Funding Higher Education — [Stewart Hosie in the Chair]

– in Westminster Hall at 9:30 am on 28th February 2018.

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Photo of Gary Streeter Gary Streeter Conservative, South West Devon 9:30 am, 28th February 2018

I beg to move,

That this House
has considered funding for higher education.

It is a pleasure to serve under your chairmanship, Mr Hosie, in a debate that I suspect has been slightly snow-affected. No doubt my hon. Friend Amanda Milling, who is standing in for the Minister, will say more about that in a moment. Also, I would like to thank Mr Barnaby Austin, who is a fine young man who is with me for three months. He has helped me to prepare my remarks today, so my thanks to him.

Like many Members, among my constituency duties I particularly enjoy interacting with sixth-formers in schools in my constituency, and I always feel encouraged coming away from those encounters. Not that everyone necessarily supports everything that the Government say or do, but I always feel encouraged that the coming generation is as bright, motivated and impressive as any has ever been. Looking forward, I feel that the country is in very safe hands.

Inevitably, as I am sure we have all experienced, the issue of student finance, student loans and tuition fees come up in those sessions. I have always been very happy over the last 10 years or so to support the system that we have, explaining that it is a generous system that does the job, that no one has to pay fees in advance and that it does not preclude anyone from going on to higher education. I am very happy to support the funding model that we have and always make the point that education is the best investment that any of young person will ever make. A show of hands normally demonstrates pretty clearly that no one is ever deterred—or very few are—from accessing higher education as a result.

However, in the last few months I have been less sure about the fairness of the current arrangements and have been looking into some of the statistics on student finance. Therefore, I applied for this debate, to put on record a few concerns that I have and some thoughts about the future. I was both delighted and surprised that, after I had applied for this debate but before it was granted, the Prime Minister herself—perhaps picking up on my thoughts, leading wherever I go—has now announced her own review of student finance, which I greatly welcome. In particular, I support the important focus in the official terms of reference of the review, which seeks to ensure

“a funding system that provides value for money and works for students and taxpayers”.

I hope that this 90-minute debate provides us an opportunity to explore together in a hopefully thoughtful way—it is a subject that deserves a thoughtful approach—how the system might be improved. I look forward to hearing the comments from colleagues from all parts of the House—I am sure that many have greater expertise in this area than I do—in trying to find a way forward to a system that is both fair and sustainable.

The current system of student tuition fees and loans as a means of funding higher education has achieved many positives over the years, not least an increase in the number of students from lower-income backgrounds entering higher education, which has to be a good thing.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

The hon. Gentleman is making a really thoughtful contribution, and I share his hope that we can have an interesting and useful debate. On the question of providing more opportunities for people from disadvantaged homes, the top-line numbers are clear. Does he recognise that there is a problem in the way that the system is limiting choice—there is substantial evidence that those from lower-income homes are seeking to minimise their financial liability by going local—and that, to give students real choice, issues relating to fees have to be wrapped up with those relating to maintenance?

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

I do agree with that, which is one of the reasons I am speaking today. I will talk about that in a moment, because the full-on higher education experience of going away to university and growing up during those three or four years, or however long it is, is an important part of the process. As I will set out in a moment, when a young person chooses to stay local and live with their parents or parent still, to me that is not the full-on experience, which is regrettable. I agree with the hon. Gentleman: I am beginning to see the top-line figures becoming quite a barrier to a number of people. I certainly would not want to be 24 with a debt of £40,000 hanging around my neck as I entered the workplace.

That is why we are here this morning: we have to try to find a new way forward together, and I very much welcome the Government’s review. I will briefly summarise the operation of the current system—although I know that you are an expert on it, Mr Hosie—then I will point out some of the areas in which it falls short and finally present my thoughts about the way forward.

As we know, currently universities in England can charge up to £9,250 a year for undergraduate tuition, with substantial variations in some parts of the United Kingdom, such as Northern Ireland, Wales and Scotland—that is what devolution is all about. Students can apply to Student Finance Ltd for a non-means tested loan of up to £9,250 a year to cover the tuition fees, while also taking out loans to cover the cost of living while at university.

To reflect on that point for a moment, we sometimes look back to the old days of maintenance grants. I came to King’s College in London in the 1970s, between 1974 and 1977—I cannot believe it—and had a minimum grant, based on my parents’ financial circumstances. I do not want to do a Neil Kinnock, but I was the first Streeter in a thousand generations to go to university, and my parents did not really understand that they could top the grant up, so I spent my three years in London with not very much money. It was still a wonderful experience, but it was not all gold in the old days, depending on people’s circumstances. I hope my parents never get to read the Hansard report of this debate, because they are wonderful people.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Education)

You might get a cheque in the post.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

It would be a little bit late, but I thank the hon. Gentleman for the thought.

Repayment of loans is a shared responsibility between the Student Loans Company and Her Majesty’s Revenue and Customs. The Student Loans Company receives all its funding from the UK Government and the devolved Administrations. Therefore, the system is based on the student owing however much money he or she needed to borrow to get through university and gradually paying it back during their working lifetime. Perhaps not surprisingly, 93% of all students in England take up student loans.

The total amount of debt that an average student who completes a three-year undergraduate course will owe has now risen to around £50,000, according to the Institute for Fiscal Studies. That sum will include just under £6,000 in interest accrued during the period of study, at a rate of up to 6.1%. A student who has taken out a loan will begin repaying 9% of their income when they are earning higher than the repayment threshold, and any unpaid debts are written off after 30 years. Broadly, that is the system.

The Government announced in October 2017 that the repayment threshold on student debts would be raised from £21,000 to £25,000, commencing from April 2018. At the same time, the fee cap was frozen at £9,250.

Photo of Daniel Zeichner Daniel Zeichner Labour, Cambridge

I commend the hon. Gentleman for making a very good speech. He has just outlined the way that the system is currently working, but does he agree that what is happening now is not what people anticipated when the coalition Government introduced it? They anticipated that there would be differential fees—different amounts paid at different universities—but because the system has not worked, a whole generation has been left with enormous debts. The system is absolutely broken, and the levels of interest are unacceptable. We really have to change it quite dramatically. Does he agree?

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

I do agree. I am looking for change and I think the Government are looking for change, which I guess is why the review is taking place. When the level of fees was increased, we were led to believe that different universities would charge different fees. Some of us who have been around for quite a long time recognised that that might not happen, and indeed all universities went for the maximum more or less straight away. However, the reason why we are here today and why the Government are reviewing this matter is that the system is not working as planned, and we now need to see some real change. That is very much what I am calling for.

Under our current system, students in the United Kingdom are landed with the greatest amounts of student debt in the developed world—greater even than the notoriously large student debts in the United States of America, which reach an average of $36,000 on graduation. The IFS has recently reported that 77% of UK graduates will never pay off their full debt, even if they are still repaying in their fifties, and that is projected to rise to 83% once the new figures have been introduced. This is an important point: we have a system that is almost set up to fail. Built into the system is an understanding that most of the people who participate will not repay. I do not want that system in place for the long term. When graduates immediately move abroad, that results in more unpaid debts. When a graduate’s employer is not UK-based, they are not subject to the automatic repayment system as they would be in the United Kingdom. In 2014, it was estimated that, by 2042, £90 billion of student support funded by the Treasury will remain unpaid.

It is certainly right for students to contribute to the cost of obtaining a degree. The stats still demonstrate that, over a lifetime, a graduate is likely to earn significantly more than a non-graduate. According to Universities UK:

“Official figures are clear that, on average, university graduates continue to earn substantially more than non-graduates and are more likely to be in employment.”

In debates with sixth-formers and others, I guess many of us have argued, “Why should a proverbial taxi driver who does not have a degree pay extra tax to help others improve their income?” There are pushbacks and answers to that, but it is still a compelling and important point. We must remember that the figures involved are significant, with each new crop of student loans being £13 billion a year. That is a substantial sum that we are having to find to support students going to university.

The principle of students contributing to their own higher education is surely right, but it must be sustainable. I am beginning to see that it is not sustainable for someone to have a debt of up to £50,000 around their neck when they enter the workplace.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education)

Does the hon. Gentleman share my concern that some students, particularly those from a disadvantaged background, will experience much higher debt than that because their families are unable to support them financially? Students from disadvantaged backgrounds entering the workplace will have a much higher burden of debt.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

I agree that people who are not able to draw down on the bank of mum and dad have a much tougher time. The figures I am quoting presuppose that someone has taken out loans for tuition fees and support. I think they are the maximum figures. I think the point that the hon. Lady and I would agree on is that there are students who do not rack up that kind of debt because they get support. Once again, there is an issue of fairness for students from disadvantaged backgrounds.

That debt is certainly a hindrance to getting on the housing ladder, to which 85% of young people aspire. It is something that the Government are desperate to encourage. If we are to meet the aspirations of generation rent, we might have to remove some of the burden from their backs. The prospect of having such a large debt hanging over their heads inevitably leads to some mental health worries among higher education students and graduates. In 2015, a study published in the Journal of Public Health, entitled “The impact of tuition fees amount on mental health over time in British students”, found that in the UK,

“poor mental health in students has been linked to financial problems, considering dropping out for financial reasons, financial concern, being in debt and concern about debt.”

It is worth noting that countries such as Sweden, Denmark, Finland and, more recently, Germany have moved away from the tuition fee model.

There are big questions about whether universities provide proper value for money for their degrees and offer favourable returns for graduates. The National Audit Office reported that two thirds of students consider that universities do not provide decent value for money. More students—especially those from poorer backgrounds, to come back to the point we were debating a few moments ago—are choosing to stay at home and attend their local university due to fears over unsustainable debt. That is a regrettable trend, because the whole university experience is partly about moving away from home for the first time, growing up and learning independence.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

I clearly agree with the hon. Gentleman on his point about the wider university experience, but does he recognise that staying at home narrows academic choice, depending on where someone lives? If people are choosing local, that might give those in London an immense range of opportunities, but in many parts of the country it narrows the choice significantly.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

That is a good point. I represent the city of Plymouth. We have an excellent university, but it is particularly strong in certain fields. If someone is minded to stay local because of cost and debt and they want to become—I had better choose my subject carefully, because I do not want to diss any of its faculties, which are all excellent—a top-notch lawyer, they might not want to choose Plymouth. They might prefer Exeter. I think I have got myself into trouble here. I thank the hon. Gentleman for leading me down that path. Plymouth is an excellent university for all subjects, but he makes a compelling point.

Moving on, what might we do? We are right to ensure that students contribute. We want universities to be properly funded, but how can we make the system fairer and more sustainable? I have welcomed the excellently timed Government review, and I very much look forward to the outcome.

Universities could do more to reduce their costs. They are slightly strange organisations. In one sense, they are neither private sector nor public sector. They are a hybrid and in many ways they are perhaps unaccountable. The salaries of vice-chancellors is just one issue—acting on them would not have a huge impact, but would be emblematic. At the University of Bath the vice-chancellor’s salary is £471,000, at the London Business School it is £448,000, and at the University of Southampton it is £424,000. How can the leader of a university earn three times more than the Prime Minister of this country? I do not understand that, and it has to be tackled. It is a bit like people wagging their fingers at us and saying, “MPs all earn so much money.” Having proper oversight of vice-chancellor salaries would not save much money, but it would send a signal, bearing in mind that students contribute 50% of the cost of those salaries. The salaries are utterly outrageous and something needs to be done. Perhaps the Minister will touch on that when he winds up.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

Given the numbers here today, there is an opportunity to have a good interactive discussion. I will try not to lead the hon. Gentleman into difficult territory with this intervention. He is absolutely right about vice-chancellors’ pay. The sector has got it wrong, and in some cases spectacularly. Does he accept that the problem is that people have said to universities, “Behave like the big businesses you are”, and are then complaining when they do? Does he think we should have the same approach to unacceptably high pay in all parts of the private and public sectors?

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

If an individual sets up their own business and still owns it then it is up to them what they pay themselves, but other than that I tend to agree about large salaries at the top justified by being in a marketplace and having to compete with other organisations. The charitable sector is another one where we have seen massive CEO salaries. I imagine that if many people knocking on doors raising money for charities really knew what was going on, they would not be so happy. There is a job to be done in all these sectors, perhaps sparked by the Government, to have more reasonable levels of pay at the very top. The gap to those at the top must be very dispiriting for those humbly working day in, day out for not very much money. I recognise that we need to do more about that. The Government have talked about it, and I support them.

I have three specific proposals before I sit down. There are two quick ones, and one where I will go into greater depth.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing, Communities & Local Government) (Planning)

Does the hon. Gentleman agree that we need the Government to look at sustainability in the sector? The briefing for this debate said that the forecast surplus for the university sector is only 1.3% this year, so it is not a bloated sector. It does not mean there is a differential outcome for various institutions. In fact, university budgets are under threat from Brexit, from the cuts in research funding, from the fall in part-time students, and from a possible fall in international students, not to mention demographic trends in our country. We have to be careful to ensure a sustainable funding system.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

I agree. When the panel reports its findings, I hope the Government take action to help us put in place a system that is both fair and sustainable. We have a world-class university system in this country that we must not in any way seek to undermine. It is hugely important that, as young people increasingly compete with people from other countries, we keep our highest university standards.

Photo of Daniel Zeichner Daniel Zeichner Labour, Cambridge

It is important to recognise that there is a dispute going on in higher education at the moment and that staff have been out on cold picket lines. Whatever one’s view of that dispute, it is partly about how resources are allocated and ensuring we have a sustainable system. Does the hon. Gentleman agree that we need an urgent resolution to the dispute? If we are to support academics in future, they must have a pension scheme in which they can have confidence.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

I must confess I do not know the details of the current dispute. I am not a huge supporter of strikes, but I agree that it would be better to have the dispute resolved as quickly as possible. All people are entitled and should aspire to a proper and decent pension settlement.

Moving on to my three points, you will be pleased to hear that the first two are very brief, Mr Hosie. I have some ideas for the Government to grapple with, although I am sure they have thought about these things in advance. One possibility to soften the blow for students could be to make the monthly repayments tax deductible, which would basically reduce the true impact of the repayments and seems both reasonable and fair. Secondly, the current interest rate of 6.1% seems almost punitive when we have interest rates so much lower. I do not think that that was ever the intention when we started off on this journey. We should consider reducing the interest rates to the amount that HMRC pays us when they have our money for any length of time. The interest calculation for overpaid tax is a lot less than 6%. If it is fair for that purpose, it would be fair for students. Again, it would encourage people to embrace the student loan system if the rate of interest was significantly lower.

Thirdly, and in a little more detail, for the first time in my life I wonder whether it is time to consider a graduate contribution system in place of the current tuition fees and student loans: in other words, what some people would call a graduate tax. We have all been involved in debates over the years in which we have said that that is an absolutely disastrous idea but, for the reasons that I am about to give, I think it should be reconsidered.

A graduate contribution tax is essentially a system sub in which the student becomes obligated to an income-related additional tax on graduating in return for Government subsidisation of higher education, resulting in low or no tuition fees to the student. The Government would in effect pay all or most of the fees directly to the university, and the student would pay a contribution over and above ordinary levels of tax for a limited period of time once they start work. That removes the burden of individual borrower accounts or balances owed. The exact percentage of earnings that graduates would be required to pay back would be up for discussion, but one option is to have a banded system in which the percentage paid back is determined by income and increases across income bands. What is the point? Two things. First, a system based on the ability to pay rather than the amount of money the student has borrowed to get through university is more reasonable and fair than the current system.

Photo of Sam Gyimah Sam Gyimah Minister of State (Business, Energy and Industrial Strategy) (Higher Education), Minister of State (Education)

I thank the hon. Gentleman for giving way and register the fact that I have arrived at the debate. The point about a system based on the ability to pay is important. In a sense, the current system is a hybrid between a loan and a graduate contribution system. People pay 9% of their income, so those who earn a lot more pay a lot more of the loan back, and people who earn a lot less pay less back. There is already a significant taxpayer subsidy up to about 45%. I want to put on the record that the current system is a hybrid between the graduate contribution system that he is outlining and a loan system.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

The Minister is absolutely right to make that point.

The second reason why I think a fresh look might be helpful is that, under a graduate contribution scheme, students would not leave university with the worries associated with personally owing so many thousands of pounds. There would be no massive debt figure around their neck. I know the Minister was snowed in this morning, so I am not sure whether he heard me say that I am coming to the view that young people having a personal debt of £40,000 or £50,000 around their neck as they enter the workplace is becoming a massive problem that we need to think about. I hope the review will look at that.

I believe that the vast majority of graduates would be happy to pay a fair income-contingent contribution in return for the direct payment of fees by the Government, thus breaking the perceived link between the cost of tuition and repayments from students. Such a change would hopefully serve to alleviate some of the mental health worries faced by students and graduates who, on finishing university, receive the infamous letter outlining how many tens of thousands of pounds they now owe: “Congratulations on graduating. Now we want the money back.” Paying a regular, reasonable graduate contribution through tax gives far less reason to worry than the contents of those letters sent to graduates. A graduate contribution system would also provide the Treasury and higher education institutions with a long-term guaranteed stream of money as graduates pay regular instalments of additional tax in line with their incomes over a certain number of working years.

The Minister might like to reflect on this next point. It would be possible also to tailor the contribution system to change the rate of tax on degrees that the Government are keen to encourage, perhaps in science, technology, engineering and maths subjects, and nursing, as an inducement for students to pursue those degree courses and consequent careers. I can see that the Minister is not leaping to his feet to agree with me. He will no doubt deal with that point when he winds up the debate later.

Obviously, training and recruiting sufficient nurses to meet the growing needs of our NHS is becoming a huge priority for our country. The Royal College of Nursing, which I had a meeting with recently in my constituency, informs me that applications to nursing courses have fallen by 33% since tuition fees for undergraduate nursing were introduced. The Government wisely said that they would review the impact on nurse training and recruitment once the new system had been in place for a year or two. We are now approaching that moment in time. I hope the review currently being undertaken by the Government will reflect on that and make recommendations. We cannot have a system that starves our NHS of sufficient nurses for the future, because that would be short-sighted.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education)

Coupled with that we have the issue of the sharp decline in EU nurses applying for positions here in the UK.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Yes, I agree, and one of the many consequences of the decision made by the people of our country in June 2016

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Well, the decision was made by the majority of people in the United Kingdom. One of the consequences is that fewer doctors and nurses are coming here to work in our NHS. That is a very regrettable problem, but there we are. We are democrats and will therefore comply with the wishes of the people.

I hope my thoughts are useful to the Government—I can see the Minister nodding his head—as we try to find our way to a system that is fair and reasonable to students and taxpayers alike, and that ensures that the United Kingdom encourages the brightest and the best to reach their potential through higher education. I look forward to the rest of the debate and the Minister’s response.

Photo of Andrew Lewer Andrew Lewer Conservative, Northampton South 9:58 am, 28th February 2018

It is a pleasure to serve under your chairmanship, Mr Hosie, particularly as you have experience and this is my first experience of speaking in a Westminster Hall debate. I hope you will be tolerant with me. I thank my hon. Friend Mr Streeter for his excellent opening speech and the points that he made. Of his three points I wrote down the one about the 6.1% interest rate, which is almost unarguably a good point. I suppose his idea about the monthly repayments being tax deductible would be a “Yes, Minister” brave suggestion. On the concept of a graduate contribution, I think it may have been better if the present system not only had been set up slightly differently, but described differently at the time it was set up, taking into account the points that both my hon. Friend and the Minister have made about its true nature.

I welcome the fact that the Prime Minister’s speech on education and today’s debate have opened up an opportunity to discuss the reforms that we need to pursue in the funding of higher education. It is often the case, and I think it is here, that the obvious solutions are not necessarily the best. Revising education options for those over the age of 18 is, however, a welcome initiative. As a former member of the European Parliament, I was the lead member for the European Conservative and Reformists group on the Committee on Culture and Education, and therefore had a lot to do with Erasmus, Horizon 2020 and so on. We have as much to learn from other European countries as we have to teach them in showing them innovative ways of working.

I have been a governor of the University of Derby for the past eight years, so I try to keep up to date with the challenges of higher education. The point about vice-chancellors’ salaries is particularly relevant. In many cases, the solution is robust internal governance on the part of governing bodies at universities. I am pleased to say that the system at Derby is robust, but elsewhere there can sometimes be a culture of embarrassment, and of deferring to the vice-chancellor and senior executive members of the university. There can also be a concept that a governor ought to be a cheerleader for the university, rather than providing challenge and pushing back at some of the ideas of those in executive positions. That is not necessarily a call for more rules about governance; it is more a cultural point. It is for the universities to make sure that their governors are providing challenge, and are not just there to say, “You’re doing a great job; keep it up,” even if they are doing that, as is often the case.

Lowering tuition fees for higher education to, say, £6,000 may seem like a good idea in theory, but in practice it may, slightly counterintuitively, benefit only wealthier graduates. Even with that reduction, the tuition fee would remain hefty, and it would become easier for higher-income students to pay it off altogether, while lower-income graduates would still end up potentially with 30 years’ worth of debt to pay. Moreover, the immediate income of universities from the loan repayments of higher-income students would decrease. Smaller, more modern universities, such as the University of Northampton in my constituency and the University of Derby, would be affected the most, because they rely on tuition fees to survive more than the elite, more market-manageable, more international universities with various external sources of funding. Furthermore, it is newer universities that tend to recruit a high proportion of their students and graduates from lower-income families.

The problem, however, is not without a range of solutions, one of which could be the reintroduction of some kind of maintenance grant for disadvantaged students. Although cutting fees may not lead to financial support for those who need it the most, grants would be targeted specifically towards lower-income students. We also need other solutions as part of a toolkit. The format of today’s debate is useful in that respect, because we are not just standing up and saying, “This is the solution to the issue,” which would not be the right approach.

One solution might be to encourage private investment, and partnering up with private sector institutions. High-quality education leads to skills that are good for business. Revising skills and education, and adapting that to economic needs, as has been touched upon, could lead to new sources of funding in the form of grants from the private sector to university students and institutions, and to even more private investment in research—an area in which UK universities are very much world-leaders.

Only a few months ago, in November, the University of Northampton was one of six universities that contributed to an independent review of social impact investment in the UK made by the Treasury, showing that they are very much up to speed with what is going on in the sector. Part of that involves catching the eye of companies for financial partnerships. The university is moving from the constituency of my neighbour, my hon. Friend Michael Ellis, to an exciting new campus in my constituency of Northampton South, which is leading regeneration. Universities have a key role in that in obvious ways, such as buildings and the presence of the students, and in less obvious ways, such as changing and mixing up the culture of a neighbourhood. That brings potential problems, but if managed correctly it can bring significant benefits.

Another aspect that needs to be considered is that, although graduates can officially leave university with debts of £50,000, as my hon. Friend the Member for South West Devon began by saying—that sum of money is a key point in the debate—many never repay those sums, owing to the nature of the loan agreements, as they do not reach a certain level of income. The level of graduate contributions thus depends on the salary level that the students get after leaving university, which in turns depends partially on the skills and education that they received. However, the fact that that huge burden of debt is not, in many senses, actually there is lost on people due to the way in which the system is set up, expressed, and currently administered. There is scope in the reforms that have been put forward and the review that has been announced to look at the system not just presentationally, but in terms of how it operates.

Investing in universities is a healthy approach to getting funds into the institutions and providing opportunities for low-income students to study. The University of Derby has invested £120 million in facilities over the past five years, and graduate outcomes have improved markedly as a result, which is really the point of all such investments. Some 74.1% of students are in graduate-level roles within six months. We all know that education is the foundation of a good, productive economy and a rich, diverse society. It will always remain a top priority for the Government, and it should not be overlooked by today’s innovators and entrepreneurs, who will be the beneficiaries of it as well.

We have a terrific university sector in the UK. It is envy of the rest of Europe and attracts huge numbers of international students. Despite changes that have taken place, which have been referred to, those numbers are still very strong. Our changes need to be forward-looking and build on that success. Although I am a great lover of nostalgia, I do not think that solutions should hark back to what was a much more elite and restricted past in the university sector.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union) 10:07 am, 28th February 2018

It is a pleasure to contribute with you in the Chair, Mr Hosie. I had not intended to speak today, but I was interested to hear what Mr Streeter had to say, and I have obviously been inspired by his contribution.

I want to make a few, probably disjointed points, the first of which is about the sustainability of the sector. As has been pointed out, we have one of the best higher education sectors in the world. At a time of uncertainty for the country, we ought to build on our strengths, and not do anything to undermine them. When the Minister winds up, I hope that he will assure us on how the review will maintain, or indeed strengthen, the sustainability of the sector.

There is a fear that, because of the way that the debate has opened up, the Government may intend simply to mitigate the costs by constraining fees without replacing them with teaching grants, rather than looking ambitiously at how the system works, as the hon. Gentleman suggested. Clearly, a move to reduce fees in certain subjects could have the perverse consequence of leading people in a contrary direction to the one suggested by the hon. Gentleman. Likewise, a fee cut that is not replaced by teaching grants across the board, or in any other way, could really bring into question the sustainability of the sector.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing, Communities & Local Government) (Planning)

My hon. Friend is making a really important point, which I hope the Minister can address. There is real concern among universities that the review could result in a huge loss of income. As I said earlier, the whole of the sector is not making a huge surplus. We want our university sector to thrive, compete globally, and give our young people and others the skills that they need to compete in the workforce. My hon. Friend has raised an important point, and it is one that the Minister needs to address.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

I agree with my hon. Friend. In his introductory remarks, the hon. Member for South West Devon rightly said that when the new system was introduced in 2012, there was an expectation of a variety of fee options. I shared his scepticism at that time. There was a thinking in Government that the £6,000 to £9,000 range would mean that Oxbridge, obviously, would charge £9,000, and everybody else would neatly rank themselves in accordance with the Government’s perception of quality. Those of us who had a relationship with the sector knew that that was not viable, because it costs as much to provide a degree in Plymouth as it does in Russell Group universities. So what happened was not surprising.

Although the review should focus on value for money, as the hon. Gentleman said, we need to be careful not to reduce higher education to a crude transactional relationship. There is an element within the teaching excellence framework that does that.

I was on the Higher Education and Research Public Bill Committee. Those of us on this side of the House supported the principle of focusing on teaching quality, but were worried that some of the metrics drove the debate in the wrong direction. We are pleased that the Government moved more towards a qualitative evaluation, rather than the simple crude quantitative measures they were initially looking at, but there is still an aspect of the debate that says we should be measuring quality by crude and easily measurable standards. We might take contact hours, for example. If we are going to measure by contact hours, Oxford would be bottom of the table. Nobody would argue that Oxford is the worst university in the country, but that illustrates the danger of crude metrics.

Photo of Andrew Lewer Andrew Lewer Conservative, Northampton South

Although crude metrics are not helpful, would the hon. Gentleman accept that having some metrics, such as the teaching excellence framework, is helpful?

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

The hon. Gentleman is right. As I said, those of us on this side of the House who were on the Bill Committee, such as my hon. Friend Dr Blackman-Woods, argued that a focus on teaching quality was right, but we needed to get the way that we measured that experience right.

The other metric that is problematic is employment outcomes. The current Minister’s predecessor, Joseph Johnson, acknowledged that they were crude and, in a sense, unreliable metrics, but they were being used because they were the numbers that were available. I pointed out to the Minister at the time that there is not necessarily a relationship between teaching quality and employment outcomes. If a student had been to Eton and Oxford, like he had, and were from the right family and knew the right people, that person’s employment outcome was likely to be fairly good, irrespective of teaching quality. So when looking at the funding review, my warning is that we should make sure that we look at the educational experience of universities in the round. We argued that there should have been a statement in the Higher Education and Research Act 2017 about what universities were for.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing, Communities & Local Government) (Planning)

I am glad that my hon. Friend has raised the discussion we had in that Bill Committee about what universities contribute to our society in addition to teaching and education. They contribute to sports development, cultural development and social outcomes in our communities. They do a lot of voluntary work. Students from my own university, Durham, do a lot of voluntary work in the local community. If we are going to look at value for money, which I agree we should, we felt that the additional benefits that universities deliver to society should somehow be brought into the equation as well, and there was certainly a danger under that legislation of the wider benefits of universities being completely discarded in the Government’s TEF measures.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

I thank my hon. Friend for that intervention. Clearly, we are at one on that issue.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

I apologise for being late for the debate, Mr Hosie. My hon. Friends make an interesting and important point. In Coventry, universities make a major contribution to the local economy, for example. Very often, we find that students are also helpful to community organisations. Sometimes, someone who is doing a law course can give unofficial advice, which is helpful, given the situation we now face with cutbacks. The other point is that further education has taken a bit of a hit as well. In Coventry, there have been 27% cuts.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

I have visited the university that my hon. Friend represents. It does particularly innovative and good work in supporting small businesses and is a leader in the sector. He makes an important point. At a time when one of the issues we face as a country is the imbalance in the economy between London and the south-east and the rest of the country, universities offer a unique asset in ensuring that economic growth is distributed across the country. They are the one asset that we have in every part of the UK, in its regions and nations. The role that they play in driving economic growth is hugely important. My hon. Friend makes that point very well.

I have three additional points. First, will the Minister answer the question—which the Education Secretary was unable to in the statement the other day—relating to widening participation and fair access funds? There is a concern that one of the ways in which the sector will be squeezed in order to hit ambitions on fees is by reducing the amount of money allocated to widening participation and fair access. Investment in that area was one of the few good things that came out of the 2012 reforms, so I would be grateful if he could give a reassurance on that.

Photo of Sam Gyimah Sam Gyimah Minister of State (Business, Energy and Industrial Strategy) (Higher Education), Minister of State (Education)

I would like to give the hon. Gentleman that reassurance now. He is absolutely right: the widening participation funds—£1,000 out of every £9,000 paid by students in fees—go towards access. We will not be doing anything to diminish that access project. Although many people talk about the fact that we have global, world-class institutions, one of the successes of our higher education system is actually the number of disadvantaged people who are going to university as a result of those funds being available. There is a challenge in making sure that they are successful at university and get well-paid jobs. We will not be doing anything to diminish that.[This section has been corrected on 21 March 2018, column 2MC — read correction]

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

I thank the Minister for that intervention. As we said earlier, fairness of opportunity and the choices available depending on where a person lives are issues in the current system. The widening participation and fair access programmes are hugely important, and I am grateful for the Minister’s assurance that not one penny will be taken from those areas of funding.

I endorse the point that the hon. Member for South West Devon made about nursing, midwifery and allied health courses. When we had a debate on the Government’s proposals in this Chamber previously, some of us challenged the Government and said that taking away bursaries and introducing fees for those courses would lead to a drop in applications. The then Minister, who is no longer a Member of the House, assured us that what the Government were trying to do—you couldn’t make it up, Mr Hosie—was share the benefits of the funding system for other undergraduates with nursing and midwifery courses. Share the benefits! Some of us questioned whether a £50,000 debt was a benefit, and warned of the sort of drop in applications that we are now seeing. I hope the Minister will tell us that the decision about the funding arrangements for nursing, midwifery and allied health courses will be reconsidered as part of the funding review, and that the Government will put on hold the current proposals to extend those arrangements to other health courses that are not currently subject to fees and loans. The Minister is obviously aware of those areas. The Opposition have tabled prayers seeking a halt to those proposals.

As Carol Monaghan said, a number of things are coming together and will cause an enormous crisis in the NHS, but that is not the only issue. Nursing, midwifery and allied health courses are one of the few areas for second-chance education. They are dominated significantly by mature students, who see them as a route into a professional career and personal advancement, which is not available through the 2012 funding system. Since the 2012 funding system was introduced, there has been a significant drop in the number of mature students.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

We have raised the issue of education maintenance grants many times in this place. Women often have an ambition to go into nursing when their children grow up, and they are affected because they cannot get education maintenance grants. This is a very important issue, and once again women are carrying the can.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

Again, my hon. Friend is absolutely right. From the point of view of the needs of the NHS and the opportunities for mature students, and just for the sake of justice, we need to look again at nursing, midwifery and allied health courses.

I will make my third point very briefly, because this is a much bigger topic. I raise this issue as co-chair of the all-party group on international students. Universities’ financial stability is partly based on this country’s enormous success in attracting international students to come and study here. Those numbers are flatlining as a result of measures taken by the Home Office and the inclusion of international students in the net migration numbers, which inevitably leads to policy decisions that discourage international students. The Minister will say that the numbers are holding roughly up, but holding roughly up is not good enough in a growing market, because it means a relative decline.

There is a huge risk as we leave the European Union, because some 125,000 of our 450,000 international students come from the EU, and most universities are modelling on the basis that we will lose about 80% of them. One third of non-EU students said before the referendum that if we chose to leave the European Union, they would find the UK a less attractive place to come to. The Government need to put in place measures within the framework of the strategy to actively encourage more international students. They can start by removing them from the net migration targets.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education)

One of the other issues with international students is that we have lost a lot of the diversity within that group. Whereas in the past, students came from India, Australia, the United States and Canada, we are more and more relying on the Chinese student population. That is problematic, because if anything happens politically to change that relationship, our universities could have difficulties.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union)

The hon. Lady makes a very important point. The numbers have been sustained only by the huge increase in the number of Chinese students. Of course, Chinese students are very welcome in the UK, but no business would be satisfied with becoming over-dependent on one customer. China is moving ahead in leaps and bounds in developing its own universities, and now has some of the finest universities in the world, doing some of the finest research in the world, so we cannot rely on that market. The hon. Lady is absolutely right that part of the new strategy that we need to encourage people to come from all over the world needs to be about looking at countries such as India, from which the numbers have dropped.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education) 10:25 am, 28th February 2018

It is a pleasure to serve under your chairmanship, Mr Hosie. I thank Mr Streeter for securing this debate. I listened to his speech with interest, and surprisingly I found myself nodding along to a lot of what he said. We have had an admission from the Prime Minister that the current system in England is not working for students. Admitting we have got it wrong is one thing, but actually carrying out a review and making appropriate changes is another. I worry that we might get stuck in the detail.

I will try to limit my comments about Scotland, where the Scottish National party has restored the tradition of free higher education while maintaining educational maintenance allowance for those in school or further education, and bursaries for young people from disadvantaged backgrounds in higher education. Our support package works: Scottish 18-year-olds from the most disadvantaged areas are now 67% more likely to apply to higher education institutions than they were 12 years ago. Scottish students graduate with the lowest debt in the UK. Their debt is less than £12,000, which contrasts with the astronomical figures we have heard about this morning. We believe that university education should be based on the ability to learn, and never on the ability to pay.

Photo of Sam Gyimah Sam Gyimah Minister of State (Business, Energy and Industrial Strategy) (Higher Education), Minister of State (Education)

To be absolutely clear, university education in England is not based on the ability to pay. On the contrary, no one has failed to get a university place in England because they cannot pay. Payment is only significant after the graduate earns more than £21,000—it will be earnings of more than £25,000 from 1 April. It is important to get the facts right.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education)

We also have to look at the retention rates for young people from disadvantaged backgrounds who do not have full support.

Ultimately, this debate should be about who benefits. We educate children in schools not simply for their own economic benefit, but for the benefit of society. We have got to ask whether the young people embarking on tertiary education courses will contribute economically and societally to our nations, or whether we are simply providing them with a service, for which they must pay. As legislators, we must be clear about that. Post-Brexit, the UK’s economic success will rely on a well-educated population. We have skills shortages in science, technology, engineering, healthcare, education and digital. Graduates are needed now to ensure that the UK remains competitive outside the EU.

Paul Blomfield mentioned the variance in fees. I have difficulties with that. If as has been rumoured we lower the fees for less expensive courses, how will we encourage our young people to study the more expensive science, technology, engineering and maths subjects, graduates of which are so desperately needed? EngineeringUK estimates that we have an annual shortfall of 20,000 engineering graduates alone. The hon. Member for South West Devon mentioned the impact of removing the nursing bursary. Again, who benefits? We should encourage young people to study those courses, not put additional barriers in their way.

Fees are not the only difficulty for English students. The interest on student loans has risen sharply—it is currently 6.1% for some students. Maintenance grants have been scrapped, and it is rumoured that student debt on completion has reached £50,000. Many young graduates will be left saddled with debt throughout most of their working lives.

The hon. Member for South West Devon mentioned students staying at home for their university experience, and was concerned about the impact on the whole package experienced by students at university. In Scotland and Ireland there is a cultural predisposition to stay at home. It is not necessarily financially driven—my son is staying at home during university—so there may be other factors at play. His education is not impacted. Students have opportunities for other life experiences, such as summer placements, industrial placements and travelling abroad. The hon. Member for Northampton South mentioned Erasmus, which is a rich experience for students even if they stay at home during university. I push the Minister to make a commitment on Erasmus, because university students and many people across the sector want that commitment as part of the Brexit process.

We are often told that our free tuition policy in Scotland prevents Scottish students from accessing available places, but since 2007, the number of Scottish-domiciled full-time degree entrants has risen by 12%. Since 2013, the total number of funded places available at Scottish universities, including additional places to widen access for students from Scotland’s most deprived communities, has also increased. The hon. Member for Sheffield Central mentioned the metrics used in the teaching excellence framework, and graduate success as an indication of our universities’ quality. Graduate salaries are a lot lower in many geographical areas in the UK, so students graduating in parts of England and Scotland will automatically have a lower salary than those in south-east England. That is a flaw in that metric.

We often talk about the number of young people going to higher education as a measure of economic success. I could not count the number of times I hear people talking about encouraging people to do high-quality apprenticeships, yet that seems to be forgotten when we talk about higher education. I would like there to be parity among apprenticeships, further education colleges and quality employment. In fact, we should look at positive destinations, not just the number of young people going to university. For many young people, a high-quality apprenticeship—degree level or otherwise—allows them to make excellent progress in the workplace without necessarily saddling themselves with debt.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing, Communities & Local Government) (Planning)

The hon. Lady makes an important point. Does she agree that it is important not to talk in binary terms about university or technical education? Our universities deliver some of the best technical education in the country, and we should aim for a route to whatever form of education is best for the young person or older person retraining. We should not get stuck in the binary divide, but ensure that we make connections between them.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education)

We have a problem if we educate only graduates—we need a full range of different people with different skills. I usually speak about tertiary education because, in Scotland, the lines between further education and higher education are less defined than they are in other parts of the UK. In fact, a lot of our degree courses are delivered in further education colleges. The movement between FE and HE is a very important part of our educational landscape in Scotland.

Positive destinations should be a measure of success, and we should encourage young people of all backgrounds into whatever is appropriate for them. That includes those from the most advantaged backgrounds considering apprenticeships. We need to try to break down that barrier. I agree with the hon. Member for South West Devon that vice-chancellor pay has reached a ridiculous level for some. Lecturers were out on strike this week and last week because their pensions are under threat. I agree with him that perhaps the time has come to look at the pay package that we offer all staff.

Paying for education is a duty of Government, business and society, including the taxpayer. We need to ensure that we have a well-educated population that can provide economic growth in different businesses and sectors. Post-Brexit, there will be a struggle to create economic growth. We all have the duty to pay our taxes so that they fund the education of our young people, benefit society and fuel economic growth. The Scottish National party is fully committed to guaranteeing fair access to higher education, so that every young person, regardless of background, has an equal chance to go to university. My party will continue to work hard to ensure that.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Education) 10:37 am, 28th February 2018

It is a great pleasure to serve under your chairmanship, Mr Hosie. I congratulate Mr Streeter on securing the debate. He spoke thoughtfully. We are both of the Kinnock generation, so I understand some of his points. He talked about his experiences in schools and people going to university. We must recognise the heart of the debate is not just the people who speak about what they might be deterred from, but the people who keep silent. The people who keep silent, whether they are older or younger learners, are being put off by the current financial structure that the Government have put in place.

The hon. Gentleman made a number of interesting suggestions about graduate tax and cutting the interest rates from 6.1%. There is consensus on that across the piece. We would have more sympathy with the Government if they had not been so intensely relaxed, and indeed complacent, when the interest rates were introduced. It was very clear that the previous Universities Minister—no doubt because he was a keen remainer—did not take into account in any shape or form the implications of Brexit in that respect. Two months before the referendum, inflation stood at 0.4%, but it is now 3.1% and rising. That is one of the reasons why the interest rate is 6.1%.

I welcome the thoughtful comments made by Andrew Lewer. He made very sensible points about governance in higher education. He rightly touched on the impact on post-1992 universities if fee aversion hits the disadvantaged students they cater for, and talked about his experiences with the two universities he is associated with—the University of Northampton and the University of Derby. I support all that, but I remind him and the House that fee aversion is an issue not simply for students but for the taxpayer. My hon. Friend Lucy Powell made exactly that point in response to last week’s statement. The Government have tried to make a virtue out of necessity by saying, “Oh, you don’t really need to repay all this money,” but we are irresponsibly laying burdens on future generations and on the tax system now. The Government should not be complacent about that in any way.

Photo of Sam Gyimah Sam Gyimah Minister of State (Business, Energy and Industrial Strategy) (Higher Education), Minister of State (Education)

I look forward to hearing the hon. Gentleman outline the Labour party’s policy. His concern is burden on the taxpayer, but there would be an even bigger burden on the taxpayer if higher education were made free—that is my understanding of the Labour party’s policy—unless places were rationed.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Education)

There were several completely unproven assertions in what the Minister just said. He would do better to stick to this debate, which is about his policies rather than—

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Education)

No, I am not going to take another intervention. The Minister will have plenty of time to say what he wants to say.

My hon. Friend Paul Blomfield rightly talked about the sustainability of the sector and some of the key issues in terms of Brexit. My hon. Friend Mr Cunningham, who is no longer in the Chamber, absolutely rightly drew us back to further education and nursing bursaries, and Carol Monaghan spoke about issues post-Brexit.

The point is very straightforward: since coming to office in 2010, Conservative-led Governments have repeatedly raised tuition fees. They trebled fees to £9,000 and subsequently increased them to £9,250. That agenda has hit students—particularly those from disadvantaged backgrounds—harder and harder since 2012. The cutting, one by one, of all the concessions that David Willetts introduced to temper the impact has been just as damaging. Those concessions were dismantled deliberately. The National Union of Students lists them in its briefing for the debate: the Government abolished maintenance grants, NHS bursaries, the disabled students allowance and the education maintenance allowance, and ended Aimhigher.

The Minister has inherited that. He is not responsible for it, but he would be wise to show due humility about its incremental impact on the people concerned. If he reads the “Fairer Fees” report published by the Sutton Trust late last year, he will see, as Members have already said, that the average debt for students in England is higher than the European average and twice the US average. As a result, the Government have racked up an unenviable record of nudging people away from, rather than towards, aspiration in higher education and chipping off many of the rungs of the ladder of social mobility that were designed to protect them.

The July report by London Economics for the University and College Union suggested that thousands of graduates would suffer a mid-life tax crisis, analysis undertaken last year by the Institute for Fiscal Studies shows the level of debt, and only this week the Sutton Trust gave us figures that show disadvantaged students across the UK are more than three times more likely to live at home while attending university. The hon. Member for Glasgow North West made that point, too.

The Prime Minister finally admitted last week, after months of us, the Sutton Trust and an impressive range of stakeholders all saying the same, that the current funding system leaves the most disadvantaged students with the highest debt, yet behind the warm words and soft soap that were ladled out by the Prime Minister in Derby and by her Education Secretary in the Commons, it seems that no new money is available and there is the potential for HE funding cuts. In her speech, the Prime Minister tried to talk the talk on social mobility and aspiration, but she did little to walk the walk and address either the FE sector, in which 10% of HE is delivered, or the problems with 16-to-18 provision that many colleges are suffering, including the one in which she chose to make her speech. It will take more than a brush-by in Derby one afternoon in February to remedy those issues.

The terms of reference published by the Department state that the review cannot make recommendations on tax policy and must make recommendations in keeping with the Government’s fiscal policies. Will the Minister confirm that that means there will be no new money for the policies in the review? Does it mean that savings will have to be found elsewhere in the FE budget if changes are to be made? My hon. Friend the Member for Sheffield Central challenged him and, to give him credit, he made a commitment that access and widening participation funding will not be diminished as a result of the review. I warn him that the Treasury has a long reach and he will need a stout shield to resist it in this area and others.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing, Communities & Local Government) (Planning)

Does my hon. Friend agree that, unless the Government are at least prepared to put more money into the sector, it is difficult to understand how we will get a sustainable system for funding universities? The Minister needs to be clear about that.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Education)

I absolutely agree. As the Minister is eager to explore our policies, I remind him that Labour’s policies and our message of progression were taken on board so strongly by would-be and existing students, their families and their parents during the recent election because we had a cohesive narrative. Whether we were talking about adult learning, college learning or traditional cohorts of young people going into higher education, we said that we wanted to lift barriers and financial burdens to make a step change in social mobility. The Conservatives did not put that message across, and suffered accordingly. Given the restrictions on the review, they will miss another opportunity.

The Conservatives continue to falter on the reintroduction of maintenance grants, to which we have been committed for nearly two years. The Prime Minister engaged with that tortuously last week. Our position is echoed by the education sector, Universities UK, MillionPlus, the Chair of the Education Committee, the Treasury Committee and even the vice-chancellor of the private University of Buckingham, Sir Anthony Seldon. UUK has said that there are ways in which the current system can be improved, such as by reintroducing maintenance grants, as has MillionPlus, but it is likely that colleges and universities will be expected to cover any extra costs. The Prime Minister implied that in her speech last week when she said the Government will have to look at how

“learners receive maintenance support, both from Government and universities and colleges.”

We have some idea of how that extra funding might be delivered under her policies: by robbing Peter to pay Paul. We saw the same sleight of hand from the Secretary of State in The Sunday Times, on the BBC and in his statement last week, when he talked about cutting the cost of tuition fees.

The bottom line is that those who already have a lot will be given more. Wealthy students and graduates will benefit the most, because they can pay off debt the earliest. Over the next 10 years, there will be 13 million vacancies but only 7 million school leavers to fill them, yet great swathes of our university extramural departments, institutions such as the Open University and Birkbeck, and new providers, have been swept away or at least crippled by the tripling of fees since 2012.

There is a social dimension. One in five undergraduate entrants in England from low-participation neighbourhoods chooses or has no option but to study part time. The Government need to address that. However, when the Prime Minister talked about lifelong learning last week, there were no words of contrition for what the Government have done: tripling fees, scrapping maintenance grants and introducing adult learning loans, half of which have been handed back unused to the Treasury.

What we need to know from the Minister—apart from why, curiously, there has been no reference to 16-to-18 education—is what he is going to do to reassure people. No direct grant has been available for university courses in the arts and humanities, social sciences, computer science, design, architecture or economics since 2014-15. Will there be anything in the review to support those? The Prime Minister and the Secretary of State have talked about two-year courses easing financial burdens on students, but where is the commitment to the continuous professional development that will be necessary in HE if those are to go forward correctly?

Finally, what are the principles behind the timing of the report? Of course, the report will be not independent but have input—that is all it is—from the panel. However, that input may be quite weak. Why will there be no consideration of that? What will the Minister do to reassure us all that it is not just a PR exercise?

Henry Ford famously said that a customer can have any colour so long as it is black. If the Minister and his Government do not take proper regard of the various elements described in the debate, they will be just as guilty of that as Henry Ford.

Photo of Sam Gyimah Sam Gyimah Minister of State (Business, Energy and Industrial Strategy) (Higher Education), Minister of State (Education) 10:50 am, 28th February 2018

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate my hon. Friend Mr Streeter on securing the debate, which has been wide-ranging and stimulating in a number of ways. Higher education is a complicated policy area, and since I have been appointed to this position I have been inundated with ideas about things to do. In the debate, hon. Members have made contributions where they have not just come up with ideas but thought of knock-on consequences of some policy suggestions. I welcome that.

There were many questions about the Government’s HE review and what it seeks to do, but before I get to that I will deal with some of the myths around the current system, because it is worth clarifying that. The system does not stop disadvantaged people applying to university. Their parents’ income and their income is not a barrier to getting into university at all. In fact, they can get into university and get on, and they have to pay back only once they have completed their studies and have a job paying—from 1 April—£25,000.

Another myth is that disadvantaged people in particular do really badly. That is not true. The system is very progressive in its repayments structure. I have been going around the country, speaking directly to students, and I went to Queen Mary in London, where 42% of students are the first in their family to go to university. That is a direct result of the policies the Government have pursued. I am not saying that everything is perfect and that there are not reforms to pursue, but it is worth recognising the success we have had.

No matter how we cut it, in every league table in the world our universities come second only to the United States. We have four in the top 10 and 16 of the top 100 in the world, and that is because we have put them on a sustainable financial footing. Those who have read the terms of reference will know that the review must have regard to the sustainability of the university sector. An important point was made that universities are not just about the education that the individual gets; in many of our towns, universities are huge employers and a source of spreading wealth and growth. For that reason alone, ensuring the sustainability of the sector is particularly important.

This year, we will probably hit the target of one in two 18 to 30-year-olds having a university education. Such an education is not just about what is studied; it has become a rite of passage for many young people. It is the first time they move away from home. They have freedoms, and they become an adult at university. We think that is a positive thing. That aspiration was set by Tony Blair, a Labour Prime Minister, so to hear Labour Members criticising us for hitting a target set by a Labour Prime Minister is a bit rich.

Who is criticising?

Photo of Sam Gyimah Sam Gyimah Minister of State (Business, Energy and Industrial Strategy) (Higher Education), Minister of State (Education)

Well, the suggestion from the Opposition spokesperson, Gordon Marsden, was that somehow we have pursued policies that are damaging higher education and the aspiration and prospects of our young people as far as the university sector is concerned. On the contrary, we have pursued policies that have put no cap on aspiration.

Photo of Sam Gyimah Sam Gyimah Minister of State (Business, Energy and Industrial Strategy) (Higher Education), Minister of State (Education)

I will take the hon. Gentleman’s intervention in a second.

I will end this myth-busting section by focusing on Scotland, where controls on student numbers continue to restrict the aspiration of young people. The Sutton Trust recently stated that Scottish 18-year-olds from the most advantaged areas are still more than four times more likely to go straight to university than those from the least advantaged areas, compared with 2.4 times in England. Audit Scotland has stated:

“It has become more difficult in recent years for Scottish students to gain a place at a Scottish university as applications have increased more than the number of offers made by universities.”

That is not an example I want to copy here in England.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education)

Of course, as I said, the distinction between FE and HE in Scotland is far more fluid, and UCAS admits that a third of young people studying degree-level courses are doing so in further education colleges, which is not captured by Sutton Trust figures or UCAS figures. Scotland is doing extremely well in this area.

Photo of Gordon Marsden Gordon Marsden Shadow Minister (Education)

The Minister speaks about rites of passage. Those are fine words, but fine words butter no parsnips. The truth of the matter is, he should be focusing on not just the number of people from disadvantaged backgrounds getting to university but what stops them staying there. He should also focus on the groups who never even think about getting there because of what his predecessors’ tuition fees policies have done, particularly for mature and part-time students.

Photo of Sam Gyimah Sam Gyimah Minister of State (Business, Energy and Industrial Strategy) (Higher Education), Minister of State (Education)

In the spirit of compromise, I agree that, yes, access should be not just about getting to university but succeeding when there and getting a well-paid job afterwards. If people do not get to university in the first place, the idea of succeeding when there and getting a well-paid job is purely academic, not to put too fine a point on it. There is clearly work to be done, but where we are now shows significant progress from where we were in 2010.

The review seeks to look at the whole higher education sector for post-18 education, including choice and competition in the market, how the funding system works and how HE and FE can be joined up, and the overlaps. That is particularly important. However, we are not waiting for the review; a significant number of reforms are under way, building on our successes.

We are in the process of implementing the Higher Education and Research Act 2017, and the new Office for Students, at whose launch I will speak later today, will be a strong voice for students and ensure minimum standards. The OFS director for fair access and participation will further drive social mobility. The teaching excellence and student outcomes framework will drive quality teaching—that is particularly important—and the reforms will facilitate further diversity, with new providers and shorter degrees delivered at lower cost. In fact, today my right hon. Friend the Secretary of State is publishing the first statement of Government priorities and guidance for the OFS. The Government are also publishing the results of recent consultations on the new regulatory approach, and the OFS is publishing the regulatory framework. That marks a key milestone in delivering our higher education reforms in that area. The review will build on all of that.

There are questions about the teaching grant, which will be looked at in the review, and whether new money will go in. As always, it is important to look at things within the constraints of the Government’s overall fiscal framework, and that will be considered alongside budget lines in wider education and our public spending.

There are issues around changing the system completely and whether we look at some kind of graduate contribution or graduate tax system. Obviously, those are all welcome suggestions. I would say they have been looked at by successive Governments over the years, but fresh thinking is welcome, and I welcome the fresh thinking that my hon. Friend the Member for South West Devon brought to the debate.

We have a higher education system that is the envy of the world, and many international students are queuing to come and study here, but the Government recognise that to deliver for students more needs to be done. My right hon. Friend the Secretary of State has said that the variability in fees that we expected has not materialised, and it is important to look at all the different ways in which universities operate. There were 534,000 students who accepted a place at university last year. They clearly do not all have the same desires, the same aspirations and the same needs, yet our university system gives all of them pretty much the same offer.

Photo of Stewart Hosie Stewart Hosie Scottish National Party, Dundee East

Order.

Motion lapsed (Standing Order No.10(6)).