Higher Education (Top-up Fees)

– in the Scottish Parliament at 9:30 am on 22nd January 2004.

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Photo of George Reid George Reid None 9:30 am, 22nd January 2004

Good morning. The first item of business is a debate on motion S2M-803, in the name of Fiona Hyslop, on the impact of top-up fees on higher education in Scotland, and two amendments to that motion.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I am pleased to open this Opposition debate on higher education, which is the first debate that we have had on the subject since the new Executive was elected in May last year.

We have much to be proud of in our higher education sector. We must see the future of higher education not only in the context of the developments in competition for research and staff with England, but in the European and global context. Given that the knowledge economy is critical, where do we foster that knowledge if not in our universities? If we want a smart, successful Scotland, where will the ideas and intellect be fostered and promoted? Our universities are critical to the country's economic future, but they are also critical to its economic present. The university and higher education sector in Glasgow contributes £0.5 billion to the local economy; here in Edinburgh, the figure is £0.75 billion; and the figure for Scotland as a whole is more than £2.5 billion. The Executive needs to see the sector as an investment, not as a cost burden.

I say at the outset that our preference would have been to debate the Enterprise and Culture Committee's report on the issue, but as Westminster will vote on the Higher Education Bill next week, it is important that, within that timescale, we take the opportunity to send a clear message to the elected politicians from Scotland at Westminster about why the introduction of top-up fees in England would disadvantage Scotland. Regardless of the top-up fee proposals in England that we are debating today, the Government in Scotland should be planning strategically to ensure that our higher education sector is well placed to meet and maximise the international opportunities in the future. However, it is unforgivable not to do so when we have the threat of top-up fees and their impact in Scotland. The Executive has seen the English higher education budget in the current six-year period grow at twice the rate of that in Scotland, even before the introduction of top-up fees.

The Scottish National Party will always stand up for the Scottish interest, wherever and whenever that interest is threatened. The SNP MPs at Westminster will vote on the Higher Education Bill next week because until we have financial independence and the powers to compete fairly with England and the rest of the world—and while our financial arrangements are so tightly constrained by the Westminster system—it is our duty and responsibility to do so. I make it clear that Scotland will not receive a Barnett consequential from top-up fees—which will be classed as private money—although we can anticipate some Barnett consequentials from the non-top-up fee student support package. However, in the long term, we will be at a disadvantage.

If any member is under the illusion that the bill will be backed by huge amounts of public money, I point out that, despite daily concessions from Tony Blair to sweeten the variable-fee pill, there is still no clear definitive statement of how much new money will go into the system.

On 15 January, Tim Yeo, the Conservative education spokesperson, asked Mr Clarke:

"There is a substantial burden of new costs associated with the Government's Higher Education Bill—costs that have increased as a result of some of the concessions that the Secretary of State has been forced to make. Will these costs be met within the higher education budget or by additions to that budget?"

The answer from Mr Clarke was:

"The former."—[Official Report, House of Commons, 15 January 2004; Vol 416, c 941.]

One concern is that a raid on the existing higher education budget will have a knock-on effect in Scotland. Clause 1 of the bill will establish a research council under the Department of Trade and Industry to implement the Government's privatising agenda down south. While I am on the subject of research, we cannot and must not accept the Westminster Government's plan to polarise research and to develop an elitist ivy league system.

The Scottish Labour MPs' problem is that they are exercising their vote, but doing so against the Scottish interest. The Tories' problem is that their sole Scottish member will not even stand up for Scotland, but prefers to sit on his hands—sometimes.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Excuse me—Peter Duncan has voted at least 37 times on English affairs, including three times on top-up fees, one of which was as recent as June last year. That is hypocrisy in action.

There is a clear consensus that we must take action to address the funding issues in Scottish universities and that the bill will disadvantage Scotland. Our choice is whether to try to influence the vote before it takes place—from our unique perspective and armed with the Enterprise and Culture Committee's report—or to react after the event. Do Scotland and Scotland's Parliament lead or do they follow?

As the Deputy First Minister well knows, I accused him of sleepwalking through the issue and of exhibiting complacency and arrogance towards the sector by not acknowledging that there was a problem.

Photo of Brian Monteith Brian Monteith Conservative

If the minister is sleepwalking, surely he is doing so subconsciously and therefore he cannot be blamed?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Although I have concerns about the minister's well-being—particularly given that he has told 700 of my constituents that he is delighted that their jobs are moving elsewhere—I perhaps will not be as cruel as Mr Monteith is.

Photo of Jim Wallace Jim Wallace Liberal Democrat

Does Fiona Hyslop acknowledge that, in the light of the white paper from the Department for Education and Skills, the Executive set up a review of higher education funding back in the summer of last year in anticipation of the possible impact? That is not sleepwalking; that is taking a measured step to examine all the issues. It is the SNP that has only recently woken up to the issue.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I welcome the fact that the Executive has set up a private and secret review group.

I return to my point that, whether or not there was a debate on top-up fees in England, the Executive should have been considering the issues anyway. What has the Executive been doing for the past four years? I know—it has ensured that while the overall Scottish budget has increased by 23 per cent, the higher education budget has increased by only 15 per cent.

Political pressure and pressure from Universities Scotland forced last week's admission from Jack McConnell that something must be done and that Scotland's funding advantage is more in the order of 3.6 per cent and not the 20 per cent that the Executive has been hiding behind. Because the SNP has forced a debate on the issue, we have seen movement today in the Executive amendment, which makes some kind of acknowledgement that there would be a disadvantage for Scotland. We thought that progress was being made until we started hearing from the true voice of Labour at Westminster that top-up fees in Scotland are inevitable.

Top-up fees are wrong in principle and we should rule them out. Student debt is already a serious problem for young people. The Prime Minister's logic seems to be that the new measures are okay because students already have debt. We either have financial independence under the SNP to grow the economy and our higher education system or we will be softened up for top-up fees from Labour. Who do we believe on those issues?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

No, I want to carry on.

Unless we see a concerted effort from the Labour-Liberal Executive to come up with financial provision, we have no option but to believe that the Executive is being softened up for the post-2007 introduction of top-up fees. The SNP can stop that by using the powers that financial independence can bring. Who speaks for Labour on the issue? Which minister was Sam Galbraith referring to in his conclusions the other night on "Newsnight"?

We have given options for tackling the short-term challenge: we should use the £47 million from the council tax consequentials, which would not cut other budgets and would keep up with the pace of investment elsewhere. I want our universities to maintain their competitive position and to continue to produce world-class research. From the Executive, I hear the silence of lambs. It might be too much to expect the roar of lions, but all the SNP is asking the Executive to do—and giving members the opportunity to do—is to speak up and speak out for Scotland's national interest.

I move,

That the Parliament believes that the Higher Education Bill published by the Department for Education and Skills on 8 January 2004 will have an adverse effect on Scottish higher education and therefore calls on all Scottish MPs to vote against the bill at Second Reading.

Photo of Jim Wallace Jim Wallace Liberal Democrat 9:40 am, 22nd January 2004

I take great pleasure in having the opportunity to move the Executive's amendment to the Opposition's motion, which I will briefly dismiss. Unlike the Conservative party, I believe that Scottish MPs elected to the Westminster Parliament should feel free to vote on issues in that Parliament. In our parties, we can discuss with Scottish MPs which way they should vote, but it is pompous and preposterous for one Parliament to tell members of another Parliament which way they should vote. We all know that, if the Westminster Parliament were to pass a motion saying what members of this Parliament should do, the biggest howls would come from the SNP benches. There is an absolute reek of hypocrisy. The SNP would be the first to squeal if the boot was on the other foot.

Photo of Margo MacDonald Margo MacDonald Independent

I am certain that the minister is aware of the section in the Scotland Act 1998 that allows Westminster legally to override any decision of this Parliament.

Photo of Jim Wallace Jim Wallace Liberal Democrat

Yes, but no one is suggesting that that is what is happening here.

Scotland's distinctive higher education system is a national asset, as Fiona Hyslop acknowledged. We have world-class universities in Scotland that are vital to our economic success. The Executive is determined not to let their status diminish. In that regard, I am pleased that we have the support of the Enterprise and Culture Committee. I want to take this chance to place on record the fact that I welcome the committee's recent thorough and thoughtful Scottish solutions inquiry report, which makes a very helpful contribution to the debate. Paragraph 3 of the executive summary of the report supports the principle that higher education is fundamental to Scotland's economic development and success.

As I said yesterday at the University of Glasgow, growing the economy is the Executive's top priority. I believe that investment in higher education has a hard and irrefutable business rationale to it. It is vital to boost skills and knowledge in our workforce and to increase our research and development capacity. For that reason, as well as for the broader social and cultural reasons that we also rightly prize, we will take whatever action is necessary to ensure that our universities retain a competitive advantage in relation to the rest of the United Kingdom and in a European and global context. That aim is bound to require some additional investment as well as some creative thinking on the part of universities. That is acknowledged by the Enterprise and Culture Committee in its findings, when it says that it

"believes that universities have a responsibility to continue to seek other sources of funding, and to work to maximise best value for public funding."

Photo of John Swinney John Swinney Scottish National Party

On the question of investment, can Mr Wallace square his remarks about the importance of investment and sustaining the competitive advantage of our universities with the fact that support to the higher education sector is now a much smaller proportion of the Scottish Executive's budget than it was when he became the Deputy First Minister?

Photo of Jim Wallace Jim Wallace Liberal Democrat

I can testify to the Executive's investment in higher education. Since the Parliament was established in 1999, investment in education in real terms has increased every year. It has gone from something like £600 million a year to £800 million a year at the end of the spending review. If spending is less as a proportion of overall expenditure, that is because in areas such as health, expenditure has also increased, which is something that the SNP has called for many times. No one can gainsay the sustained increase in investment that the Scottish Executive has put into higher education.

We want to consider these matters properly. That is why we want to quantify Scotland's present advantage and the challenges that we face. We recognise that the universities are under pressure and that we need to make sure that the extra investment meets the needs of the sector. That is where we take a rather different line from that taken by SNP members, who seem to have woken up only very lately to the importance of supporting our higher education institutions properly. The SNP manifesto for the election last year makes only a passing reference to the core funding of higher education. It suggests only that the SNP's proposed review of student finance would be able to look in passing at the

"the overall context of ... higher education funding".

That is why I find it a bit rich of Fiona Hyslop to say that we should be planning strategically. There was no strategic planning for the core funding of higher education in last year's SNP manifesto.

It was clear that Fiona Hyslop seemed to have missed the fact that our strategic planning has been such that we have established not only the third phase of the higher education review but also initiated two previous phases of work to examine other aspects of higher education in Scotland. Phase 2 of that work reported in March last year.

It was only at the end of last year that SNP members became switched on and decided that higher education was extremely important to them and that they would commit the one-off consequentials from the Chancellor of the Exchequer's pre-budget report to the long-term funding of the sector. Until then, their priorities for extra spending had been wide and diverse—from litter bins in Stirling to new rail bridges in Dornoch.

Photo of Jim Wallace Jim Wallace Liberal Democrat

I do not have time. As I indicated to Fiona Hyslop, we have been engaged in a proper and detailed process, building on our higher education framework document, published last March, which in turn built on 18 months of detailed discussion with the sector.

Further, we have conducted our higher education review. The fact that Fiona Hyslop described that as "private and secret" shows how much attention she has been paying to the situation because, having conducted its Scottish solutions inquiry, the Enterprise and Culture Committee endorsed our approach, concluded that the Executive's measured approach was "wholly appropriate" and—wait for it—commended the "open and inclusive" process that we have put in place. Far from conducting a private and secret process, we have engaged stakeholders, university principals, staff and students.

I expect to receive the phase 3 report of our higher education review at the end of next month. Given that we have embarked on a process that the committee believes is wholly appropriate, open and inclusive, it would be wrong to prejudge that report or have a knee-jerk reaction to it before we have seen it. We will take the report forward and it will inform the spending review that will take place later this year. That is a proper and responsible process. The fact that any legislation from Westminster will not begin to come into effect until 2006 will give us time to do that.

We are building on a strong track record. We have increased funding from £600 million in 1999 to £800 million by 2005-06. In the three years covered by the previous spending review alone, the Scottish Higher Education Funding Council saw a rise in cash terms of 15 per cent, which is 6.9 per cent in real terms. That level of investment speaks for itself. One of the things that it should say to people is that the Executive takes higher education extremely seriously and that when we say that we will take the necessary steps to retain a competitive edge for our universities, we mean it.

What we do will be driven by Scottish priorities, not by knee-jerk reactions to what happens across the border. I remind the chamber that Scotland has a lifelong learning strategy and that the Enterprise and Culture Committee's report particularly stressed the need to continue to consider further and higher education side by side. I was sorry to note that Fiona Hyslop's speech said nothing about the importance of the role of further education colleges, not least with regard to providing a large volume of vocational higher education.

Our approach makes sense for Scotland. The Executive has a good story to tell. Since 1997, the SNP has changed its policy on student support more times than one would care to imagine. Its 2001 UK election manifesto was described by its own student group as a seriously watered-down version of the SNP's policy and as having led to a real sense of disappointment in the Federation of Student Nationalists. That manifesto also says that attempts to mitigate the impact of policy moves south of the border will not work in the long term.

However, the Executive will not give up so easily. We are proud of our Scottish higher education institutions. Our support for them has increased since devolution.

We have a good record and a strong starting point, which we will defend. Above all, we will do whatever is right for the needs, circumstances and priorities of Scotland, at the right time and through a measured process. We have set our own agenda for higher education and lifelong learning and we will not be deflected from it by opportunists who want only to make headlines.

I move amendment S2M-803.2, to leave out from "believes" and insert:

"recognises that Scotland's distinctive higher education system is a valuable asset which must be maintained and developed for the good of the nation; further recognises that its competitive advantage must be maintained; welcomes the commitment in the Partnership Agreement that the Executive "will not support the introduction of top-up tuition fees" in Scotland; notes that the Enterprise and Culture Committee's report on its Scottish Solutions Inquiry considers that the Executive's decision to respond to developments in England by proceeding with a third phase of its higher education review in order to establish a robust evidence base "is wholly appropriate", and looks forward to this third phase of the review reporting in the early spring."

Photo of Murdo Fraser Murdo Fraser Conservative 9:49 am, 22nd January 2004

I welcome the opportunity that this debate provides for the Conservative party to set out its opposition to top-up tuition fees north and south of the border. I also welcome the opportunity to expose the shameless opportunism of the SNP on this issue.

We have always opposed the introduction of tuition fees and top-up fees in Scotland and in England, and Michael Howard and his Conservative colleagues in the House of Commons have been leading the opposition to them. Top-up fees might deter students from less well-off backgrounds from applying to universities. The previous Conservative Government had an excellent record in extending higher education to all and we think that top-up fees could reverse that trend.

One of the reasons why the Scottish Conservatives oppose top-up fees in England and Wales is that we recognise that they might have a detrimental impact in Scotland. I am a member of the Enterprise and Culture Committee and other speakers in the debate have referred to the committee's report, which makes that point perfectly clear. There is concern that universities in England and Wales have higher incomes and that they will therefore be able to pay higher salaries. They might attract staff from Scotland and might have a higher status in the eyes of overseas students.

There is a growing political consensus that top-up fees might have a detrimental effect on the Scottish sector. That is why our amendment calls on the Executive to respond to the bill by bringing forward proposals to address the impact on Scottish universities and Scottish students, whether they study here or elsewhere in the United Kingdom.

Photo of Jamie Stone Jamie Stone Liberal Democrat

For accuracy, will the member concede that the issue is not so much academics' salaries as their background support packages, because there are national pay scales to govern these matters?

Photo of Murdo Fraser Murdo Fraser Conservative

That is a fair point. Universities have the opportunity to offer additional support packages to academics, so the base salary is not always the most important factor.

The support of other parties and the Labour rebels is welcome, but it is the Conservatives who will lead on the issue at Westminster so that we can—as we must—defeat top-up fees.

The stance that the SNP has taken on the issue is both hypocritical and politically opportunistic. The SNP supports an independent Scotland. If Scotland was independent, no one in Scotland would have any say whatsoever about what happens in the English higher education sector. Even if we were an independent country, there would still be a knock-on effect on Scottish education because we have a single market in the UK with cross-border flows of students and staff—that would remain the position in an independent Scotland. The SNP proposes a policy under which we would have even less say on the impact on Scottish universities than we have at the moment.

The SNP's real agenda is now apparent. It has no real interest in supporting higher education in England or even, I suspect, in Scotland. It is trying to ensure that MPs who represent Scottish constituencies vote on an issue in which they have no direct interest, and it hopes to encourage an English backlash that will destabilise the current constitutional settlement. No unionist, of whatever party, should have any truck with such an approach.

The SNP approach is not just politically opportunistic but tactically inept. It would have made much more political capital if its Westminster MPs had decided to abstain and had shown up Labour MPs on the issue. Typically, the SNP has not had the wit to see that political opportunity but, given its past record, we should not be surprised about that.

Photo of Murdo Fraser Murdo Fraser Conservative

I am sorry, but I am in my final minute.

In contrast to the SNP's opportunistic stance, the Conservatives have a principled stance and our Scottish MP, Peter Duncan, will abstain from the vote on the issue.

We recognise that the current constitutional settlement is imperfect. In an ideal situation, the Speaker would certify which of the bills that are before the House of Commons apply to England and Wales and which affect the whole of the UK. MPs who represent Scottish constituencies would vote only on the latter. Until that happens, there is a judgment to be made on all pieces of legislation and Peter Duncan is quite right not to vote on this particular issue. Unlike the stance that has been taken by the SNP, which picks and chooses when to have principles, our stance is consistent.

I urge MPs who represent Scottish constituencies to follow Peter Duncan's lead and abstain from the vote on tuition fees in England. I have no doubt that if they do so, the damaging proposal of top-up fees will be defeated and we will avoid the dangerous consequences to the UK of this unpopular and unwanted policy being carried through for England on the back of votes from the Labour MPs who represent Scottish constituencies.

To conclude, I contrast the principled stance that we have taken with the opportunistic and tactically inept stance of the SNP. We want tuition fees to be defeated both north and south of the border. If all the MPs who represent Scottish constituencies follow our principled lead, I have no doubt that top-up fees will be defeated. I urge them to do so.

I move amendment S2M-803.3, to leave out from "will" to end and insert:

"imposing top-up fees may have an adverse effect on Scottish higher education; calls on the Scottish Executive to set out its proposals for dealing with any consequential impact on Scottish universities and on Scottish students if top-up fees are introduced in England; rejects the politically opportunistic stance of the SNP on this issue which is intended to destabilise the Union, and calls on all Scottish MPs to follow the lead of Peter Duncan MP, Shadow Secretary of State for Scotland, and abstain from voting on this Bill and, indeed, all Bills that relate only to England and/or Wales."

Photo of Mike Watson Mike Watson Labour 9:54 am, 22nd January 2004

As always, it was instructive to listen to Fiona Hyslop's opening remarks. I was astonished to hear her say that the Executive should see the higher education sector as an opportunity and not as a "burden". I hope that I have quoted her correctly. I would like to see evidence that the Executive sees the sector as a burden, bearing in mind the increases in funding that have already been outlined and which will, no doubt, be referred to again in the debate.

The standard of the research that Fiona Hyslop put into her speech was revealed by her amazing comments about the secret cabal or group that is the phase 3 review of higher education in Scotland. Jim Wallace mentioned that the Enterprise and Culture Committee, of which I am a member, said in its report that the group is open and inclusive. To show how open and inclusive it is, I point out that it includes groups such as Universities Scotland, the Association of Scottish Colleges, the Association of University Teachers, the Educational Institute of Scotland, National Union of Students Scotland, Unison and the Scottish Higher Education Funding Council—it is hardly a secret group.

Photo of Mike Watson Mike Watson Labour

I will in a moment.

Fiona Hyslop might want to respond to the most surprising thing, which is that the committee is chaired by her colleague Alasdair Morgan, and includes Brian Adam as a member. I sat through most of the meetings, if not all of them, and I do not remember the view being put forward that it was a secret group—we welcome the study that is being undertaken. I would welcome Fiona Hyslop's comments on that.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I do indeed want to comment. My concern is that this is the first debate that we have had on higher education since this Government came into office. It would have been helpful to and instructive for the public in Scotland to know not just that the review was taking place but what it has done and what it has influenced. We have review after review after review, but it is results that matter.

Photo of Mike Watson Mike Watson Labour

As I understand it, the group will report next month. At the moment, we do not know the final form of the bill or even whether it will be passed by the House of Commons. The issue is an imprecise one, just as it was when the Enterprise and Culture Committee considered it. In fairness, the Executive is doing as much as it can, given the imprecise nature of the issue. That has not prevented continuing increases in investment in Scottish higher education throughout this session of the Scottish Parliament.

On the hypocritical content of the SNP motion, which tells MPs how to vote, how indeed would we react if Westminster told us how to vote? All MPs were sent a copy of the Enterprise and Culture Committee's report, which contains clear recommendations, including a recommendation that the Scottish Executive should significantly increase its investment in higher education in real terms. I am sure that MPs will have read the report and I hope that they will take it into account when they vote, but I am not going to tell them how to vote any more than I would want them to tell me how to vote.

We dismiss higher education in Scotland rather too easily. We must recall that in 2002-03, funding per student, excluding support, was £146 in Scotland and £122 in England, which represents a difference of some 20 per cent. It is certainly incumbent on the Executive to do whatever it can in the spending review to ensure that that level is maintained. Anyone who listened to Jim Wallace yesterday will have heard him stress that his main ambition in the spending review is to build on the substantial investment that is already being made in tertiary education in Scotland. That is the Executive's position and we should support it.

Fiona Hyslop made a rather dismissive comment about Barnett consequentials. There will be consequentials if, as looks likely, the scheme includes considerable DFES student support. That is not to be dismissed—it will be on-going and we have to accept that. That is not to say that there are not threats in the bill being passed as drafted—those threats are recognised in the committee's report and I am sure that they will be taken on board by the Executive.

The SNP has commented that any increase that is applied in England should also be applied in Scotland through general taxation. That is what John Swinney said on Newsnight two or three months ago, and on that occasion he prayed in aid Professor King from the University of Abertay Dundeee and Dr Ian Johnston from Glasgow Caledonian University. In fact, those two august academics have argued for a graduate tax. The SNP must be clear about where their support comes from and to what extent they are supported.

My final point is on the SNP's call on the Executive to rule out ever applying top-up fees. For a start, we cannot top-up fees in Scotland because we do not have any fees. The SNP should be asked whether, if it was ever in a position in which it could influence such matters, it would, in principle, outlaw raising personal or business taxes to pay for the unspecified maintenance of the advantage that we have over the English universities. That point needs to be answered because, as usual, the SNP has lots of ideas but no outline of how it would fund them. The Executive has indicated through its policies in the past four and a half years that higher education is a priority, and I am sure that that will continue in this year's spending review.

Photo of George Reid George Reid None

It is extremely difficult to manage debates on subjects as important as those that we have this morning within the very short time that is available. We want to encourage dialogue, but at the same time we must have a balanced list, so it is likely that some speakers will drop off the list, even though speeches are now limited to four minutes.

Photo of Colin Fox Colin Fox SSP 10:00 am, 22nd January 2004

As I watched the debate on variable top-up fees unfold at Westminster in the past few weeks and saw the dwindling number of Labour rebels, it brought to mind the famous description of a shiver running through Labour ranks desperately looking for a spine to run down.

The Labour Party's U-turn on top-up fees is surely as stark any political volte-face in living memory. I remind the minister that Labour's 2001 election manifesto said:

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

It does not say much about the Labour Party's powers of prevention when it cannot even resist itself. The amendment that the minister moved today, in which he says that

"the Executive 'will not support the introduction of top-up tuition fees'", has the same hollow ring to it.

It is clear that nothing discredits politics in this country as a lie, a U-turn and a blatant betrayal. As one Labour MP put it, the impression is that,

"once you have sold the principle, you will sell everything else as well."

In truth, the significance of the debate on top-up fees is that the Labour Party is now applying its Tory free-market philosophy to education; that is precisely what we are debating. In one way, that is an entirely dog-bites-man story, because we have seen that happen repeatedly.

It would be one thing if the Labour Party stood up and said, like John Maynard Keynes, "When the facts change, so do our opinions", but the reality is that nothing has changed. Top-up fees are the extension of Labour's pursuit of individualism over common cause. In the Labour Party's theory, universities are now businesses, and the logic is simply that those businesses must be allowed to charge their customers a fee. Labour's ultimate legacy will be education as a commodity. On "Newsnight" on Monday night, Tony Blair said, in that bewildering way that he has of making the most immoral suggestions sound meek and mild:

"It's only right, surely, that those who gain from a university education should pay for it, isn't it?"

The reality is that they do pay for it already. If his argument is taken to its logical conclusion, what will he say next: that only the ill should pay for health care or only pensioners should make a contribution to their pension when they retire? That is the logic of his argument. To add insult to injury, it comes from a man who did not pay for his education in that way—neither did Charles Clarke, Jack Straw nor any of the proponents of top-up fees in the UK Parliament. It is no wonder that the country at large is sick of the debate.

Top-up fees represent a double jeopardy—a second tax. According to figures that I saw on Monday, when top-up fees are introduced postgraduates will be on a tax rate of 41 per cent, once taxes and the fees are added together. Students will pay a higher rate of tax than the richest men in Britain; they will pay a higher rate of tax than the Prime Minister, who is on £200,000 a year, when they are on £15,000. That is the reality.

I am in favour of extra funds for universities—they are long overdue—and I would like the bill to include measures to reintroduce maintenance grants for all students, provide rent-free accommodation for those students who need it and pay proper wages to staff in universities. Members might ask how those would be paid for, but I pre-empt their question: they should be paid for out of general taxation by, as the NUS has suggested, taxing those on incomes of over £100,000 a year at 50p in the pound, which would bring in £4.6 billion, and increasing company taxation in line with taxes throughout Europe, which would bring in £2 billion.

In spite of those suggestions, the Prime Minister says that there is no plan B; his creator said, "There is no alternative." The reality is that the problem is less about getting into a university than it is about staying in one. In regard to students, the universities have changed from being gatekeepers to being repomen and bailiffs. I hope that the bill will be defeated at its second reading, but I fear that the Thatcherisation of the Labour Party means that it has gone too far and that those who oppose it are too weak and ineffectual to stop it.

Photo of Alex Neil Alex Neil Scottish National Party 10:04 am, 22nd January 2004

I will mention two or three things that are growing into myths in Scotland before I go on to deal with the substantive issue.

First, the Tories have an absolute cheek to say that they will not vote on behalf of Scotland when, for 18 years, they used their English majority to overrule every one of Scotland's interests and the Scottish people's democratic wishes.

Photo of Alex Neil Alex Neil Scottish National Party

I do not have time, unfortunately.

The second myth is the Labour-Liberal Democrat myth that tuition fees have been abolished. Sam Galbraith—God bless him, the only honest Labour politician of recent years—gave the game away the other night when he stated clearly that it was a myth in the minds, not the brains, of the Liberal Democrats that tuition fees had been abolished. How can they be abolished when, after students graduate, they have to pay them back? By definition, fees have to exist to be paid back.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

Alex Neil said that students have to pay their tuition fees back but, of course, the Education (Graduate Endowment and Student Support) (Scotland) Act 2001 specifically says that the money is ring fenced for student support; it has nothing to do with fees. It is not possible to top up something that does not exist.

Photo of Alex Neil Alex Neil Scottish National Party

Mike Rumbles has just proved Sam Galbraith right.

The third myth, which was reiterated by Mike Watson, who has not done his research, is that there is a 20 per cent differential in our favour at the moment between the spend on universities south and north of the border. All the objective research shows that the differential is nearer 3 per cent than 20 per cent.

Photo of George Lyon George Lyon Liberal Democrat

Does Alex Neil not accept that that is because we have a 50 per cent participation rate in Scotland, unlike the universities south of the border, which are desperately trying to play catch-up to reach the level that we have in Scotland?

Photo of Alex Neil Alex Neil Scottish National Party

George Lyon's numeracy is as good as his literacy. We were talking about pounds per head, which totally defies the nonsense that he has just uttered.

I will try to do something that neither the Tory speakers, Liberal Democrat speakers nor Labour speakers have done: deal with the fundamental issues. First, we need to ensure that our universities are second to none not only in the UK and Europe but, as Fiona Hyslop said, worldwide. We cannot create a smart, successful Scotland without heavy investment in our universities—the structure and the students. I hope that we are all agreed on that point.

The second fundamental issue is that, to achieve that objective, we must recognise that Scotland's universities are grossly underfunded. Even if we were not having the debate about top-up fees south of the border, we would still face the need for additional funding for our universities.

As I have only a few seconds left, I will deal with the third point. When the Cubie report was published, the SNP proposed a comprehensive programme for the funding of our universities; we called it Cubie plus. The Executive did not implement the Cubie report—it implemented only part of it—but had it implemented the report in full plus the additional measures that the SNP suggested, we would not be in this situation today.

I tell the Executive members to waken up, forget the cheap jibes and do something for Scotland's universities.

Photo of Des McNulty Des McNulty Labour 10:09 am, 22nd January 2004

Alex Neil's trademark is cheap jibes, so we can start from there.

In recent years, Scotland has outperformed not only the rest of the UK but the rest of the world by successfully increasing the number and proportion of young people from poorer backgrounds who enter higher education. Glasgow Caledonian University, where I worked for more than 20 years before I entered the Parliament, has been outstandingly successful in that regard, but many other Scottish universities have excellent track records too. The SNP fails to recognise those facts, and the only explanation that I can come up with for its opposition to the graduate endowment scheme, which has been so successful in boosting participation, is its ingrained habit of running Scotland down.

It is clear to everyone in higher education that more money is needed if our universities are to maintain their competitiveness—not only with their English counterparts but internationally. However, the underlying issue is the fact that in recent years university staff salaries have not increased at the same rate as those of other workers. That is the main element of the money that is needed. We must address that issue if we are to attract top-quality people into academic life and to keep them there.

Photo of Phil Gallie Phil Gallie Conservative

Des McNulty referred to the increase in the number of students who are going to university and to Glasgow Caledonian University. Does he acknowledge that the increase happened during the Tory term in office, or is there a coincidence in that it happened only after Des McNulty left Glasgow Caledonian University?

Photo of Des McNulty Des McNulty Labour

Part of the increase occurred during the Tories' period in office, but the record since 1997, when Labour came to power, shows that there has been a further significant shift forward. That is to be welcomed by everyone. It is not a question of who delivered what—we all have an interest in improving and boosting participation.

Every time that the SNP sees a political advantage in promising additional spending, it makes a commitment knowing that it will not have to deliver. That is fundamentally dishonest. The SNP cannot have Jim Mather and Fergus Ewing running round the country saying that they will reduce taxes, at the same time as it says that it will spend more and more on transport, education and health. There is a debate to be had about the genuine implications for Scottish higher education of what is proposed south of the border. I am concerned that if a variable fees scheme is introduced, it is likely that a future Administration—perhaps a future Conservative Administration—will increase the level of fees sharply. That is what the conservatives in Australia did. The most meaningful commitment that we can get from Michael Howard is not to put up variable fees if they are introduced.

There is also a genuine concern that the Government's estimates of the average repayment period do not take account of the differential in average earnings between men and women. Men on average earnings may take between 10 and 12 years to repay their debt, whereas women on average earnings may take between 15 and 20 years to repay exactly the same amount of debt for exactly the same course. That is a genuine issue. It is the kind of question that we should be debating. The differential impact of top-up fees may have a significant effect on the choices that people make—not only on their choice of courses for which to enrol, but on their future life decisions.

The UK Government has changed its scheme by making fees and grant remission in the form of bursaries available to poorer people. However, for the SNP to argue that general taxation should cover the funding needs of the universities is fundamentally dishonest. The argument that we need to have in Scotland concerns how we should modify the current scheme to take account of the needs of our universities and the implications of the new proposals in the rest of the UK. I still believe that consideration should be given to a graduate tax scheme, which would link payments to the benefits derived from university rather than to costs associated with the course. I know that many other people in higher education share that belief. That is the serious debate that we need to have. It does not help that the stance that the SNP takes in this debate is that characteristic of the ostrich—head in the sand, bottom up.

Photo of Mark Ballard Mark Ballard Green 10:13 am, 22nd January 2004

We have heard that universities are the intellectual boiler houses of Scotland, with an international reputation. It is worth while to consider some international comparisons. Only two Organisation for Economic Co-operation and Development countries charge outright variable fees for higher education. One is Australia; the other is the USA. Even before top-up fees are added, the USA spends per capita from public funds a much higher proportion of its gross domestic product on higher education. It is an almost unprecedented move—the only exception is Australia—to shift from a state education system to a system based on variable fees. I believe that that is a very risky step to take.

I came to Scotland—to the University of Edinburgh—in 1990. I was an intellectual migrant to Scotland. I hope that, like other such intellectual migrants, I have made a contribution to Scotland since I arrived. I am very worried about what the introduction of variable fees in England will mean for future English-born students who want to come to Scotland. There is a huge lack of detail about what the measures will mean. Will English students who come to Scottish universities have to pay top-up fees, as they would if they studied at a university in England? If so, over a four-year course, that will be a major disincentive for English students to come to Scotland.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

The urgent need for action to be taken and reports to be implemented now is illustrated by the fact that the University of Edinburgh is already having to draft publications to attract students who will graduate in 2008. The university has no idea what the Scottish Executive plans. Is that not a problem here and now for the university?

Photo of Mark Ballard Mark Ballard Green

I agree completely that that is a major problem. A corresponding problem is that if the University of Edinburgh and similar universities do not manage to attract English students to Scotland, as happened previously, there will be a gap in their student rolls. How will that gap be filled? There is a complete lack of detail concerning the impact of the new measures.

It is a week before the Higher Education Bill is debated at Westminster. Before the bill's second reading, we need more details from the Scottish Executive concerning the impact of the measures on Scotland. It is no good saying that a report will be published in March, as it will appear after the vote. The information that we need is missing. If there is a head-in-the-sand approach, it is being taken by the Executive. The Executive has finally recanted its belief that top-up fees in England will not affect Scotland, but it is still uncertain about how they will do so. Until we are certain about the effects of top-up fees, it is not prudent to proceed with an experiment that has been done in so few countries and to move to a system of variable top-up fees.

My underlying fear is that Professor Sutherland, who was the principal of the University of Edinburgh when I studied there, is right—that there is a choice to be made between state funding of education and a free market, and that variable fees will open up a free market in education. Professor Sutherland talked about students being charged the market rate. That is what I am worried about, and that is what I think variable fees will end up meaning.

Photo of Lord James Selkirk Lord James Selkirk Conservative 10:17 am, 22nd January 2004

All of us have an interest in the pursuit of excellence in education. I have two sons at universities, one in Scotland and one in England.

Today I wish to speak about the very important representation that the British Medical Association Scotland has made. I do so in particular because the University of Edinburgh is a recognised centre of excellence for medicine and medical education. The BMA Scotland is particularly concerned because it fears that the introduction of top-up fees in England will make Scotland suffer a shortage of doctors. It believes that access to university should be based not on the capacity of the student to pay but on academic ability, with equity of access to medical schools for all young people.

One key point that worries the BMA Scotland is that medical students' courses last five to six years. The costs of medical courses are much more considerable than those of other degrees and from year 3 the academic year consists of up to 50 weeks for medical students, as opposed to 30 weeks for students on other courses. The concentrated nature of the work, coupled with the length of the term, makes it very difficult for medical students to supplement their income through part-time work. They also have other expenses—books, clothing, stethoscopes and essential travel to and from clinical placements.

Medical degrees in England could easily incur top-up fees, with the result that they will cater either for the very poor or for the very wealthy. That would have the knock-on effect that many more students from England, predominantly from the middle-income bracket, would apply to Scots universities but return to England to practise, leaving Scotland short of doctors. In other words, we would have a brain drain—something that Harold Wilson deplored before he became Prime Minister.

There is a danger that the introduction of top-up fees will have two effects. First, there may be a big influx of predominantly middle-income bracket students from outwith Scotland. Secondly, there may be a brain drain of staff and graduates after qualification.

We believe that access to universities should be based on merit and excellence and be open to all. The Scottish university system should provide sufficient graduates to meet Scotland's needs. The great worry is that Scottish universities may lose their competitive edge. There is a shortage of doctors in Scotland, although Scotland produces infinitely more doctors than the number of doctors who work for the national health service in Scotland. I understand that there are more than 200 vacant consultant posts in Scotland.

The BMA is opposed to top-up tuition fees. However, if top-up fees come in south of the border, the Executive should examine closely and monitor the inevitable impact on our universities and our medical facilities and be prepared to come up with effective solutions to the problem.

Will the Deputy First Minister please keep a very close eye on the situation and keep it under review? The First Minister has given this commitment:

"We will ensure that whatever proposals are finally agreed by the House of Commons, the Scottish university system will stay ahead of the game."—[Official Report, 4 December 2003; c 3966.]

I hope that the Deputy First Minister and his ministerial colleagues—incidentally, I am surprised that neither of the education ministers is present, because this is an extremely important issue for Scotland—will, individually and collectively, honour the First Minister's commitment. I hope that they will keep in mind the particular difficulties of all students in Scotland, including medical students, who must not be forgotten.

Photo of Jim Mather Jim Mather Scottish National Party 10:20 am, 22nd January 2004

I hope that we all agree that education in general and university education in particular should be a vehicle for unhindered social mobility. However, top-up fees are likely to have the opposite effect—especially here in Scotland.

In an ideal Scotland—with the right economic conditions—education, hard work and ambition should be the only attributes that people need to have successful and fulfilling lives. However, if the economic conditions are not optimal and the education system is diluted or damaged, the other two attributes will not be enough to deliver the full potential of individuals and their nation. That must be the likely consequence of top-up fees.

That view is endorsed by the many voices from all parts of the political spectrum who have weighed in with their concerns on the issue. Implicitly, all those voices are recognising that the current devolved settlement is producing complexity, unforeseen consequences and adverse outcomes for Scotland.

The reason for that is straightforward. Scotland without financial freedom—the defining attribute of a distinct economy—is almost powerless to alleviate the adverse effects of moves such as the application of top-up fees down south. We can alert people to the fact that the proposal will do nothing to improve growth, increase incomes or reverse our population decline. The SNP will continue to make the case that Scotland will always be boxed in and inhibited while the United Kingdom Parliament exclusively retains all the economic levers and takes decisions that undermine our competitiveness.

I do not need to stress the point—it is increasingly obvious—that Scotland is being denied the chance of the optimal economic performance that we need to provide adequate funds for our universities; to remove the fear of debt as a barrier to education; to retain skilled academics; to attract bright, motivated students; to attract research funding; and to bring all that to bear to maintain and hone Scotland's long-term competitive edge.

Certainly, the Executive cannot achieve those objectives when the only option that it has is to raid its finite pot of money in the upcoming spending review. The bleakness of the situation is perhaps best expressed by a Universities Scotland spokesman, who stated:

"If top-up fees go through, students in England are going to be taught in better classrooms, work in better laboratories and better libraries and be taught by the best staff. If we get nothing, we are going to end up with second-class students—a massive betrayal of our reputation of being the best in Britain."

Photo of George Lyon George Lyon Liberal Democrat

Given that Jim Mather is on the record many times as saying that he wants to cut taxes in an independent Scotland, how on earth would he maintain the current level of spending on higher education in Scotland?

Photo of Jim Mather Jim Mather Scottish National Party

It is not a zero-sum game. I am ambitious for Scotland and ambitious to build the revenue of Scotland.

If we want to continue to be the best in Britain, the status quo is becoming less and less sustainable, as it puts us at an increased competitive disadvantage and will make unhindered social mobility the subject only of nostalgic discussion. That is a deep affront to people of my generation and of my working-class roots who were beneficiaries in a previous era of unhindered social mobility; it is a deeper affront to a new generation of young people, who can see the benefits of such a strategy accruing to their contemporaries in Finland and Ireland.

Therefore, the situation cries out for a better approach and a strategy that can deliver both a vibrant, competitive, growing economy and thriving universities. The strategy that is needed to provide that better future is simple. It is one that answers the call from Lord Sutherland of Houndwood, who stated in yesterday's edition of The Scotsman:

"the real solution has to be found in tackling deprivation, which includes educational deprivation."

The solution in question is the one that we have been promoting for years and which has recently been winning more and more converts. It is the solution that will never go away. It is to give Scotland the financial independence that it needs to compete. In the context of this debate, financial independence would allow Scotland to emulate role-model countries and learn from wise heads such as Stewart Sutherland. That would enable us to produce the blend of economic conditions and university funding that works elsewhere and would give us the power that we need to compete, grow and root wealth and talent in Scotland.

Photo of Gordon Jackson Gordon Jackson Labour 10:25 am, 22nd January 2004

The question—[ Interruption. ] Thank you.

The question of whether what is happening in England will have a serious knock-on effect in Scotland is serious. The motion states that it will, the Tories say that it might and the Executive says that it will not. Who knows? Frankly, I do not know and I do not think that anyone can be sure of what will happen. Until we see these matters working out in practice, it is impossible to make such predictions.

However, an equally serious question is what we in Scotland should do if a funding gap is created. On that issue, I suspect that I part company with most members. The motion and the debate are based on the assumption that what is happening in England is wrong in principle. Fiona Hyslop says that it is, and so do Colin Fox and Murdo Fraser—that is an unholy alliance if ever I saw one. I happen to disagree.

If universities need additional funding, the proposals that are currently at Westminster are a rational and equitable means of providing that.

Photo of Gordon Jackson Gordon Jackson Labour

No. I do not have time.

Under the proposals, no student requires to make payment up front and no student therefore needs to be deterred from going to university because he or she is unable to find the money. That is very important.

Poorer students will be better off while at university, thanks to the new support package of maintenance grants and bursaries. Such repayment as is required will come into force only when the student is earning decent money and is therefore reaping the reward of their years at university. If members look in detail at what is proposed, they will see that in a variety of ways the repayment system will be much fairer and easier than it has been.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

Does Gordon Jackson really think that it is fair that someone who is training to be a consultant will end up having to pay back not £30,000 but £40,000? That might be okay for families that have two incomes coming in, but it is not okay for the majority of the public.

Photo of Gordon Jackson Gordon Jackson Labour

I think that it is okay, because it is better than any alternative that is being suggested.

The overall result is that those who come from a poorer family will be much better off in the short term while they are at university and no worse off in the long term. People who are from a better-off background will of course be required to make some repayment as and when their earning power makes that possible, but even they will not be required to make payment up front.

That is a fair and rational method of dealing with any current funding gap. Those who instinctively and, if I may so, sometimes irrationally disagree need to tell us what a better solution is. I notice that there has been no detailed analysis of the proposed system by any of its opponents. Of course, one answer is general taxation, but even if those of us who make more were taxed more, that would not be a better way forward in the real world, where priorities have to be fixed in education and beyond.

We should not be telling our Westminster colleagues that they are doing wrong. We should support them in what they are doing and I say bluntly that if there is a funding problem as a result, we should be prepared to follow them.

Photo of Trish Godman Trish Godman Labour

Before I ask Jamie Stone to speak, I should say that there are still three or four members who wish to speak. Therefore, speeches after Jamie Stone's will be down to two and a half minutes.

Photo of Jamie Stone Jamie Stone Liberal Democrat 10:28 am, 22nd January 2004

I am sure that Gordon Jackson enjoyed his supper with Sam Galbraith last night.

We should be in no doubt that the future prosperity of our economy, and indeed of our nation, depends on the performance of our higher and further education sectors. I am afraid that the Scottish National Party has, again, chosen to make cheap political points rather than consider the substantive issue of how we should ensure that our universities play a key role in the future.

I have to say to Fiona Hyslop that her contribution to the debate was misdirected and premature. It was misdirected because the real debate is surely about the substance and detail of what we can do to ensure that our universities maintain their competitive advantage, rather than about telling Westminster MPs which way they should vote. That is up to them and, as Jim Wallace said, we would not like it if MPs told us how we should vote.

Let us be quite honest and straightforward about the fact that the Scottish Executive's position on the matter is absolutely clear. It was written into the partnership agreement that there would be no top-up tuition fees in Scotland. Watch my lips: there will be no top-up tuition fees in Scotland. The Executive opposes in principle the introduction of such fees. Indeed, that principle led us to abolish tuition fees in 2000. As the father of three children who attend Scottish universities, I can tell members that my children have been among the first to reap the benefit of the abolition of tuition fees. I received an e-mail from a friend who attended the University of St Andrews with me and who now lives in Devon. It said, "Alas and alack; my children are approaching the stage that yours are at. What a pity it is that we do not live in Scotland." Facts are chiels that winna ding.

Photo of Murdo Fraser Murdo Fraser Conservative

Does the member agree with the former Minister for Children and Education's authoritative comment that the claim that tuition fees have been abolished is merely a con?

Photo of Jamie Stone Jamie Stone Liberal Democrat

Ah, yes—dear Mr Sam Galbraith. I am sure that he is enjoying a happy retirement and that we are all glad to see him in his retirement. Sam Galbraith once famously referred to one of Fiona Hyslop's colleagues as needing a good cormorant—[ Laughter. ]—or, rather, cousin of the cormorant.

Liberal Democrat MPs at Westminster will defend the principle that top-up fees should not be introduced and Liberal Democrat MSPs in the Scottish Parliament will do the same. Unlike the Tories, our position is consistent. Murdo Fraser—and anyone else in the Tory party—might like to consider two points. First, the Tories' policy of opposition to top-up fees is linked to a cut in the number of students who gain access to higher education. Will the Tories spell out which universities and departments will be cut and which young people will have their dreams shattered? Secondly, on 31 October 2002, Brian Monteith said that the need for income

"may require the best universities to charge top-up fees ... There is no reason why this should not be allowed".

What is the Tories' position? Do they support Brian Monteith's policy on top-up fees or Michael Howard's anti-fees stance?

The Enterprise and Culture Committee commended the Executive's approach, which recognised the need to consider the wider issues. I welcome that approach and I hope that when the review reports next month it will provide the evidence that we currently lack. I urge the minister to take heed of the committee's report on Scottish solutions; I know that he has done so.

The Executive amendment is sensible. It recommends a gradual and considered approach rather than a knee-jerk reaction. We cannot play fast and loose with the issue; we must get it right. I know that the Executive will do whatever need be done and I will take great pleasure in supporting the minister in that endeavour.

Photo of Dennis Canavan Dennis Canavan Independent 10:33 am, 22nd January 2004

When tuition fees were introduced by the Westminster Government, we were told that top-up fees would not be allowed. That commitment was reiterated in the most recent Labour Party manifesto. However, next week, Tony Blair, aided and abetted by some Scottish Labour MPs, will attempt to ditch that commitment.

Is it any wonder that young people are disillusioned with politicians? Is it any wonder that more and more young people do not even bother to turn up to vote? They see politicians parading themselves on the telly, proclaiming in patronising tones that they want to "engage" with young people. When I was a boy, "engaged" meant that the phone was blocked or the lavvy door was locked. Now the blocked minds of politicians are trying to lock the minds of young people and throw away the key.

Education is the key to the liberation of people, in particular young people and especially those from disadvantaged backgrounds. Top-up fees would deter many such young people from going to university, because they would face carrying a millstone of debt around their necks for many years after they graduated.

That might be difficult for someone like Tony Blair to understand. He comes from a privileged background and neither he nor his family had to make the sacrifices that many families have to make so that someone can go to university. However, there are MPs in the House of Commons, some of whom represent Scottish constituencies, who should know better. Those politicians paid no fees and received generous student grants to enable them to go to university, but now they are kicking away the ladder of opportunity for many young people.

I urge the Executive to stand firm in its commitment not to introduce top-up tuition fees and I ask the First Minister and the Deputy First Minister to join me in urging all MPs who represent Scottish constituencies to vote against the Higher Education Bill next week, because the bill is a reactionary piece of proposed legislation that will do immense damage to higher education in Scotland and south of the border.

Photo of Margo MacDonald Margo MacDonald Independent 10:36 am, 22nd January 2004

Dennis Canavan has demonstrated why it is absolutely relevant that this Parliament should make heard its point of view on top-up tuition fees. We have a lobbying function because we are a devolved Parliament and we occasionally have to go cap in hand to our Westminster colleagues.

If I was a Westminster MP, I would vote alongside Tam Dalyell, against the Government's proposal. I would do so first, for the same reason as Tam Dalyell: he will break his principled self-denying ordinance, which prevents him from voting on measures that apply only to parts of the UK other than Scotland, because he believes that it is more important to prevent the introduction of a policy that will militate against the best interests of Scottish universities. He is as correct about that as he was when he pointed out the flaws and idiosyncrasies in the Scotland Act 1998, which placed us in the position that we are now in—although many members of the unionist parties in the Scottish Parliament sincerely believe that it is possible for us to produce and carry through a distinctively Scottish agenda, as the Deputy First Minister suggested.

The other reason why I oppose the Government's proposal is, of course, that the ethos of the Scottish Parliament has been to build a sense of community in Scotland. Although I can make plenty of detailed criticisms of the Executive's programme, I believe that the Executive's intention is to try to bridge the gaps in opportunity that exist between different groups of people and different regions in Scotland. I hope that I will not be proved wrong, but I do not expect to hear a defence of the policy on top-up tuition fees that is constructed along the lines of the patronising, selfish, stupid and divisive defence that has been offered by Tony Blair and some of his supporters. Dustbin men, hospital cleaners and porters have the same interest as doctors, lawyers or MSPs in ensuring that all parts of our education system are as good as possible and that entry to higher education depends on the ability to learn, rather than on the ability to pay.

The people who benefit financially from having obtained a university degree should pay their dues through income tax, when they are earning the big bucks. No one will be deterred from going to university by the knowledge that they will pay the top rate of tax when they earn more than £100,000 per year. However, people will, by the knowledge that they could choose a cheaper degree and pay £20,000, be deterred from attending a university at which they would pile up a debt of £30,000. I was that student—that answers Gordon Jackson's point. It is not just the fact that someone gets a degree that matters; the sort of degree that they get and what they can do with it matters, too.

The credo that is being introduced in England will leach over the border. Every member of this Parliament has a duty to oppose such a distortion in the balances of responsibility among all sections of society.

Photo of Margo MacDonald Margo MacDonald Independent

The Executive might feel that it might get an under-the-counter payment through the Barnett formula if it does not present too much opposition, but it is highly unlikely that that will happen. How can the Executive expect to be treated with respect if it is prepared to risk our educational heritage?

Photo of Mike Rumbles Mike Rumbles Liberal Democrat 10:39 am, 22nd January 2004

One of the most important legislative changes that the Scottish Parliament made in its first session was to abolish student tuition fees. The fact that we are now having this debate on the effect of the proposals to allow English universities to charge students even higher levels of tuition fees demonstrates how right we were to abolish fees altogether for full-time students in Scotland.

There has been a huge amount of misinformation in the media about the fact that our students do not pay tuition fees, but pay into the student endowment fund after they graduate. Sam Galbraith has made much of that recently. That he fails to understand what was done just confirms how weak was his grasp of what was going on.

Photo of Mike Rumbles Mike Rumbles Liberal Democrat

I would if I had the time, but I do not.

I well remember when the Education (Graduate Endowment and Student Support) (Scotland) Bill was first published. It failed to ring fence the endowment payment strictly for student grants. I brought that to the attention of ministers and, almost uniquely, the bill was immediately withdrawn and republished as it should have been in the first place. Our legislation makes it clear that the endowment fund can be used only to help students. It cannot go to the universities for them to spend on what they wish. One cannot top up something that does not exist, but one can ask the Scottish Executive to increase its payments to our universities, and that is what our university sector is doing.

I have never understood Gordon Jackson's argument that our students should pay for the tuition because they benefit financially from their university education. Anyone who benefits financially will automatically contribute more through income tax. That is what income tax is designed for. What could be fairer than income tax?

I have no doubt that top-up fees are unjust for English students down south, but that is an issue for our MPs, and we should not be telling them how to vote. They are all over 21 and they can make up their own minds. The coalition Administration will not countenance the return of tuition fees to Scotland for our full-time students, whether they are top-up fees or not.

Photo of Richard Baker Richard Baker Labour 10:41 am, 22nd January 2004

Once again, a debate on student funding has provoked a wide range of strongly held opinions. Nobody disagrees that the prospect of top-up fees in England represents a major challenge to our higher education sector, but we should all be clear that the challenge is to keep Scottish education where it is now—ahead of the game. We have heard various figures quoted, but what is undeniable is that higher education in Scotland has for many years had higher levels of funding than higher education in the rest of the UK has had, as Mike Watson illustrated.

The rest of the UK is playing catch-up on student funding. When other members were taking their seats in the first session of Parliament, I was campaigning for better student funding in my role as president of NUS Scotland. In that job, I met countless people who had benefited from Labour's policy of widening access. The introduction of bursaries for poorer students remains one of the most significant achievements of the Scottish Executive, and we heard from the minister about the significant increases in funding that the Executive has pledged to higher education.

Challenges there may be, but the doom-mongers among the SNP and Tory members are well wide of the mark. Ever since I have been involved in the debate on university funding, it has benefited from processes of careful consideration. From Cubie to Dearing to the Executive's own current review of lifelong learning, the debate represents the strategic thinking that Fiona Hyslop demanded. By contrast, as Jamie Stone said, knee-jerk reactions and political point scoring that are backed up by no practical proposals for long-term funding of higher education benefit no one, least of all students.

In this Parliament, far from there being a gloomy outlook, there will be no fees; it is right to say that they are not fees but contributions to bursaries. We will also review the level of bursaries for poorer students.

Photo of Richard Baker Richard Baker Labour

I am sorry, but I do not have time.

In the long term, if top-up fees in England proceed, there are a number of measures that we can take that will help our universities to compete without disadvantaging students. Legitimate concerns, which were constructively outlined by Mike Watson and Des McNulty, include the possible impacts on academic staff and on Scottish students studying in England.

However, a number of tools to deal with those issues have been suggested in the Enterprise and Culture Committee's report. The report's suggestions should be implemented. There should be better support for staff, particularly junior support staff, and institutions should be encouraged to diversify their funding streams through working more with business, for example. We must also prioritise any possible Barnett consequentials for higher education.

Those useful proposals are in stark contrast to the paucity in the Opposition's response to the situation. An example of that is the opportunism of the Tories. Murdo Fraser accuses Labour of opportunism, but what could be more opportunistic than to oppose a policy without proposing an alternative. Phil Gallie and Murdo Fraser talked of the Tories expanding access, but at least until the demise of Iain Duncan Smith the Tories' policy was to restrict access to higher education.

The SNP, which has no ideas or plans for increasing investment in higher education, instead indulges itself once more in misguidedly using today's debate to attack the constitution. I agree with Murdo Fraser that to do so is irrelevant because an independent Scotland would face exactly the same challenges. Mike Watson's questions about how we would pay for what Opposition members propose have gone unanswered. Jim Mather supports the comments of Lord Sutherland, who advocates an entirely free market in higher education. It is surprising that Jim Mather should support such a view.

Perhaps all Parliaments in the UK should in future give more consideration to how their decisions will affect one another. When there were changes to student funding here, the SNP did not suggest that we consult MPs first. Now SNP members tell us to tell Westminster what to do. If the reverse were true for the Scotland Act 1998 or any other act, they would be furious with MPs.

Today's debate has been another example of the Opposition's being high on criticism but short of ideas on finding a way forward. The Executive is well placed to meet the challenges and to give Scotland's universities and colleges the support that they need to continue to be accessible to people in every part of our society and to be among the best, not just in the UK, but in the world.

Photo of Brian Monteith Brian Monteith Conservative 10:45 am, 22nd January 2004

It is such a pleasure to join in this debate, especially as my name has been quoted so often. I must draw to Parliament's attention the fact that as soon as Jim Wallace stood up to reply to the Opposition, he turned towards the Conservative benches. Even in what is called Opposition time, Jim Wallace notes that the real opposition to his Executive comes from our benches, not from the SNP.

The first point that I would like to pick up from the debate concerns the principle of SNP members at Westminster voting in the debate on top-up fees. Fiona Hyslop has told us that that is right and proper until such time as we have powers in this Parliament to address matters of higher education. Do not we actually have those powers? We certainly have the legislative powers. Whether one likes the graduate endowment or not, and whether one wants to abolish it or not, that legislation was passed here; it is a Scottish creation. We have those legislative powers, but is it perhaps that we do not have financial independence? Well, I am sorry to say to the SNP that we have a thing called the tartan tax. If we seriously believe that more funding is required, we can raise the basic rate of our income tax, find more money and give it to the universities. Do I hear about that from the SNP benches? No, I do not, because it is a policy that the SNP has dropped.

Photo of Brian Monteith Brian Monteith Conservative

I do not have enough time to take interventions—Mr Stone knows that.

The SNP does not have enough principles. It is not so much a case of "The Silence of the Lambs", because Fiona Hyslop is no Clarice Starling—maybe she is Hannah Lecter, Hannibal's long lost sister. The real silence is coming not from the Executive, as she suggests, but from Alistair Darling, the Secretary of State for Scotland, who has the University of Edinburgh in his constituency. That is where the silence is. Let us hear him argue in the pages of the Edinburgh Evening News and The Scotsman for top-up fees, which he will no doubt vote for. There is also the silence of Anne McGuire, MP for Stirling and Parliamentary Under-secretary of State for Scotland. With so many University of Stirling students in her constituency, she will still vote for top-up fees in England and Wales. That is where the silence is and that is where, I believe, the point of attack should be.

Alex Neil tried to tell us that decades of Tory policies that were imposed on us against the wishes of Scots mean that our MPs in Westminster must vote against top-up fees. We have had almost 300 years of what I love to call the great union of Great Britain. In that time, we have had Liberal Governments with majorities from Scotland voting against England's wishes, and Labour Governments voting for policies against England's wishes because their majorities came from Scotland. That is part of the deal and it is a deal that I am quite happy with. What we have now is quite different: we have Scots MPs making decisions on English policies that no UK MPs can decide on for Scotland. For that reason, Peter Duncan is quite right and quite principled to abstain in the vote.

The bare-faced duplicity that exists comes from members who say that they will not introduce such policies, but do. Tony Blair said that there would be no tuition fees, but they were introduced. Tony Blair said that there would be no top-up fees in his time in the next Parliament, but he introduced them just after that. The Executive parties tell us that there will be no top-up fees. I say to members: if those parties are returned to Government in 2008, watch this space.

Photo of Jim Wallace Jim Wallace Liberal Democrat 10:50 am, 22nd January 2004

I will again do the courtesy of addressing Brian Monteith first. He asked why his name had been mentioned a few times in the debate. I rather suspect that it is because of the official Conservative press release that he issued on 31 October 2002, in which he said:

"To fund this may require the best universities to charge top-up fees. There is no reason why this should not be allowed".

Given that the whole thrust of Murdo Fraser's speech was that top-up fees are fundamentally wrong, we can now see where the gaps are appearing.

Murdo Fraser and Richard Baker pointed out the opportunism of the SNP in calling on Scottish MPs to vote in a way which, if the boot was on the other foot, they would be howling about. The SNP position is hypocritical. Indeed, as Murdo Fraser and Richard Baker also pointed out, if Scotland was an independent country, there would be no Scottish MPs at Westminster to vote on fees. Murdo Fraser rightly highlighted the consequences that the SNP fear could still apply in respect of the flow of students unless, that is, the SNP is suggesting that an independent Scotland would somehow or other put up the barriers.

Jim Mather said that everything would be different if we had fiscal autonomy, but he ran away from George Lyon's question about whether that meant that the SNP was going to raise taxes to fund all that he proposed. I am also interested in Jim Mather because he quite properly pointed out the importance of higher education. However, in his wish list for the Highlands, which he published in The Press and Journal on 3 January this year, there was a deafening silence about the importance of the UHI Millennium Institute, which is an important higher education institution for the Highlands and Islands.

I could not quite follow Murdo Fraser's argument when he said that Michael Howard was leading the fight against tuition fees with such strength and conviction that Peter Duncan would abstain. He said that that was a matter of principle—no doubt it was the same kind of principle that I am told led Peter Duncan to vote on the Mersey Tunnels Bill.

That apart, some important issues have been raised in the debate. I welcome the robust way in which Jamie Stone reminded us of the partnership agreement commitment, which is set out in the Executive amendment, which states:

"the Executive "will not support the introduction of top-up tuition fees" in Scotland".

I repeat and reaffirm that commitment.

Photo of Jim Wallace Jim Wallace Liberal Democrat

No, I have not got very much time and I gave way in my opening remarks.

We need also to nail the myth that tuition fees have not been abolished in Scotland. Of course, they have been abolished in Scotland. [Interruption.] I declare my interest—I have a daughter who is in her first year at the University of Glasgow and I am not paying any tuition fees for her course. The graduate endowment is ring fenced to fund student support; the kind of student support that, as Richard Baker pointed out, we also want to see being improved.

If the SNP wants to abolish the graduate endowment, its members must say where, in times to come, they will find the additional resources to increase and improve student support. I assure Dennis Canavan that we stand by the commitment in the partnership agreement.

The review of higher education was mentioned on a number of occasions. Fiona Hyslop wondered whether the review had done anything. I say to her that the phase 2 report that was published in March last year is pretty comprehensive. It seemed to me that Fiona Hyslop did not know that the phase 3 review is going ahead. It will look into all aspects of the possible implications for Scotland of the proposals south of the border.

Members quite properly mentioned that there could be implications for cross-border flows of students and for recruitment and retention of staff. It was because we identified those possible implications that a working group was set up as part of the review to try to get some sort of handle on what might happen. We have never denied that there could be implications. What we said was that, until we saw the shape of the UK Government's legislation, it would be difficult to quantify the nature of the implications. That is a perfectly sensible way to proceed. Fiona Hyslop suggested that the review is "private and secret", but it is actually Richard Baker's successor at NUS Scotland who is chairing the working group that is considering the cross-border flow of students.

Lord James Douglas-Hamilton raised the question of medical students. We will keep the issue under review. At the moment, we are conducting an inquiry into medical education. That inquiry, which is led by Sir Kenneth Calman, is due to report soon and we hope that the report will help us to identify the steps that we will need to take to ensure that we have an adequate supply of the doctors that Scotland needs in the long term. I reassure Lord James Douglas-Hamilton that the matter is one that we take very seriously indeed.

Photo of Jim Wallace Jim Wallace Liberal Democrat

No—I am in my last minute.

I believe that there is consensus that universities are an important investment for Scotland and that they are important for our economic future. We believe that we have an advantage. As we say in our amendment, the

"competitive advantage must be maintained".

I assure Parliament that we put that in our amendment because we will stand by it and we mean it. I believe that higher education is one of Scotland's rich and valuable assets and it is an asset that we do not want to diminish. It is an asset that we want to see flourishing as we go forward into the coming years of the 21st century.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party 10:56 am, 22nd January 2004

Albert Sorel said that politics divides those who seek to change the world to suit their ideas from those who seek to modify their actions to suit the world. The debate encapsulates that. Those of us on the SNP benches classify ourselves in the former category, but it is clear that the Executive members fall into the latter category. Rather than drive forward with an agenda that would give Scotland a prosperous future in a new millennium, they sit back and allow events at home and north and south of the border to affect us; indeed, to buffet and, ultimately, to damage us. If "do less, better" is the Executive's maxim, the public's exhortation is, "For God's sake, do something." To do nothing is most certainly not an option.

There are several aspects to the debate. The first is the question of voting in the Parliament in England, which was raised in particular by members on the Tory benches. Let us be quite clear that it is the duty of every Scottish elected representative, no matter how high or how humble, to defend Scottish interests. It is their duty to do so in every chamber, at every opportunity and in every forum or jurisdiction. To vote against top-up fees is not only to defend Scotland's students and universities, but to defend all Scotland's economic interests. For Scottish MPs to fail to vote would be an abdication of responsibility and to vote for top-up fees would damage and undermine their constituents and their country.

Another aspect is the question of whether tuition fees have been abolished. I do not want to mull too much over the private grief between the Liberal Democrats and their Labour colleagues. The fact of the matter is quite clear: Sam Galbraith's statements are irreconcilable with those that were made by members on the Liberal Democrat benches and—in particular—by the minister. The fact of the matter is that if Sam Galbraith is telling the truth, the minister most certainty is not. All of us know about the shameless deal that was put together by the Liberal Democrat and Labour parties and it is quite clear that, in this respect, the deal is a sham. In fact, in this case, the old adage, "they speak with forked tongue" has been shown to be true.

What can be done? Two quite different positions were put forward by Mr Jackson and Mr Baker. Again, their positions showed how irreconcilable are the differences not between the views of members of the coalition parties, but between the views of members of the same party. The fact is that it is quite clear that the changes down in England will affect us. I say to the Executive members that either they should accept change and become masters of their own destiny by taking fiscal responsibility or continue to throw money here and there out of the limited pocket money that the Executive is allowed. The sticking-plaster approach is fundamentally affecting the Scottish economy.

An article in Tuesday's Financial Times showed clearly that the successful cities in the European Union and beyond are those that invest in their education and which do so through taking fiscal responsibility. I suggest to the members who are giggling on the Liberal Democrat benches that if they have not read the article they should do so.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

No. I do not have time.

The successful nations and successful regions and cities that were mentioned in the article are not Nottingham, Newcastle, Manchester or other English regional or metropolitan areas; the most successful city was Stockholm, followed by Helsinki, followed by Copenhagen—all of which are cities in small nations that follow their best interests. Rather than do that, members in the Liberal Democrat and Labour benches would have us follow the method that is taking those regional areas in England into economic penury. We should follow the examples of the Scandic nations.

I refer to a meeting that was hosted by the Association of University Teachers in which the Finnish Minister of Education, Mr Heinonen, addressed the subject of higher education in a small European nation. He said about Finland:

"At the moment, higher education and research are the very essence of the Finnish national strategy devised to redefine our position in the new international setting and globalized economic environment."

That is very much a smart and successful Finland. He set out the goal—which is ambitious in comparison to ours—of providing higher education for 60 to 65 per cent of the relevant age group. We pat ourselves on the back because we achieve a figure of 50 per cent. They wish to drive considerably further forward.

The conclusion that Mr Heinonen came to was that for a small nation to maintain a high-quality higher education system, government must invest heavily in it because external funding from business and industry is not nearly as easy to obtain as it is in bigger national economies. That is still the only survival strategy for a small nation to compete successfully in the production and utilisation of knowledge. That is why Finland has refused tuition fees, that is why it continues to support its students and, indeed, that is why it wishes to increase its student population percentage.

We are at a time in Scotland when we are looking back at our history. On Friday night we can watch "Scotland's Empire" and we can read Tom Devine's book and Arthur Herman's "The Scottish Enlightenment: The Scots' Invention of the Modern World". We praise what we have done, and if we asked those academics why we what we did, they would say that the driving force was that our people were educated. Our people became, to an extent, the cadre of the British empire. When they hit the foreign shores of the new world and elsewhere they were able to drive forward because we invested centuries ago in education, when other countries had not even thought about such a thing, we had the Education Act 1696, which conferred literacy and numeracy on our people. We did that and we reaped the benefit. Other nations that did not have the same literacy levels paid the price.

Centuries on from that, we could learn from our forefathers: we could invest, as they did, not just in literacy and numeracy but in higher education, because in the new millennium, higher education will be ever more vital. Indeed, it could be argued that higher education is comparable to literacy and numeracy in the 17th century.

We will not be able to replicate what our forefathers did unless we invest in our education system at the basic and higher levels. If we do that, instead of follow the downward track of the English metropolitan cities, we will drive forward while emphasising our correspondence with the success that is being delivered in the Scandinavian and other small nations. To do that, we require fiscal autonomy. We should take charge so that, rather than react to events, we will be able to dictate events and follow the successful Finnish model.