself a progressive political party.

The House can stop that decision today. The deputy leader of the Liberal Democrats says that he cannot support the Government-as well he might, because his local university's funding will be cut from £38 million to £3 million a year, and it has already said that it wishes to charge the full £9,000 tuition fee. The Liberal Democrats' deputy leader says that he may vote against the Government, and if he and every Member of the House-not just Liberal Democrat Members, but Conservative Members, Labour Members and Members of other parties-vote against the proposal today, it will fall.

Let me set out why Members should vote against, or vote for a delay and a rethink, rather than abstaining.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

Is my right hon. Friend aware that the Secretary of State said earlier that 15 vice-chancellors support him? I have a petition from the university of Warwick of 240 leading academics in this country who object to the increases in charges and, more importantly, call for a public inquiry into the future of education. What does my right hon. Friend think about that?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

There is widespread disquiet not only in the academic community. Significantly, the Secretary of State referred to the letter from Universities UK but did not read it out, because it makes it absolutely clear that Universities UK opposes the cuts in higher education funding on which the fee increase is based. He has persuaded vice-chancellors, with a gun to their head, that as the money is going the fee increase is the only option in town, but that hardly speaks of him persuading the university community of the policy.

As you said last night, Mr Speaker, today's vote is on a narrow issue-the fee cap. Behind that, however, is the most profound change in university funding since the University Grants Committee was set up in the 1920s. It is the ending of funding for most university degrees. It is a huge burden of debt on graduates. It is an untried, untested and unstable market for students.

Although there is always room for improvement, England enjoys a world-class university system: world-class in research, with a disproportionate number of the best research universities; and a richness and diversity of higher education to compare with the best. The risks are so high, and the consequences so unclear, that no sane person would rush the proposal through without proper debate or discussion. Today, however, we do not even have the promised higher education White Paper to tell us how it is meant to work.

Several hon. Members:

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Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I give way to a representative of one of those leading research universities.

Photo of Julian Huppert Julian Huppert Liberal Democrat, Cambridge

While the right hon. Gentleman is talking about fundamental changes, will he talk about his party, including him, voting to introduce fees and breaking the principle of free education? That is a fundamental change, for which he voted, and he voted for top-up fees against manifesto commitments. Will he apologise?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

The 2001 Labour manifesto-I was a Back Bencher at the time, and my right hon. Friend Mr Blunkett was the responsible Minister-ensured that the policy did not come into force until there had been a further general election. That is not the coalition's proposal.

I am sorry that the Prime Minister has left, because he did his bit yesterday to run down our English universities, saying that they were unsustainable, uncompetitive and unfair. He did not say that they were world class or praise what they had achieved; he could only knock them. "Uncompetitive"? They are the second most popular destination for overseas students in the world, but the Prime Minister tells the world that they are uncompetitive. That is a great deal of help for our universities.

The Prime Minister, however, has some interesting thoughts about overseas students. When he was in China, he told Chinese students that

"we won't go on increasing so fast the fees on overseas students, because in the past we have been pushing up the fees on overseas students and using that as a way of keeping them down on our domestic students. So we have done the difficult thing in our government which is to put up contributions from British students."

For foreign students, he said,

"we should be able to keep that growth under control."

Now we know why the Prime Minister wants to push up contributions-to keep down the price for Chinese students. Extraordinary!

Yesterday, the Prime Minister said that the current model of higher education funding is not providing enough money. Quoting the Browne review, he said that public funding per student is lower in real terms than 20 years ago. We are bound to ask, "How the hell did that happen?" It did not happen under Labour. I can tell the Prime Minister how it happened. Between 1989 and 1997, under the previous Conservative Government, public funding per student fell by 36% in real terms. Who was the special adviser to the Conservative Chancellor at that time? It was the Prime Minister. If he wants to know whose fault it was, he ought to look more carefully in the mirror in the morning.

Now, the Prime Minister is at it again. He was cutting university funding then; he is cutting university funding now. This is a Tory policy of cutting higher education; unfortunately, this time they have Liberal Democrats to take it through with them.

Photo of Tristram Hunt Tristram Hunt Labour, Stoke-on-Trent Central

Why does my right hon. Friend think that the Government are so intent on destroying the humanities base in this country? Humanities is one of the leading areas of research and excellence, and they are withdrawing public funding. What do they have against it?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

It is hardly for me to try to get inside the heads of Government Members. If we read what they say, however, we see that they think, purely and simply, that subjects have no value unless they have a value in the marketplace.

Photo of Anne McIntosh Anne McIntosh Chair, Environment, Food and Rural Affairs Committee, Chair, Environment, Food and Rural Affairs Committee

According to the last figures available, when the shadow Minister was in government, of the 80,000 children on free school meals, only 40 went on to Oxford and Cambridge. Does he not accept that his proposals for a graduate tax would mean less social mobility and people repaying a higher amount at an earlier stage?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

No, I do not. If the hon. Lady will forgive me, I will come to that point in a moment.

As a result of these Tory policies, this country will stand alone with Romania as the only OECD countries cutting investment in higher education. The Prime Minister's speech yesterday, which was meant to be a defence of this policy, shows that he does not understand the most basic features of his policy. The fee increases are not designed to raise extra money for universities. That was Labour's scheme-we took the difficult decision to introduce top-up fees, to add to record university income, and to enable more students to go to better-funded universities. The Prime Minister's plan, put forward by the Business Secretary, is totally different. Fees are being trebled simply to reduce the 80% cut in the funding of university teaching, not to raise extra money. Most graduates will be asked not to pay something towards their university education, but to pay the entire cost of their university education. Universities will have to charge £7,000 to £8,000 simply to replace the money they lose, and many universities will lose 90% of their public funding. That is what is at stake today .

If the House passes the fee increase, English students and graduates will face the highest fees of any public university system anywhere in the developed world: higher than France, higher than Germany, and higher-yes-than the United States of America.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

Will the right hon. Gentleman welcome the fact that the repayments threshold is being increased to £21,000, and the fact that anyone earning less than £25,000 a year will pay less than £1 a day for university education?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I will come to that in a moment. It is on the standard handout. Let me say first, however, that the hon. Gentleman may not realise that the increase to £21,000 will happen in 2016, when it will be worth, in real terms, precisely what our threshold was worth when we introduced it.

Several hon. Members:

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Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I must make some progress.

Most graduates will be paying off their debts for 30 years. Under the current scheme, the average is 11 years. The children of those graduates will have started university before they have paid their own fees. As I will show, the payment system is not fair.

Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member)

Does my right hon. Friend accept that reducing access and increasing relative price to our competitors will reduce the productivity and tax receipts of future generations and undermine economic growth? What we should be doing is making the bankers pay the levy rather than giving it back in corporation tax, and investing that money in higher education and the future productivity and economic growth of this country.

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

We certainly need to sustain investment in higher education, but as-again-I will show in a moment, it is not necessary to adopt our macro-economic policies to know that the Government could have made a different choice. No other country in the world is taking the step we are taking, and no other country in the world can understand why we are taking it. As always, rather than defending their position, the Government give the pathetic answer, "We had no choice." But they did have a choice. Everyone knows they had a choice.

We in the Labour party would take a more measured and responsible approach to deficit reduction, but even on its own terms, if the coalition had cut higher education in line with the rest of public services, we would have been looking at fee increases of a few hundred pounds. The Business Secretary has told us that the figure should be not 10%, but 20%. That would mean fee increases of not much over £4,000, rather than the £6,000 to £9,000 for which the House is being asked to vote today.

Photo of John Baron John Baron Conservative, Basildon and Billericay

The right hon. Gentleman cannot get away from the fact that most independent experts agree that the graduate tax, which seems to be the policy of the Labour party, will make students worse off because they will have to pay back more debt and pay it back earlier. Why does he not address that fundamental point?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

Let me explain in a straightforward way to the hon. Gentleman and others who may be confused. There are two stages in this process. The first is deciding how much public funding there will be and how much money needs to come from graduates. The second is deciding how the graduates are to make their contributions. The first stage is the critical one to consider today, because it is the 80% cut in university education that is forcing the graduate contributions so high. As for the second, if the hon. Gentleman will bear with me, as did Miss McIntosh, I will set out the case in a few moments.

Several hon. Members:

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Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I need to make some progress, because I am coming to an issue that concerns many Members.

The Business Secretary pleads that he has no money in his budget. I do not see why future generations should pay through the nose for his incompetence in allowing his budget to be cut by more than that of almost anyone else in Whitehall. The Government did not have to do that, and the truth is that in the long run it will almost certainly cost the taxpayer more.

What is the Government's plan? I will tell the House. Every year they will borrow £10 billion to fund student loans, and every year they will write off £3 billion of the £10 billion that they have just borrowed because they cannot collect the loans. That is as much money as they are cutting from university teaching, but as the Institute for Fiscal Studies, the Higher Education Policy Institute and London Economics have said, the Government have almost certainly underestimated how much debt they will have to write off because students are borrowing more and borrowing it for longer. Students, saddled with debt, will be worse off. The universities, cut, will be worse off. the taxpayer will be worse off. If it were not so serious, it would be comic. Let us look at the Government's central claim for their proposals.

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I will give way to the hon. Gentleman because he was a higher education spokesman for his party.

Photo of Stephen Williams Stephen Williams Liberal Democrat, Bristol West

Perhaps the shadow Secretary of State will enlighten us. When he was in the Cabinet-until May last year-and his successor Peter Mandelson proposed £1 billion of cuts from the higher education budget, did he support him or speak against the proposal?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

Being at the Dispatch Box is an interesting experience. [Hon. Members: "Answer the question."] I am going to answer the question. Half the time we are told, "You never had a plan for dealing with the deficit", and half the time we are told, "This is what you were going to do to deal with the deficit." The Government cannot have it both ways. As I have said on many occasions since the publication of the Browne review, the higher education budget would not have been unscathed under our deficit reduction programme, but it would not have been cut by 80%, and we would not have forced the fees up to £6,000 or £9,000.

Several hon. Members:

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Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I want to make some progress on the issue of fairness, because I believe that it lies at the heart of many of the Government's arguments and of questions raised by Members in all parts of the House. The Government say that their proposal is fairer, and that it is better for low-income graduates. The Deputy Prime Minister has said:

"The bottom 25% of earners will pay much less in their contributions to their university education than they do at the moment."-[ Hansard, 10 November 2010; Vol. 518, c. 281.]

The Prime Minister said yesterday:

"With our new system, the poorest quarter of graduates will pay back less overall than they do currently."

He also said:

"The poorest will pay less, the richest will pay more."-[ Hansard, 8 December 2010; Vol. 520, c. 281.]

Over the last 24 hours, we have seen a parade of conscience-stricken Ministers saying that they just have to hang on to ministerial office-they just have to keep their red boxes and their cars-because this is really such a good deal for low-income graduates. They will all be better off, they say. When I heard the Prime Minister say yesterday that trebling fees would leave everyone better off, I thought, "I've heard that voice before somewhere." I could not place it at first, but last night I remembered. He is the bloke who does those advertisements on day-time television. You know the ones: "Have you got bad debts, credit card bills, county court judgments against you? Let us wrap them all into one simple payment and reduce your monthly payments." We all know what is wrong with those advertisements. People are charged higher rates of interest, and end up paying much more. That is exactly what the Prime Minister is proposing today.

We all know what is wrong with the Prime Minister's claims. Let us now have a look at the Government's claims. Labour Members do not accept the Government's comparisons between their scheme and ours- [Interruption.] I mean their comparisons between their scheme and the current scheme. We think that they have chosen their assumptions to produce the figures that they want. Many people do not realise that the £15,000 threshold set in 2006 is the same in real terms as the £21,000 threshold that will start in 2016.

Let us look at the Government's figures none the less. They say that a graduate in the bottom 10% will pay less, but how much less? What is the change that has led the Deputy Prime Minister, the Prime Minister and many other Ministers to say that the new system is so fair and so wonderful? According to the Government's own dodgy figures, the poorest 10% of graduates will pay an average of just £88 a year less-£1.60 a week. As the advertisement says, every little helps; but to see Members of Parliament, including Ministers, sell their consciences for just £88 a year is a tragedy.

If the Government's real aim were to ease the pressure on the lowest-paid graduates, I would support it. The Government would have needed to make only minor changes to the current scheme to achieve that aim. However, nothing about the tiny benefit for the lowest-income graduates justifies doubling or trebling the debt of the vast majority of graduates. The IFS yesterday said that graduates from the 30% of poorest households would pay more. The heaviest burden will fall on graduates on average earnings; they will be the hardest hit in terms of how much of their earnings they will have to pay over the coming years. They will be hit harder than the graduates who go into the highest paid jobs. That is what the House of Commons Library says. That is what London Economics says. That is also what somebody to whom the House might wish to listen has said. Many Members will remember David Rendel, who for many years was the Member for Newbury and the higher education spokesman of the Liberal Democrats. In an e-mail I have received, he says the following to a number of his colleagues:

"There are those who are claiming that the current proposals are progressive. But this is only the case if by "progressive" you mean that in any one year richer graduates will pay more than poorer graduates. For all the middle- and higher-earning graduates, over their lifetimes the more they earn the less they pay. Since a very large part of the justification of charging tuition fees is the higher lifetime earnings of graduates...a scheme in which graduates with large lifetime earnings pay less than graduates with comparatively small lifetime earnings cannot be regarded as either progressive or fair. (In this regard"- says the former higher education spokesman for the Liberal Democrats-

"the new proposals, because they include a real-terms interest charge, are in fact more regressive than Labour's scheme!)."

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

I pay tribute to the right hon. Gentleman for his honesty and candour in making a substantial spending commitment. Will he tell the House how much?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

The hon. Gentleman has clearly not been listening. I have been talking about the changes that were open to his party to make.

It is because the average graduates going into typical jobs will get hit hardest compared with the highest-earning graduates, that we will need a fairer system of graduate contribution in the years to come.

Photo of Matthew Hancock Matthew Hancock Conservative, West Suffolk

The right hon. Gentleman will not accept comparisons between the existing scheme and the Government's proposals, but will he accept the analysis by the Institute for Fiscal Studies showing that the proposed system is more progressive than both the current scheme and the measures put forward in the Browne review?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

No, the IFS said graduates from the poorest 30% of households will pay more, and clearly at all other levels people will pay more than under the current scheme.

Several hon. Members:

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Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I must make some progress.

The "fairest" can be judged only by how much graduates pay. It must also be measured by the chance of becoming a graduate at all. Over the past few years the proportion of students from poorer backgrounds has steadily increased. There is much more to be done, and even more to be done on access to the most selective universities, as my right hon. Friend Mr Lammy has brilliantly shown this week.

The progress we have made was not an accident, however; it took great efforts by the majority of universities, and we constructed the support, the routes and the ladders of opportunity for more and more of those bright, talented young people. All that has been kicked away.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

I wanted to make the point the shadow Secretary of State he has just made when I tried to intervene on the Secretary of State's opening speech. Participation has been widening, but there is evidence that the poorest children are not going to the best universities, and that remains a problem. The concern for many of us on the Government Benches-or some of us, certainly-is that increasing fees even further will mean they will be even less likely to go to the best universities.

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I am very sorry that the Secretary of State did not give way to the hon. Gentleman, because I think anybody who is showing the integrity and courage he is displaying in standing out and being critical of his party's policies deserves a hearing from his own side of the House. In what he says, the hon. Gentleman is in some very good company, as I will show in a moment.

We created ladders of opportunity for young people from low-income backgrounds, but they are now being knocked over. The Minister for Universities and Science was recently asked a parliamentary question about the impact of Aimhigher. He said that

"evidence from colleges, schools and academies showed that involvement in the activities provided through Aimhigher was associated with higher than predicted attainment at GCSE and greater confidence among learners that they were able to achieve."-[ Hansard, 29 November 2010; Vol. 519, c. 590W.]

I repeat:

"greater confidence among learners that they were able to achieve."

So what is the Minister doing? He is closing it down.

Photo of Angela Smith Angela Smith Opposition Assistant Whip (Commons)

Figures from the Library show that the Labour Government put £230 million into widening participation. Aimhigher has gone and the rest of that money has not yet been confirmed by the new Government. If it goes, will it not mean that the £150 million made available is in fact a cut in terms of widening participation?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

My hon. Friend is absolutely right. The scheme that was trumpeted at the weekend-and which I will talk about shortly-is dwarfed by the scale of the cuts and the uncertainty in the higher education budget. It is a loan that is dwarfed by the cut through the stopping, in about four weeks from now, of education maintenance allowance awards, which will stop for young people going to further education college this January.

EMAs have, of course, never been just about getting young people to university. Many young people have been enabled to succeed in getting other qualifications, and in going into better jobs or into the vastly increased number of apprenticeships that we created. EMAs make a difference to those aiming for university, yet the Government are shutting them down.

The whole House knows about the work of Sir Peter Lampl of the Sutton Trust. No one outside the education establishment has done more-or, indeed, been prepared to invest more of their own money-to campaign for fair access for students from low-income homes. He supported Labour's fees policy in 2004, but he says about the current proposals that

"there is no doubt that such a significant increase in tuition costs would be a serious deterrent for those from non-privileged backgrounds. The double whammy of major cuts to state funding of universities and higher fees is inequitable and is sure to freeze social mobility. That is a bitter legacy for any politician."

I hope Members will think about that, especially those final words.

Photo of Chuka Umunna Chuka Umunna Labour, Streatham

My constituency is in the fifth most deprived local authority area in London and the 19th most deprived in England. Participation rates among people going into higher education increased by over 80% between 1997 and last year. How can these proposals do other than bring that figure down and deter people from poor backgrounds from going to university? I have not had a single communication from a constituent telling me these proposals will make it more likely that they will go to university, but I have had many representations saying they will put them off going to university. Is that also the experience of my right hon. Friend?

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

Well, it is the view of an organisation that has done more work on this issue than any other, and I think we should respect it.

Several hon. Members:

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Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

I will not take any further interventions. I have been speaking longer than I had intended, and I still have a couple of substantive points that I wish to make.

At the weekend we got a bit of a breakthrough. The Government finally admitted that high fees will put off low-income students. They announced the national scholarship scheme and fee waivers for students on free school meals. The Government like this idea: it saves them money, because they do not have to make loans. It costs universities money instead, because they have to match funds. It is also a limited plan covering 18,000 out of the 2 million students in higher education. In case Members do not know this, I will point out that free school meals are generally available only to those families where no one works. What about the millions of working families who earn just a little above benefit levels, however? I look forward to the next election when Tory and Lib Dem MPs will have to explain why John Smith, whose parents do not work, will get £18,000 knocked off their fees, while Susan Jones in the same street, whose parents have always worked and paid their taxes, gets no help at all. I am glad the Secretary of State for Work and Pensions is present on the Front Bench, because he should have a word with his colleagues about how this supports the idea that work should pay.

This system will punish the very universities that have done the most to widen participation. The university of Bedfordshire, which took 120 students from free-school meal backgrounds in 2006-07, would have had to find £750,000 in match funding, whereas Cambridge, which took just 20, would have had to find only £120,000. Where is the sense in punishing success and rewarding failure? The IFS says that it

"provides a financial incentive for universities...to turn away students from poorer backgrounds."

It does not make sense.

All the signs suggest a Government policy in disarray. There is no White Paper, and every day the Government try to respond to the latest criticism. Last week, we showed that two thirds of part timers would not benefit from their scheme, so they had to rush out a minor change yesterday. Last week, under pressure from me, the Business Secretary said he would write to the Office for Fair Access to give guidance about fair access and he has, but it was an empty document. Let me address one point: the House has been told that universities might charge £9,000 in "exceptional circumstances", but nowhere in the guidance document that has been issued does the term "exceptional circumstances" appear. The Business Secretary does not tell the director of OFFA to limit the highest fees to exceptional circumstances or ask him to tell us what exceptional circumstances are. The truth is that he came to the House making a fine promise about the £9,000 and the exceptional circumstances but he has done nothing to bring that about in practice because he knows he will not be able to enforce it. That is not the right way to handle the House.

If I had more time, I would speak about the objections of the British Medical Association, the teaching organisations and the fact that the universities that train teachers have no idea how they will be funded. Let me end by saying a few words to those Ministers and Back Benchers who are struggling, even now, to reconcile party loyalty with a desire to do the right thing and support future students and our universities. [ Interruption. ] [ Laughter . ]

Photo of Chris Ruane Chris Ruane Labour, Vale of Clwyd

They are not laughing in the Public Gallery.

Photo of John Denham John Denham Shadow Secretary of State for Business, Innovation and Skills

Millions of parents, students and future students will be watching the debate and they will wonder why it is such a laughing matter for right hon. and hon. Members.

Let me say a few words to those who are wrestling with this issue. It would be crass to compare the two issues, but I once resigned on a point of principle when I was a Minister. I say to Ministers and Back Benchers who are considering their positions today, "I know what you are going through. It is hard to stand aside from friends and colleagues with whom you've shared many a battle, but after you've done it, you realise it wasn't half as bad as you thought it would be. The self respect you gain far outweighs any temporary loss of position, power or income." The truth is that in any generous political party-mine is not the only generous political party in the House-there is usually a way back. This decision matters so much to so many people that I say to hon. Members, "If you don't believe in it, vote against it."

Several hon. Members:

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Photo of Ian Murray Ian Murray Labour, Edinburgh South

On a point of order, Mr Speaker. Will you give the House some guidance? The Business Secretary has come to the Dispatch Box to tell us how progressive and fair the system that the Government are imposing on thousands of students across the country is, but he has recently been quoted in a Liberal Democrat leaflet that has gone out in Scotland as saying not only that it is akin to the poll tax but that it is incredibly unfair-

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission

Order. I have listened to the first two or three sentences of the hon. Gentleman's attempted point of order, but I am afraid that it is not a point of order. He has put his concern on the record. I appeal to hon. Members to have regard for each other's interests. I want to accommodate as many Members as possible, starting with Mr David Evennett.

Photo of David Evennett David Evennett Conservative, Bexleyheath and Crayford 1:34, 9 December 2010

I am very grateful for the opportunity to participate in this important debate. As the shadow Minister with responsibility for higher and further education when in opposition, I strongly supported setting up the Browne review of student finance. The review, which was published earlier this year, was very thorough and from it the Government have, after considerable consideration, come forward with their plans.

I congratulate my right hon. Friend the Business Secretary on his moderate and constructive speech and on the constructive and progressive decisions that he has taken. The proposals are much more progressive than the current system or any that the Opposition support. We all know that this is a difficult and emotional issue, and it has been made more so by the legacy of the previous Labour Government, who saddled us with huge economic and financial problems. If they had managed our public finances better, we would not have so many grave problems now.

I was very disappointed by the speech of Mr Denham, which lacked any alternative or constructive policies and was vague and waffling on Labour policies. It is all very well for him to come here and wring his hands, but his Government were the ones who caused all the problems.

Three vital criteria should always be considered in relation to these matters. The first is, of course, finance and whether students will be put off going to university because they come from a disadvantaged household or a deprived area, or because they are concerned about future debt.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

It is quite right that we should help people on low incomes, but will my hon. Friend say a word about the many people whom we represent who are in work and have moderate incomes? They also need help and must not be disadvantaged. Middle-income Britain cannot go on paying for this.

Photo of David Evennett David Evennett Conservative, Bexleyheath and Crayford

My hon. Friend makes a very good point. Middle England will be looked on favourably because we want to get more students into university who have the ability, talent and determination to go there.

Several hon. Members:

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Photo of David Evennett David Evennett Conservative, Bexleyheath and Crayford

I shall not give way for the moment as I should like to make some progress.

Assistance must be given to those who are most disadvantaged, and I think that my right hon. Friend the Business Secretary sorted that out in his speech and his proposals.

The second criterion is that students need an improvement in the student experience if fees are to go up. They should get more tutorials, lectures, careers advice and so on. Currently, student experience is very varied; many have complained to me about the poor service they have received at university. There has to be an improvement in the quality of student experience-students want value for money. [ Interruption. ] I shall not take any notice of sedentary comments from Opposition Members. Perhaps they should listen. They did not listen when the Secretary of State was speaking; perhaps they would have learned something if they had.

Thirdly, universities need to adapt by creating more part-time courses, modules and, perhaps, two-year courses. I welcome the fact that my right hon. Friend is looking at assistance for students on part-time courses, who have been neglected in the past. The needs of our country should be paramount and the universities have to change to meet the challenges of today, the demands of students and the needs of our country. We are fortunate to have a world-class university system, but it needs to be maintained in the face of world competition, especially in the far east and America. We need the best students to come to our country, and from within it, and go to our universities to advance themselves and the interests of our country. The proposals deal with the three vital criteria that I have set out as being necessary to make the system work, be progressive and make our country's future a success.

I have always been against a graduate tax-an idea that the Opposition now seem to be tinkering with. Browne considered it in his review but decided that it was not a good idea. I am against it because money would go straight from the graduate to the Treasury, whereas under our graduate contribution scheme, money will go directly to universities and give them an independent source of income free from Government interference. Mr Denham has not really explained the policy, but with a graduate tax, graduates would pay when they reached the taxable threshold, whereas our system proposes that they should pay only when they start earning more than £21,000. That is positive.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

Does my hon. Friend agree that a graduate tax would act as a massive incentive for our brightest and best graduates to leave this country and pay tax elsewhere?

Photo of David Evennett David Evennett Conservative, Bexleyheath and Crayford

My hon. Friend makes the absolute point, outlining one of the many reasons why it would be a terrible mistake to go along that route. The Opposition are always going backwards, and this is an example of their doing so yet again. Time is short in this debate, because so many hon. Members wish to participate, but I must say that the disadvantages of the graduate tax are many and varied, and we should cast it into the dustbin, as the Government have done.

Members on both sides of the House must accept that things need to change. We do not like change sometimes, but it is necessary and this is an example of its importance -[Interruption.] But progress is not being made. Many disadvantaged children in London are not getting into university under the current system, and we need to change that. We want to give them the opportunity to do so. The new system has to be fairer to ensure that those young people have opportunities to go to the colleges and universities, as we want them to do.

I am a passionate supporter of more part-time and foundation degrees, and I am encouraged by the approach taken by the Open university. I recently discussed this with its vice-chancellor, Martin Bean, and learned of his enthusiasm and commitment to providing a completely different student experience. We welcome that, because flexibility and an innovative approach is what we need. That is what these proposals are about, and it will not do for Opposition Front Benchers just to waffle vaguely on the key issues. The need for change is here, we have to look forward and we have to be progressive. That is what we are looking for. We want to ensure that there is fair access for people. That is what the Government believe in; we believe in opportunities for the future.

The Government accept the broad principles of the Browne review, with some amendments to make it more acceptable to the vast majority of young people who want to go into higher education. This reform package will offer more support to those on lower incomes, and will put higher education funding on a fairer and sustainable footing. It will be fair to students, taxpayers and universities-we must not forget that all those people have an interest and are involved. The Government's proposals go a long way to achieving all that, because they are progressive and will aid social mobility. [Interruption.] Opposition Members make sedentary comments, but they do not want to listen. They failed to get social mobility in the 13 years that they were in government; we have put forward more policies in the past five or six months to do more than they did in 13 years. Our aim must be to create a stable future for higher education, and to encourage a genuine market that will provide academic excellence and reinforce the international success of British universities. That is what we are about in this House and this measure today, and I commend it to everybody.

Photo of David Blunkett David Blunkett Labour, Sheffield, Brightside and Hillsborough 1:43, 9 December 2010

I congratulate my right hon. Friend Mr Denham on an excellent speech, in contrast to what we have just heard from Mr Evennett.

May I bring the House back to the reasons why we changed the funding system for higher education in 1997-98? As my right hon. Friend said, there had been a 36% drop in funding per student over the previous eight years. There had also been an eight-year cap on the expansion of higher education, denying literally millions of young people the opportunity of higher education over that decade. We introduced a new system that almost immediately raised £1 billion-that was not instead of the resources that were already going in, but in addition to those-so that tens of thousands and then hundreds of thousands of young people with the qualifications to be able to enter higher education were able to do so. We introduced a contingent repayment system for the flat-rate loan for maintenance. We introduced a system of bursaries for maintenance called "opportunity bursaries" and a system in relation to the new fees that were being charged. It resulted not in 18,000 young people being exempt from the fee for one year or a maximum of two years, but in more than 40% of all young undergraduates being exempt from the fee and a further 30% having the fee in partial remittance. In other words, this was contingent on the income of the family, it took into account the ability to pay and it introduced a much fairer repayment system. All of it was designed to expand opportunity, to develop courses within the universities and, as my right hon. Friend said, to provide the opportunity to make our country the second destination in the world for students across the globe.

I wish briefly to deal with social mobility. I know more about social mobility than most, because my whole life has been an example of it, from when I was on day release and attending evening classes to when I took the opportunity to get to university as a mature student. I am telling this House and, in particular, Mr Clegg- if he were here-that he knows nothing about social mobility. The Government are removing the education maintenance allowance from constituencies such as mine, which ranks third lowest in Britain on past access to higher education; removing the child trust fund, which would have given young people a nest egg at the age of 18 and provided them with the incentive to go on and the funds to be able to repay loans; removing the Aimhigher scheme; and rolling in the so-called pupil premium by cutting 2.25% from the schools budget and then giving it back in something that is a sop to the Liberal Democrats, but which will actually be perverse in its impact across the country. Introducing a £9,000 a year fee on top of cuts in youth and careers services across the country is a deliberate, consistent and unfair attack on young people in our country and their future. That is why it should be rejected. It is not fair to young people and their families, it is not fair to universities, and it is not fair to our country and the future of Britain in a knowledge economy.

But this proposal is not necessary either because, as my right hon. Friend mentioned and as is clearly spelt out by the Office for Budget Responsibility, the borrowing that will be required to fund the loans in the first place will actually outstrip any gain that might have been made. Borrowing of £4.1 billion this year will increase to £10.7 billion in 2015-16, so far from helping us to tackle the deficit this adds to it. In other words, we are making the deficit worse in the period when we are supposed to be reducing it. If the Government are right and the economy recovers-God willing, it will-we will be able to sustain the £3 billion that is being removed from teaching, rather than remove it.

Photo of Dan Byles Dan Byles Conservative, North Warwickshire

First, I wish to point out that many Government Members understand social mobility. I am the first member of my family to stay at school beyond 16 and to go to university. What would the right hon. Gentleman say to the low-income non-graduate workers in my constituency who ask me why the lion's share of the payment for degrees comes from their taxes to enable others to earn more money than they could ever hope to earn? Does he not accept that this is not as clear-cut and black and white as he is saying, and that it involves a very difficult balance between taxpayers and students?

Photo of David Blunkett David Blunkett Labour, Sheffield, Brightside and Hillsborough

I recall arguing in 1997 that we should ensure that there is a fair balance; I used to use the analogy of those getting up at six in the morning to do a cleaning job. I know slightly more about that than the hon. Gentleman because many of my constituents do exactly that for a living. As my right hon. Friend pointed out, the perverseness of what is being introduced now will discourage people from going into work, from seeking promotion in work and from wanting their children to go to university in the first place.

Photo of David Blunkett David Blunkett Labour, Sheffield, Brightside and Hillsborough

No, I will not. I pray in aid the Institute for Fiscal Studies, because when it discussed this scheme it said that the system generates perverse incentives. For example, the national scholarship fund provides a financial incentive for universities to reject students when they charge more than £6,000. In other words, the higher-level universities will end up rejecting students from poorer backgrounds-the exact opposite of what has been argued this afternoon. The position is very clear: the scheme is designed to change the architecture of higher education in this country. It is ideologically based, not logically based- [ Interruption. ]

Photo of Dan Byles Dan Byles Conservative, North Warwickshire

On a point of order, Mr Speaker. Is it in order for the right hon. Gentleman to make such a personal remark, suggesting that I might not understand how difficult it is to get up early to go to work? When I was a soldier, I used to get up considerably before 6 am to serve my country.

Photo of David Blunkett David Blunkett Labour, Sheffield, Brightside and Hillsborough

The answer is very simple. More of my constituents and those who visit my advice surgery understand those issues than do those of Government Members. That is a simple fact, and that is why this is a value-laden, ideological issue, not one of rationality, not one of deficit-reduction-

Photo of Greg Mulholland Greg Mulholland Liberal Democrat, Leeds North West 1:51, 9 December 2010

I rise to speak in a debate in which I do not want to speak. I do not believe that this debate should be happening today, and I do not believe that it should be happening in the way that it is. It is only seven months since the general election and the Government were formed; it is less than two months since we saw the Browne report for the first time, and it is a month-a month-since the Government announced their proposals on higher education. Yet, today, we are being forced to hold the significant vote, without considering the other proposals, with a mere five-hour debate.

I make it clear that I am a Government Back Bencher. I support the coalition Government and I support what they are doing. I also support, understand and accept that both parties and MPs in the coalition have to compromise, but let me tell you, Mr Speaker, being asked to vote to increase fees up to £9,000 is not a compromise. It is not something that Liberal Democrat Back Benchers or even many Conservative Back Benchers should have been asked to consider.

As you and the House will know, Mr Speaker, I tabled an amendment, which unfortunately was not successful. It was tabled in my name, that of Dr Lewis and those of Members from all parts of the House. That was the final attempt to get the Government to listen, because the simple reality is that, even if their proposals are the best way forward for higher education, and I do not believe that they are, the Government have to accept that they simply have not convinced people of that, not only on the Liberal Democrat Benches, but far more importantly among the wider public and, crucially, future students and their families.

Photo of Richard Graham Richard Graham Conservative, Gloucester

What does my hon. Friend consider to be a reasonable percentage of time to spend on this debate relative to the amount of time given by the previous Government to the debate about whether this country should go to war with Iraq?

Photo of Greg Mulholland Greg Mulholland Liberal Democrat, Leeds North West

All I say to the hon. Gentleman is that sometimes Governments are wrong, and sometimes one needs to have the courage to say so. I am doing that today.

Photo of John Pugh John Pugh Liberal Democrat, Southport

Summarising this debate so far, one has to accept that the Secretary of State for Business, Innovation and Skills, my right hon. Friend Vince Cable, though very wise, does not know for certain that he is right, and that Mr Denham, though equally wise, does not know for certain that he is right. Does not the House need an opportunity to assess the results of whatever policy we adopt today, and not do something that is purely irreversible?

Photo of Greg Mulholland Greg Mulholland Liberal Democrat, Leeds North West

My hon. Friend is entirely right. There simply has not been an adequate evaluation to allay the very real concerns out there.

I am going to talk about the pledge. I did not sign just one pledge, I actually signed two: the National Union of Students pledge in this very House, and the Leeds university union pledge at the university. I do not regret signing either, but that is not the sole or, even, most important reason why I shall vote against the Government today. I shall vote against the Government today, because I simply cannot accept that fees of up to £9,000 are the fairest and most sustainable way of funding higher education.

Before I became a Member, I opposed the Labour Government introducing fees in the first place, and I opposed the Labour Government introducing top-up fees. I said at the time, as did many hon. Members including courageous Labour Back Benchers, "This will lead one day to huge increases in fees and become a never-ending path." Sadly, that has been shown to be absolutely correct.

Photo of Greg Mulholland Greg Mulholland Liberal Democrat, Leeds North West

I will not give way, I am afraid, because I have taken my two interventions and the hon. Lady will have the chance to intervene on other people. I do apologise

We do need to look at higher education funding, but we must look at it as a whole, within the education system and with apprenticeships and further education. Rushing through this single vote today will do none of that. On the current proposals, I have said all along, and look to the Minister for Universities and Science, my right hon. Friend Mr Willetts as I say it now, that there are indeed many progressive things in the proposals. The levels at which graduates will have to make a contribution, the measures for part-time students and the £21,000 threshold are very welcome.

I fully acknowledge all those things, but we need to debunk a myth. All those positive things, which are in the proposals and are progressive in terms of the graduate contribution, do not need to be tied to a huge increase in fees. That is simply a non sequitur. It is simply not true to say, "You cannot have one without the other," and that is the crucial flaw in the Government's argument today.

The Secretary of State knows, and we all know, that there is much confusion about the proposals, but is that not another reason to have more time for the Government to try to convince people? He and all Ministers who support the proposals today have to accept that they have not won the argument, and rushing things through, given the concern and anxiety about how it has been done without proper parliamentary scrutiny, is simply a recipe for bad policy.

The idea is that, when we finally get to the proposals in the White Paper, they will deal with the deficit, but that is questionable. In the proposals to be put before the House in the White Paper in the new year, huge amounts of money will go from the Treasury to the universities, but the difference is that those figures will have been moved from expenditure and put into a different column. That is the reality.

The Higher Education Policy Institute report states that

"the proposals will increase public expenditure through this parliament and into the next", and that

"it is as likely that in the long term the government's proposals will cost more than they will save."

It is smoke and mirrors, so I am afraid that the argument to increase fees to £9,000, albeit backed by progressive elements, is certainly not enough to persuade me. It is not enough to persuade many of my Liberal Democrat colleagues or, indeed, colleagues and friends from our coalition partner.

So, I say one last time, having done so over the past week, that it is not too late. There needs to be a re-think and a proper review of how we come up with the best system for higher and, indeed, all post-18 education. That should be done properly. It should not be rushed through; it should be done with proper parliamentary scrutiny.

To Liberal Democrat colleagues who are listening to the argument and say that we need to get this issue out of the way and get the pain over with, I say, this will not finish with today's vote, because there will be amendments to reverse the proposal when we do reach the White Paper.

I say to this House and I say to colleagues, for the sake of the Liberal Democrats, for the sake of this Government, for the sake of Parliament, please vote against these proposals tonight.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield 2:00, 9 December 2010

I stand here with some trepidation in the sense that, in 2004, I made a speech in a similar debate and many of my colleagues howled at me and did not agree with much that I said. In those days, my Committee-the Select Committee on Education-had carried out an inquiry into top-up fees and had come out in favour of them. Of course, the majority was only five. I think that Select Committee report did have some influence.

I do not regret either the Select Committee report or my vote that day. However, I want to take us back briefly, so that we can try to learn something from history. We had a debate then because, with all-party agreement, we had set up the Dearing report. I have to say that Dearing was a far better choice to do such a report than Lord Browne, who produced the more recent one. The Dearing report essentially argued that if we want to move from an elite system of higher education to a mass system, somebody has to pay. In his view, the cost should be fairly distributed within society between the taxpayer, the individual who benefits and employers. That was Dearing's opinion.

We must all confront the fact that what we are talking about today and have discussed over past years is how to get that balance right. I do not think that anyone would want to go back to the days when the state paid everything or have a situation in which the student pays everything. I have to say, in light of the Secretary of State's remarks, that employers have never been very willing to pay their share. Since 2004, we have developed a system in which there is a fair balance. However, I must remind the House that we-including my dear friend Mr Blunkett, the former Secretary of State for Education and Skills-did not get it entirely right. We rushed the response to Dearing and got it wrong. We were rightly criticised for that, but we did get it right over time. That is why we had a second reaction and had to go for top-up fees-variable fees. That is when we got it right and I want to learn the lesson from that.

Policy made speedily and on the hoof is not good policy. I admire the speech made by Greg Mulholland. This piece of legislation is being rushed through in a way that is a disgrace to parliamentary procedure, to this House and to higher education. Are we the best in the world at automobile production? I do not think we are. Are we the finest in banking? I do not think we are. We could list the sectors in which we are not world class, but we are clearly world class when it comes to higher education.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

The hon. Gentleman rightly spoke about the importance of employers paying their contribution towards higher education. Does he therefore support the University and College Union's proposal for a business education tax that would essentially be a corporation tax on the 4% biggest companies that benefit directly from graduates? That would generate £3.9 billion for higher education and would mean that we could scrap tuition fees altogether.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

I listened very carefully to that. It is an interesting idea. The timetable that the Government have put on this procedure means that we will not be able to consider serious ideas such as that.

I have some reservations about a graduate tax. The Select Committee has considered a graduate tax, as have other people, but there are some formidable difficulties with it. That is not to say that a graduate tax is impossible, but I can honestly say that we have not had time to develop it fully. That is true. In the same way, the proposals on which we will be voting today have not been thought through or mulled over, and the consequences of them have not been considered.

Someone asked what procedure we would like there to be. We have a procedure, which involves introducing a piece of legislation, publishing a Green Paper and discussing the proposals. When the Government have firmed up their ideas, a White Paper is published. During that process, there is discussion with the people who work in universities, who study in universities and who do wonderful research in our universities. There is actually discussion with the community. Can hon. Members imagine not talking to people in any other sectors on which we legislate?

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

I thought we just did talk to the electorate. We had a general election and the hon. Gentleman's party lost.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

We tend to get passionate in debates on such things. In fact nobody won the election. The Conservative party did not win the election because it did not get a majority. I was reflecting on that matter. When I used to teach politics in a university, I can remember many people arguing that it would be wonderful to have a coalition because it would temper the debate. People would not rush into daft policy because the minority party would say, "Hold your horses. We're not sure of this. Let's think carefully, let's do research and let's talk to the people in the sector." That is what we thought a coalition Government might do. I do not know if I was ever really persuaded of what a coalition would do. I believe that coalition Government leads to weak leadership, weak Government and some people getting their way by trampling on democracy. The higher education sector in this country is the best in the world. I think it is better than in America. The US might get more international students but, pound for pound, professor for professor, student for student, we have the best system in the world.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

The hon. Gentleman is making a very principled speech. Does he agree that if the election had been won by the Labour party, the chances are that it would have implemented the Browne review?

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

I do not believe that at all. Let me be straight with the hon. Gentleman. I believe that there is a great deal of strength in the Browne report. It refers to a deferred payment system, which is not a bad system. There are some good elements in the report. I like the section on part-time students and the fact that we will no longer pay a massive interest subsidy to people who do not need it in terms of the zero interest rate. There are some good things in Browne. If we could have had a conversation about the matter, we might, for once, have got some all-party agreement on the side of higher education, which is absolutely central to the future wealth, progress and happiness of this country-happiness is in favour at the moment, is it not?

If we pass the legislation, we will make some mistakes today that will punish people in this country, demoralise higher education and put us down the league in terms of our university sector. I hope that hon. Members vote against the measure tonight.

Photo of Ben Gummer Ben Gummer Conservative, Ipswich 2:08, 9 December 2010

I am grateful for the contribution of Mr Sheerman because he gave the lie to the Opposition's argument. There is a great deal of agreement between the two sides, and I shall turn to that in a moment.

What worries me most is that the entire tenor of the debate is doing more to put off aspirant students than anything contained in the proposals. Government Members and those on the Opposition Benches who had the opportunity to go to university are, I am sure, deeply conscious of the privilege that we have enjoyed. Those of us who have but one or two generations of university attendants in our families are also aware of the advantages we have received as a result of that. To divide the debate artificially along the lines of those who are in favour of social mobility and those who are not is to misunderstand what we are trying to do.

I take my hat off to Mr Blunkett whose passion for social mobility is undeniable. However, he had 13 years in which he played a long and influential role in a Government under whom social mobility went backwards. The gap between rich and poor widened. I do not doubt the passion and integrity of Labour Members who wish to see social mobility increase-that is the case among Government Members-but they have had their opportunity and it did not work, and we must try again.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health)

The latest evidence on social mobility is based on a comparison between those born in 1958 and those born in 1970. Does the hon. Gentleman think it is right to say that people who were 27 years old when the previous Government were elected should be blamed for that?

Photo of Ben Gummer Ben Gummer Conservative, Ipswich

I am afraid that I do not get the full gist of the hon. Lady's intervention. All I know is that every single study that has been done on social mobility and the gap between rich and poor under the previous Government has shown a slowing of social mobility and a widening of the gap.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

Mr Blunkett made an impassioned speech about social mobility, claiming that he knew more about it than anyone else. Perhaps he does, because he knows that social mobility runs in both directions given his extremely chequered history in office.

Photo of Ben Gummer Ben Gummer Conservative, Ipswich

I happen to be one of the Government Members who admires the right hon. Member for Sheffield, Brightside and Hillsborough for the forthright way in which he stuck up for his principles in the previous Government. His passion is shared on both sides of the House, and I hope that we can contribute to the debate in that manner.

To my mind, the question is threefold. First, how do we widen and maintain access to higher education and participation across the spectrum? Secondly, as the hon. Member for Huddersfield said, how do we maintain and increase funding for our excellent universities? Thirdly, how do we do this within the boundary of the deficit? That has been forgotten by Labour Members and the fact is that if we do not deal with the deficit now, there will not be an economy and there will be no jobs into which graduates can go. There is no point, therefore, in constructing a policy that does not create jobs at the end of the road.

I address this issue critically and with some scepticism because some years ago I was in favour of free tuition. I have talked to the students in my constituency and I have talked to those at the new university in my constituency, and I have had very productive discussions with both groups. I pay tribute to those at the students union of university campus Suffolk, who have taken a very constructive approach. They understand the difficulty that the country is in, and understand also that students must make a contribution of some degree. They and I, and many Government Members and Labour Members, agree that whatever scheme comes in must ensure that access is widened. That is the litmus test. Within that, we must also ensure that funding is maintained for universities. The proposals put forward at the weekend will mean that the 25% of poorest students will do better under this system than under the current one, as was confirmed this morning by the IFS in a radio interview on the "Today" programme. That is the positive effect on social mobility, and it therefore ticks that box.

What, then, of university funding? University campus Suffolk is about 18 months or two years old. It is one of the newest higher education institutions in the country. It is a fantastic institution. For one that is still so young, it is already building several excellent areas of research capability, especially in regenerative medicine. I pay tribute to the provost, Mike Sacks, who is an inspirational man. I had a long discussion with him and, for me, the continuation of university campus Suffolk is critical to my voting in favour of these proposals; if that will not be the case, I cannot support them. I raised that point with him the other day and he felt that the degree of Government funding should be slightly more. However, on the basis of what he has been told and the comprehensive spending review, he said, "I am confident as I can be that we can move forward with our plans and ambitions under the proposed scheme." I therefore feel confident, apropos the institution in my constituency, that I can support these proposals, because the leaders of the university have the ability to do the extraordinary things that they plan with the scheme that is on the table.

I have several questions for the Minister, to which I hope he will reply at some point. I have an issue about how foundation courses will be dealt with. I should like to understand about long courses, not only those in medicine but those such as architecture where it might be problematic for small practices to pay students' fees in later years. We need a bit more clarity about visas for international students so that international income can be guaranteed. The data and transparency side of the deal must be fleshed out a bit so that students can understand what they are getting into.

I have one final question, and that is about an alternative. Many Government Members, while listening to these debates, have asked to see what alternative there is. Some alternatives have been put forward by the NUS. Its alternative seems to change every few weeks, but at least it has one. It seems that the Leader of the Opposition also understood that there had to be an alternative. He said on 29 June:

"You're right to point out the practical issues... and that is why I want to consult widely before publishing detailed plans later this year."

We now have a few weeks left before the end of this year, and I have not seen a detailed plan. For those coalition colleagues who are having difficulty with this proposal, I understand their problem in many ways, because there is no alternative for them to consult. Her Majesty's Opposition have provided nothing for them to look at. In the absence of that, we must look at the plans that have been given.

Let me offer some counterfactuals. Do we cut university funding and not increase fees? If we put student fees up only to £5,000, which was one option mooted by Labour Members, Universities UK suggests that student numbers would go down by 25%. Alternatively, do we go for a graduate tax? The Leader of the Opposition has suggested that a graduate tax would appear to be so like a student loan system that it is hard to understand the difference between the two.

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Chief Whip, Shadow SDLP Spokesperson (Culture, Media and Sport), Shadow SDLP Spokesperson (Business, Innoviation and Skills), Shadow SDLP Spokesperson (Health) 2:17, 9 December 2010

Because time is worryingly short, given the importance of what is being discussed and the fact that so many Members wish to contribute, I will keep my remarks as brief as possible. Although I have much to say, I hope to accommodate others as best I can.

We need only look outside our windows, not just today but over the past few weeks, to see the strength of feeling that has been generated by this issue. I would like to offer my support to those students, many of whom are from my own constituency, who have come here to make a peaceful and reasonable protest. I have substantial sympathy for the case made by Greg Mulholland about a serious conversation and a greater degree of consensus on the issue.

For me, the whole future of the high-tech, high-value-added economy to which we all subscribe depends very much on equality and access to third-level education. The Government have chosen-I reiterate the word "chosen"-to subject students who wish to study in England to the highest fees in the western world outside the United States. In my brief comments, I want to draw attention to how much-or should I say, how little?-consideration has been given to the impact that these measures will have on Northern Ireland, students from Northern Ireland, and indeed the devolved regions and students from those places as well. A large number of students from Northern Ireland, particularly from my own constituency, undertake their studies at universities in England and will therefore be subject to the higher fees. Indeed, in Northern Ireland nearly a third of our students move outside Northern Ireland; in my constituency, that percentage is even higher. As such, there is likely to be a dramatic increase in the cost to the Northern Ireland Executive-it has been placed at close to £30 million -in order to meet the generated costs.

Photo of Pete Wishart Pete Wishart Shadow SNP Spokesperson (Culture and Sport), Shadow SNP Spokesperson (Constitution)

Does the hon. Gentleman share my disappointment that this Government have given absolutely no consideration to the impact that this has on the devolved nations, including Scotland? Will he join me in trying to encourage the Government to think as much as possible about what these plans will do to Northern Ireland, Scotland and Wales? So far they have given that no thought whatsoever.

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Chief Whip, Shadow SDLP Spokesperson (Culture, Media and Sport), Shadow SDLP Spokesperson (Business, Innoviation and Skills), Shadow SDLP Spokesperson (Health)

I agree with the hon. Gentleman. It is difficult for those of us who come here attempting to encourage devolution and work to create a bridge between the devolved Governments in Scotland, Northern Ireland and Wales and the Government here in this House, because this action in many ways erodes and undermines the devolution that has taken place.

That is compounded by the problems with the Barnett formula and the implications for Barnett formulation. The consequential cuts to university teaching budgets have already been passed on to the Executive, so we are being hit twice in advance of any changes that might be made to student fee arrangements. We need considerable clarity on the new arithmetic that is being used in Barnett formulation if we are to understand the knock-on effects of the proposals.

Why should the Northern Ireland Executive face the penalisation of students through the student funding proposals, while their budget is already being penalised through the Barnett formula? We are forced to tread the nearly impossible path of protecting our students who wish to study at universities in England, while providing the funding that is necessary to sustain the universities in Northern Ireland. All too often, the argument is framed only in terms of the impact of the measures on England, rather than in the context of the devolved nations.

Thanks to Social Democratic and Labour party colleagues who have served in the Northern Ireland Assembly and as Ministers in previous Northern Ireland Executives, there has been since devolution a reduction in the number of people who pay fees. We reduced the amount of money that people had to pay and we were the first to bring back student grants to widen access for those on the margins and those who are impoverished in our society. That shows that progressive elements can be injected into the existing system without having to triple tuition fees or radically alter the system.

The measures proposed by the coalition Government will place enormous pressure on universities in Northern Ireland to raise their fees to match the fees in England.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport)

I understand that the proportion of students from Northern Ireland who go across the water is up to a third. There will be an impact on the Northern Ireland Assembly and on its budget. There will be an impact on moneys that are already set aside, and we have made no allowance for that.

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Chief Whip, Shadow SDLP Spokesperson (Culture, Media and Sport), Shadow SDLP Spokesperson (Business, Innoviation and Skills), Shadow SDLP Spokesperson (Health)

The hon. Gentleman endorses exactly the point that I was making-we will be hit both ways. My party has campaigned ardently to protect the cap on fees for Northern Ireland universities, but we would be naive to ignore these measures. When fees go up in English universities, it will have a knock-on effect and fees will inevitably go up for Queen's university and the university of Ulster.

As I am sure you will have read from between the lines of what I am saying, Mr Speaker, we do not believe that the measures are the right way to go about managing third-level education. We are not persuaded that they will improve access to higher education, particularly for those on the margins. We must oppose the measures, because we do not know what the fallout for Northern Ireland will be. We have set third-level education as a matter of the highest priority. We believe that the high-tech, high value-added economy that we want to see built in Northern Ireland can be delivered only through a high standard of third-level education that is accessible to all. Again, I repeat that it should be accessible, in particular, to bright young people from disadvantaged backgrounds, who struggle already to enter third-level education-these measures will further cut off such people.

The Government will cut spending on higher education and place the burden of payment on future generations of students, who, as they begin their careers, will face mountainous debts that they will spend much of their lives clearing. I was once a medical student, but I cannot imagine any medical student or student of architecture-as Ben Gummer suggested-now emerging from university with debts of less than £100,000.

There is also the problem that educational maintenance allowance has been withdrawn. That will massively compound the crisis for many of our poorest potential students, who may forgo the option because the threat of debt is much too high. The proposed increases to student fees run counter to our vision for third-level education and we will therefore oppose the proposals today.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole 2:25, 9 December 2010

This has not been the easiest of weeks, as I have wrestled with what is, to me, an incredibly important issue. We are all the sum of our experiences and our backgrounds. I say to Mr Blunkett that it was outrageous to suggest that Members on the Government Benches do not understand people from ordinary backgrounds. I come from an ordinary background, as do many Government Members. I do not think that he enhanced the debate in the slightest.

I would prefer not to be making this speech on this issue, because I am a huge supporter of the coalition. I thought that the coalition was the right way to move forward and it has tackled some difficult issues with great speed and in the correct way. However, on this issue, the Government are wrong. I shall explain the particular issues that I have in a moment.

First, I will say something of my colleagues on the Government Benches who will vote in favour of the measures. Some of the criticism levelled at the people who support the measures has been incredibly unfair. The people who support the measures are not cruel or elitist, but have their own views and have come to their own hard-headed decision. They may think in different terms from me, but I do not like the way in which the debate has become polarised. I am sure that all hon. Members condemn the violence that has been associated with this issue.

I speak from my own experiences as a former schoolteacher, which I have mentioned on many occasions, and as the first person in my family to attend university-I know that I am not unique in that among hon. Members. I went to university on a full grant with all my tuition paid, shortly before tuition fees were introduced. I can only think about the impact that the proposed fees would have had on me and my family when I was growing up. Would my parents have encouraged me to attend university, had they thought I would come away with debts of £40,000 or £50,000? I do not think so. Similarly, many of the students whom I taught in deprived schools in Hull wanted to go to university, but when I encouraged them to do so, the response was often, "My dad says that we can't afford to go to university." That was after fees were introduced.

Since fees were introduced, the evidence has shown that although there has been widening participation, students from some backgrounds are not attending the best universities, as I said to the shadow Secretary of State. They choose where to attend based on money and finances, rather than on what is best for them. They often choose to stay at home.

Photo of Anne Main Anne Main Conservative, St Albans

My hon. Friend is giving a very sensitive speech and I sympathise hugely. Indeed, I marched against student fees in 2004, because they opened a Pandora's box. He is right that the fairest thing is not to deter people with up-front fees, but to have pay-later graduate contributions. Labour let that out of the box, and there is no going back.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

I thank my hon. Friend for that intervention. There is, of course, a choice to be made, and Governments can make whatever choices they want to make on important issues such as this. However, I do not think that the case has been made for this proposal, and I shall go on to say a little about that in a moment.

I have a particular issue with the loss of funding to the arts and humanities. It is wrong for the Government to say that there is no value to the state in the arts and humanities. We lead the world in research in the arts and humanities, and the loss of funding in its entirety for those who want to pursue degrees in those subjects certainly does not sit well with me.

I accept that the mechanism that the Government are proposing to put in place could not be much more progressive. I believe that it is fair, and that it will protect the poorest students. However, I have made the point to Ministers on several occasions over the past few days that we have not won the argument on that basis. Many of the choices that young people make about higher education are based on perception, and there is a perception out there that this measure will lead to huge debts of £40,000 to £50,000 at least. We have not won the argument relating to that perception.

Photo of Margot James Margot James Conservative, Stourbridge

My hon. Friend is making some good points, but does he accept that one third of students will be better off? The progressive nature of the proposal means that some students will never pay off their debt unless their earnings take them into the higher-rate tax band. Surely that is an argument against what he has been saying.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

A number of hon. Members have made that very point today, and I accept that the principle of tripling fees-in many cases, they will go up not to £6,000 but to £7,000, £8,000 or £9,000-means that the system is progressive. My concern is that we have not had a proper debate. We have not had time to consider the options and we have not had time to have a sensible, grown-up debate-

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

I am not going to give way again, as I have only three minutes left and other Members wish to speak in this important debate.

My major concern is that, in the public's mind, we have not made the case for trebling tuition fees. I also have a huge concern about where our young people are going to end up going to university. Everyone knows that this is not just about tuition fees; we also have to take into account living costs. Speaking from personal experience, I was at university on a full grant and had no tuition fees to pay, but I left with considerable additional debts on my credit cards and so on. It is just the same for students today, and that is going to continue. When we look at students' debt issues, we need to take into account not only tuition fees but living costs and the other debts that students inevitably rack up while they are at university.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

I am not going to give way, because a lot of Members want to contribute to the debate.

I have struggled with this issue, as I hope Members will understand from my speech. I urge the Government to row back a little bit, to think again, to delay this decision today and to give proper, grown-up, sensible consideration to all the possible alternatives. I accept that the Opposition might well have found themselves in exactly the same position, and that they have not offered a credible alternative to this proposal. I am in a strange position, as I have said to my local paper many times over the last couple of days, because I do not have a credible alternative to it either. Perhaps I am therefore making an emotional decision rather than a hard-headed one, but I urge the Government to think again and to come back to the issue next year, in six months' time, when we have had a proper conversation about it. We get to do this only once, and if we cede the principle of £9,000 tuition fees, I will be deeply concerned about the message it will send to people out there. I need no more proof than the e-mail I received this week from one of my constituents, Cathy from Burton-upon-Stather. I am sure that she and her son will be supported, but the message that has gone out because of the debate on this issue is that she will not be able to afford to send her child to university. I can only wrestle with my conscience and stick to what I believe, and my view is that the Government have not made their case. I will not be supporting the proposal this evening.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Health) 2:33, 9 December 2010

I want to start by dealing with the main issue, before moving on to give the Liberal Democrats some advice.

The main issue is that the Conservatives say that there is no choice: they have to raise fees to make up the funding shortfall. There is a choice, however. They could choose not to cut the funding budget by 80%, and they could choose not to privatise university teaching. Perhaps this proposal is what one might expect from the Conservatives, but students and their parents trusted the Liberal Democrats when they voted for them, and they did not expect this. They believed Liberal Democrats when they said that they would oppose rises in fees; they believed Liberal Democrats when they said that they would get rid of fees; and they believed Liberal Democrats when they said that they wanted to be fair. I am sure that when the candidates, who are now Members of Parliament sitting on the Liberal Democrat Benches, spoke to students and promised to be on their side, they meant it. They probably did not know that, in April, their leadership was conspiring to drop that pledge if they got into government. When Mr Clegg looked into the camera and promised to be fair and not to raise fees, he did not tell them what was in his head.

Photo of Gordon Birtwistle Gordon Birtwistle Liberal Democrat, Burnley

Does the hon. Lady agree that if the previous Government had not left us in a desperate financial plight, on the edge of bankruptcy, we would not be discussing the problem today?

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Health)

I am grateful to the hon. Gentleman for raising that point because it is central and needs to be tackled. When the majority of people voted either Labour or Liberal, they voted for political parties that, at the time, stood for paying back the deficit responsibly, cutting not too deeply and too fast, but in the context of growth and jobs. Frankly, people who voted Liberal Democrat are desperately disappointed in the turn-about not only on tuition fees but on what we should do for the economy and what is best for the nation. The Liberal Democrats will not be forgiven.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Health)

If hon. Members will forgive me, I will not give way again-I want to get through my speech quickly so that others have an opportunity to speak.

As soon as he got into power, the right hon. Member for Sheffield, Hallam dumped his principles and pushed his Ministers into a new policy of tripling fees. Ministers then discussed abstaining from that policy, which they had developed themselves, and now they say that they will vote for it. The majority of people who voted Liberal or Labour did not vote for that.

Neither did people vote for cutting the education maintenance allowance. City and Islington college, as Ofsted confirms, is outstanding. It is a beacon college. Fifty-seven per cent.-2,500 kids-who go to City and Islington get the highest rate of EMA. Those are the free school dinner kids, about whom Government Members cry such crocodile tears. They will lose their money. How many will have the opportunity to do their A-levels and even apply to Oxford and Cambridge? People who voted Labour and Liberal Democrat did not vote for cutting EMA, for raising fees or for the terrible cuts that will decimate our communities.

The Lib Dem leadership has double-crossed the electorate and is not fit for office. The question for Back-Bench Liberal Democrats is whether they have the backbone to vote against the policy. Do they have the backbone to vote for their principles? Never mind pledges and promises, the debate is about principles. As politicians, we cannot say, "I've got a principle. I keep it in my pocket. I take it out occasionally and I polish it before putting it back in my pocket." Equally, if we get into government, we cannot take the principle out of our pocket and chuck it in the gutter. We have to apply our principles to power and do the right thing.

I have seen an e-mail from Jo Swinson. It was written yesterday and is about principles. She says:

"My view remains that the best solution is for higher education to be paid for from general taxation. Sadly, the voters did not agree, and with fewer than 1 in 10 MPs in Parliament, the Liberal Democrats are simply not in a position to deliver on all of our manifesto policies."

Well, compromise. Do it in the correct way by voting against tripling fees tonight. If people voted for the Lib Dems on the basis that fees would be cut or not go up, it is not consistent to vote for them to be tripled. Surely anyone can see that. If the Lib Dems do not vote against that and the terrible change goes through, any claim that they ever had to be the party of fairness is gone for ever, and they will never be forgiven.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey 2:38, 9 December 2010

Mr Sheerman decided to give us a short history lesson. He reminded the House of the debate on tuition fees here in 2004. That Bill passed by five votes. However, he did not say that, during that debate, we heard the same apocalyptic messages that we are hearing in the Chamber today. The issue then was fees increasing from £1,000 to £3,000. No Government Member says with relish that we should increase fees, but it is important to note that six years on from those debates, 45% of people go to university and 200,000 people want to but cannot go. The hon. Gentleman should therefore have told us that, although we were worried at the time, many of those worries proved unfounded.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

May I develop my argument, please?

I listened to the Secretary of State's argument. I like the fact that he has wrestled with his conscience, flirted with a graduate tax and finally come to the decision that the fairest policy is a graduate contribution. That is in stark contrast to the Opposition, who say that they had the fairest and most balanced solution to the student problem when they did not. What is unfair about the university system they have left us with is that for many people, the costs of going to university outweigh the benefits. That is why graduate unemployment is at 6% when it should not be.

Photo of Tristram Hunt Tristram Hunt Labour, Stoke-on-Trent Central

We are having the astronomical rise in fees because of the 80% cut in the teaching grant. We are dealing today with an assault on the entire ethos of the British university.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

The real test of policies is the outcome. What is coming out of the system that Labour left us? Lots of students are unable to find jobs when they come out of university, with employers telling them that their degrees are not worth the paper they are written on.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

May I develop my argument?

Why is that outcome important? Unless we understand the outcomes we want from our universities, the debate on fees is totally out of context. I began as a sceptic. I adopted the view that we perhaps needed to row back and have a system that involved fewer people going to university. I thought that a system of grants could be better, or that we could charge less. However, the truth is that higher participation in higher education is here to stay, which is good. We must therefore work out how we can continue to fund that, and how to ensure that our universities remain world class and experiences such as mine at university-if parents cannot contribute, the student is really stuck-are not a key factor in the equation.

My hon. Friend Andrew Percy mentioned a mother who is worried that she is unable to fund her daughter's education. He is right to raise that concern, because a lot of people will feel that they must dip their hands into their pockets to pay the fees. However, more than anything else, the policy shifts the burden from parents-students pay when they have graduated and when they benefit.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

No, thanks.

Everyone has omitted to say that when people graduate, they earn about £100,000 more than people who do not.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

The situation is that working class families, who are least able to support their children at university, will bear the additional costs. That was my point.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

If any lie has been perpetrated in this debate, it is that working class children who want to university cannot get there- [ Interruption. ] May I finish? The truth is that our education system is so bad that for a lot of underprivileged kids, the whole concept of university is simply academic.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

I want to develop my argument.

Let us look at the proposal in simple terms. Before I went to university, if someone had said to me, "Sam, if you want to improve your life, I will give you money so you can go and do that. When you finish, come back to me only if you have found a job. I'm not going to charge you any interest unless you're earning more than a certain amount, but I want you to improve your life, so go ahead and do so," I would have bitten their hand off.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

No, thanks.

If we are to be responsible in this debate, we must explain the policy rather than trade the same political points that we traded six years ago, which have proved to be unfounded.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

No, thanks.

We have also seen the old notion of class warfare revamped this week. I saw it mentioned somewhere that Harvard had better access than some of our higher education institutions. What was omitted in that article was the fact that Harvard charges huge fees, and that is how it funds access. I am not saying that we want to go the way of Harvard, but there is a way to have high participation and fees and still ensure that the least advantaged make it.

That cannot happen just through fees. We need to reform our education system in total. I am glad that the Secretary of State mentioned the need for further education colleges to get more involved in the delivery of higher education. I am pleased that the 40% of students who are part-time students, who have previously had to fund themselves, will now have access to funding through our current policy proposal. I am pleased also that he mentioned that we will help people make their investment decision about which university to go to, through information about which courses will lead to employment and benefit them and whether they will ever see their tutors. Those things drive equality in the education system.

The motion is purely about fees, but fees are just one part of an entire package of higher education reform. Rather than play politics, we have to examine the whole package before casting judgment on it.

Photo of Heidi Alexander Heidi Alexander Labour, Lewisham East

I thank the hon. Gentleman for finally giving way. Does he not accept that for students from poorer backgrounds, the huge debt that they could now face will act as a greater disincentive to go to university than it will for students from more affluent backgrounds?

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

The truth is that under our current system, it is the middle classes who benefit the most. The people whom the hon. Lady defends are not getting to university, and we need to reform the system so that university is not the same for everyone-three years on campus, costing the same amount of money. There need to be more options for people to get to university over time.

Tony Blair gave an aspirational target of 50% going to university, and I actually like that aspiration. I am glad that, with this policy, we can continue to drive aspiration forward. The past was not right, because there was no utopia of social mobility. The present is letting students down, because they are not getting jobs-

Photo of David Lammy David Lammy Labour, Tottenham 2:47, 9 December 2010

I am very grateful for the opportunity to contribute to this debate, particularly as a former Higher Education Minister.

Young people outside this building are deeply angered, concerned and frustrated by the debate that we are having, and it is right that we all reflect on a generation that may inherit something far less than many of us in the Chamber did. Many of us grew up in a period of largely full employment and pretty generous pension schemes into which the system had paid over a sustained period. Many benefited from free education, which is at the heart of this discussion.

Photo of David Lammy David Lammy Labour, Tottenham

Not at this point.

The decision that we made in 2004 was not that we should move away from free education, because of course it was not free. Taxpayers were pooling resources to contribute to the higher education of this country. We decided, alongside the taxpayer, to ensure that individual students and universities made a contribution to higher education.

Photo of Diane Abbott Diane Abbott Shadow Minister (Public Health)

Does my right hon. Friend agree that those who argue that students need not be frightened of £9,000 a year fees, because they will not be paying up front, entirely fail to recognise that for someone who comes from an immediate family in which no one has ever been to university, or maybe even stayed at school past 16, the prospect of debts of £50,000, or possibly £100,000 if they want to be a doctor, must be off-putting? Coalition Members have to put themselves in the position of those ordinary families.

Photo of David Lammy David Lammy Labour, Tottenham

My hon. Friend is absolutely right. We should reflect that fees of £9,000 a year could total up to debt of between £40,000 and £50,000 on completion of a university course. That is substantially more than the annual incomes of many of our constituents.

Several hon. Members:

rose -

Photo of David Lammy David Lammy Labour, Tottenham

I will not give way because I want to make some progress.

That is substantially more than the £3,000 we introduced. The essential ingredient of this debate is that we are breaking the partnership between student, state and university. We are saying that the state can step out of the arrangement, and that the arrangement should be entirely between the student and the university. It is my contention that that is unacceptable.

When we set up the Browne review, we specifically asked Lord Browne, in the terms of reference, to look also at the fourth constituent part of the arrangement that also benefits. I am talking about employers. Multinational companies in this country benefit greatly from graduates, so I am disappointed that Lord Browne spent effectively 300 words on them. It was heartening to hear the Secretary of State mention employers; I just wish he had not done it so late, and I wish he could attach a figure to what their contribution should be. If this is a genuine partnership, it must be one between students, the state, universities and employers. That is why this is so unfair and why people outside are so angry.

It is right for students to say, "What do we get for that £9,000?" There should be something before the House explaining what they will get for that money. Let us remember that, because universities had been so badly underfunded under a previous Conservative Government, the fee we introduced was topping up a big black hole in university finances. In fact, much of the tuition fee we introduced went to lecturers' pay and salaries. Many people still believe that they cannot fully identity what they got for their contribution, so as we move to £9,000, should not the Government come forward and say, "For this money, these are the contact hours you will have with your lecturer. For this money, this is the size of your tutorial. For this money, we will be able to tell you what your employment prospects will be afterwards"? But there is nothing before the House about what the student gets for the contribution they are making.

A young girl approached me this week who wanted to go to my old university-the School of Oriental and African Studies. She wants to study development studies. She is a young black woman in my constituency. However, owing to the message the Government are sending on arts and humanities, and on the worth of doing development studies at SOAS, she is doubting whether it is worth coming out with debt to the tune of £40,000 and doing a subject such as development studies. I say to the Minister for Universities and Science that surely we recognise that we live in a multi-disciplinary, inter-disciplinary world. We do not just want scientists; we want those who study the humanities. We see in universities cross-disciplinary activity producing beneficial results, so why has he chosen to withdraw funds from arts and the humanities and teaching in this manner?

Photo of David Lammy David Lammy Labour, Tottenham

I have one minute left, so I will not give way. We will hear from the right hon. Gentleman later- [Interruption.] I have one minute left. I will not give way. The clock will not stop.

We have seen what our best universities are doing on access. Why should the London borough of Richmond send more young people to Oxbridge than Barnsley, Rochdale, Middlesbrough, Hartlepool and Stoke combined? That is unacceptable-and this measure will make it worse. It is unacceptable that 21 colleges across Oxford and Cambridge did not take on a black student. What will this do to address that problem?

That is why the people outside this Chamber are so angry and frustrated. If the Minister believes that this debate will stop as a result of the vote tonight, he is mistaken. It will continue, and I will join the students and their parents in the protest.

Several hon. Members:

rose -

Photo of Dawn Primarolo Dawn Primarolo Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I call Mr Steve Brine, but I should say that he cannot just sit and smile; he has to stand up to indicate that he wishes to speak. Fortunately, I thought that he might want to speak.

Photo of Steve Brine Steve Brine Conservative, Winchester 2:55, 9 December 2010

Indeed I do. I apologise for that, Madam Deputy Speaker, and I thank you for calling me.

I am a new Member in this House-obviously-but there are some things that I have learned in the short number of months that I have been here. When proposals come before us, I always ask two questions: first, can we stick with the status quo and bury our heads in the sand; and secondly, can we put off until tomorrow what needs to be done today? The conclusion that I have come to on the proposals before us is that the answer to both those questions is no. The current funding model for higher education is simply not providing enough money to support the growing number of students who want to go on to higher education. As it stands, we turned away just under 200,000 young people this year. Funding per student is now lower in real terms than it was 20 years ago. As someone once said, "We can't go on like this." [ Interruption. ] Opposition Members may want to listen.

As my right hon. Friend the Prime Minister said yesterday, we cannot allow our universities to fall behind the rest of the world. India is building new technology institutes and new universities, and in the next 15 years the number of graduates from Chinese universities is expected to grow fivefold, so what do we do? Do we turn millions more young people-people like me-away from aspiring to go to university? I do not want to send that message out from this House. If that is what the Opposition have decided, that is their decision, but it is certainly not mine. Do we just increase state funding to higher education, so that fees can either stay as they are or, as some in this House would like, be abolished altogether? We know that we cannot do that because, once again, the country faces ruin after a Labour Government.

As Mr Blair's new Government proved, simply increasing the money from the Exchequer was not possible in '97, when we had a fantastic economy, which was bequeathed to Labour, and it is certainly not possible with the wrecked economy that we face today.

Photo of Steve Brine Steve Brine Conservative, Winchester

No thank you.

I strongly supported setting up the Browne review. I did not sign any pledges about what it might or might not recommend-I think that was the right decision-and I welcome a new system in which no students will pay up-front fees. It is also a system in which, for the first time, part-time students will pay no fees up front. That is a real development. I welcome lifting the repayment figure from £15,000 to £21,000, and I very much welcome the repayment figure being linked to earnings.

I am new here, and I have wrestled with this decision like no other. I opposed the £1,000 fee in 1998 after the Dearing report, because I feared that it would breach the principle of free higher education. I said that there would be no turning back, and I think that I was right about that. I was not in this House then, but my party opposed top-up fees in 2003-04, because we feared that they would restrict access to higher education. I have to say that I think we were wrong, and we have been proved so, because the number wanting to go keeps going up and up.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Constitutional Reform), Shadow SNP Spokesperson (Scotland)

If the hon. Gentleman is such a fan of tuition fees of £9,000 per annum, will he pay £9,000 in retrospect for every year that he was at university? He is not duty bound to do so, given that he was not charged when he was at university, but he can freely pay now. He is at liberty to do so. If he so strongly believes in the principle of paying tuition fees, will he now pay £9,000 for each year that he was at university?

Photo of Steve Brine Steve Brine Conservative, Winchester

I do not know whether the hon. Gentleman has access to my bank accounts, but if he did, he might not have asked that question.

Whether or not we all agree that 50% of young people should go to university, that is a decision that millions of young people and families across the country choose to take. That is the situation that the House faces. I hope that these proposals will put higher education funding and student finance on a sustainable footing, improve the quality of university degrees and put a progressive support package in place for students that will not deter access on account of the absence of up-front fees.

The Minister will be disappointed in me-I am glad to see him back in his place-if I do not make a point once again about Aimhigher. I think it works and that it has been proved to work, and it worries me that it is disappearing. I urge the Secretary of State and the Minister for Universities and Science to revisit this decision or, at the very least, to do more to safeguard the functions of Aimhigher. Aimhigher Hampshire is based at the university of Winchester in my constituency; it does a very good job.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

I am grateful to my hon. Friend for giving way-unlike Mr Lammy. I would like to assure him that Aimhigher has produced some valuable initiatives and that individual universities can carry them forward. Indeed, under the new requirements we are introducing for the Office for Fair Access, we will expect them to take initiatives to broaden access. The best of Aimhigher will thus survive in a new form.

Photo of Steve Brine Steve Brine Conservative, Winchester

I am glad to hear that. The Minister knows that I will be back and will hold him to that assurance. I also urge him-perhaps he will come back to it when he winds up the debate-to ensure that what universities such as the university of Winchester charge is not pegged at £6,000. They must be free to charge where they see fit within the £6,000 to £9,000 range.

I take no ideological great pleasure from today's decision, but to govern is, indeed, to choose. I agree with the Deputy Prime Minister that to govern is not to abstain, but to choose. I shall support the proposals. We can support or not support only the proposals before us-not those that we would like to be before us. I will support them.

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Education) 3:02, 9 December 2010

I am grateful for the opportunity to speak against the motion on behalf of all my constituents, especially the teenagers who have e-mailed me over the last few days asking me to do so. I want to talk about what the Government's plans will mean for many of those young people, if not all of them.

In a Liberal Democrat press release during the election campaign, the Deputy Prime Minister said:

"If fees rise to £7,000 a year, as many rumours suggest they would, within five years some students will be leaving university up to £44,000 in debt. That would be a disaster."

I am sure that this is going to be the only time I find myself saying this, but "I agree with Nick." Even if most universities charge the minimum of £6,000, it will still be a disaster. If most of the more prestigious universities charge £9,000, it would be an even bigger disaster.

For many young people in my constituency, fees of £27,000 will prove the ultimate deterrent to carrying on their education and realising their academic potential. If their ambition were strong enough, they would still find themselves having to think very seriously about going to a local university-to avoid the living expenses-rather than to the best university that would accept them, based on their ability. Indeed, comments made by the Secretary of State in the last debate on this subject lead me to believe that this is exactly what he intends people to do. I find that totally hypocritical, given that he had the opportunity to live in Cambridge and attend a top university.

Do not get me wrong, Madam Deputy Speaker, as many of the local higher education providers in my constituency are excellent for both the quality of teaching and the student experience. The university of Sunderland was recently declared at The Times higher education awards as the top university for the student experience. That does not mean, however, that staying local offers the best possible educational opportunities for everyone in my constituency. Many of my constituents are able enough to earn a place in a highly sought-after course elsewhere in the country, and it is imperative that they should feel able to apply to such institutions to study such courses without their main focus being on the potential cost.

Photo of Gavin Williamson Gavin Williamson Conservative, South Staffordshire

The hon. Lady talks about top universities, but the Russell group of universities says:

"There has been much misinformation about the effect of fees on access. The evidence is clear that fees do not deter poorer students from university-particularly when combined with a progressive repayment system, precisely as the Government is proposing."

Does that not destroy her argument?

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Education)

Not at all. That is rubbish, and I totally disagree with it. As hon. Members have said, the proposal will put off people from working-class backgrounds from going to any university, let alone a top one.

Of course the headline cost-the £44,000 spoken of by the Deputy Prime Minister-will not remain static. I have done my sums, and assuming my constituents graduate with a debt of £40,000 and are lucky enough to find a job that pays £21,000 in a market ravaged by the Government's cuts, that debt will start to creep up. We hear that the interest rate will be 2.2% plus inflation. I note that for the purpose of raking money in, the Government have chosen the retail prices index, yet for paying out-say, in benefit uprating-they have chosen the lower measure of the consumer prices index. If we add the current RPI to 2.2%, we get 7.1%, which will mean an interest payment of £2,840 per annum on a debt of £40,000. To keep up with that interest and stop the debt rising, a graduate would need to earn more than £52,000 a year.

Most people in this country, graduate or otherwise, would consider themselves lucky to earn £52,000 by the age of 52, let alone 22. Where is the sense in the Government's proposals if many graduates will have a bigger debt at the end of 30 years than they did when they graduated? On my calculations, I estimate that large numbers of students will have their debt written off under the proposals. How is that a better way of doing things? At least under the previous system graduates were able to pay off their debts, if they were working, on average within 11 years.

Concessions have been outlined over the past couple of days, as they were when the matter was discussed in a debate in Westminster Hall secured by my right hon. Friend Mr Lammy. They must have been drawn up on the back of one of the Deputy Prime Minister's ever-growing pile of empty fag packets, but their announcement gives me the impression that someone in the Government must recognise the damage that their plans will do to the life chances of many young people and to the wider economy. It beggars belief, therefore, that they are still pressing ahead with them.

Photo of Christopher Pincher Christopher Pincher Conservative, Tamworth

I do not know who has done the hon. Lady's sums for her-possibly the shadow Chancellor-but they do not add up. Graduates in my constituency on a median salary of £24,000 are currently paying back £810 a year. Under the coalition's proposals, they will be paying back £270 a year. For graduates, that is real practical help, which her party never gave.


well said Chris, a reduction of £540 a year is fair for all

Submitted by Andrew James

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Education)

I inform the hon. Gentleman that I did my sums myself. I have them here, and I will forward them to him so that he can see the truth of the matter.

The Government's reckless behaviour in this and other areas of policy directly affecting young people, such as scrapping the EMA without proper scrutiny, shows that the policies are less about pragmatism and totally about dogmatism. Incidentally, I urge my hon. Friends to read the illuminating article in The Times-written in 2003, it must be said-by the current Secretary of State for Education. The article highlights exactly how the minds of those in this Administration work, and how they will be worse for our constituents than even the Thatcher Administration, who ruined lives and wrecked communities.

If Liberal Democrat Members file obediently through the Government Lobby tonight, their betrayal will not be forgotten, and they will never be taken seriously again by their constituents. For the sake of young people throughout England, I sincerely hope that they will manage to locate their spines between now and the putting of the Question, and will join me and other hon. Members in opposing this regressive and deeply divisive motion.

Photo of John Leech John Leech Liberal Democrat, Manchester, Withington 3:10, 9 December 2010

I welcome the opportunity to speak in the debate, although, like my hon. Friend Greg Mulholland, I wish that the Government had been persuaded not to press ahead with the plans, and that they had not been necessary.

I do not intend to speak for long, because I think I made it clear last week, during the Opposition day debate, where I stand on the issue of increasing tuition fees. I will vote against the proposed increase, and I was one of the signatories to the amendment tabled by my hon. Friend the Member for Leeds North West.

I take no pleasure in voting against the plans presented by my right hon. Friend the Business Secretary. In fact, in many ways I welcome some of the proposals that have followed the Browne review. Increasing the level at which graduates must pay back any money to £21,000 is certainly an improvement on the current £15,000 threshold. Treating part-time students in the same way as full-time students by not charging them any up-front tuition fees will be of benefit, and providing additional support for students from poorer backgrounds is also a step in the right direction. The Institute for Fiscal Studies has rightly confirmed that the proposals are more progressive than the current regressive tuition fees system. However, I will vote against an increase in tuition fees, simply because I think that a higher cap will discourage some young people from going to university in the future.

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

I, too, signed the cross-party amendment tabled by Greg Mulholland. I am sorry that it was not selected.

The hon. Gentleman mentioned the Browne review. Coalition Front Benchers have made some play of rejecting the upper figure of £12,000, but does the hon. Gentleman agree that by also rejecting the clawback and the disincentive mechanism in the review, the coalition Government have made it more, not less, likely that the top fee of £9,000 will be charged?

Photo of John Leech John Leech Liberal Democrat, Manchester, Withington

I rather suspect that most universities will want to reach that £9,000 limit even if they choose not to do so initially. When tuition fees were first introduced, it was clear that universities wanted ultimately to charge as much as they possibly could.

Photo of Graham Stringer Graham Stringer Labour, Blackley and Broughton

I am pleased to learn that the hon. Gentleman will be going into the correct Lobby this evening. However, he has only dealt with half the equation. Can he explain to the people in his constituency-the people of Manchester-why he voted for an £80 million cut in the Manchester university fee as part of the £3 billion cut in university grants?

Photo of John Leech John Leech Liberal Democrat, Manchester, Withington

That is not relevant to the debate, or to the point that I am trying to make. The proposals mean that the least well-off quarter of graduates will be better off than they are under the scheme introduced by the last Labour Government. However, the flaw that I see in the proposal of my right hon. Friend the Business Secretary is that no one goes to university believing that they will be among the bottom 25% of graduates. Their assumption will always be that they will have to pay off the whole of their student debt, although for a large proportion of them, that will never be the case. I believe that a number will be put off choosing to go to university in the first place.

Photo of John Leech John Leech Liberal Democrat, Manchester, Withington

I will not give way a third time.

As I said earlier, I signed the amendment tabled by my hon. Friend the Member for Leeds North West. However, I also strongly support the amendment tabled by my hon. Friend Dr Huppert. Along with most other Members who are graduates, I benefited from a free education, and left university with a very small amount of debt. I am not about to vote to leave future graduates with tens of thousands of pounds of debt. I hold to the old-fashioned principle that a university education benefits the country and the economy as well as the individual. Graduates who are successful and earn high wages after they leave university pay more taxes and repay the cost of their university education that way. I am therefore slightly disappointed that the amendment to which I have put my name has not been selected and will not be voted on, because that vote would have revealed which Members support the principle of free education, and Opposition Members would have had a chance to show their support for the existing unfair regressive fees system. We are not going to get that opportunity, however.

All we are getting from the Opposition is pathetic political opportunism. The House witnessed that last week, yesterday and this afternoon. The Leader of the Opposition has suggested he supports a graduate tax, but is not prepared to tell us how much it would cost and how many graduates would be worse off under his proposals. This week we are told that the shadow Chancellor has had a road to Damascus-style conversion to the concept of a graduate tax; either that or, more likely, he has had a North Korean conversion to the graduate tax. Both the Leader of the Opposition and the shadow Chancellor were members of the Cabinet that introduced the Browne review with the explicit intention of raising tuition fees. Nobody in this House or outside it should be duped into believing that Labour would not be proposing an increase in tuition fees if they were still in government. While I welcome their convenient conversion to opposing a rise in tuition fees, the House should be under no illusion: if they were in government they would be doing exactly the same as what is being done today.

Photo of Rob Flello Rob Flello Shadow Minister (Justice) 3:16, 9 December 2010

I listened with great interest to the contribution of Mr Leech, particularly when he talked about political opportunism. I seem to remember that being on every page of the Orange Book, the bible of the Liberal Democrats. Perhaps the hon. Gentleman should have a word with the Deputy Prime Minister about political opportunism.

I am conscious that I do not have much time to speak in this debate, which is a great pity. Yesterday we debated, at insufficient length, how much time we would have for today's debate but, yet again, a Liberal henchman moved the closure motion at the behest of his Tory string-pullers. [Interruption.] Thank you.

I should declare an interest. My daughter is currently at university. She is studying a course involving applied theatre and education. The course will not exist after next year, however, because the university is cancelling it, as it is one of the courses the university will not have the funding for because of the 80% cuts.

Photo of Kevan Jones Kevan Jones Shadow Minister (Defence)

When my hon. Friend's daughter made the decision to enrol on that course, did she follow the advice of Mr Gyimah, who said young people should choose which course to study as an investment decision?

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

I am grateful to my hon. Friend for that question, because the course my daughter chose is of great benefit to the community as it looks at applying theatre in places like prisons and special schools. She looked upon the course not as an investment for herself, but as an investment much more broadly.


were it not for the "micky mouse" courses that Tony Blair encouraged, to give a sensation of verisimilitude, to his shout of, Education, Education, Education. and to massage the figures of...

Submitted by Mike Johnson Continue reading

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Constitutional Reform), Shadow SNP Spokesperson (Scotland)

In Scotland, Labour's tuition fees were abolished by the Scottish National party. Does the hon. Gentleman think that Labour made a mistake by putting tuition fees on to the political landscape?

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

I knew that it would be a great gift to give way to the hon. Gentleman, but I think he knows the situation in Scotland well enough.

Staffordshire university and Keele university serve my constituency and the wider local area. Combined, they are looking at £100 million-plus of cuts: cuts that will affect every possible course, and certainly ones that greatly benefit my constituents. We have heard from Government Members that the cuts are all somehow the fault of the previous Labour Government-I am sure that they will all start shouting, "Yes," in a moment-but they seem to have forgotten the bankers. They have forgotten that it was the banks and the global banking crisis that got us into this mess and that other countries were looking to the previous Prime Minister and Chancellor for a way out of it. If the problems, which require such massive cuts and therefore these fees, are all about cutting the deficit, will Government Front Benchers say that in four years' time-when they intend to have paid off the deficit-these proposals will be reversed and the money will go back into the higher education sector?

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

No, I will not give way to any Government Member because they shamefully voted for the programme motion yesterday, so they clearly do not want any debate to take place.

Let us consider the impact on students. We are trying to raise aspiration in areas such as Stoke-on-Trent and wider north Staffordshire and to get more students into university. Indeed, in the past few years, the number of students from north Staffordshire going to university has gone up by more than a third, which is a huge increase. I have been contacted by a great number of students who are at university in and around north Staffordshire. Many constituents and families have been in touch. I have with me a handful of the e-mails I have received. I have also received many letters and callers to my office.

Let me quote from what Jasmine wrote to me. At 20, she is the eldest of four children. Her family are all professionals, being in the police force, the civil service or the army. Her mother is a social worker. Like many of my constituents, her family are good, decent, working people who work locally in and around north Staffordshire. Jasmine is currently at Staffordshire university and wants to be a teacher after she graduates-something she could not do if she did not have a degree. She tells me:

"I am enraged that the government is going to raise university fees".

She receives only a maintenance loan because her parents work in areas such as social work and the police force and are not therefore able to fund her. Like many people in the Chamber and the wider community, they have children from a previous marriage who also need to be funded and taken into account.

Photo of Tristram Hunt Tristram Hunt Labour, Stoke-on-Trent Central

My hon. Friend's constituency and mine share Staffordshire university, which is also dealing with the cuts to its university quarter being driven through by the Government. Why does he think the Government are so anti-university when every other nation in Europe is investing in its science and universities at this time of recession?

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

My hon. Friend puts the point extremely well. I do not think the Government are anti-university per se, although we have heard some interesting comments from Mr Gyimah, who said that our education system is "so bad"-perhaps he was following the Prime Minister's lead in talking down British universities, students and teaching. I think they are more interested in promoting elitism.

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

No, I will not, for reasons that I have stated. Perhaps the hon. Gentleman should have voted against the programme motion last night; then I would have given way.

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

The same goes for the hon. Member for East Surrey.

Jasmine's letter continues:

"This generation and the one following are the future of Britain and the government should be investing in them-not making it impossible for people to afford, grow and be educated."

That is just one of many e-mails and letters I have received.

Is this feeling particular to students or to my students? No it is not. A ComRes poll for ITV said-if I can find it-

Photo of Matthew Offord Matthew Offord Conservative, Hendon

Let me help the hon. Gentleman.

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

No; I will not take the hon. Gentleman's help. He can resume his seat.

A ComRes poll for ITV News found that 70% of the public agree that higher tuition fees will deter students from poorer backgrounds from going to university and that only 17% think they will not. A recent Ipsos MORI poll found that raising fees to £5,000 a year would deter almost half those from deprived backgrounds who would otherwise go on to higher education and that raising fees to £7,000 a year, let alone £9,000 a year, would cut the number who do so by nearly two thirds.

This is a shamefully short debate, because hon. Members should have had a proper opportunity to take part. I would have taken interventions had the Government not shamefully curtailed the time available. This debate will rage on outside this place among the disgusted people of this country. [Interruption.]

Photo of Dawn Primarolo Dawn Primarolo Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. It is not necessary for Members of this House to count down. The clock is perfectly accurate. Although feelings are running very high and arguments are being put forcefully, courtesy can still be shown in this Chamber.

Photo of Alok Sharma Alok Sharma Conservative, Reading West 3:26, 9 December 2010

We have heard much self-righteous indignation from the Opposition about the proposed rise in tuition fee levels, but no real acknowledgement of why these decisions are having to be made. The fundamental reason why the coalition Government are having to make difficult choices on public expenditure is the shocking state of the public finances left to us by the previous Government.

Photo of Anas Sarwar Anas Sarwar Labour, Glasgow Central

Is it not the case that the UK spends only 0.7% of its gross domestic product on higher education, compared with the OECD average of 1%? So this is not an economic decision, but a political decision taken by the coalition.

Photo of Alok Sharma Alok Sharma Conservative, Reading West

This is an economic decision. The Labour party left us with a mess, they have absolutely no plan and they come here trying to oppose a fair policy that we are putting forward. The Opposition have talked about the proposed tuition fees increase "pulling the ladder" away from poorer students, but that clearly is not the case. Such talk is pretty rich coming from a party whose policies in government were pulling the ladder away from the whole country. In case Labour Members are suffering from collective amnesia, I should remind them that it was their party that first introduced tuition fees, that subsequently increased tuition fees threefold in 2004 and that cut hundreds of millions of pounds from higher education when in office. It was also their party that initiated the Browne review, because it knew that changes had to be made in higher education funding. In The Times of 13 November, the shadow Chancellor, who was the higher education Minister in 2004, was reported to have said that Labour should have gone for higher fees at that time, perhaps of £5,000 a year.

Photo of Gordon Birtwistle Gordon Birtwistle Liberal Democrat, Burnley

Does the hon. Gentleman agree that it is a total disgrace that the previous Prime Minister has not been seen since May and has not returned to this Chamber to explain this and apologise to the students outside for putting them in this position?

Photo of Alok Sharma Alok Sharma Conservative, Reading West

I could not agree more with my hon. Friend, who makes a very good point. It is clear that Labour's opposition to the change in tuition fees is all about party politics and opposition for its own sake.

Several hon. Members:

rose -

Photo of Alok Sharma Alok Sharma Conservative, Reading West

No, I will not give way now. That approach comes from a party that appears to have no consistent or developed policy on higher education funding. The Leader of the Opposition, who is not in his place, has said that that Labour party policy is a "blank sheet of paper". Well is it not time that he started scribbling on it? The Opposition have raised a number of objections to the proposed tuition fees increase. They say that it will put people off going to university, that it will have a negative impact on social mobility and that, overall, the increase is just not fair. Let us examine each of those points.

Will the increase put students off going to university? Tuition fees have been in place for more than a decade and the number of students has increased by 44%. Why the increase? It is because students realise that having a good degree adds value to their prospects and is a passport to a better job. OECD figures clearly indicate that UK graduates earn, on average, 50% more than those who finished education at A-level.

Photo of Alok Sharma Alok Sharma Conservative, Reading West

No, I will not just now because I want to make some progress. The proposed changes will be an important step in ensuring that the money follows the student and will go further towards making universities more accountable to students as customers.

I do not subscribe to the view that the proposal will reduce social mobility, because it ensures that no one has to pay anything up front and no one has to repay anything until they earn at least £21,000 a year, a 40% increase on the current figure. Everyone, whatever their background, will be able to take advantage of the opportunities offered by a university education.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Constitutional Reform), Shadow SNP Spokesperson (Scotland)

If the hon. Gentleman is such a supporter of tuition fees, will he pay £9,000 for every year that he was at university?

Photo of Alok Sharma Alok Sharma Conservative, Reading West

Another tax rise. That is what we get from the Opposition. Another tax rise. They left us with the biggest budget deficit of all time, and now the hon. Gentleman proposes that we increase taxes further. That is their answer to absolutely everything.

Let me continue with the proposed extra help. Through the national scholarship programme, the increase in maintenance grants and the required checks to ensure that universities take people from disadvantaged backgrounds before they are able to charge more than £6,000, social mobility will be further encouraged. But social mobility-

Several hon. Members:

rose -

Photo of Alok Sharma Alok Sharma Conservative, Reading West

No, I will not give way, because I do not have much time left.

Social mobility starts at school, and a report in November 2008 by the Teaching and Learning Research Programme, called "Widening participation in higher education", concluded that a lack of attainment at secondary school was the biggest factor in non-participation in higher education. So it is highly disappointing to see the OECD figures, published over the last few days, which show that secondary school pupils in the UK have fallen well behind their international counterparts, a fall presided over by the previous Government. Between 2000 and 2009, we slipped from seventh to 25th place in reading skills, from eighth to 28th in mathematics and from fourth to 16th in science. The Opposition are not in any position to lecture us on improving social mobility.

I urge all Members also to take note of all the university vice-chancellors and principals who, in a letter in The Daily Telegraph yesterday, expressed their fears that social mobility would be curtailed if the regulation were not passed this evening. They said:

"If the vote on Thursday fails, the alternative is likely to be a reduction in students numbers that would be enormously damaging to social mobility and would seriously hamper Britain's ability to adapt to the economic needs of the future. We urge MPs and peers to support the Governments proposals."

Are the proposals being discussed today fair? Well-[Hon. Members: "No!"] Well, we cannot continue with the current system. All parties agree, and that is why the former Labour Government proposed the Browne review in the first place. Labour seems to be flirting with the concept of a graduate tax.

Photo of Nadhim Zahawi Nadhim Zahawi Conservative, Stratford-on-Avon

Does my hon. Friend not agree that that flirtation with a graduate tax is short-term opportunism for which the Opposition will pay dearly?

Photo of Alok Sharma Alok Sharma Conservative, Reading West

My hon. Friend is absolutely right. A graduate tax would mean that poorer graduates paid more and richer graduates paid less, which is neither fair nor progressive. A graduate tax would also be a tax for life, rather than the maximum period of 30 years in the proposed scheme.

The coalition's proposed system is fair. The Institute for Fiscal Studies says that it is more progressive than the current system, and the Opposition have proposed no system at all. It is fair to all taxpayers that students, who will on average earn significantly more than non-graduates in their lifetime, make a contribution to their education after they graduate; it is only fair to full-time and, now, part-time students and their parents that they do not have to find any money up-front; and it is fair because graduates will pay less per month than do they under the current system.

I hope that, rather than playing grubby politics with the aspirations of a generation of students, the Opposition will be honest with students and taxpayers. I hope that they join us in offering students increased opportunity and a greater stake in their own education, instead of raising false expectations that an as yet unexplained utopian alternative exists. I urge all Members to support the regulations.

Several hon. Members:

rose -

Photo of Naomi Long Naomi Long Alliance, Belfast East 3:34, 9 December 2010

I am grateful for the opportunity to participate in the debate, which will have profound implications for the devolved Administration in Northern Ireland and for my constituents. I hope to come to that point later. However, given the time constraints, my remarks will not be as comprehensive as I would wish. I shall consider briefly just three aspects of the proposals with which I take issue: the first is the principle underpinning the changes; the second is the effect on social mobility; and the third is the impact on Northern Ireland's students and universities.

First, I shall discuss the principle underpinning the introduction of tuition fees. The increase in fees and the reduction in the grant to universities for teaching is based on the premise that students are the main beneficiaries of a university education and that they should therefore make a specific contribution to the cost. I take issue with that. I may be unusual in doing so, although I am glad to see that some Liberal Democrat and Conservative Members have indicated that they also take issue with it.

One of the principal benefits to a graduate from their education is higher earnings. However, that is already accounted for in a progressive manner through general taxation. Over their lifetime, graduates pay more than 40% more tax than a non-graduate. The higher earnings of a graduate are therefore accounted for through taxation. However, although graduates benefit from studying, society also benefits from their degree. For those hon. Members who have asked how, I simply say that every time someone goes to their pharmacist, dentist, doctor, sends their child to school or university, drives over a bridge or on a road, or turns off a tap in their home, they are benefiting directly from someone else's university education. Employers benefit from increased competitiveness. In Northern Ireland, our international competitiveness and ability to attract direct foreign investment and develop spin-out economic activity linked to research and development is dependent on having well-educated graduates in our population. That benefit is extended to everyone.

Like Greg Mulholland, I was opposed to the introduction of tuition fees and top-up fees. I am also opposed to these proposals, which will further shift the responsibility for university funding on to individual students and away from wider society. A number of hon. Members have referred to the introduction of tuition fees as opening a Pandora's box. I think the introduction of tuition fees is akin to a conversation between a man and a woman in which the man says, "Would you sleep with me for £1 million?" The woman then says, "Yes," and the man says, "Now we've established the principle, let's negotiate the price." What we are doing today is negotiating the price, not the principle. Labour Members should take that into account in what they have to say.

When Labour established the principle of tuition fees and top-up fees, market forces were introduced into the university system. Yesterday, the Deputy Prime Minister said that he would like tuition fees to be scrapped, but that he lives in an imperfect world. I share his aspiration. I am opposed to the measures, not least because by cutting the teaching grant and moving reliance on to individual contributions, the chance for scrapping fees moves from being an aspiration to a pipe dream.

Social mobility is hugely important and my views have been influenced heavily by my personal experience. Neither of my parents had the opportunity to go to university and both went out to work when they were 14. Indeed, my father did so to fund the education of his younger brother. That situation may become more common in the future, as tuition fees rise. For me, the opportunity to attend university was life changing. I had the benefit of a maintenance grant and did not have to pay fees. That financial support was critical to me. My father died when I was 11 and my mum was on a state pension by the time I made it to university. Without making the sacrifice of what was, effectively, six years of deferred earning, when I could not contribute to the household and was reliant on my mum, I would not have been able to get my education. It was the right decision for me, but it is one I fear that other students might not have the opportunity to take.

People from lower-income backgrounds tend to be more debt adverse, and that is deeply engrained in their psyche. Full cognisance has not been given to that in developing the proposals. I want other young people to have the opportunities that I enjoyed. I therefore cannot support the proposals.

As I said last night, the decision taken in this House today will have a profound effect on students from Northern Ireland and on the devolved Administration. An independent review is taking place under the auspices of the Department for Employment and Learning in the Northern Ireland Assembly. However, the report made it clear in its initial phase that it would be very difficult for us significantly to vary from the situation in England.

It was also made clear in the Grand Committee that the Barnett consequentials of a decision that has not yet been taken have already been factored into the budget. I have no doubt that Sammy Wilson will have more to say about that in due course.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Justice), Shadow Spokesperson (Foreign and Commonwealth Affairs), DUP Westminster Leader

I agree almost entirely with the hon. Lady's comments. Does she now regret that during the election campaign she received the wholehearted endorsement of Mr Clegg and that she was so effusive in her support for the Lib Dems?

Photo of Naomi Long Naomi Long Alliance, Belfast East

No, I do not regret receiving the right hon. Gentleman's support during the election campaign. I am thankful to be here as an Alliance party Member representing its policies and not as a Liberal Democrat Member. I think that Mr Dodds is well aware of that.

In Northern Ireland, this will be a matter for the Northern Ireland Assembly. However, if a balance cannot be found between protecting Northern Ireland students who may be deterred from attending university, and underfunding our participation rates, there are serious implications for rebalancing the Northern Ireland economy, which the Government have said is a priority for them. It is hugely important that our universities in Northern Ireland are considered powerfully in this. Northern Ireland universities have some of the best participation rates among lower socio-economic groups. One of those is a Russell group university-Queen's university Belfast. Lessons could be learned from the arrangements that it has put in place to widen participation to support students into education. We should not simply dismiss this as a matter that concerns only English students without giving full consideration to students from Northern Ireland. It is hugely important that the situation in Northern Ireland is fully considered. Although there are progressive measures regarding the repayment of these fees, I cannot, on balance and in the absence of a full package, give my support to what has been put before us.

Photo of Nicholas Boles Nicholas Boles Conservative, Grantham and Stamford 3:42, 9 December 2010

In the short time available to me, I want to focus on the question that really vexes most people in all parts of this House: what effect do the different systems of university finance available to us have on social mobility? Will this Government's proposals encourage more people whose parents did not go to university to do so? As we have often heard, there are many very strong opinions in this House on the answer to that question. Many Members believe fervently that the fees proposed by the Government will deter people whose parents did not go to university and who come from families on low incomes from going to university. It is also true, as we heard earlier, that some opinion polls suggest that a very large proportion of people say that they will be deterred from going to university. Yet people do not always do what they say they are going to do- [ Interruption. ] We are all flawed.

I have tried to find research to give us some facts to work with, because projections of what people will do are not nearly as interesting as the facts about what they have done. Several countries operate their university systems on the basis of quite substantial fees, chief among them the United States, Australia, Canada and New Zealand, as well as ourselves. Unfortunately, there is not much research out there that goes into the question of the kinds of people who go to university, but fortunately I have found one such piece of research conducted by a group called Higher Education Strategy Associates. It carried out a truly systematic comparison of what it calls educational equality and it discovered, extraordinarily and against our expectations, that high fees do not deter people from low-income families from going to university.

Photo of Sam Gyimah Sam Gyimah Conservative, East Surrey

Is it not the case that in countries such as France, Italy and Holland where there are no fees for university education-that is, where it is free-there is not the mass participation that occurs in countries that have fees?

Photo of Nicholas Boles Nicholas Boles Conservative, Grantham and Stamford

My hon. Friend is, as ever, way ahead of me and exactly right. The reverse of what one might have expected is true. In Germany, 63% of the student population- [ Interruption. ] Please listen to this, because it is important. In Germany, 63% of students have fathers who also went to university. That means that only 37% of the students in Germany are the first in their family to go to university-the figure in the UK is 51%. Only 29% of students in Australia have fathers who went to university. The figure is only 31% in Canada and 39% in the United States.

The countries in which universities make the biggest contribution to social mobility are therefore those with the highest fees. How can that be? I agree that it is counter-intuitive. I will not deny to Opposition Members that that is not how one would expect people to behave. However, it is explainable.

First, such universities have an incentive to expand the number of places, because they receive additional money for each place-enough money to pay for the costs of that place. They therefore massively expand the number of places. That makes it easier for people who have not had huge advantages in life, who have not been able to go to the best schools and who do not have the highest grades, but who are nevertheless huge potential reservoirs of talent, to get places.

Photo of Susan Elan Jones Susan Elan Jones Labour, Clwyd South

I am reluctant to disturb the hon. Gentleman, but I wonder whether he has read the Institute for Fiscal Studies report, which states that under the proposals, graduates from the poorest 30% of households

"would still pay back significantly more than under the current system".

That concerns a large number of hon. Members.

Photo of Nicholas Boles Nicholas Boles Conservative, Grantham and Stamford

The Institute for Fiscal Studies, like everyone else in this debate, talks about what it thinks will happen, rather than what is actually happening in comparable countries.

The second explanation is that universities that earn a substantial income from fees are able to devote more resources to active steps to woo students from poorer families. They need a lot of wooing because they are frightened about what will happen. Such universities not only invest in wooing students from poorer families, but support them with bursaries and scholarship grants. The university with the best record in the world in participation from low-income families is Harvard university, which charges tuition fees of $32,000 a year. It can do that because it offers scholarships and bursaries to ensure that people are not put off. It goes out into schools and actively recruits people from low-income families.

Finally, this idea works because universities innovate. They come up with different kinds, shapes, lengths and costs of courses. Some courses take place over longer periods with lots of part-time study.

I believe that this House should operate on the basis of fact and evidence. The evidence is that the Government proposals will increase the participation of people from poor families, and that is why I support them.

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield 3:48, 9 December 2010

I place on record my opposition to the huge rise in tuition fees and the disproportionate effect that it will have in Makerfield, compared with more affluent areas of the country.

I will commence my remarks at the stage before people apply for university. We have lost the Aimhigher programme, which succeeded in raising the horizons of disadvantaged learners in my community and in motivating them to achieve and to progress. Many young people in my constituency have low aspirations and narrow boundaries, and feel that many of the goals that we are discussing are not for them. That was illustrated when I toured one of the last schools to be completed under Building Schools for the Future. A year 7 pupil, who went around it with me, kept saying, "Look at this, isn't it wonderful? Is it all for us? Isn't it a bit too good for us, really?" Unfortunately for my constituency, the untimely demise of Building Schools for the Future has reinforced that view. That makes the Aimhigher project all the more vital. At all costs, we must avoid a return to the situation in 2004, when schools in Wigan had no links to universities and when many pupils had never been to a university campus, nor spoken to somebody who had started at university.

Photo of Jenny Chapman Jenny Chapman Labour, Darlington

I have given the progressive nature, or otherwise, of the proposals a great deal of thought throughout the debate, and I have managed to find one way in which they are progressive. It is that they will enable some hard-pressed Labour candidates to progress into Liberal Democrat seats at the next election.

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

I thank my hon. Friend for that intervention.

Encouraging young people in Makerfield to consider university, and to consider which university course is right for them, has been difficult enough without bringing in the added complication of the huge rise in costs due to the trebling, in some cases, of tuition fees. Not only will potential students from poorer backgrounds be deterred from further education completely, but those who are determined to proceed will feel pressure to choose the most affordable course, even though it may not be the right one for them.

The average student debt will rise massively to £40,000, according to the University and College Union. In Makerfield, that equates to just over half the cost of the average terraced house, the kind of property in which many of my constituents live. The idea of taking on that amount of debt at a young age, and also having to plan for a future later, is unimaginable and frightening to many people.

Photo of Mark Hendrick Mark Hendrick Opposition Assistant Whip (Commons)

Many of my hon. Friend's constituents live fairly close to my constituency, which houses the university of Central Lancashire. Many of our constituents probably thought that £3,000 was quite a lot when the Labour Government originally voted to introduce tuition fees. In fact, we found that £3,000 fees did not close the market. The vice-chancellor of the university of Central Lancashire tells me, however, that fees of £9,000 will close the market, as they will frighten people off going to university.

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

I absolutely agree with my hon. Friend.

In my constituency, a traditional working-class community, debt is regarded as a bad thing, and parents do not encourage their children to take on levels of debt on this scale. For me, education has always been a partnership between the individual and the state. It involves an investment on both sides. However, this rise in tuition fees, coupled with the cuts to the university teaching budget, has shifted that. The loss of funding for many courses, particularly in the arts, humanities and social sciences, has transferred the funding solely to the students of those subjects.

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

No, I will not give away again.

Those shifts in funding cannot be fair or right. Is this the society in which we want to live, where we know the price of everything and the value of nothing? Young people in my constituency are angry; they feel let down. They have been e-mailing me and urging me to vote against this increase. I am glad that those people are angry, but I worry about the ones who have not contacted me, who perhaps feel that this unfair policy is all that they deserve, and that they can expect nothing better. It is not what my constituents deserve; they deserve the best chances in life, and I shall vote against this policy to ensure that they get them.

Photo of Rehman Chishti Rehman Chishti Conservative, Gillingham and Rainham 3:53, 9 December 2010

I rise to support the Government's proposals on the basis that they are fair, just and progressive. I have formed that opinion on the basis of my own personal experience, having gone to a local secondary modern high school in a tough catchment area which closed the year I left, and having been the first in my family to go to university. I am still paying back the tuition fees from the Bar vocational course that I took before qualifying as a barrister. I was also an executive member of the National Union of Students in Wales between 1998 and 1999.

In the light of that experience, do I feel that the Government's proposals will allow students from all different backgrounds to go to university and reach their potential? The answer is that I most certainly do feel that anyone who wants to go to university will be able to do so, and will be able to reach their true potential. The concepts of aspiration, hard work, determination, dedication and perseverance are crucial to getting someone to university, through university and beyond.

Photo of Paul Uppal Paul Uppal Conservative, Wolverhampton South West

I come from a working class background-seven children in a two-up, two-down. My parents took two jobs and I did not qualify for a grant because they supported my extended family in India. I worked my way through university. Is not it the case that it is not money, but individual personal ambition and aspiration that drives people?

Photo of Rehman Chishti Rehman Chishti Conservative, Gillingham and Rainham

I thank my hon. Friend for making that pertinent point. It is not simply about money, but about aspiration, commitment, dedication and determination to go to university. My hon. Friend makes an excellent point.

Photo of Chris Bryant Chris Bryant Shadow Minister (Justice) (Political and Constitutional Reform)

May I put a slightly different version of the facts to the hon. Gentleman? By the end of a three-year, perhaps four-year course, somebody could have debts of £40,000 or £45,000. For many people in my constituency and in many mining constituencies in this land, that is more than the value of their home. That is the equation that goes through their mind.

Photo of Rehman Chishti Rehman Chishti Conservative, Gillingham and Rainham

The hon. Gentleman makes a pertinent point. I was at university in Wales and I know the community there. However, the key element is that there are no up-front fees and that is why the motion is a good one.

One has to consider the overall package rather than single elements for its progressiveness, fairness and justness. As well as there being no up-front fees, the increase in the threshold from £15,000 to £21,000 has to be a good thing. There will be a cap at £6,000 and then at £9,000, linked to exceptional circumstances. Some of the highest-performing universities will have to go out and ensure that students from less privileged backgrounds take part. That is absolutely right and fair.