Higher and Further Education

Opposition Day — [6th Allotted Day] – in the House of Commons at 6:59 pm on 11th September 2012.

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Votes in this debate

  • Division number 63
    A majority of MPs voted against reducing tuition fees to £6,000, funded by reversing the corporation tax cut for banks and requiring graduates earning over £65,000 a year to pay higher interest rates on their student loans.

Photo of Dawn Primarolo Dawn Primarolo Deputy Speaker (Second Deputy Chairman of Ways and Means) 6:59 pm, 11th September 2012

We now come to the second debate. I have to announce that the Speaker has selected the amendment in the name of the Prime Minister.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills) 7:17 pm, 11th September 2012

I beg to move,

That this House
notes with concern that September 2012 marks the first term where students will face the trebling of student fees to £9,000 a year;
further notes that barriers are also being put up for vocational routes, with direct Government support for learners cut for level 3 courses and above, which includes apprenticeships and access courses to university, and with Higher Education-style loans being introduced, costing learners up to £4,000 a year;
and calls on the Government to change course and, as a first step, reduce tuition fees to £6,000, funded by reversing the corporation tax cut for banks and requiring graduates earning over £65,000 a year to pay higher interest rates on their student loans.

In just over a week, university freshers weeks will kick off in earnest ahead of the new academic year. New students will soon start arriving at their institutions excited, nervous and full of anticipation and hope for their futures as they look forward to three, maybe four, of the best years of their life. They do so against a backdrop of confidence in the quality of our world-class higher education sector, which collectively will do all it can to give them the best possible higher education experience.

But this year is also markedly different, for this year we will see the first cohort of students who as a result of the Government’s action will be paying tuition fees of up to £9,000 a year and leaving university with significant debts which for some will exceed £50,000. Until the Government changed the rules of the game, higher education had been paid for by a partnership between the student and taxpayer since 1998, but this Government’s trebling of tuition fees in conjunction with their 80% cut in the teaching grant for universities represents a betrayal of future generations of students.

The partnership model for funding has been torn up, and students have been told to go it alone. They must bear the burden of the cost entirely on their own. We all know that this is not what the Liberal Democrats said they would do before the general election.

Photo of Graham Stuart Graham Stuart Chair, Education Committee, Chair, Education Committee

The hon. Lady is speaking fluently from the Dispatch Box, but she is doing our young people a disservice. She is scaremongering and sending them the message that they cannot afford university when the monthly payments are lower than they were before, the threshold before they start paying is higher than it ever was before and anyone who suffers illness, who is pregnant and stops working or has—

Photo of Lindsay Hoyle Lindsay Hoyle Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chairman of Ways and Means, Chair, Panel of Chairs

Order. I am sure that the hon. Gentleman wants to catch my eye and make a speech later rather than waste time now.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

If the hon. Gentleman had not decided to patronise me at the beginning of his intervention, he might have had enough time to complete his mini-speech. I will move on later to the record drops we have seen in the number of applications, including from mature students, and the increase in the withdrawal rate for students who have been offered university places but decided not to take them, which stands in direct contrast to the rather more rosy picture he is trying to paint.

As I was saying, the Liberal Democrats went into the 2010 general election promising to scrap tuition fees altogether—we all remember that famous pledge—but they broke their promise, and the trust of those who voted for them, and betrayed the students whose votes they courted so assiduously ahead of the election. I wonder how many of them will rediscover their pre-election principles in the Lobbies tonight. Although the Conservatives are no doubt pleased that most of the anger surrounding the betrayal on tuition fees has focused on the Liberal Democrats, they too have form, having previously voted against a rise in tuition fees to £3,000.

Photo of Jonathan Edwards Jonathan Edwards Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Business, Innovation and Skills), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Communities and Local Government), Shadow PC Spokesperson (Culture, Media and Sport), Shadow PC Spokesperson (Wales), Shadow PC Spokesperson (Wales)

I am grateful to the hon. Lady for giving way and congratulate her on her appointment. The motion

“calls on the Government to change course and, as a first step, reduce tuition fees to £6,000”.

As she knows, in Wales fees are substantially lower, and in Scotland there are no fees at all, so if right hon. and hon. Members from Wales and Scotland support the motion, are they in effect advocating an increase in fees to £6,000 in their respective countries?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

Both the motion and our alternative proposal for the Government of a £6,000 cap on fees reflect our position as it relates to England, not the devolved Administrations. The Conservatives and the Liberal Democrats have played politics with tuition fees in the past, and it is students today who are paying the price.

Photo of Simon Hughes Simon Hughes Deputy Leader, Liberal Democrats

I am happy for us to deal with the allegations about what happened after we did not win the general election and therefore could not deliver what we promised, but I would be grateful if the hon. Lady would quickly confirm that Labour promised no tuition fees, but then introduced them, promised in its manifesto not to increase them, but then did so, and has now adopted tuition fees to £6,000. Will she confirm that that is entirely correct?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

The right hon. Gentleman’s party went into the 2010 general election promising to scrap tuition fees at a time when they knew the country faced a difficult economic situation, so I am afraid that he cannot escape his own record by looking to much older Parliaments. We are talking about the burden of debt that this Government have placed on students, which is much more significant than anything they faced before.

Photo of Gareth Johnson Gareth Johnson Conservative, Dartford

Does the hon. Lady not agree that there is something inherently right about those who benefit from having a degree paying for it?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

The principle that those who benefit should pay a contribution towards their degree is absolutely right and one we support, but we believe that paying for higher education should be a partnership between the individual student who benefits and the taxpayer, who also benefits greatly from those going into higher education.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

The hon. Lady might recall that I voted against tuition fees, and I am saddened that some of the things we warned about have come to fruition, but I struggle to understand why the income level of £65,000 has been chosen. How would that be funded, and when would the interest rates come in? If someone drops below that income level, would they fall back down? Can she also explain why the Labour party defends retaining child benefit for people on £65,000 but wants to land them with a higher interest rate on their student loans?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

Our proposal that the Government should reduce the headline level of tuition fees from £9,000 to £6,000 is an alternative measure that they could introduce right now, paid for by not going ahead with the corporation tax cut for the banks. It would be a way for the Government to send a message to the country that they will support future generation of students, rather than saddle them with ever higher levels of debt. As for those earning £65,000 or more, that reflects earnings in each and every year of their working lives. All we are asking is that the wealthiest 10% of graduates pay a little more towards the cost of higher education in order to reduce the costs for those elsewhere.

Several hon. Members:

rose —

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I will make a little progress before giving way again.

The biggest impact has been on the number of applicants. Although applications for the coming term are still open, we already know that there are around 50,000 fewer applications to higher education for the coming year and that one in 20 18-year-olds who would have been expected to apply in previous years have not applied this time around, which represents a decline of around 15,000. I am told by the sector that total accepted applications are down by about 30,000 on last year. That is equivalent to shutting down two mid-sized universities—for example Imperial college and the university of Lincoln.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

Not at the moment.

That is set against a backdrop of a worsening economic outlook as a result of the Government’s failed economic policies. The economy is in a double-dip recession made in Downing street. We know that there is a strong link between periods of recession and interest in higher education, as people seek to enhance their employability and competitiveness in difficult economic circumstances, but this year that is not the case. There is a massive drop that, combined with cuts in the number of places, will result in tens of thousands fewer students entering higher education in 2012. It indicates straight away the impact of the Government’s trebling of tuition fees. Students are being put off and are basing decisions not on whether a university education is right for them, but on whether they can afford it. That is a tragedy for both the person making the decision and the country as a whole, because if they miss out on higher education, we miss out by failing to capture their full potential.

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

On affordability, will the hon. Lady at least admit that a graduate earning £21,000 will pay £45 less than they would have done under the system we inherited from her Government?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

And if the hon. Gentleman’s party took on board our £6k proposal, there would be an even more progressive system for future generations of students.

Cost is the real problem. The Centre for Economic Performance recently surveyed 12,000 teenagers and found that all the indications are that the hike in fees in late 2010 increased the perception that going to university is simply too expensive. That perception was significantly higher in comprehensive schools, compared with independent and selective state schools, and among children eligible for free school meals. If these perceptions influence effort at school or behaviour post-16, they will increase future socio-economic inequality.

Mature students are one of the worst affected groups, as many more are choosing not to go to university this year. The Government failed to take into account the effects of their policies on that group, and we have seen an 11.3% drop in such applications, making them the biggest group affected. There are around 30,000 fewer older applicants this year than last year.

Photo of Lisa Nandy Lisa Nandy Labour, Wigan

Does my hon. Friend agree that, at a time when the Government are closing off opportunities for young people at every turn, with the axing of the future jobs fund, the abolition of the education maintenance allowance and youth unemployment now over 1 million, opening up these opportunities to young people from deprived backgrounds is more important than ever?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

My hon. Friend makes an extremely powerful point. I agree with her comment and endorse it entirely.

Too often we in this House consider higher education issues through the prism of the 18-year-old undergraduate going to university for the first time. Although the experience of such undergraduates is of course incredibly important, we know from the figures that in 2009-10 more than a third of undergraduates entering university for the first time were 21 or older. The impact of the trebling of tuition fees on that group is particularly interesting, as their perspective and actual experience of debt and finance are very different. These are people who often have significant financial and family commitments, with mortgages to pay and child care costs. If they are making a decision to walk away from enhancing their skills by obtaining a degree, they are doing so on the basis of cost.

There is a much higher rate of withdrawals from the application process this year than last year—16% higher. At this stage, 13,138 students who are holding offers from universities have decided to withdraw from the process. That is an extremely worrying sign that students who had already made the decision to go to university are now being put off. Having attended open days, filled out applications and gone to interviews, they are now saying “No thanks.” Where will they end up? What are their prospects for the future given the record levels of youth unemployment and the ongoing recession?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

Not at the moment.

Reading the Government’s amendment, one would think that there were no problems with their policy whatsoever and that it has had hardly any impact—further proof, if any were needed, that they are complacent and out of touch.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I am not going to take any more interventions at the moment; I will do so later.

The Government try to explain away the impact of their choices by saying that the drops in applications are due to the decline in the population of 18-year-olds. However, that does not get them off the hook because, as the Independent Commission on Fees pointed out in its recent report, in the rest of the UK, where the fees regime has remained the same, there has not been the same drop in applications.

Photo of Naomi Long Naomi Long Alliance, Belfast East

It may be relevant to look at the applications of Northern Ireland students to Northern Ireland universities versus GB universities. While applications to Northern Ireland institutions have been consistent with previous years, this year applications to GB institutions have dropped by 14%. Even allowing for demographics, it is clear that students are choosing to stay at home and not to apply to university, perhaps in England specifically, because of the rise in fees.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

The hon. Lady makes a very powerful point, and she is entirely right in her conclusions.

The Independent Commission on Fees found that in Scotland, Wales and Northern Ireland the number of applicants aged 20 or over increased between 2010 and 2012 while, by contrast, in England they fell by 12%. The number of younger applicants—those aged up to 19—fell by 7%, but by only 1% to 2% in the other home countries. Although population size could be a factor, the report found that the relative decline in English applications was much higher. That raises concerns about the impact of fees, because there are falls in the number of applicants both in absolute terms and relative to the rest of the UK.

Photo of Steve Brine Steve Brine Conservative, Winchester

They say that persistence always pays off. I thank the hon. Lady for giving way; she is being very generous with her time. She keeps saying that applications are down. At the university of Winchester, fees have increased from just over £3,000 a year to just on £8,000, and applications are up on last year. The main reason is that the graduate employment outcomes of students at the university of Winchester, with teacher training being one of the biggest parts of its business, are 97%. Does she accept that the key point is that it is up to higher education institutions to make the case for students to come and spend their money with them so that they will get the benefit from it?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I am glad that I gave another hon. Gentleman an opportunity to make a mini-speech. If only the experience of the whole of the higher education sector was the same as that in Winchester.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I am afraid not; I have no desire to respond to a Whips’ question.

The trebling of fees is not the only thing that this Government have done to destabilise and put at risk the quality of our higher education sector.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Cabinet Office), Party Chair, Co-operative Party

Is there not another reason to be concerned about the current admissions data? For example, has my hon. Friend seen today’s report suggesting that even vice-chancellors of universities that have done reasonably well in terms of applications continue to be worried about a decline in the number of applications for humanities and languages?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

My hon. Friend is absolutely right. There are worrying signs of perverse things happening as a result of the Government’s policies. Of course, there has been a focus on STEM subjects—science, technology, engineering and maths—which are very important to our continued economic growth, but that should not happen at the expense of modern languages or humanities. It is very worrying that we are seeing drops in the number of applications for those subjects.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Is it not true that the impact of Government policy is putting off not only UK students but, with the visa debacle, international students, and that that combination threatens to destabilise our universities to the detriment of individuals and UK plc?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I thank my hon. Friend for raising the subject of international students, which has been much in the news recently with the case of London Metropolitan university. I have written to the Minister for Universities and Science with some detailed questions about the handling of the London Met affair. I have yet to receive a response, but I very much look forward to it given that at last week’s Business, Innovation and Skills questions he ducked the opportunity to promise that no genuine international student at London Metropolitan university would be financially worse off. Perhaps he would like to intervene now to confirm that that will be the case—but I see that he is not going to do so.

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee

I have met some of the students at London Met. It is not just a question of being financially worse off; some had come to the end of their degrees and had been asked to take re-sits when they were six weeks away from getting their PhDs. It is very important that no matter what the Government have done—they may have done the right thing; the courts will decide in the end—genuine students should not lose out as a result of their decision.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

My right hon. Friend, who is Chair of the Home Affairs Committee, has been speaking up powerfully on behalf of genuine international students at London Metropolitan university, and I commend him for his efforts in trying to protect them from the impact of the decision to revoke its highly trusted status. He is absolutely right. Genuine international students who have paid huge sums of money for the privilege of a UK higher education and who have come to the end, or almost the end, of their studies at London Met should at least have been given the opportunity to continue and complete them there rather than have to scramble around to find an alternative institution that might take them. It seems entirely right that new international students are prevented from coming to London Met until these issues are resolved, probably through the courts system, but those who were already here and were genuine international students should not have had to suffer in this way.

This is one of the hardest years for universities, which begin the year 20,000 places down thanks to 10,000 places being directly cut by the Government and a further 10,000 being taken away because of the discredited, and frankly chaotic, core and margin policy. Core and margin was a deliberate attempt to force fees down—but crucially, not to benefit students but because the Minister got his sums wrong when he, the Business Secretary, who is sitting next to him, the Deputy Prime Minister and the Prime Minister were busy telling everybody that £9,000 would be the exception rather than the norm and that the average would be much more like £7,500. We now know that that is not how things panned out. To cover that up, and no doubt to get the Treasury off his back, the Minister introduced his core and margin policy. That policy does not put students at the heart of the system. First, it sends a dangerously conflicting message about the cost of tuition. On the one hand, the Government tell students that they can afford £9,000 a year because of the repayment terms, but on the other they try to show that cheaper courses are a good option for those put off by the top level of £9,000. It also acts as an inverse pupil premium. Incentivising poorer students to take up cheaper courses means that they are entering into a higher education experience with the least being spent on them, their learning resources, their activities and their institution. This undermines the Deputy Prime Minister’s pupil premium policy, and there is a risk that it will further entrench educational inequality in the UK.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Cabinet Office), Party Chair, Co-operative Party

Some of the cheaper courses to which my hon. Friend refers are clearly intended to be provided by commercial, for-profit universities. Why does she think that Ministers believe that commercial, for-profit universities should be regulated to a lower standard than mainstream universities?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I thank my hon. Friend for his question, which the Government have managed to duck through their refusal to introduce a higher education Bill in this Parliament. Frankly, they were taught a very hard lesson on the Health and Social Care Bill and other reforms that they have tried to make, so they have bottled it on higher education, which means that there are regulatory gaps in the system. I and others in the sector have warned that regulation is incredibly important to the reputation of our higher education sector, and that the Government should not miss an opportunity to ensure that the regulatory system for all providers of higher education in our country is robust and represents a fair and level playing field.

The core and margin model further undermines the idea of student choice. The policy makes a mockery of the Minister’s ambition to put students at the heart of the system, because it artificially takes places away from institutions that have high demand for their courses, to much lower-demand colleges. It is incoherent, hypocritical, bad for students and bad for universities. Alongside the core and margin model, the Government have removed a number of controls for recruitment at grades AAB as a result of the plan to go down to ABB next year. Again, the implementation of the numbers control policy poses a threat to the stability of the higher education sector.

Photo of John Healey John Healey Labour, Wentworth and Dearne

My hon. Friend is making a very powerful critique of the chaos caused by recent policies. We have two very fine universities in Sheffield in south Yorkshire. Sheffield Hallam university has told me, just as she has said, that the problem is that

“the goalposts were moved often and late this year…This made it difficult for potential students to decide where they might want to go and difficult for Universities to be precise about what they could offer and how many places they had.”

Does my hon. Friend recognise those problems, which are being caused by the Government’s policies?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I thank my right hon. Friend for his intervention. In fact, I visited Sheffield Hallam university during universities week and the academic staff I met made exactly the same point to me. The way in which the Government have gone about making their changes to higher education, with the introduction of the core and margin model after applications had been made and after fees for the academic year had been set, was chaotic, caused universities no end of difficulties and is absolutely not the way to treat a world-class higher education system.

Last year’s estimate of the number of students who would fall into the grade AAB category was 20,000 lower than what transpired when the results came out a few weeks ago. That places a considerable burden on the student support budget, which cannot properly be planned, and risks exacerbating funding pressures on top of the points that my hon. Friend has made about Sheffield Hallam university.

There is a considerable risk that the nature of equivalent qualifications—a distinction for a BTEC, for example, will be counted in with the AAB-plus grading—means that estimates will be very difficult to calculate and are highly likely to be inaccurate. This adds yet more uncertainty and instability to a sector already fraught with upheaval.

Institutions will lose out, budgets will not stretch, and services and support for students will be put under significant strain.

The early indication is that the policy is not working. The vice-chancellor of Southampton told the press last week that his university, which was meant to benefit from the AAB policy, has been struggling to recruit and is about 600 students down. I have visited Southampton university with my hon. Friend the shadow Business Secretary. It is an excellent institution and I am sorry to see that it is facing such difficult circumstances as a result of the Government’s ill-thought-out and ill-planned policies.

On the heels of the trebling of tuition fees and the scrapping of the education maintenance allowance from 2013-14, the Government are withdrawing the support that they offer for people aged 24 or over who take A-level equivalent courses and above, and are introducing a system of loans for further education students. These could be as much as £4,000 a year. Course fees are expected to rise dramatically as colleges look to recoup the money they lose from Government funding. At present, the Government provide about 50% of the funding for such courses, so this mirrors the problems that occurred as a result of their disastrous changes to higher education loans. According to the Skills Funding Agency’s figures, about 376,000 people took such courses in 2010-11. The changes could have a real and damaging effect on social mobility and on individuals’ career and job prospects. It is an attack on aspiration and on people trying to get on. Many of those taking level 3 qualifications missed out on the opportunities the first time around and may come from disadvantaged backgrounds.

Photo of Meg Hillier Meg Hillier Labour, Hackney South and Shoreditch

The further education college in my constituency, Hackney community college, provides a lot of support to precisely those people whom my hon. Friend is talking about—people who did not receive education the first time around and who now often have children. Now they have to make a choice about whether they can commit to a course for three years and I fear that many will choose not to. Does my hon. Friend have any further comments on the Government’s policy in that regard?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I thank my hon. Friend for her intervention. She is absolutely right. As I have said, choices that are being made on the basis of affordability represent a tragedy not just for the individual making them, but for us as a country, because we are missing out on their potential at a time when we should be investing in our education and skills base. In a highly skilled economy we need our people to have high-level skills. This Government are creating circumstances in which that will not be possible in the future.

This Government’s policies will affect level 3 apprenticeships for those aged 24 and over. The added costs could act as a deterrent for potential apprentices and the added bureaucracy could put off businesses from offering places.

A high percentage of learners are also enrolled in courses directly related to, or benefiting, public services. For example, just over 90,000 learners were enrolled in courses in health, public services and care, and over 45,000 in those for education and training. Sixty three per cent. of those affected are women. A drop-off from those numbers would hit local services, and local economic growth prospects could hit the productivity of the public sector and the life chances of tens of thousands of adult learners. The policy will also affect those taking courses in science, technology, engineering and maths when we need more people, not fewer, to take STEM subjects in order to compete in the world with new technology and new industries.

As with higher education, the Government’s policies on further education take us in the wrong direction on participation and social mobility. We are mindful of the impact that the trebling of fees is having on students and would-be students, so this time last year we suggested an alternative to the Government. We have called on them to cut the tuition fee cap to a third, to a maximum of £6,000. We have proposed a fully funded way of doing that, paid for by not going ahead with the corporation tax cut for the banks and through some additional payments by the wealthiest graduates.

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

The hon. Lady is being very generous in giving way. We know now the difference between a Labour tuition fee and a Conservative tuition fee—it is £3,000. She says that the proposal will be funded by reversing the corporation tax for banks. Does that include Scottish financial institutions? Why should they pay for a cut in tuition fees for English students?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

The corporation tax cut is for banks across the UK.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

No, I will not, because I must wrap up. Under our alternative package, the top 10% of earners—those with average incomes of £65,000 or more over their working lives—would pay more, but research from the House of Commons Library has shown that all other income groups would be better off under this package. Universities would receive funding to compensate them for the loss of income from lower fees and the package would be revenue-neutral. The important point is that the headline level of debt carried by students would be significantly lower and would avoid the harm to families and graduates that would be caused by the Government’s plans.

Tonight’s vote is the last opportunity before the new academic term begins for this House to force the Government to change course on their trebling of tuition fees and to give hope to future generations of students that we as a House are prepared to prioritise them and their future; that we will not abandon them; that we understand that we need to provide them with ladders of opportunity, not kick them away; and that we will do whatever we can to help them fulfil their aspirations. If they are allowed to succeed, we as a country will succeed, and I commend this motion to the House.

Photo of Lindsay Hoyle Lindsay Hoyle Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chairman of Ways and Means, Chair, Panel of Chairs

I warn Members that I will have to introduce a seven-minute limit on speeches, and that that will have to go down later on, due to the amount of time that we have.

Photo of David Willetts David Willetts Minister of State (Universities and Science) 7:50 pm, 11th September 2012

I beg to move an amendment, to leave out from “House”
to the end of the Question and add:

“congratulates all those who have recently achieved their educational qualifications;
notes the number of full-time higher education students in 2012 is expected to be higher than in any year under the previous administration;
believes that the pupil premium, which is designed to raise the attainment of pupils from low-income households, represents a powerful mechanism for widening participation in higher education;
welcomes the increased spending on widening participation in higher education, including the higher maintenance grants, the National Scholarship Programme and the extension of tuition loans to part-time students;
further notes the Institute for Fiscal Studies
recent finding that the new student finance system ‘is actually more progressive than its predecessor: the poorest 29 per cent of graduates will be better off under the new system’;
supports the extra information provided to prospective students through the student finance tour and the Key Information Set;
further supports the efforts being made to ensure the best possible match between students and institutions, with one-quarter of all undergraduate places removed from centralised number controls;
and congratulates the Government for working with employers to deliver an unprecedented increase in apprenticeships, with 800,000 new starts since September 2010.”

I welcome this opportunity to debate our reforms to higher and further education. It is the right time to have this debate, as hundreds of thousands of students are starting at university. We congratulate them on their achievement and wish them well at university. We also welcome this opportunity to set out our policies. I will describe our approach to higher education and my excellent new colleague, the Under-Secretary of State for Skills, my hon. Friend Matthew Hancock, will set out our approach to training and further education.

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

In a moment.

Of course, it is also right to scrutinise the Opposition’s policies, as set out in the motion. I will turn to the previous Minister for universities, Mr Lammy, in a moment. I hope he will accept that under the inevitable partisanship of these exchanges, we should remind ourselves that all three political parties, faced with the dilemma of how to finance higher education in the future, have concluded that the right way forward is to have no up-front payments by students, but instead to have a graduate repayment scheme, paid for through pay-as-you-earn and incorporating the best features of a graduate income tax. All three parties, when faced with the responsibilities of Government, have reached the same decision.

Photo of David Lammy David Lammy Labour, Tottenham

The right hon. Gentleman said that he welcomed the debate and thought that it had come at an opportune moment. When does he intend to publish the White Paper and bring forward legislation in this area?

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

We have published our White Paper and have set out our proposals in several consultation documents. We are implementing those proposals step by step.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

The Minister has tried to defend his £9k policy, but has avoided saying anything about the 80% cut to teaching grant funding, which has necessitated the trebling of tuition fees to £9,000 a year. What does he have to say about that?

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

That leads me on neatly to setting out what our reforms are accomplishing. The first thing they are accomplishing—[ Interruption. ] Shabana Mahmood will have to be patient, because I am going to set out the figures for her. Our reforms ensure that students will continue to get well-funded higher education, while at the same time—we make no apology for this—saving money for the Exchequer, because of the fiscal crisis that we inherited from the previous Government. The total amount of cash going to universities to pay for the teaching of students is £7.2 billion for 2011-12, £7.4 billion for 2012-13 and £7.9 billion for 2013-14. We are increasing the amount of cash available to finance the education of university students, while significantly reducing the Exchequer contribution.

Contrary to what the Opposition spokesman said, we are maintaining a partnership between Exchequer funding and private funding. The latest OECD figures, which were published yesterday in its excellent education handbook, estimate that approximately 40% of the costs of educating students will be met directly by the Exchequer. The other 60% does indeed come not from students, but from graduates when they can afford to pay it back. That is a sensible way of financing higher education in an age of austerity.

As well as providing more cash for universities while saving money for the Exchequer, our second achievement is increasing the choice and flexibility in the system by liberalising the controls over numbers that we inherited. We have started that this year with our liberalisation for AAB students. We estimate that approximately one in four students will benefit from the freedom of choosing a university without any of the old corporatist controls on the total number of places at individual universities that we inherited. We are proud to be going further next year by including ABB students, meaning that one in three students will enjoy those freedoms.

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

I want to make some progress, but I will of course give way to the Opposition spokesman for a second time.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I thank the Minister for giving way a second time. Will he remind the House why he had to introduce his core and margin model? Does he remember telling the House on many occasions that £9k fees would be the exception, not the norm?

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

I did not recognise what the hon. Lady said about fees of £7,500. I have explained to the House many times the basis of the calculations. We introduced the policy to bring more diversity into the system. There are local further education colleges across the country that, for the first time, will be able to offer higher education, financed out of our core and margin policy, which is to be welcomed.

We have therefore increased choice and flexibility. We have also transformed the amount of information that is available for prospective students, which we believe will drive up standards in universities as prospective students think about what contact hours they will have, what the class sizes will be, how universities score on the national students survey and, crucially, how universities score on employment outcomes for graduates.

Indeed, this morning, I joined Which? at a London comprehensive for the launch of its excellent new website, which offers far more information to prospective students than ever before. It was a great moment. It was also a pleasure to be joined by the president of the National Union of Students. The NUS is working with Which? to provide better consumer information for prospective students.

Photo of Andrew Smith Andrew Smith Labour, Oxford East

If the information that the Minister is giving out is so good, why are withdrawals from the application process up by 16%? Does that not show that the more information people get about the costs that the Government have imposed, the more they are put off?

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

No. I think that we have succeeded in getting across to prospective students the important message that they do not have to pay up front to go to university. I hope that all Members from all parts of the House, regardless of their views on the fees, will agree that we should all communicate the message that no student pays up front and that they pay back only as graduates. I pay tribute to the enormous efforts of my right hon. Friend Simon Hughes in that regard.

Photo of Emily Thornberry Emily Thornberry Shadow Attorney General

I wonder whether the right hon. Gentleman will help me communicate a message to one of my constituents, who is here legally as an overseas student. He is unable to go into the third year at London Metropolitan university because, for some reason, he is no longer allowed to go there. He wishes to pay the fees and wants to complete his degree. Will the right hon. Gentleman help me convey to him why his education has been so abruptly and unfairly stopped?

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

Several points have been made about London Met, so let me explain the latest position to the House. I fully understand that there are genuine overseas students who are here legitimately and who need as much assurance as we can offer them about their ability to pursue their studies. That is why we set up a taskforce on the day that the UK Border Agency took its operational decision. The taskforce has met several times. It is led by the head of the Higher Education Funding Council for England and other bodies are involved. Next Monday, as a result of the efforts of the task force, there will be a mini clearing procedure. We are collecting offers from universities around London and elsewhere of places on particular courses, which will be available to overseas students at London Met. I will be happy to keep the House updated, in whatever way is suitable, as the taskforce makes progress in ensuring a fair deal for overseas students.

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

Why did the Department for Business, Innovation and Skills not stand up to the Home Office and the UK Border Agency, and not stand up for British universities and their reputation around the world, by not allowing this crazy decision to go ahead, which is doing untold damage to this world-class industry?

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

It was an operational decision by the UK Border Agency, for whom the matter is very clear. Highly trusted status, which is enjoyed by individual universities, is highly prized and brings heavy responsibilities. UKBA’s assessment, independently made, was that London Met was not meeting the responsibilities that it needed to in order to have highly trusted status. In those circumstances, it was unable to advise Ministers that the situation should be allowed to continue. That is the background to the decision, but we are focusing on ensuring the best possible support for legitimate overseas students as constructively as we can.

Photo of Simon Hughes Simon Hughes Deputy Leader, Liberal Democrats

Does the Minister agree that we need to persuade everybody to get the message across not only that there are no fees to be paid up front or while at university, but that there are still places available not just for first-time, 18-year-old students but for more mature students? We should also encourage people to consider university not as the only option in the weeks ahead but as one option.

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

My right hon. Friend is absolutely right, and that leads me to my next point.

Another feature of our reforms is that we have done everything to encourage students from the widest possible range of backgrounds to continue to apply for university. I remind the House of the figures, which the Opposition spokesman carefully ignored in her lengthy speech. The percentage of applications to university by young people has indeed fallen—I accept that—to 31.6% from 32.6% last year. Last year’s rate was the highest on record, and this year’s is the second-highest on record. It is a higher rate of university applications than in any year when the Labour party was in government. I believe that that is because we have successfully communicated to young people that they will not have to pay up front to go to university. Of course, we are also increasing maintenance support for students at university this year. The maintenance grant and support for bursaries are going up. That is why we still have record rates of application to university, and we should celebrate and remember that fact.

Photo of Steve Brine Steve Brine Conservative, Winchester

Given that the Minister inherited a commitment to cutting £600 million from the budget, what would the outcome have been if he had not taken the decision to base university financing on a system of student fees and loans? Presumably a dramatic drop in numbers and me having to say to thousands of my constituents, “Sorry, university’s not for you.”

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

We inherited from the previous Government a simple line in the 2009 autumn statement announcing £600 million of cuts in higher education, science and research. Absolutely no work had been done about where the cuts should be and how they should be delivered, but they would have meant either falling student numbers or less support for science and research. We have been able to offer cash protection in a ring-fenced science budget, and as I showed the House earlier this evening, there has been an increase in the total funding available for teaching in our universities. To achieve that when we are facing the severe financial problems that we inherited from the previous Government is evidence of our commitment to opportunities for young people and to universities and research.

That is exactly what the outside experts say. For example, I remind the Opposition spokesman of the assessment by the Institute for Fiscal Studies. It stated in June:

“The HE funding regime to be introduced in England in September 2012 will be substantially more progressive than the current system. Roughly the poorest 30% of graduates, in terms of lifetime earnings, will be better off…than under the current system…Universities will also be better off, on average, and the taxpayer will save around £2,500 per graduate.”

Only yesterday I met the head of the education division of the OECD, who was here to launch “Education at a Glance”, its annual publication. He described our system of repaying loans as

“the most advanced system in the OECD”,

and added that

“probably no system does it better.”

That was what the impartial head of the OECD’s education division said yesterday.

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

I hope that the hon. Gentleman will agree that he should endorse the assessments of the IFS and OECD.

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

While the Minister was having that conversation, did the OECD back the Government’s strategy of an 80% cut in the teaching budget at a time when every other major nation is investing in education and higher education and thinking about those industries as part of the future rather than cutting them? We are in the same bracket as Romania.

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

The OECD actually believes that our proposals are a way of continuing to ensure that a good number of people go to university even when we are having to save Exchequer funding. It believes that other countries can learn from our model.

I have set out our policies, and I should like to turn to the Labour party’s policies, about which the hon. Member for Birmingham, Ladywood said surprisingly little in her lengthy speech. We know from the motion that Labour’s policy is £6,000 fees. There is a long and unhappy history to Labour’s higher education policy. I will not take her through the whole of it, although I am tempted. I will jump straight to where we are at present, as stated in the motion and in the longest single statement of Labour’s policy that we have found, the speech by the shadow Secretary of State on 2 December. His explanation of that policy took up a tiny fragment of the speech, a few lines. It was the type of fragment of text that academics in our universities love to pore over. He said:

“I’ll explain how this works: reducing the maximum level of fees to £6,000 while compensating universities for the difference costs £1.1 billion.”

That was his starting point. Well, the Department’s official costings show that his policy of bringing fees down to £6,000 would cost £2 billion. That £2 billion is currently going to our universities to pay for the education of students and for outreach, bursaries and access programmes that we thought Labour supported. He would take away that £2 billion of funding for higher education. He claims that he would miraculously be able to finance that, although admittedly he would only have £1.1 billion so he is £900 million short already.

Let us go through how the shadow Secretary of State claims he would plug that gap. He stated:

“£350 million will come from automatic savings from reducing the cap to £6,000 because it will mean some associated expenditure, such as on as fee waivers, will no longer be required”.

The trick is in the words “such as”, because it is not just fee waivers. Let us be clear about what that “associated expenditure” is. It is programmes to assist with student retention; outreach programmes whereby universities go to local schools and encourage students to apply to university; and bursary programmes financed out of the higher fees to offer our students increased financial support. I have a simple question for the hon. Member for Birmingham, Ladywood. I have already permitted her to intervene twice, and I will do so again. Can she offer a guarantee that no student at university would be worse off as a result of the changes that she would make to save that £350 million?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

I am very happy to intervene on the Minister, and I can absolutely guarantee that. What he is missing in his desperate attempt to attack the much more progressive £6,000 fee proposal is that it would automatically obviate the need for quite so many fee waivers and bursaries created by his more expensive system of tuition fees.

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

That is a very confusing intervention. First, the hon. Lady said that she could guarantee that nobody would be worse off, then she said that Labour’s policy would obviate the need for bursaries. Let us be absolutely clear that no student will pay fees up front. They will be paid by graduates. Bursaries matter because they are cash for students now. Is she pledging that the extra money from fees above £6,000, some of which finances bursary programmes and extra support for students, would continue after fees were reduced to £6,000? Yes or no? Would all bursaries be preserved?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Business, Innovation and Skills)

The position of bursaries would be unaffected under the £6,000 proposal. We are saying that the additional cost incurred by moving to £9,000 tuition fees would be brought down. We would not need quite so much money, because people would not have the same level of debt.

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

We are talking about future graduate debt, and the House is noticing that the hon. Lady is wriggling on the issue. We are saying that the extra funding helps to pay out cash for students at university through higher bursaries that are paid for out of revenues from higher fees. Students will have observed the failure of the Labour party to commit to maintaining that money.

Let us look at the next item that will supposedly meet those losses. We have established that the cost is not £1.1 billion but £2 billion, and that £330 million of that already comes from a set of measures that students will dislike. The shadow Secretary of State went on:

“£300 million comes from cancelling the Government’s planned cut to the corporation tax on the banks”.

That is the next extraordinary device that he thinks will help him save that money. Let us be clear: this Government have introduced a bank levy to raise at least £2.5 billion a year. That was set out by the Chancellor in the 2012 Budget, to take account of the benefit to the banking system from additional reductions in corporation tax on banks. In other words, we are already raising this money; we are already collecting extra money from the banks through the banking levy which is to offset the effect of lower corporation tax. There is no reduction in the taxation on banks that the Labour party could use to pay for this policy; the banking levy is extracting that funding.

If any Member of this House was be remorseless in ensuring that every pound of revenue was extracted from our banks to contribute to education and other purposes, it would be my right hon. Friend the Secretary of State. We are already extracting a large amount of money from the banks, and it is evidence of the bankruptcy of the Labour party’s thinking that when faced with any problem or public expenditure challenge it keeps claiming that it can meet the cost by taxing the banks. The evidence shows that the funding is simply not available to pay for it.

Reversing the VAT increase—£13.5 billion—is supposed to be met by taxing the banks. The Opposition have called for more capital spending—£5.9 billion—which will supposedly be met by taxing the banks. Reversing the child benefit savings of £2.5 billion will apparently be met by taxing the banks. Reversing tax credit savings—£5.5 billion—will be met by taxing the banks. They want more regional growth funding, and now we learn their plans for universities as well. There is simply no way in which taxing the banks will solve the gaping black hole in the Opposition’s financial proposals, and we will not let them get away with it.

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

Let me continue to make progress.

The final item, and the biggest on the shadow Secretary of State’s list, is in some ways the most curious. Some £500 million is to come from the top 10% of graduates. I quote the shadow Secretary of State, who wishes to ask

“graduates earning over £65,000 in each year of their working life—to pay more through a combination of a higher interest rate…and to continue to pay for an additional two years.”

That is £65,000 in each year of their working life. The shadow Secretary of State is possibly the only person in the Chamber who could have imagined earning £60,000 a year in each year of his working life. The idea that a levy on people earning £60,000 in each year of their working life could raise £500 million is absolutely incomprehensible. Does the Labour party perhaps mean that when someone’s earnings eventually reach £65,000, they will be charged a higher rate or be charged retrospectively? Again, however, there is no way in which such a measure could raise anything like £500 million, not least because in a free and voluntary system in which we have—quite correctly—protected the right of people to make early repayments of their loan, people whose earnings are heading that way will simply repay their loans. The idea that they will find themselves trapped in penal repayment terms when they are earning over £65,000 a year is complete fantasy. There is no £500 million.

I am, incidentally, offering the hon. Member for Birmingham, Ladywood a free briefing on her policy, and I hope she appreciates how helpful it is. I am trying to explain it to her. In addition, if she were to move to anything like the commercial terms envisaged by the Opposition, consumer credit legislation would come into force and she would find a whole host of new regulatory requirements placed on her scheme that it would not be able to meet because of the design of the scheme that we inherited from the previous Government. It would simply become unworkable. There is no £500 million to finance the Opposition’s proposal, and they have no way of financing fees of £6,000.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Cabinet Office), Party Chair, Co-operative Party

Perhaps I can bring the Minister back to the Government’s own policy—or lack of it. Perhaps he will explain why it is fair for a student and their family to be able probe the offer from a mainstream university using freedom of information legislation, but not that of a commercial, for-profit university.

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

It has come to a pretty pass when a loyal Opposition Back Bencher has to help those on the Front Bench by diverting attention from his party’s own policies, but that is what it has come to. The fact is that there is a black hole in the Opposition’s accounts, and we need to know whether they will cut £2 billion from resources that are now going to our universities. How are they are going to provide an extra £2 billion that is financed properly and honestly, and not by the slick accounting tricks used in the only attempt that they have so far made to explain their policy?

Photo of George Freeman George Freeman Conservative, Mid Norfolk

The Minister is famously well read, and I wonder whether he saw the comments made by Lord Mandelson in his paperback autobiography. He said that when he launched the Browne review in November 2009, he

“assumed, as the Treasury did, that the outcome would have to include a significant increase in tuition fees. I felt that they would certainly have to double.”

Is not the truth that dare not speak its name on the Opposition Front Bench that the Labour party would have doubled fees had it stayed in power?

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

I do recall that vivid and frank admission from the former Secretary of State.

The final irony of the Labour party’s proposals is that it is not at all clear what purpose they achieve. Let us be clear: there is nothing in those proposals for students who are currently at university, there are only risks. There are risks of having less money to pay for the student’s higher education, and, as we have seen, of less money for their bursaries. There seems to be no proposal to change the repayment terms of the scheme—9% on earnings above £21,000—and there is no reduction in the monthly repayments that graduates pay. There is, therefore, nothing in those proposals for people in their 20s or 30s; it will simply mean that they end their repayment period a bit earlier than they would otherwise have done. There is absolutely nothing for recent graduates.

Therefore, there is nothing for students, nothing for recent graduates because monthly repayments are not reduced, and there is no help for the poorest graduates, the one third who are better off under our scheme because we fully accept that they will not be able to repay the full amount under the current scheme. The Opposition managed to spend £2 billion of money that they do not have, with no help for students, no help for recent graduates, and no help for the poorest graduates. That is an extraordinary achievement.

I do not know which bit of the policy-making process produced this proposal, but the Opposition really need to do better. Just possibly, the Leader of the Opposition recognises that problem. In September last year he was asked on the “Andrew Marr show” about his policy, and about the status of the commitment to £6,000 and whether it was a policy that the Labour party would take into the next election. He said:

“The status is that it’s something that we would do now, that it’s something we’re committed to. But the manifesto’s three and a half years away. We'll announce the manifesto”.

It does not even look as if the Leader of the Opposition believes that that policy will ever make it into the Labour manifesto, and after what we have understood about it in today’s debate, I am not at all surprised.

Photo of Nick Brown Nick Brown Labour, Newcastle upon Tyne East 8:18 pm, 11th September 2012

It is a pleasure to follow the Minister. He entertained the House enormously as he distracted attention from the core point of the Government’s policy and did his best to misrepresent the Opposition’s policy, so much so that he chided my hon. Friend Shabana Mahmood for trying to draw his attention back to the Government policy he is supposed to be defending. If that is the most terrible charge the Minister can make against my hon. Friend, surely his case is weak.

Before coming to my core concern—the level of student debt—I should congratulate my hon. Friend on how she opened the debate for the parliamentary Labour party. It is a pleasure to follow her, just as it is a pleasure to follow the Minister. He did his best to distract attention from his policy and to misrepresent the Opposition’s policy. At one stage I thought he was praising—almost sincerely—the Secretary of State; next he will be writing “Focus” leaflets to deliver around the House of Commons. I have too much respect for the Minister to encourage him to go down that sad and sordid road.

My key point is this: my objection to the student fee contribution arrangements being introduced in this academic year is that the required student contribution is too high. It is as straightforward as that. I am not quarrelling with the Minister over the repayment mechanism: he is right that there are common themes between the Labour party and Conservative party positions, but whatever the arguments about establishing competition and a marketplace through different student fee contributions might have been in theory, the fact of the matter is that the annual student fee contribution for most courses has remorselessly settled already at the ceiling of £9,000 a year.

To that we must add the cost of student maintenance, including rent, and the cost of necessary books, equipment and visits associated with the course. Annual living costs for students are expected to reach £11,000 this year, which is £910 a month—the cost was £561 a month in 2004. With fees, that amounts to around £20,000 per year. That is too much money for young people to carry as personal debt. Of itself, it is unjust.

Other things in life require debt in early adulthood: a starter home and the accompanying mortgage, or perhaps a loan to set up a small business as a new entrepreneur. Any lender will take the student debt into account when looking at the potential for repayment. The 30-year repayment period means that debt follows the young person well into middle age.

The Government’s new regime has brought about a rather obvious response. Before the introduction of the new regime there was a burst of applications, but this year university applications are down by 8.7%. The situation is particularly pronounced in the north-east, which I have the honour to represent—applications are down by 11.2%—and among the poor.

The Office for Fair Access tells us that despite substantially larger bursaries at Cambridge than at Northumbria university, Northumbria’s proportion of students from poor backgrounds is around four times higher than Cambridge’s proportion. That, too, is unjust. Young people are having the opportunity to be everything they could be priced away from them.

Photo of Nick Brown Nick Brown Labour, Newcastle upon Tyne East

I shall willingly give way to the right hon. Gentleman, who also represents our region.

Photo of Alan Beith Alan Beith Chair, Justice Committee, Chair, Liaison Committee (Commons), Chair, Liaison Committee (Commons), Chair, National Policy Statements Sub-Committee, Chair, Justice Committee

The right hon. Gentleman and I share an interest in Northumbria university, where there are a large number of part-time students. Under the Government’s scheme, they will be given access to repayment facilities that they did not have before.

Photo of Nick Brown Nick Brown Labour, Newcastle upon Tyne East

I accept that. I am sympathetic to features of the Government’s scheme, and we would find agreement and consensus on other aspects, including those to which the Minister referred. My objection is to the total debt. My contention is that £20,000 a year is just too much money for a young person to take on. The right hon. Gentleman knows that there will be a similar feeling among his constituents, who are no more affluent than people in the community I represent.

For those trying to get into higher education, the situation is exacerbated by the loss of something like 15,000 student places—that is the only election pledge that the Liberal Democrats have actually kept. Young people from economically poorer backgrounds look instead at going directly into employment and making their way without a degree and the accompanying mandatory debt. Even if they do so, the cards are stacked against them, because graduate entry is now much more of a requirement for careers that used to be open to non-graduates.

The argument for the fee contribution is that graduates, over a lifetime, will earn more than non-graduates, and so should make a contribution to their education costs. I accept that, but the argument is about how much of a contribution they should make. Not all graduates will find well-paid jobs. Graduate recruitment is currently running at 6% below pre-recession levels, if we take the high point of 2007, and for every graduate job advertised there is an average of 52 applications. One in five graduates is unemployed.

The remedy seems clear enough: we should cap the fee contribution. The Labour party has pledged to set a cap at £6,000, and to go further in reducing the cap if the reduction is affordable. I say that we should go further and we should face up to the fact that it must be paid for.

The Secretary of State for Business, Innovation and Skills has very little room for manoeuvre in his departmental budget. To achieve his share of the cuts, he has shifted costs from the state to the students in higher education and abolished the regional development agencies, which were the principal regional economic development arm. His Department has cut university teaching budgets by 47% in real terms, from £7.1 billion to £4.2 billion. Combined with the increased subsidy element of student loans, that results in a real-terms cut in higher education funding, excluding research, of 23%, from £8.8 billion to £7.5 billion by 2015.

Dr Wendy Piatt, the director general of the Russell group, warned today that the UK has fallen behind countries such as Mexico, Russia and India in investment in higher education as a proportion of gross domestic product.

We must look outside the Secretary of State’s Department to find the savings dramatically to reduce the cap on student fees. The renewal of Britain’s independent nuclear deterrent and a new generation of Trident submarines are unaffordable and unnecessary public expenditure, not the higher education of our nation’s young people—[ Interruption. ] To respond to the Minister, at least I can say how I would pay for it.

The coalition Government have made a different choice. They have diminished the importance of higher education, and in that, they are wrong.

Several hon. Members:

rose —

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

Order. James Clappison will be the last hon. Member to have a seven-minute limit. After him, I will reduce the limit to six minutes.

Photo of James Clappison James Clappison Conservative, Hertsmere 8:27 pm, 11th September 2012

Thank you, Mr Deputy Speaker—I hope I will not take that long.

It is always a great pleasure to follow Mr Brown, who is a great champion of the north-east. Both he and Shabana Mahmood, who spoke for the Opposition, made some perfectly proper points about tuition fees in principle. Her points were answered comprehensively from the Government Front Bench by Alan Johnson when he took the Labour Government’s tuition fees Bill through the House in 2003. I had the pleasure of serving on that Bill Committee. The same points arose then, but with one significant distinction: the Labour Government’s increase in tuition fees was introduced at a time when the public finances were in a completely different position to the one they are in today.

Then as now, however, the issue of tuition fees was politically linked to what Ministers then and now have chosen to call “access to universities”. Then and now, my question, which arises naturally from the question of access, is about maintaining the highest possible academic standards in universities.

Like many others, I believe that the achievement of those high standards, which is in our national interest, depends on admissions to university being strictly on merit and admitting those whom the universities judge to be of the highest merit. The universities themselves are best placed to make that judgment. That the principle of university autonomy over admissions ought to be cherished is a clear conclusion to be drawn from a conservative view of the world. It would be anathema to somebody who really believed in a free society to contemplate with equanimity the prospect of state interference, whether directly or indirectly through a quango, in university admissions.

Photo of James Clappison James Clappison Conservative, Hertsmere

I will give way to my hon. Friend, because I get an extra minute if I do so.

Photo of Brian Binley Brian Binley Conservative, Northampton South

Does my hon. Friend realise that the new director of OFFA reportedly said that he wants the Russell group universities to admit one student from a poor background for every student accepted from a wealthy background? Does that mean means-testing becoming part of the admissions process, thus excluding some students for reasons other than academic ones, and does it suggest that our worst fears about this new appointment are coming to fruition?

Photo of James Clappison James Clappison Conservative, Hertsmere

I am grateful to my hon. Friend for his intervention. I have written to the Minister about this, and I look forward to hearing his interpretation of the remarks of the distinguished gentlemen placed in charge of OFFA. I hope that the Minister will answer that in his winding-up speech.

Ministers claim to be interested in encouraging applications but not in interfering with or influencing admissions, yet Governments send out directives to OFFA telling them how to set access agreements and giving them clear political steers. How can we see it as anything other than political interference when Ministers send guidance to OFFA enjoining it to implement Ministers’ wishes, as happened under the previous Government and is happening under this one? In a directive last year, the Government told OFFA to send the following message to universities:

“Through this letter we want to encourage you and the higher education sector to focus more sharply on the outcomes of outreach and other access activities rather than the inputs and processes”.

To what, other than admissions, could “outcomes” possibly refer? They are the only way that outcomes can be defined and measured. How can that not affect universities, given that OFFA has swingeing powers to take away their income if they do not comply with its injunctions?

How can we say that universities have complete freedom over admissions when they have this apparatus hanging over them? How can they not be influenced, given that they face swingeing fines and their fee income being withheld if they do not comply with OFFA’s targets?

Photo of James Clappison James Clappison Conservative, Hertsmere

I will later, if I have time. I think I have used up my extra minutes already, although I know that the right hon. Gentleman is very interested in this subject.

Although I disagree with OFFA in principle, I pay tribute to its outgoing head, Sir Martin Harris, who is a man of great academic distinction. That brings me to the question of his successor. As my hon. Friend Mr Binley touched on, the Business, Innovation and Skills Committee expressed concerns that led it to withhold approval for his appointment. I share these concerns and, as a parliamentarian, take little pleasure in seeing a Select Committee’s view being completely ignored, but I wish Professor Ebdon well, will take a close interest in his work and will endeavour to help in any way I can. His recent interview with The Daily Telegraph, however, has attracted much comment. [Interruption.] I can see the Minister in a leaping position, as though he wants to leap into the debate. I will certainly give way, if he wishes intervene.

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

I look forward to continuing these exchanges in a variety of ways, but let me assure my hon. Friend that the most recent advice that I and my right hon. Friend the Secretary of State have sent to OFFA makes it clear to Les Ebdon, for whom I have the greatest respect, that he is to work within the framework of agreed Government policy, as set out in the higher education White Paper. We explicitly set out in our letter that he has a duty to protect the ultimate right of higher education institutions to select their own students. That right of universities to choose their own students was put into law by the previous Government—possibly by the very Committee that he sat on—and is one that we will continue to respect and protect.

Photo of James Clappison James Clappison Conservative, Hertsmere

That is like the small print of a contract. I have seen the advice to OFFA and what is said on its website. I do not know whether my right hon. Friend, through that intervention, sought to withdraw the injunction given to OFFA last year—[Interruption]Simon Hughes is looking very interested—that universities should focus more sharply on their outcomes, rather than simply on their inputs and activities in trying to generate applications. The universities were given the clear message that there had to be a sharper focus on targets. If my right hon. Friend the Minister is withdrawing that, I would be pleased to hear it. Otherwise, what he has said remains the case, as it always has been, including under the previous Labour Government—it has been put in the small print as a longstop.

Photo of James Clappison James Clappison Conservative, Hertsmere

That sharper focus was the clear message in the guidance. If my right hon. Friend is prepared to withdraw that, I will happily give way to him.

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

Let me try to set out the position—this goes back to my comments about the Opposition’s policies. We are talking about universities having perhaps £700 million of access spend, because of the extra revenues they have from higher fees. It is absolutely right to say to OFFA that we want it to scrutinise the effectiveness of all that spending. Some of it goes on summer schools and some of it goes on outreach visits to secondary schools, and there are also foundation-year programmes. Indeed, there is a whole range of things. When we are talking about expenditure on such a scale, it is rather important to ask OFFA to work out what works and what does not. That is a legitimate question when substantial sums of money are involved.

Photo of James Clappison James Clappison Conservative, Hertsmere

I would be grateful if my right hon. Friend could therefore clarify—perhaps I will leave it to the wind-up, because I am intervening in my own speech now—what else “outcomes” can mean other than admissions. That is the only way one can look at it in this context. My right hon. Friend’s advice was to go beyond applications and look at outcomes, and outcomes in this context can mean only admissions. If there is another meaning, I look forward to him clarifying that, but as I see it, the position is that OFFA’s original activities were given a “sharper focus”, as the advice to OFFA from the present Government puts it. I shall be taking a great interest in this matter.

I am also particularly interested in what Professor Ebdon has said—perhaps the Minister would care to deal with this in the wind-up as well—about what he describes as the “most selective universities” in terms of admissions. He said:

“It would be wrong to underestimate the challenges they face.”

I think we should praise and celebrate our most selective universities, including Oxford and Cambridge, not seek to undermine them. My frame of reference is the fact that they are a great national asset. They are not doing anything wrong. If Ministers and Professor Les Ebdon want something to look at, they should perhaps look at those universities that have an extremely high drop-out rate—not Oxford and Cambridge, or the other selective universities—which is such a waste of public money and resources.

I hope that the Minister will be able to convince me in his winding-up speech and answer the concerns that have been raised. At the moment, I feel very much as though I am not helping to build the big society—which is what I want to do—but recreating the Soviet Union, because that is what this apparatus reminds me of.

Photo of David Lammy David Lammy Labour, Tottenham 8:37 pm, 11th September 2012

I am grateful for the opportunity to discuss these important issues. Indeed, it is some time since the House had the opportunity to consider them.

Given that I preceded the Minister for Universities and Science, it is probably right to begin by welcoming some of the moves he has made, particularly on student contact hours, which were a growing concern during our period in office, employment outcomes, the relevance of which has become even more heightened, given the nature of the economy, and, importantly, ring-fencing the science budget. However, this debate is important also because of where this country stands economically. We are in a second recession in as many years. Unemployment is at an all-time high among graduates and is seriously worrying among non-graduates. Under the circumstances, one would expect university to be a place where young people go to shelter and stay. Indeed, many of the debates that we are having in this House—and that we shall rightly continue to have—go to the heart of whether we can begin to see serious growth in our economies. We will not see that growth unless we have university students coming out and getting jobs, and unless we can be convinced and reassured that our universities will remain world class.

However, as my hon. Friend Shabana Mahmood outlined in opening for the Opposition, the backdrop for higher education is one of serious concerns and confusion about core and margin and AAB, as well as confusion in the lead-up to reaching the fee agreement. When I pressed the Minister on when we would see the legislation that he promised almost two years ago, he was unable to give us a date. Against that backdrop, universities are, quite rightly, hugely worried about their future. This is a serious issue, and the Minister ought to have demonstrated more concern about the fact that students are turning away from higher education in the way that they are.

The Minister will know that, before the Labour Government came to power, there were parts of Birmingham, Manchester, Cardiff and London in which more young people were going to prison than were going to university. My constituency was one such area. I am proud that, during our period in office, constituencies such as mine saw the numbers of people going to university quadruple, and that the number of young people from right across the country going to the Russell group universities trebled in that period. Participation rates were between 10% and 12% when I was going to university in the late 1980s, but the Labour Government achieved a rise in the rate to 43%, which represents a 44% increase in the number of entrants. That is now being put in jeopardy, and that should be a matter of concern if we want to compete properly, to have a growth economy and to see the kind of prospects for our country over the next few years that we clearly need to see.

Higher education contributes £59 billion a year to the UK economy, making it a hugely important sector. Many hon. Members who have raised the issue of London Metropolitan university have voiced their serious concerns about Britain’s reputation. There might be an assumption that Britain is open for business, and that we want to be world class and to be at the centre of higher education in the world, but the message that the Government are repeatedly sending out is that none of those is the case.

The Minister’s description of higher fees and of what he suspected took place under the Labour Government does not accord with my understanding of the situation. We certainly had absolutely no plans to strip out 80% of the teaching budget. That this Government are doing so is a scandal. There is no country in the civilised world that does not acknowledge the importance of the state’s contribution to higher education. It is only this Government who have decided to withdraw entirely from that area. It is no wonder that we have seen a drop in applications for humanities and languages this year.

That disastrous Government policy sits alongside the huge escalation in fees to £9,000—a trebling of the figure. For an average family, with combined earnings of £42,000—in effect, the earnings of a postman and a nurse—and unable to get a grant, £9,000 is just too much. How are they to find that amount? That is the question on the table, but the Minister has not answered it. Numbers are falling and we are losing our world-class status. I am sorry to say that, on his watch, a world-class educational sector in this country is losing its way.

Photo of Rob Wilson Rob Wilson Conservative, Reading East 8:43 pm, 11th September 2012

It is a pleasure to follow Mr Lammy, who made his case powerfully. Perhaps he forgets, however, that during his time as a higher education Minister, a number of physics and chemistry departments around the country were closed, not least at Reading university. We all need to look to our record on these matters.

The motion deals with tuition fees, but the real issue for debate is social mobility and how we approach it through higher education. My view is that going to university must be about individual academic ability, and not about where someone was born or about their parents’ bank balance. No talented young person should be left behind because of their background. For many people, university is a way of unlocking their potential and becoming socially mobile—essentially, bettering themselves and preparing themselves for a better life. Of course it is worth pointing out that university is definitely not the only route to success, and that many happy and successful careers are pursued by people who do not have a university degree, but I want to focus today on higher education, rather than on further education, apprenticeships and all the other avenues that are available.

For those who are suited to university, regardless of their socio-economic background, sustainable funding arrangements must be in place, coupled with a rigorous admissions process that is based on merit. The Labour party’s rather shrill message this evening has been that the new fees form a barrier to higher education. That, however, is simply not the case. Leading experts in the field of higher education do not consider the new tuition fees to have hit students, particularly students from disadvantaged backgrounds, negatively. The unfair and unworkable situation that Labour prophesied has simply not come to pass. Labour needs to understand that fees are not the real barrier to higher education.

I am pleased that the Opposition have raised this subject for debate this evening, but I am disappointed that the motion fails to deal with the real threat to social mobility that is stalking higher education. That threat is to be found in our schools and their role in failing to secure more admissions to top universities and therefore wider participation. The sad fact is that the poorer people are, the less likely they are to attend one of our top universities. Figures from the Sutton Trust show that a comprehensive school pupil on free school meals is 55 times less likely to attend Oxbridge than those educated at an independent school.

We heard today that four of our universities are in the top six in the worldwide league tables, but if we are to ensure our continued pre-eminent position as a world-class provider of higher education, with world-class institutions equipped with world-class reputations, we must have an admissions regime based on individual academic merit.

Because social mobility is so important, I know that many hon. Members share my concern, as my hon. Friend Mr Clappison has made clear, about the comments of Professor Les Ebdon, the head of the Office for Fair Access. I have held meetings with him and I am willing to give him fair wind and every chance to prove himself in that role. Last week, however, barely 72 hours into his new post, he suggested that, over time, our top universities should have one poor student for every candidate enlisted from the top 20% of households. I would be grateful if the Minister clarified whether that is the Government’s understanding of OFFA’s role. Is it the Government’s desire and expectation that that should happen?

In many respects, this is a laudable aim, but it is completely impossible for universities to deliver it on their own through the many outreach and summer schools and the foundation degrees that they invest in heavily. The implicit threat in Professor Ebdon’s approach to fair access is that targets are to be forced on top universities— regardless of merit. His approach does not seem overly concerned with removing the current barriers to opportunity, which would mean addressing the structural issues. Sadly, Professor Ebdon’s philosophy appears to be that of a social engineer, rather than one to socially enable. He sees his role as “challenging” universities on admissions targets.

Photo of Paul Blomfield Paul Blomfield Labour, Sheffield Central

Does the hon. Gentleman not recognise the role, as prescribed by the Government, of the director of fair access? It is not his responsibility to restructure the entire education system; it is his responsibility to challenge universities on their contribution.

Photo of Rob Wilson Rob Wilson Conservative, Reading East

I thank the hon. Gentleman for his contribution, which I will deal with if I have enough time.

I fear that Professor Ebdon’s comments on setting “challenging” targets for our most selective universities show that he sees OFFA’s access agreements as a means of forcing institutions into accepting rigid quotas for university applicants. He has said that he is unafraid of using the “nuclear” penalties option available to him through OFFA. Such action would tear this country’s higher education system apart. He is on record as saying to his critics that

“the reason I shouldn’t be appointed was if I got the job, I might actually do it”,

but I think we need to be clear about what that job entails.

In my view—one shared by many of my colleagues—Professor Ebdon’s job is not to interfere with the university admissions process. He favours the deliberate lowering of admissions criteria in order to increase the number of poorer students into elite universities. This is not the way to ensure that our top universities remain the best in the world or to help poorer students. It is, at best, a short-term fix. Instead, we need to enhance opportunity for students from disadvantaged backgrounds by improving the state secondary education system across the board. We need to get more students up to the level necessary for them to apply to our best universities, and when they are, we need to ensure that they actually apply to our top universities.

According to Professor Ebdon,

“Context has to be taken into account if you are going to assess potential.”

I do not disagree with the proposition that individual cases may well require context, but that is a matter for the admission boards at universities, not for state interference, and the universities deal with it very well. The trouble is that Professor Ebdon appears to believe that top universities are deliberately trying to exclude poorer students, and that could not be further from the truth. In contrast to Professor Ebdon, I believe that we must change the context of this debate; and that means driving up standards in state schools, much as the Secretary of State for Education is trying to do. Initiatives such as the pupil premium, free schools and university technical colleges, among many others, make an enormous contribution. The solution to the problem of providing fair access to university is not to be found through heavy-handed outside interference or pontification on fees. It is to be found pre-university, in our state schools.

Photo of Adrian Bailey Adrian Bailey Chair, Business, Innovation and Skills Committee 8:50 pm, 11th September 2012

I welcome the motion, and the opportunity to debate the issues that it raises.

Much of what has been said in today’s debate should have been said 18 months or two years ago. The range of problems that we are discussing now arose partly because of the back-to-front way in which the Government have implemented education policy. We have seen the most profound change in our education system since the war. The trebling of tuition fees, along with the cuts in higher education funding, took place without adequate consultation with all interested bodies, and without the normal process involving a White Paper and subsequent legislation. The rest was supposed to come later. Yes, we did get the White Paper—about nine months later—and it listed a range of consultations that still needed to take place. We were then promised a Bill, which has somehow evaporated, and as a result we are now having to deal with a legacy of muddle and confusion, both in the minds of would-be students and in universities.

In the short time available to me, I want to focus on the idea of widening participation. As a representative of a black country constituency with a legacy of low income and low educational aspiration, I think that the policies that are now being implemented had the potential to bring about profound consequences. The first and most obvious was that the headline raising of tuition fees, and the likely debt that would have to be paid off as a result, would disproportionately deter those from low-income families. That has still to be tested. Initial figures from UCAS indicate that although there has been a drop in the number of applications—the figure of 50,000 has been mentioned today—the percentage of applications among those with lower-income backgrounds has not changed significantly. However, that fails to take a couple of factors into account.

First, the cohort that is going to university now would have gone into the sixth form two years ago under a different regime, and would have had university aspirations at that time. We do not yet know whether the cohorts of subsequent years will have the same aspirations. Secondly, a worrying trend is beginning to be discerned among applicants. UCAS says that there is no evidence that applicants are opting for their local—sometimes cheaper—universities. In fact, considerable evidence is emerging in the black country that applicants are opting for their local universities so that they can study at home, although I do not know whether those universities are cheaper. The local newspaper, the

Express and Star

, rang a number of secondary schools, and some of the leading providers of university applicants—Wood Green in Wednesbury, Brownhills in Walsall and Wednesfield in Wolverhampton—said that the percentage of their students applying to go to their local universities so that they could study at home had greatly increased. That is good news for Wolverhampton, but it has other implications.

Photo of Simon Hughes Simon Hughes Deputy Leader, Liberal Democrats

The Chairman of the Business, Innovation and Skills Committee is being very fair in his analysis. All the evidence is that, because of cost of living issues, if there is an equal choice of university, more students will want to go less far away in the future. We also ought to pay attention to the fact that there has been a drop in the number of mature students applying to universities. They are far more difficult to reach because they cannot be captured in the school context. That is a challenge in the west midlands, as in the rest of England.

Photo of Adrian Bailey Adrian Bailey Chair, Business, Innovation and Skills Committee

The right hon. Gentleman mentions a number of issues that I wish I had sufficient time to deliberate upon. The point I am making is that those from lower-income backgrounds whose local university is not one that higher-aspiration students might wish to attend are suffering a disadvantage. A two-tier system may therefore be emerging. More lower-income students will want to stay at home regardless of the nature of their local university. I should stress that I think Wolverhampton university is excellent, and I would recommend it to prospective students, but it may not be the most appropriate institution for those seeking professional and academic qualifications. Not only will such lower-income students be missing out on the broader university experience of living away from home—although it is debatable how important that is—but they are less likely to have a good home learning environment.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Cabinet Office), Party Chair, Co-operative Party

If there is an increase in the numbers wanting to stay at home and go to their local university, there is also the risk of distortions in respect of choice of subject. In that context, has the hon. Gentleman seen the comments of the languages professor at Southampton university who is worried about the lack of provision of languages courses in the east of England, with the sole exception of Cambridge?

Photo of Adrian Bailey Adrian Bailey Chair, Business, Innovation and Skills Committee

My hon. Friend makes an important point. I have alluded to the lack of choice such students would have. Their local university may well not offer the appropriate course for them to be able to optimise their educational development. That is a further example of potential disadvantage.

People from lower-income and lower-aspiration backgrounds will also be disproportionately disadvantaged as a result of the further education loans measures. They are more likely to have missed out on their original educational experience. They are also more likely to be in jobs where they need to upskill, so they will have greater need of support to study for enhanced qualifications. The Government are seeking to shrink the public sector in order to benefit the private sector, and the lowest-income areas are often those with the highest proportion of public-sector workers, who are most at risk, and most in need of support to acquire the skills to enable them to transfer from the public sector to the private sector, in furtherance of Government policy. This is an example of disjointed government. People who will need to change jobs as a result of Government policy in one area will have the support that they need to fulfil the Government’s objectives kicked away. The end product could well be that their lives are devastated, along with the Government’s economic objectives.

I would like to discuss many other aspects of funding and the economics of this issue, but my great concern is supporting educational aspiration and fulfilment, and the need to do that to benefit our economy. That will not be achieved under these proposals.

Photo of Gordon Birtwistle Gordon Birtwistle Liberal Democrat, Burnley 8:59 pm, 11th September 2012

Two and a half years ago, I arrived in this place and two years ago I was introduced to the Browne report on the future funding of universities, which had been asked for by the previous Labour Government. It was to be studied not only in itself, but when the country faced a catastrophic financial situation. I could not have agreed with the Browne report as it was, because having universities charging unlimited sums was not acceptable to me. So I told the current Secretary of State that I could not agree with it and that he had to do something for the poorer families in the country, particularly those in my constituency. We then got the proposal that we have now, with the change from an unlimited to a limited amount of money. The Browne report, asked for by the Labour Government, was talking about making it unlimited. Now, not only was the amount to be absolutely limited at £9,000, but there would be national scholarships to help young people from families who did not have the funding to go to these places. That has happened quite a lot in Burnley; a lot of young people have gone on these special scholarships, getting their first year and, we hope, their second year free at the colleges.

When I went back to the town to discuss the matter with the young people there, I was astonished to hear that they had been fed the story, particularly by the Labour party, that they would have to find the money up front—that the £21,000 would have to be paid before they turned up on the university doorstep. That was parroted by the Labour party and in some of the press.

Photo of Paul Blomfield Paul Blomfield Labour, Sheffield Central

The hon. Gentleman is making a serious claim against the Opposition. Will he say on precisely what occasion anybody speaking on behalf of my party said that?

Photo of Gordon Birtwistle Gordon Birtwistle Liberal Democrat, Burnley

A number of members of the Labour party in Burnley were saying to the young people of Burnley, and convincing them, that they would have to find the money up front. That was obviously not the case, so I told them that they would not have to pay the money up front, that the money would be given to them up front and that no repayments would have to be made until they were earning £21,000. They then asked how much they would have to pay when they were earning £22,000, which is a gross salary of £1,850 a month. When they are on that income, their repayment to the taxpayer for funding their education at university will be £8 a month. When I asked them whether they would mind paying back £8 a month if they had a salary of £1,850 they said, “Of course not. We understood that it would be lots more than that.” I then asked them to assume that they were on a salary of £25,000”, which is a substantial salary in Burnley, and so would be collecting more than £2,000 a month. When I asked whether they would then object to paying £30 a month back to the taxpayer who had funded their education at university I was again told, “Well of course not, but that is not what we have been told. That is not the understanding that we have. So we are happy to do it.” I even got the student union rep at the university of central Lancashire to say, “That is far better than what we have now.” The young people of Burnley are getting a better deal now than what they had before, and that convinced me to support the proposals in the Bill.

I also compared the number of students who go to university with the total number of students who leave school. About 40% go to university, which means that 60% do not. So I looked at the prospects for those young people who do not go to university—I am thinking of the apprenticeship scheme. I was an apprentice engineer in 1958. Over the past 25 years, various Governments, particularly the last one, took the decision to destroy apprenticeships. They said that they did not need apprenticeships, that they would pray and bow to the City and the finance sector, so never mind the manufacturing sector—let it go. The Indians and Chinese could do the manufacturing and we would just make money out of the finance sector. We all saw what happened to the finance sector: it caught a cold and we all got pneumonia.

We have to support manufacturing, so the Government have invested in 800,000 young people who are now apprentices. Many of them are going to university but are being funded by the companies that they work for, which means that they are getting degrees and have a job, but do not have any debt. That is the kind of forward thinking that the Government should demonstrate and that is what we have had.

M

I believe that Mr Birtwistle is referring to me when he states: I even got the student union rep at the university of central Lancashire to say, “That is far better than what we have now.”

I have contacted his Office for confirmation together with a copy of supporting documentation in evidence of this quote. I am yet to receive a response. Considering that I worked tirelessly for 12 months against the rise in tuition fees and the system proposed at the time, together with a number of requested for Mr Birtwistle to keep to his pre election pledge. I am confident that I am being misquoted and am highly offended by his actions. I would therefore like this to be formally noted.

Submitted by Michael Palmer

Photo of David Lammy David Lammy Labour, Tottenham

I welcome what the hon. Gentleman has said about apprenticeships, but does he share my concern that we have too many apprenticeships that are for less than six months and many apprenticeships in parts of retail that are not like the apprenticeships he described, such as the one he went on?

Photo of Gordon Birtwistle Gordon Birtwistle Liberal Democrat, Burnley

I have some sympathy with that comment, because I believe that apprenticeships should be for a real job and I agree that young people should not be taken on on short-term contracts and called apprentices. I have met many young people in Burnley who are on real apprenticeships in engineering, distribution, motor mechanics and so on and they are doing very well out of it.

I also want to comment on the £350 million that the Government are putting in to university technical colleges. Technical colleges are another thing of the past—people who did not go to grammar school but to the secondary modern school could manage to get to a technical college halfway through. Technical colleges trained people to go and do a job in industry, but we gave up on them in the 1960s. They are now coming back and we will have 32 university technical colleges.

Young people will be able to leave secondary school at 14 and be trained at the colleges for a real job, doing subjects into which the businesses in the area will have input. Those companies are now involved with the university technical colleges, which are delivering young people into the jobs that this country needs. We are desperate for engineers and scientists, whereas there are more people with law degrees stacking shelves in supermarkets than doing anything else. We need to start making things and training people to do the jobs of the future and that is what the university technical colleges will do with young people. If we take the colleges, together with the apprenticeships and the young people who go to university, we have a good deal.

I do not see the arguments against our approach and what I have heard from the Minister tonight suggests that the funding system proposed by the Opposition is equal to the previous funding system, which has bankrupted the country. I do not want to go back to those days. I want real jobs, for real young people studying at university, and the delivery of everything else that goes with that.

Photo of Pat Glass Pat Glass Labour, North West Durham 9:08 pm, 11th September 2012

I wanted to speak in the debate because I feel very strongly about this issue. I have listened to several debates on tuition fees and was a member of the relevant Bill Committee in 2010, so I have heard the Government’s arguments a number of times and have heard them again today. I did not accept them then and do not accept them now.

I remember being lobbied by some young people from my constituency at the time of the vote on tuition fees in 2010 and being joined by one brave Tory MP. I must say that there were not many Lib Dems around at the time, but some Tories came out and argued their case. That MP said he had concerns that people who had not had the advantage of a university education were being asked to pay for the education of others who would not only get a good education but benefit financially from better earnings. He felt that that was not fair and I accept that argument, but I recall one young person coming back quickly and, taking that argument to its natural conclusion, asking why we ask well people to pay for the NHS and the sick and why we ask single people without children or childless couples to pay for the education of other people’s children—an argument I think we all recognise. As a community, we all contribute to the education of other people’s children because ultimately we all benefit from a better educated and skilled work force that makes this country richer. For me, it is simple: I believe that paying taxes to educate our young people is not a waste of money but an investment for the future of not just the young people themselves but of all of us who benefit from an educated, knowledge-rich, competitive society that leads to an entrepreneurial economy.

We do not have a lot of time, but in the time I have I want to talk a little about what is happening in further education now. I sat this morning in the Education Committee, as did colleagues on the Government Benches, listening to evidence on the GCSE English language fiasco this year. I thought I understood what had happened. I thought that there was some leniency in marking in January, so that there had to be some bringing into line of the marking in June. But that was not what happened. I was pretty stunned by what I heard.

It appears that under Ofqual’s policy of comparable standards, whereby whatever the cohort got at key stage 2 they have to get at key stage 4, irrespective of better teaching or improvements in learning—

Photo of Pat Glass Pat Glass Labour, North West Durham

I am going on to talk about further education.

Mr Deputy Speaker:

Well, will you get on to it please?

Photo of Pat Glass Pat Glass Labour, North West Durham

Okay.

As a result, young people who should have been enrolling on level 3 courses in FE are now enrolling on level 2 courses, and many more are simply disappearing from the system. This will have an impact on our number of people not in education, employment or training. It is not just that there was some rigorous marking in June; but there has been clawback, as the pupils in June are compensating for over-lenient marking in January. I think it goes against the principle of natural justice that one group of young people is doubly punished for what happened with others.

The young people are I am talking about are C-D borderline pupils. There are not many such pupils in grammar schools or independent schools. These are kids from comprehensive schools from less well-off homes. These are the kids from whom the Government have already taken the education maintenance allowance. They are the kids who can least afford to have a kick in the teeth like this. It simply illustrates the fact that the Government’s education policy from higher education to further education and right through to the key stages in schools is chaotic; it is damaging our children and ultimately it will damage our economy.

Photo of Pauline Latham Pauline Latham Conservative, Mid Derbyshire 9:12 pm, 11th September 2012

I am pleased to follow Pat Glass, who did not seem to touch on tuition fees at all.

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

She talked about further education.

Photo of Pauline Latham Pauline Latham Conservative, Mid Derbyshire

But we are talking about tuition fees.

I am delighted to follow my hon. Friend Gordon Birtwistle, who raised all the issues that I want to talk about. He has studied what has been going on and he cares about it. I am pleased that young people at last understand what the tuition fees are all about. All the demonstrations in London and elsewhere took place because students had been misled by the Labour party, the National Union of Students and the media, who were determined to make them realise that they would have to pay the fees up front. They have never had to pay up front and they never will have to. They have to start paying after they earn over £21,000.

I have spent quite a lot of time talking to young people in my constituency—some who have been through university and finished, under the old system introduced by Labour, and some who are going to university this

October. I have also talked to people working in this establishment for Members of Parliament. Those who went to university under the old system say that they wish that they had studied under the system that is going to start now. They would far rather not have had to ask their parents to help them pay the money up front. They would rather pay it themselves. It is much better for people from poorer backgrounds to be able to pay so that their parents do not have to contribute. It is better that they do not feel under pressure to ask their parents to pay, because they cannot afford it.

The students who will be going through now will earn more than many people in this country. When I ask young people whether they think it is fair that the caretaker or dinner lady in their school has to pay for their education, even though they will never earn as much as the young people, I find that the young people understand that it is much better that they pay back to the taxpayer, who is funding their education in the first place.

Photo of Mel Stride Mel Stride Conservative, Central Devon

My hon. Friend makes a powerful point. Does she agree that one of the benefits of a loans system is that those going to university are far more discerning in their choice, which makes universities work much harder to secure those students and, therefore, drives up standards?

Photo of Pauline Latham Pauline Latham Conservative, Mid Derbyshire

My hon. Friend makes a powerful point. My children used to come back from university with some horrific tales about the sort of education they were getting. I believe that once students become customers the universities will have to sharpen up their act, which they are already doing, and in many cases they are providing a better education for the students now going through the system.

I am pleased to report that none of the people I have spoken with has a problem. Not one person I have spoken with has said that they are not going to university. Some might decide to choose apprenticeships, which my hon. Friend the Member for Burnley mentioned. I am delighted that we have so many opportunities for apprenticeships in this country and surprised that no Opposition Members mentioned them whatsoever, because they are opening up opportunities and we need more people in engineering. We have lots of apprenticeships in Derbyshire, particularly in Derby, and some really high-quality apprenticeships in Rolls-Royce, Bombardier and Toyota. We need all those people, because they are the income generators of the future.

Shabana Mahmood said that tuition fees will put off mature students. Well, the interesting statistic from Derby university, which is in my constituency, is that 52% of the student intake are under 21 and 47% are over 21 and mature students. It is also interesting to note that 46% of them are male and 54% are female, and it is extremely good that more women than men are going to Derby university, because that did not used to be the case.

I am pleased to report that in Mid Derbyshire we have a thriving university that has come up through the ranks. People used to write it off, but it is doing incredibly well, under the leadership of Professor John Coyne. It is providing world-class graduates, many of whom work in local industries and businesses because they liked what they saw when they came to live in Derby. I am very pleased about that, because they contribute a huge amount to our economy.

I am sure that many Opposition Members will have seen, before and during the Olympics, the wonderful ceramic flower garden on Cromwell Green, which was the work of a fantastic artist called Paul Cummins, a graduate of Derby university. He has special needs, went through Derby university and has thrived as a result, because he was nurtured there. We need to encourage more students from all backgrounds to go to university. I am pleased to report that Derby university is doing better than ever and is not having the problems in attracting students that universities in some Opposition Members’ constituents are clearly having.

The difference between the two parties that we must recognise is that we like to talk up our education and the opportunities for young people, whereas the Labour party seems to want to undermine the university opportunities that this Government have given students. I am very disappointed about that, because we all need world-class graduates who will contribute to our economy.

Photo of Tristram Hunt Tristram Hunt Labour, Stoke-on-Trent Central 9:19 pm, 11th September 2012

First, I declare an interest as a lecturer at Queen Mary university of London. I therefore know something about the university system first hand and from the inside; I am not sure that Pauline Latham does.

Over the past year, the number of young people out of work for 12 months or more has reached its highest level since July 1997. Over the past year, youth unemployment in my constituency has risen by almost 300%. Alongside their disastrous economic policy, that inability to get a grip on youth unemployment is one of the defining stories of this increasingly discredited, hapless Government. That is why this debate is so important. If we are going to pay our way in the world, as the Chancellor likes to say, and deliver the right jobs to rebuild our economy, we desperately need a skilled and well-educated work force. As my right hon. Friend Mr Brown said, graduate employment is vital in the global marketplace, and no Labour Member can see how on earth Government policy is going to deliver that.

When one speaks to vice-chancellors and students, they say that they see a Government who fail to value higher education; who put cart before horse by introducing tuition fees with no proper strategy for the sector, given that we have yet to see a White Paper on it; who fail to take on the Home Office over immigration, casting ridicule on our university sector right around the world; and who cut investment when every other competitor is looking to support learning and education.

In a more sympathetic previous life, the Minister for Universities and Science wrote a book on the plight of young people today—“generation crunch”, as he called them. We thought it was a critique; in fact, it was a recipe for policies. He then introduced one of the most expensive tuition fee systems in the western world, where student debts of £30,000 to £40,000 in places such as Derby will become the norm. In our view, this level is simply too high.

Photo of Gordon Birtwistle Gordon Birtwistle Liberal Democrat, Burnley

What would the debt be under a cap of £6,000? Does the hon. Gentleman have many students in his constituency who, with a salary of £1,850 a month, would object to paying back £8 a month?

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

I am happy to have taken that intervention, which allows me to say that the debt would be less because we would be charging £6,000 as a cap rather than £9,000.

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

I will not take any more interventions because I want to allow colleagues to speak.

When the cost of providing a world-class education is already so high, why on earth would the Government have as their priority the slashing of 80% from the teaching budget? That miscalculation led to the nonsensical “core and margin” proposals, which, in effect, incentivise students to take up cheaper courses, with poorer students often taking up poorer courses. As my hon. Friend Mr Bailey suggested, that will mean local people going to local universities which do not always supply the kind of education that they want but to which they are driven by price structures.

What is more, we know that this policy is really going to bite in the middle-ranking universities just below the Russell group which are charging £9,000 a year. We have already heard about the difficulties that Southampton university is facing. These universities are complaining about the implications of the policy. They are also complaining about what is happening in university entrance departments as regards the AAB marks. The last-minute upgrades are playing havoc with course planning. Perhaps the Government’s strategy is for a little bit of creative destruction in the public services; perhaps they want a few universities to go bust. If the Minister can be honest about his policy, we would like to hear that from the Dispatch Box.

In the past, Ministers have poured scorn on those of us who warned that such fees would deter students. Well, now the numbers are in. History applications are down by 7%, design applications are down by 16%, and non-European language applications are down by 21%. I am interested to hear how this Government, who hope we will export to the BRIC economies of Brazil, Russia, India and China and make our way in the world, can think that non-European language applications being down by 21% is in any way a good economic strategy for this country.

Staffordshire university in my constituency has experienced a drop of 12%, while nearby Keele university is taking over 1,000 fewer students this year. Overall, the number of students accepted on to higher education courses last year fell by over 30,000. With student numbers falling by far less in Northern Ireland, Wales and Scotland, one does not need a degree, even from the university of Winchester, to work out what is deterring them. We heard about a fall of 14% in applications from Northern Ireland to institutions in Great Britain. That is the reality of what is happening as a result of this policy.

On the question of having different fees in different nations of the United Kingdom, I cannot think of a more sure-fire way to break up the Union than differentials of the kind that we are seeing. This is not the Government’s particular problem, but by increasing the cap to £9,000 they are, as used to be said, accelerating the contradiction.

It is clear that the Opposition policy is correct. It is right that we should use corporation tax to lower tuition fees, and it is right that we should ask those who earn £65,000-plus to make a larger contribution.

While we are discussing higher education, let me say something, briefly, about the controversy at London Metropolitan university. To be frank, I am amazed that the Minister and the Business, Innovation and Skills team have allowed the Home Office cack-handedly to undermine one of our most successful global industries. The actions of the UK Border Agency have reverberated around the world and our competitors in America, Australia and Canada are delighted at what has happened. I recently returned from a trip to New Delhi, where the Indian authorities cannot understand why we are seeking to shoot one of our most successful industries in the foot. What London Metropolitan university has done wrong needs to be addressed, but that will not be achieved by punishing those who are studying.

Our competitors around the world recognise that investing in higher education and lifelong learning and widening the skills base are the route to a more prosperous future, but, as colleagues have pointed out, we are one of the only countries in the OECD that is not currently increasing spending on higher education. Instead we are making an 80% cut to teaching budgets. It seems perverse that countries such as Mexico, Russia and India, above all, are succeeding when we are choosing to undermine one of our most successful global industries. The Government have got this totally wrong.

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

Order. The time limit for speeches is five minutes and I advise Members that any interventions will eat into the time left for the last contributor.

Photo of Justin Tomlinson Justin Tomlinson Conservative, North Swindon 9:26 pm, 11th September 2012

I will try to make a whistle-stop speech covering just two aspects that allow potential students to make informed decisions, the first being career options and the second the cost of tuition fees.

One of the things that all parties have done over the past 10 to 15 years is desperately chase the target of getting 50% of young people into higher education. I have to say that sometimes I question whether that was the right target, in part because it created such a stigma for those who did not choose to go into higher education. There are alternatives, and I welcome the increase in the high-level apprenticeships and in apprenticeships in general, the options to consider work-based learning and the Government’s decision to invest £350 million in university technical colleges, from which my constituency is determined to benefit.

I have also been doing a lot of work, both in my constituency and by making speeches in Parliament, on encouraging more young people to consider becoming young entrepreneurs. Over the past six months, 759 start-up businesses have started in Swindon and some of them have involved young people.

My hon. Friend Pauline Latham made a valuable point that we need to empower students who are paying tuition fees to become more like consumers, because we are going to make universities display statistics and information relating to their courses, the contact time available, the employability ratios, which are essential if students are going to make informed decisions, and student evaluation surveys, which I certainly would have enjoyed completing following my time at university.

I want to reflect briefly on my time at university. I was one of 350 students who went to Oxford Brookes university and studied business with a mind to set up a business, but I was the only one who actually went on to run one. With hindsight I would question whether it was beneficial for me to spend four years doing that, because we did not learn very much about setting up a business. Actually, they managed to teach 349 people out of taking the risk of doing so, whereas we certainly need more people to make that step up.

The cost of tuition fees is also important when it comes to making informed decisions. My hon. Friend Gordon Birtwistle set out clearly the challenges and confusions that potential students face. The system is complex. Recent research by the Sutton Trust and Universities UK shows that less than a third of prospective students fully understand how they will pay for their education. Just as worryingly, more than half of parents believe that they have not received enough information, and a third say that they little or no understanding. That concern is shared by 95% of vice-chancellors.

One strand of the work of the all-party parliamentary group on financial education for young people, which I chair, relates to higher education. We were delighted that Martin Lewis of MoneySavingExpert was keen to support that work. He did not comment on whether tuition fees were good or bad, but was just determined to set out clear information. On behalf of our group, he approached Ministers, who empowered him to set up the studentfinance2012.com website, which set out to educate prospective students and their parents through leaflets, videos and online calculators. He busts some of the myths with his ten points:

“You don’t need cash to pay for uni”,

“There are no debt collectors”,

“Earn under £21,000 and repay nothing”,

“After 30 years the debt is wiped”,

“Repayments will be £470 a year less than before”,

“Repay the same per month at £6,000 or £9,000”,

“You will owe longer and may pay more”,

“Loans and grants for living costs are given too”,

“For many £9,000 doesn’t cost more than £6,000”,

and finally,

“Paying fees upfront could be a big mistake”.

That is the sort of information that is needed so that people can make an informed decision about what is the best option for their career and what is their best option financially.

I congratulate the Government on listening and making the change to allow graduates who are fortunate enough to get a good graduate job to make early repayments and not be locked in to costly repayment costs.

Finally, we all have a duty to help young people to make an informed decision, regardless of which system they face.

Photo of Paul Blomfield Paul Blomfield Labour, Sheffield Central 9:31 pm, 11th September 2012

I have the privilege of representing both of Sheffield’s great universities. Both are strong in their own parts of the sector, extremely popular and important to the local economy, and both are facing falling applications as a result of this Government’s policies. That is no surprise, because it is in line with the national trend. The deeper concern in the sector, as I have learnt from talking to vice-chancellors over the past year, is not so much about the applications but about the conversion rate. We are now seeing their fears realised. As the final figures are beginning to emerge, it is clear, as has been pointed out, that the rate of people dropping out of the process after submitting applications is now much higher at 16%.

It does not have to be like this, because politics is about choice. The Government are clearly making the wrong choices. Earlier in the debate, the Minister for Universities and Science, on the back foot, simply blamed austerity. Were he here now, I would remind him of his statement to the House in November 2010. In response to questions, he made it clear that the Government’s response to the Browne review was only partly driven by the need to deliver cuts, and was more about “delivering reform” and “remodelling” the sector. Indeed it was: it was about transferring the cost of teaching from the state to students, ending the previous position whereby that responsibility was shared, and making our system one of the most expensive in the world, with fees higher than most universities in the United States.

Photo of Paul Blomfield Paul Blomfield Labour, Sheffield Central

I am sorry, but I will not because of time.

The Government’s response was about withdrawing all public funding for teaching from the majority of courses in the majority of universities, making the statement that arts, humanities and social science courses do not deserve public support.

I am also sorry that Simon Hughes is not in his place, because I recall him, in the same debate, seeking and securing a guarantee from the Business Secretary that fees of £9,000 would be the exception, not the norm. They are now the norm, because the Government failed to listen to vice-chancellors when they changed the system. At that time, every vice-chancellor was saying, “We cannot run our institutions at the fees the Government are talking about.”

Amazingly, when university governing bodies fulfilled their responsibilities to their institutions by setting fees at the much higher level that we have seen, it seemed to surprise the Government. It appears that they expected the universities obediently to set their fees according to their perceived quality, with Oxbridge setting the fees at £9,000 and everybody else neatly ranking themselves below. When that did not happen, new policies emerged as quickly as they could be written on the back of a cigarette packet, particularly the core and margin policy. Taking 20,000 places out of the system and selling them off to the lowest bidder does not help students; it simply reduces the student loan obligations to the Treasury. Indeed, it has damaged the position of many students, as universities were encouraged to scrap bursaries to fund fee cuts and create competition for places.

The debate is about not just the sector’s problems but the unfairness caused to students who can least afford it. The problem at the heart of the Government is that the Prime Minister just does not get it. Echoing the comments made by Pauline Latham, I recall that at the height of the debate on trebling fees, the Prime Minister tried to defend his policy during a factory visit by asking workers:

“Do you think it is right that your taxes are going to educate my children and your boss’s children?”

It clearly had not crossed his mind that those factory workers might have children who wanted to go to university, had the talent to do so and deserved support.

The damage that the Government’s policies are doing to social mobility is not just at undergraduate level. There is deep concern in our universities that the transition from undergraduate courses to postgraduate taught courses will be affected by higher fees. The Browne review did not consider the issue, but many professions now require a taught master’s qualification and others expect it. If that route is closed to those who cannot afford to add to their debt, we will have taken an enormous step backwards.

The Government’s higher education policy is deeply damaging to our universities and deeply unfair to students, so I hope that the House will support the motion.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Cabinet Office), Party Chair, Co-operative Party 9:36 pm, 11th September 2012

My hon. Friend Paul Blomfield is spot-on about the effect of such high tuition fees on those wanting to apply for postgraduate courses. Like him, I want to focus on one particular issue, which is clearly linked to the Government’s plans for higher education and their policy of £9,000 tuition fees, but which has not been given such a high profile in the debate so far.

As others have mentioned, Ministers wanted students to consider degrees costing less than £9,000, to reduce the Treasury’s exposure to student debt. What has not been highlighted in the debate is Ministers’ plan significantly to increase the role of commercial, for-profit universities owned by private shareholders to help to achieve that objective. They have significantly increased the number of courses run by such institutions for which students can secure a student loan.

I should say that there are already a large number of students studying and doing well at private universities in the UK. However, it is far from clear that Ministers have grasped the scale of risk involved in allowing an even bigger expansion of access to student loans for commercial universities without proper safeguards. In the US, the for-profit higher education world has been rocked by a series of scandals involving very high drop-out rates, very low degree completion rates and aggressive recruitment practices. Indeed, according to a recent American Senate investigation, in the three previous years almost 2 million students had withdrawn from for-profit institutions without completing a degree but with significant personal debt. One such institution had a drop-out rate of 84%.

I accept that Ministers have said that some safeguards are needed as the commercial, for-profit part of the universities sector grows. It would be helpful if the Under-Secretary of State for Skills, Matthew Hancock, whom I congratulate on his appointment, set out in his response a little more detail about the Department’s plans.

For-profit commercial universities are still much less well regulated than mainstream universities. Surely Government Members would want the marketplace, as they describe it, for university education at least to be on a fair basis. Surely all for-profit companies offering a university education that want to recruit students who can access publicly backed loans should be subject to the same information and publication requirements as public universities. Those requirements should include student data and financial information and, as I made clear in my intervention on the Minister—uncharacteristically, he resorted to blather and ducked the question—be subject to freedom of information legislation.

When he replies to the debate, I encourage the Minister not to follow the example of his right hon. Friend the Minister for Universities and Science but to answer the question: when will Ministers bring forward plans to require commercial, for-profit universities to be subject to freedom of information legislation? When will they be required to provide the same level of data and information as mainstream universities are so that they can be held to account in the same way?

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

Briefly, we are using the designation power—the power to designate courses and institutions—much more actively than the previous Government. That will ensure both the financial strength and the quality of provision in courses at alternative providers. There are still differences in the regulatory regime and it cuts both ways—FOI legislation cuts one way, equalities cuts the other, but that is the power we are using.

Photo of Gareth Thomas Gareth Thomas Shadow Minister (Cabinet Office), Party Chair, Co-operative Party

I say gently to the Minister that it is interesting that he and his colleagues in the Treasury are examining whether commercial, for-profit universities should be exempt from VAT in order to create a level playing field, but other sensible regulations, such as the requirement to be answerable to FOI legislation, as mainstream universities are, do not apply. Our collective experience of banking regulation and its failings, about which hon. Members across the House have uncomfortable memories, ought to encourage Ministers to be wary of market failure. As I have said, surely commercial universities that want exemptions should be properly held to account.

In her excellent opening speech, my hon. Friend Shabana Mahmood set out clearly how this policy of higher tuition fees exemplifies the Government’s failures in a series of other areas. Our motion outlines a clear, sensible alternative, and on that basis, I commend it to the House.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills) 9:41 pm, 11th September 2012

I begin by commending all speakers for the Opposition. My right hon. Friend the Member for Newcastle upon Tyne

East (Mr Brown) was forensic on debt, and my right hon. Friend Mr Lammy was impassioned about participation. My hon. Friend Mr Bailey was sharp on upskilling as was my hon. Friend Pat Glass when she spoke about the chaos in the FE sector. My hon. Friend Tristram Hunt spoke about teaching, my hon. Friend Paul Blomfield about social mobility, and my hon. Friend Mr Thomas about the problems of private providers.

We move from one fee fiasco in higher education to another in further education. In her opening remarks, my hon. Friend Shabana Mahmood spelt out the uncertain future that faces the nearly 400,000 adult learners affected by the proposals. That situation came about as a direct result of the blood offering made by Ministers from the Department for Business, Innovation and Skills to the Chancellor’s cuts in late 2010. As if appalled by the implications of what they had done, they then sat on the issue and dithered for over a year before commissioning any surveys or discussing its practical consequences with stakeholders. Those consequences are now putting huge pressures on the FE sector.

FE colleges, which are key drivers of social mobility and hubs within our communities, are being hit left, right and centre by Government policy. First they were saddled with the 25% cut in resource grants, then the abolition of the education maintenance allowance put a strain on their budgets and, for the first time in many years, they have seen a fall in the number of enrolments of 16-to-18 years olds. They are now confronted with an FE loans policy that operates on a base assumption that student numbers will drop by 20%. In fact, the Department expects as many as 45% of learners—up to 150,000 people based on current numbers—to drop out, and that will hit learners old and young alike as the viability of college courses is affected.

The system is inevitably more complex than HE loans because of the varying start dates, course durations and the costs of FE courses, and no central administration similar to that of UCAS has been entrusted to the Student Loans Company. I say no more. Many hon. Members bare the casework scars from that organisation, and there are no pilots in place to trial the new system.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Business, Innovation and Skills)

You have not. With their ability to offer a second chance, FE colleges are at the vanguard of promoting social mobility and loans could be a huge barrier to that. Four thousand pounds is a huge amount of money during the recession and could be a major deterrent for learners, restricting the social mobility that I thought the Business Secretary was keen to promote. He should not just take my word for that, but should listen to his party’s immensely respected former spokeswoman on education in the Lords, Baroness Sharp. In May this year she said:

“I cannot understand why we, as a government, why on earth we are pushing forward with loans for level 3…I really think that if we are concerned about social mobility, it’s very important that we try to overturn it.”

She speaks for women, with whom level 3 FE courses are popular. The Departments statistics show that women make up roughly two thirds of the cohort who will be hit by FE loans. For many women—those doing low-paid jobs or juggling family and caring commitments—a £4,000 a year loan is not a realistic proposition.

My discussions with women learners around the country reminded me of the outlook of many of my women students when I was an Open university tutor. They wanted to broaden their horizons and welcomed what their completed qualifications could offer them. However, none felt they would be able to do those things under a loans system. The Government, and not least the Minister, have told us that we should forgo Government activity in favour of nudge theory. The jury may be out on the latest intellectual fad, but Ministers need to be reminded that people can be nudged away from things as well as towards them.

HE access courses are a popular route for female learners, so I am glad that, after a long campaign, the former Minister for Further Education, Skills and Lifelong Learning announced a series of concessions before the summer recess. That was a welcome first step, but his successor needs to ensure that those commitments are implemented rapidly and effectively. Even so, Million+ warns us in the briefing for today’s debate that the net result of the overall changes will, in the long term, be fewer mature learners, and that progression by those who want to study later in life will be undermined.

However, the Government have not budged an inch on scrapping direct financial support for level 3 and above apprenticeships and forcing apprentices to take on individual loans. In responding to the FE consultation, the UK Commission for Employment and Skills specifically counselled the Government that not just large employers are concerned and lukewarm about the proposals, but adult apprentices themselves. UKCES gave the Government at best an amber light, and at worst a red light, and yet they press ahead. If huge numbers of adults drop out, the Government’s much-vaunted drive to increase apprenticeships, which is heavily dependent on increases in post-25 apprenticeships, will be in tatters. The numbers will simply fall off a cliff. That might blow a hole in the Government’s hubris, but more importantly, it will deny the life chances of tens of thousands of adult learners.

At the other end of the age spectrum, grants are offered for small and medium-sized enterprises to take on 16 to 24-year-olds, but they are moving at a snail’s pace. That is why the Opposition proposed earlier this year to expand the number of apprenticeships, by buddying up with large employers and expanding group training associations. In the meantime, local authorities, including many Labour local authorities, must pick up the slack as the Government stall and flail around. Councils such as Liverpool, Wakefield, Barking and Dagenham, Knowsley, Dudley, Oldham, and my council, Blackpool, work with local colleges and providers to place young people in quality apprenticeships.

Many young people are still unable to access some of the most competitive apprenticeships without the necessary pre-apprenticeship training. The Government’s fiascos—they first allowed and then curtailed short-term apprenticeships—have wasted precious months and years, as the Association of Employment and Learning Providers said in its September newsletter. Young learners in further education face a double-whammy. Those not in education, employment or training and those just above have not had the training and support to allow them to access apprenticeships, while those in the middle must compete with young people who have stronger academic grades.

On top of that, Department for Education Ministers have failed to fulfil their part of the FE bargain by dropping work experience from the schools curriculum, dropping independent advice and guidance, and by failing to help young people to climb the FE or apprenticeship ladders. They do not say that that is what they are doing; they simply abdicate their responsibility for providing frameworks to make those things happen.

The classic example is the Government’s response to Jason Holt’s excellent review on how small and medium-sized enterprises could be given more support and encouragement to take on young people. The Department’s response to his plea to them on careers advice and guidance was this:

“Whilst we welcome the specific suggestions made by Mr Holt …we believe it should be up to schools, together with local partners including employers, to determine how best to address this challenge”.

I am therefore not surprised that, in this week’s issue of Further Education Week, Mr Holt states:

“I am disappointed the Government has not taken more notice of my proposal…I had hoped they would require schools actively to promote apprenticeships and to put a stronger emphasis on equipping pupils with…skills…there is still no obvious structure in the school system to encourage young people to think of apprenticeships…The Government’s decision to hand the baton to already hard-pressed and financially constrained schools will result in little actually happening.”

When I chided him on this last week in Question Time, the Secretary of State said that he did not regard the hands-off approach at the Department for Education as the last word on active Government. The new Under-Secretary of State for Skills, Matthew Hancock, has a golden opportunity. He is a Minister in the Department for Education as well as BIS. Will he take up the cause and address Jason Holt’s concerns? His predecessor would have done so.

At the same time, little or nothing has been done to respond to the pleas from business to get involved in such programmes—again, waffle but no action. This is a dithering Government. For all their talk of being joined-up, the chasms and conflicts between the Department for Education and BIS are widening. They have wasted the best part of two years, failing to use billions of pounds of public procurement to guarantee apprenticeships from companies bidding for large contracts.

While the Opposition have been working closely on policies to give young people a linked partnership of opportunities—from school days and college through to further education, including for older learners—the gap between the two Departments has become a chasm. While they want to erect barriers, we want to build bridges. As my right hon. Friend the Leader of the Opposition said this week, we need a skills system that does not leave us a country where the 50% who do not go to university feel completely left out. We plan to build that new agenda with schools, young people, businesses and trade unions working to fashion new vocational training systems. My right hon. Friend has said it all: while the Government dither, we are stepping forward. I commend the motion.

Photo of Matthew Hancock Matthew Hancock The Parliamentary Under-Secretary of State for Business, Innovation and Skills, The Parliamentary Under-Secretary of State for Skills 9:51 pm, 11th September 2012

I rise to propose that the House oppose the motion. We have had contributions of great passion, not least from the right hon. Members for Newcastle upon Tyne East (Mr Brown) and for Tottenham (Mr Lammy), both of whom supported fees in principle but wished that they were lower. They both generously set out where they agree with what the Government have done, not least on improved contact hours and the focus on employment outcomes, which surely must be crucial. I listened carefully to their points and welcome their constructive approach, particularly because each argued that, in this competitive world, having a first-rate university and further education sector is critical for our ability to compete in the world. I welcome many of their comments, but would go further. The right hon. Member for Newcastle upon Tyne East even said how he would pay to reduce fees. I will come to that in a moment.

That constructive approach was in sharp contrast to the contribution from Tristram Hunt, who is not in his place. He talked about application numbers, but did not point out that the number of 18-year-olds in the country is falling. We therefore have to look at the proportion of 18-year-olds applying. According to UCAS, the proportion applying this year was higher than in any year of the previous Labour Government. Every Opposition Member should remember that fact when listening to the anecdotal numbers. If there are fewer 18-year-olds, surely we should look at the proportion of them applying to university.

My hon. Friend Justin Tomlinson made a powerful speech and, in particular, celebrated studentfinance2012.com, which busts many of the myths sadly propagated by Opposition Members and instead points out what happens to students when they go to university, and when and how much they pay back. I commend the work of studentfinance2012.com. Indeed, I am sure that the fact that the proportion of applications is higher than in any year under the Labour Government is partly because students look at facilities and think very hard about how they are going to go to university.

Paul Blomfield argued strongly about social mobility. By contrast, I had a lot of respect for, but disagreed with, Pat Glass. She made an impassioned argument against fees, as did the hon. Gentleman. She also focused on the need to reform the GCSE system. She made an effective speech, and I agree that the GCSE exam system needs to be reformed.

My hon. Friends the Members for Hertsmere (Mr Clappison) and for Reading East (Mr Wilson) focused on access, saying that universities should be free to make decisions about access. The Minister of State set out the duty to protect the rights of universities to select students. Les Ebdon’s comment that one poor student should be able to go to university for everyone in the top 20% is indeed a laudable aim. I agree with him about that, and I think broad education reforms will be needed, not least free schools, academies, the pupil premium and the focus on improving education throughout our system, including in schools, all of which will be important.

Photo of Matthew Hancock Matthew Hancock The Parliamentary Under-Secretary of State for Business, Innovation and Skills, The Parliamentary Under-Secretary of State for Skills

I am sorry, but if the hon. Gentleman had been here at the start of the wind-ups, I might have given way to him.

Photo of Matthew Hancock Matthew Hancock The Parliamentary Under-Secretary of State for Business, Innovation and Skills, The Parliamentary Under-Secretary of State for Skills

No, I am not giving way. If the hon. Gentleman will not come back for the wind-ups, he is not going to have another say.

Mr Bailey raised concerns about applications from low-income students and asked about FE loans. The shadow Minister, Mr Marsden—with whom I look forward very much to working—also made the argument about FE loans. Rather like with part-time students in HE, the FE loans policy will remove up-front costs. Following the package that was set out by my predecessor in July—which was welcomed by the Association of Colleges, as well as the hon. Gentleman and others—I very much look forward to working with him and the Chair of the Business, Innovation and Skills Committee on the design of the package, and to talking to him about it soon.

Mr Thomas argued against profit-making universities.

Photo of Matthew Hancock Matthew Hancock The Parliamentary Under-Secretary of State for Business, Innovation and Skills, The Parliamentary Under-Secretary of State for Skills

I will give way to people who were here for the start of the winding-up speeches, but not those who make a speech and then do not come back.

Photo of Matthew Hancock Matthew Hancock The Parliamentary Under-Secretary of State for Business, Innovation and Skills, The Parliamentary Under-Secretary of State for Skills

It was very clear.

My hon. Friends the Members for Burnley (Gordon Birtwistle) and for Mid Derbyshire (Pauline Latham) effectively made the case that we all have a responsibility to let everybody know that no one will pay a penny in their fees until they are earning over £21,000. Let that message go out from here. My hon. Friend the Member for Burnley was typically passionate, and my hon. Friend the Member for Mid Derbyshire showed strong support for Derby university and for apprenticeships.

Photo of Matthew Hancock Matthew Hancock The Parliamentary Under-Secretary of State for Business, Innovation and Skills, The Parliamentary Under-Secretary of State for Skills

No.

Finally, in the short amount of time available to me, let me say that Government Members faced up to the difficult challenges of funding higher education. However, we do not know what the Opposition stand for. It is like a multiple-choice question. Which is the answer? Is it the graduate tax? We know that the Leader of the Opposition is in favour of a graduate tax because he said:

“I want to have a graduate tax.”

Or is the answer lower fees, paid for by axing bursaries and access schemes and by cutting courses—

Photo of Alan Campbell Alan Campbell Opposition Deputy Chief Whip (Commons)

claimed to move the closure (Standing Order No. 36 ).

Question put forthwith, That the Question be now put.

Question agreed to .

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.

The House divided:

Ayes 224, Noes 285.

Division number 63 Opposition Day — Higher and Further Education — Tuition Fees

A majority of MPs voted against reducing tuition fees to £6,000, funded by reversing the corporation tax cut for banks and requiring graduates earning over £65,000 a year to pay higher interest rates on their student loans.

Aye: 223 MPs

No: 284 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 137 MPs

Abstained: 1 MP

Absents: A-Z by last name

Abstaineds: A-Z by last name

Question accordingly negatived.

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

Question agreed to.

Main Question, as amended, put and agreed to .

Resolved,

That this House congratulates all those who have recently achieved their educational qualifications; notes the number of

full-time higher education students in 2012 is expected to be higher than in any year under the previous administration; believes that the pupil premium, which is designed to raise the attainment of pupils from low-income households, represents a powerful mechanism for widening participation in higher education; welcomes the increased spending on widening participation in higher education, including the higher maintenance grants, the National Scholarship Programme and the extension of tuition loans to part-time students; further notes the Institute for Fiscal Studies’ recent finding that the new student finance system “is actually more progressive than its predecessor: the poorest 29 per cent of graduates will be better off under the new system”; supports the extra information provided to prospective students through the student finance tour and the Key Information Set; further supports the efforts being made to ensure the best possible match between students and institutions, with one-quarter of all undergraduate places removed from centralised number controls; and congratulates the Government for working with employers to deliver an unprecedented increase in apprenticeships, with 800,000 new starts since September 2010.