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Education (Student Loans) Bill is too brief. Clearly, they are more interested in opposition for its own sake than in opposition for any real, cogent or constructive reason. This Bill is short and concise. It sets out the framework for intended legislation, with detail to be found in regulations. Its raison d'e tre is the need to attract more students to advanced education and, at the same time, to generate more funds.

I support student loans because they represent new money. The proposed £420 is additional to the existing grant. That point was made by my right hon. Friend the Secretary of State when he opened the debate. No hon. Member can doubt that there must be a limit to the number of students whom taxpayers can afford to support on the present grants only basis. I do not believe that the taxpayer should be soaked for every single student penny. The loan, which is interest-free and not repayable until the student is earning 85 per cent. of the national average wage--about £9,500 on current standards--will form an important addition to student finance. In addition, women who start families will not be required to repay the loan until they actually start to earn. There will be no such thing as a negative dowry.

My hon. Friends and I have been touched by the great concern expressed both within and outside the House about the likely level of default and about bankers' profits. We have heard figures from the United States which would curdle the blood of any true blue British banker. As all hon. Members should know, the principal reason for the high incidence of default in the United States is that there is no general provision for graduates to defer payment when their income is low. That contrasts sharply and unfavourably with what the Government are proposing. If we need to seek an indication of student default we can look to Scandinavia, which is much closer to home and where the level of default is between 1 per cent. and 2 per cent.

It has been argued that a high measure of taxpayer support is necessary to guarantee admission to advanced education, but since 1979 the real value of the student grant has fallen by at least 10 per cent. The hon. Member for Blackburn (Mr. Straw) said that it had fallen by 23 per cent. Despite that real reduction, there are almost 200,000 more students in higher education, and the percentage of 18 and 19-year-olds entering higher education has increased from less than 13 per cent. to more than 14 per cent. There is thus no reason to argue that a reduction in grant equals a reduction in student numbers. That is demonstrably untrue.

However, I share some students' apprehensions. I have met a number of delegations and, in general, they are apprehensive about the loss of social security benefit. Incidentally, Beveridge, the great initiator, never foresaw a situation in which students would be the beneficiaries of social security payments. If it is argued that with adequate funding for their support they would not need social security benefit, I return to my general principle that the proposed loan will be part of their support.

With regard to access funds and the part that they have to play, the problem is not their number but their size. The access funds totalling £15 million are inadequate. I again urge my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary of State to reconsider the amount of funding. The sum should be substantially increased. Access funds will be required to assist young people, especially those from disadvantaged sections of

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our community, who wish to enter advanced education. If they are to be assisted to any marked extent--and that must be one of our principal aims--access funds must be increased.

Most graduates can expect to receive substantially more remuneration than non-graduates. As students benefit most from higher education, why should the tax paid by those who leave school and start work at 16 materially assist those attending university? Can it really be fair or just that the non-graduate should be called upon to subsidise the graduate? Economic analysis shows that graduates receive a personal return of about 25 per cent. on their investment in higher education. Society's return by contrast is only between 5 and 8 per cent.

The hon. Member for Bridgend (Mr. Griffiths) says that loans will discourage young people from blue-collar homes from entering advanced education--

Mr. Win Griffiths : It will.

Mr. Pawsey : That point is made as though the present system worked to their benefit, but currently, although they account for 60 per cent. of the population, they only manage 21 per cent. of university admissions.

Mr. Win Griffiths rose --

Mr. Pawsey : No, I cannot give way. They account for only 21 per cent. of university admissions or 24 per cent. of admissions to polytechnics, so the present grants system does not seem to be an outstanding success for working-class youngsters.

A further reason why I support top-up loans is that about 4 per cent. of parents do not make the full parental contribution and students have to make good the shortfall in various ways. Many, for example, borrow and, if they do, they borrow at commercial rates of interest, which compare unfavourably with the zero rate of interest proposed in the legislation.

I am absolutely convinced that a mixed system of grants and loans is fairer. It at once represents better value for the taxpayer and improved access to higher education. I urge my right hon. and hon. Friends to support the Bill.

7.21 pm

Mr. Martin Flannery (Sheffield, Hillsborough) : In the age in which we live, under this Government, we receive lectures on the Health Service from a Cabinet whose members never use it. We receive lectures on the education service from a Cabinet whose members never use the public service. Practically all the Cabinet come from wealthy homes and went to prep or private schools and to Oxbridge, and although they lecture us about what we should do for our children, they have always depended on mummy and daddy. That is a fact of life for this Cabinet, although I am not saying that it applies to every Conservative Member.

The scheme is really a cut. It is a cut made in a foundering economy. Indeed, the Government are having to make such cuts--they have no choice. The economy has foundered so badly that one Chancellor of the Exchequer has resigned and his place has now been taken by another. Furthermore, an election has now taken place that nobody

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ever thought would take place. I have not yet heard the result-- [Interruption.] Well, in other words, there is a crisis in the Government and--

Mr. John Marshall rose --

Mr. Flannery : No, I shall not give way because I have only 10 minutes in which to make my speech.

This is not one but two debates, although they are essentially the same. They are both about how to cut the education service. One is about keeping down the wages of teachers and school conditions and the other is about how to cut students' money. That cut is not so much a plot as a necessity. The Government have to make that cut--they have no choice. Having seen the whirlwind coming, Ministers continually visit America to study schools there. The Americanisation not merely of our economy but of our health and education services is now well under way.

However, the Government who are now making these cuts had access to a boon that no other Government in Europe have had. One of my hon. Friends has costed the money that the Government have received from North sea oil at at least £80 billion. We did not have the benefit of that. From selling the family silver, the Government have received at least £30 billion-- even after the massive advertising on a grand scale, hitherto unknown, involving public and taxpayers' money. Those are the people who are lecturing us about what we should be doing, yet the Government know full well that they are looting the common exchequer. Although more millionaires than ever are emerging and they are growing richer than ever, just outside the House people are sleeping in cardboard boxes. When Opposition Members try to set that right, the Government drag up all kinds of arguments to try to prove that we are somehow in the wrong ; but we are not in the wrong. We know that the students will now take a kicking and a beating from the Government and that many of them will no longer enter areas that they have previously been able to enter.

As I said a month ago, I am one of only a few hon. Members who had experience of higher education before the grant system. Only a handful of ordinary boys and girls could get to university on the few scholarships available. The others could not go. Many of them took up teaching so that they could get a loan from their local education authority for two years. When I came back from the war, it took me four years to pay back my loan. Despite all the boasting from Conservative Members, some former students in America are in penury as a result of trying to pay back their loans and pay off their mortgages, yet that is what the Government are driving us towards. The Government have driven our economy to such desperation that their own party is now in deep crisis and they are trying to shift that crisis on to us.

However, there are some who realise the present serious condition of education. The Committee of Vice-Chancellors and Principals has briefed the Opposition on this, stating that it believes that such a scheme should ensure that students have enough to live on while they study and that it does not deter increasing numbers from applying for higher education.

Although it has been said that more people enter advanced education in America and West Germany, that has nothing to do with grants ; it is because those countries have much stronger economies than we have. Indeed, even the Italians and the French now have more powerful

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economies than we have. That means that they can afford advanced education without the grants that we would give. Nevertheless, ours was the most advanced system when we helped more students to take up higher education, but our economy has foundered since then and has driven the Government into a loans system.

The hon. Member for Wantage (Mr. Jackson) knows of the Committee of Vice- Chancellors and Principals because he is a former don. The Committee said that such a plan should be simple, that it should provide adequate means and that it should not deter students from poorer families. It concluded that the White Paper failed to satisfy any of those criteria.

The loans scheme, which Conservative Members have praised so much, will cut, stabilise or freeze grants, yet it will take more money from the taxpayer--and from the students themselves. It will also remove the housing and other benefits that students so urgently need, so it is socially unjust.

The loans scheme could deter students from entering higher education. Of course, it will not deter the rich students. It will not deter the sons or daughters of the present Cabinet. Like the cuts in the Health Service, the scheme will not affect them because, like the Prime Minister, they can still go private. Members of the Cabinet can do all that, but they still lecture us about how we should deal with our education system--the one that we built. I remind Conservative Members that Robert Peel built the National gallery for the poor--for those who could not afford pictures of their own. However, the Government's hard-heartedness and their lack of care for ordinary people mean that this and similar schemes will be heaped on working people.

It is likely that the scheme will stop students becoming doctors, teachers and graduate nurses. Conservative Members have no intention of facing reality, but they should study the briefing from the Royal College of Nursing, which deplores the fact that the number of graduate nurses will decrease. I note that several of my hon. Friends nod their heads in agreement, but Conservative Members are not interested in briefs that give them facts. They are interested only in briefs that uphold the necessity to cut the Health Service, and attack the ambulance service and the education system. They are interested in briefs that help their people. Eventually, Conservative Members will leave the scene because they will be kicked out, but they will do so with pockets full of loot from the common exchequer. They have not used that loot on education, on building hospitals and so on.

The scheme is vicious. It is anti-education and anti the poorer student. It is deplored by nearly every group in this country except those who sit on the Conservative Benches. The scheme should be kicked out, because it is against the interests of ordinary people. Conservative Members may smile, but they are well-heeled, and they know it. They do not like hearing the truth ; instead, they give a nice smile. When the Labour party gets the chance, however, the scheme will be thrown out.

7.30 pm

Mr. John Maples (Lewisham, West) : The Opposition have sought to confuse the issue and to make it much more complicated than it is. Both parties are agreed that they want to double the number of students in higher education

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in the next 20 years. The simple problem is who will pay for that increase and how that cost will be shared among taxpayers, parents and students.

The issue is relatively simple. Will we double the £500 million a year currently spent by the Government on student support? Will we increase parental contributions, or should some of the burden be put back on to students? I believe that the right solution is to put some of the burden back on to students. The other alternatives would never allow us, or any other Government, to double the number of students in higher education.

The loan proposals will enable the number of students to increase. It will also greatly help those who rely on parental contributions, as we know that those contributions are often not made. More money will be made available for all students. The proposals will especially help students from the poorest families, as the amount of total grant and loan will be increased by 20 per cent. They may be poor students, but they will not be poor graduates and the time when they need help is when they are students.

The debt repayments will not represent a significant portion of a graduate's income. When the scheme is in operation the maximum debt that a student will be able to incur is about £3,900. To repay that over five years requires a payment of £15 per week. Over 10 years, the cost would be £7.50. We know that the average graduate earns about 30 per cent. more than the national average income. After tax, a graduate's income represents an additional £3,000 per year in his pocket compared with the earnings of a non-graduate. We are talking about 25 per cent. of that additional £3,000 being needed over five years to repay the loan, or 12.5 per cent. of that income being needed for 10 years. I do not believe that that is an unreasonable burden, nor is it likely to discourage people from participating in higher education.

At a time when real incomes are rising extremely fast, it is right to start to shift some of the burden from public expenditure to private, and at the same time to allow the Government to reduce taxes. Student loans are an example of where that can be done to great benefit.

The Opposition have criticised the scheme as they believe that it will inhibit access and that it will be costly to administer. If I felt that their criticism about access was justified, I should be against the scheme. That scheme, however, will make more money available to students from the poorer families and it will help those who are discouraged from higher education because their parents do not make up the total contribution. In future it will be unnecessary for them to demand so much from their parents.

We do not need lectures from the Labour party about access. Between 1975 and 1979 the number of full-time students at universities and polytechnics rose by 1 per cent. Between 1979 and 1987 the number rose by 20 per cent. Whatever mistakes we have made, they are obviously nothing like those made by the Labour party. I do not believe that the scheme will have any effect on access, and I believe that participation in higher education will go on growing, as it has in the past decade.

Germany and Japan are often held out as examples of more successful economies than ours because their education and training are better. During the period of their great success, those countries operated 100 per cent. means-tested loans and offered no grants. A higher percentage of our adult population have degrees than is

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the case in West Germany. It is extremely difficult to construct an argument to prove that the scheme will hinder access to higher education.

I suppose that the hon. Member for Blackburn (Mr. Straw) had to find some basis on which to oppose the scheme--after all, that is his job--and, as is common in the Labour party, he followed his prejudices, wrapped himself up in social concern and trailed a lot of red herrings through his argument in an attempt to confuse it. The same goes for the other leg of the Opposition argument, relating to cost. The hon. Member for Oxford, East (Mr. Smith) has written articles and asked many questions trying to prove that the cost of the scheme is much greater than estimated. I am not sure whether he is trying to say that we are spending too much on the scheme. He has said that we should do more for students, but at the same time he appears to be arguing that we are doing too much. I should have thought that he would welcome our efforts.

The Labour party would be likely to spend more and achieve less. In its policy review, it says that it wants to retain grants and to review the parental contribution. Subsequently it has said that it wants to abolish the loans scheme. At the same time, however, the Labour party has said that it wants to double the number of students in higher education. The only way it could do that would be through far more public expenditure than we propose.

The Opposition argue that the Government scheme will result in an increase of £660 million in public expenditure by 2001. By 2012, however, the net additional cost to public expenditure will be zero and, thereafter, the scheme will result in a negative cost--a reduction in public expenditure-- of £200 million per year. If the Labour party simply turned the loans to grants and did not ask for repayment, the deficit by 2001 would be £1,525 million. By 2012, instead of the accumulative deficit being zero, the cost to the Exchequer would be £4.1 billion. Thereafter, the costs would increase by £200 million per year. In other words, the Labour party would incur an additional £400 million per year on public expenditure. If, on top of that, the Opposition sought to make some reduction in the parental contribution, the cost would be even greater. The parental contribution totals about £300 million per year. If the Opposition reduced that by one third, a further £100 million would have to be found from public expenditure. If the number of students doubled, that cost would increase to £200 million per year. That means that the Labour party would be spending about £600 million per year more than we propose to spend.

If I were Secretary of State for Education and Science and the Chancellor told me that I had £600 million per year to spend on higher education and on encouraging more people to take up such education, I cannot imagine that I--or, indeed a Labour Secretary of State--would spend it in the way proposed by the Labour party. It is all fiction, as we know that the shadow Chancellor has said : "We are all agreed that we cannot spend what has not been earned. If that means postponing some of our social ambitions--we may have to do this."

My right hon. Friend the Secretary of State also quoted that remark. It is a fair bet that the £600 million additional expenditure proposed by the Labour party would be one of the early postponements. The Labour party would be unable to increase public expenditure, but it would not

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agree to loans, so there would be no way of increasing the number of students. Once again, the Labour party wills the end but not the means.

We are faced with a simple problem--the problem of who is to pay. I believe that shifting a small part of the financial burden on to students will mean that the number of students will increase and that more support can be given to individual students and we can reduce the burden on taxpayers and on parents. I do not believe that the scheme will affect access and it will certainly reduce long-running costs. It is a truly Benthamite solution and everyone--students, parents and taxpayers--will benefit.

7.38 pm

Mr. Peter L. Pike (Burnley) : I wish to speak against the Bill. I do not agree with the hon. Member for Lewisham, West (Mr. Maples) that it is a simple issue. We recognise that money spent on all levels of education represents an investment in the future of our nation which will benefit it. We are prepared to spend money on that important service.

The Government keep challenging us on the question of payment. We have said that we are prepared to increase taxation for those most able to pay and those earning the most who have benefited the most under the present Government. We are prepared to put up taxation from 40p in the pound to 50p in the pound. This is one service

Mr. Jackson : Will the hon. Gentleman tell the House how much money these tax changes will generate and compare that with the £600 million estimated by my hon. Friend the Member for Lewisham, West (Mr. Maples)?

Mr. Pike : I should not have given way because I do not have time to go into detail about that-- [Laughter.] Conservative Members laugh, but I shall deal with that aspect when we have a proper debate without time restrictions. I cannot do so now, particularly as the Secretary of State talked for nearly an hour when he opened the debate. We are debating one of the nation's most important principles : educational opportunity. One reason why my hon. Friends and I are in the Labour party is that we believe that there are some things in life to which all people should have a right regardless of their ability to pay and background. One such is education and another is health care. Fate has determined that this week the Government are trying by various measures to remove people's rights to both these essentials.

We are anxious to increase the opportunities for people to be educated. Only 5 per cent. of the 18-year-olds in the socio-economic groups 3, 4 and 5 entered higher education in 1987-88, despite the fact that they represent more than 60 per cent. of that age group. That should be a matter of concern for Conservative Members. Why are only 5 per cent. of young people in that group able to take advantage of educational opportunities?

Mr. Tim Janman (Thurrock) rose --

Mr. Pike : I shall not give way because the 10-minute rule is in operation.

We must take into account the fact that people within those groups have ability and should receive educational opportunities, which is what we are arguing for. The former Secretary of State for Education and Science said :

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"I confidently expect that the numbers in higher education, in polytechnics and universities will increase because of our proposals."--[ Official Report, 9 November 1988 ; Vol. 140, c. 320.] The Secretary of State's speech this afternoon has not convinced me for one moment that that will be true. I believe that the exact reverse will be the case and fewer people will be able to receive university education if these proposals are forced through. Many people have referred to the opportunities for university education in France, Germany and the United States. It would benefit this nation if we followed their example.

This is a squalid, enabling Bill in a long series of such Bills. It is time for Conservative Back Benchers to be as concerned as Opposition Members that Members' rights are continually eroded by the powers given to the Secretary of State without those proposals being debated in the House. We are moving in the wrong direction, as is reflected by the Bill.

Schedule 2(1)(c) provides that the Secretary of State can "make provision for the deferment or cancellation of a borrower's liability in respect of a loan."

While the loan is deferred, it continues to attract

interest--although the Government claim that it is not interest. However, to increase the amount owed by the inflation rate is at least the equivalent of an inflation-linked interest rate. Whatever the Government call it, they cannot get over that fact. In many cases the repayments will be deferred for many years which will create tremendous administrative problems. I accept that the Government have said that repayments can be deferred if the borrower is not earning 85 per cent. of the national average earnings.

This is one proposal--if time permitted I could give several other such illustrations--about which we do not have the nitty-gritty or the facts to debate properly because this is an enabling Bill. That is deplorable and Conservative Back Benchers should be concerned about the Government's increasing tendency to remove hon. Members' rights to debate issues before decisions are implemented.

On 20 October I asked the Secretary of State whether he accepted-- Conservative Members have accepted this today--that people who have had a university education earn on average 30 per cent. above the national average and, therefore, the higher taxes that they pay would cover the cost of maintaining them while they were at university. That seems a perfectly reasonable and sensible proposal. With the exception of the poll tax, which does not take into account someone's ability to pay, most taxes are fair, and income tax is certainly fair because it is based on ability to pay.

This afternoon the Government have skirted round the loss of benefits that students will suffer. It is clear that many students will lose more in benefits than they will receive in loans, which is regrettable.

Whenever the Government consider education, they fail to recognise the challenges facing the nation. They fail to recognise that education is an essential investment in this nation's future and the need to ensure that everybody in this country, regardless of background, should have an equal chance to receive education. The Government's dogma, their attitude that come what may they must cut public expenditure and the Prime Minister's-- and therefore the Cabinet's--obsession that public expenditure should govern everything the Government do mean that

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they judge issues only by the amount of Government expenditure. They fail to ensure that we tackle these problems positively. This is a bad Bill which does nothing to ensure or enhance people's educational opportunities. When students graduate from university and are faced with the expenditure of setting up their own homes, the Government's proposals will burden them with debt repayments. The Bill is bad for the nation's education and should be rejected. 7.50 pm

Mr. David Davis (Boothferry) : Much of the case put by Labour Members so far hinges on two arguments : that the introduction of loans will reduce participation overall in higher education, or will reduce the participation of those in the less well advantaged groups. Either outcome would constitute a poor result for our policy, if either were true. In fact, there is no distinguishable correlation between the existence of grants or loans and the take-up of higher education.

That may seem odd, because one might expect that a subsidy plus the advantage of a 40 or 50 per cent. increase in income would lead to a great take-up of higher education, but experience of take-up in West Germany and Sweden, which have predominantly loan-based systems, is no worse than experience in this country. That should be explained clearly when we say that loans will not curtail higher education for our youngsters but will have the opposite effect.

In making my case, I will develop a point put first by my hon. Friend the Member for Eastwood (Mr. Stewart) and then by my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey). For this purpose I shall cite three cases--a youngster from a very low income family, a youngster from a very high income family, and one from a family in between. I shall examine those cases from the point of view of parental contribution to see what effect that contribution has on the decision whether to go to university or college.

We have heard that 35 or even 40 per cent. of students do not receive a full parental contribution.

Mr. Jackson : It is 40 per cent.

Mr. Davis : With the very low income family, no parental contribution applies, so I can set that case to one side. At the other extreme, the high income family typically will have a lot of discretionary income and, if it is a managerial or professional family, will have some experience of higher education and therefore an understanding of its value. Indeed, such a family will probably already have been paying school fees, perhaps of £6,000 or more a year. For that family, a payment of £2,000 plus would not represent a great deal.

The difficult case occurs with what I have heard described as the class three person, perhaps a relatively well paid skilled manual worker. The family income for such a worker is now significantly more than £300 a week. That family will have to find over £1,000 to send its offspring to school, a large sum for such a family.

We must remember that the head of that household himself probably left school at 15 or 16 and went on to do an apprenticeship for a pittance for several years. He has no experience of the value of higher education and could

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reasonably reach the conclusion that it was not a good investment, for he or she will see all of the costs but none of the benefits.

Mr. Harry Barnes (Derbyshire, North-East) : Is the hon. Gentleman aware that the examples he is giving could be of people who are in professions which are badly paid? They may be social workers, school teachers and others who earlier in their lives were graduates and who have the same understanding of higher education as those in higher income groups.

Mr. Davis : The hon. Gentleman is making my case. I was about to deal with the very cases to which he referred, and I will do so later. Meanwhile, I am making a clear case affecting a large number in the population in the income categories of which I have been speaking.

Let us not forget that the decision on this issue is not made by the beneficiary--the person who will receive a 40 per cent. gain in income. The decision is pushed on to the parents rather than on to the youngster. The Bill moves that decision, at least in part, back to the beneficiary, the youngster, and that is a key issue in the debate.

Opposition Members have suggested that what is proposed will become a millstone for that beneficiary later in his or her life. That argument ignores the practicality of the timetable of the imposition of the scheme. It goes through the whole of the 1990s, and we have heard in other debates that throughout the 1990s there will be a demographic shortage of young workers. In other words, there will be more than enough demand for every available graduate leaving university.

Companies searching for new graduates will pay off the loans. In other words, companies will bid against each other to pay them off. Rather than a millstone, it will enable youngsters to see where they can get the best return on their education. Instead of being a millstone, it will be an economic lodestone.

7.55 pm

Mr. Roy Beggs (Antrim, East) : The proposed student loans scheme, together with freezing parental contributions and grant in cash terms from 1990-91, will cause unnecessary hardship for students in Northern Ireland and in other areas of high unemployment and deprivation.

To deny most full-time students in further and higher education income support, unemployment benefit and housing benefit is a further attack on the least well off in society. Disabled students will not be well served by the proposals.

I can only assume that those radical advisers who were responsible for promoting these new measures for financially supporting students have limited knowledge of the struggle to make ends meet experienced by students from less-well-off backgrounds. "Access funds" to provide discretionary support in individual cases of financial need for students losing entitlement to benefit will not be an acceptable alternative. Harold Wilson, when Prime Minister, was given a clear message from Northern Ireland after his "spongers" remark. We in Northern Ireland are not spongers, and the Government should not attempt to make our students beggars and borrowers.

It is generous of Government not to abolish parental contributions and to provide parents with the option of

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paying more, thereby requiring the student to borrow less. That may be acceptable in the affluent south and south-east of England, but many parents in Northern Ireland--where there is a higher cost of living, lower than average national income and higher

unemployment--cannot afford to pay more.

Every young person in Northern Ireland and throughout Great Britain, irrespective of class, creed or sex, whose academic achievements qualify him or her for further or higher education should automatically qualify for sufficient grant to enable qualifications to be obtained which will ultimately lead to gainful employment. A highly educated and skilled population will help us to bring economic prosperity to Northern Ireland. Education is the soundest investment we can make.

I do not believe in encouraging anyone to borrow or to get into debt, and least of all in burdening with loan debt students who have enough stresses and strains to cope with already. Loan sharks are causing a lot of trouble in my constituency. I should hate to think that students would ever get into their clutches. That is why we should pay students grants and let them pay their way.

It must be a matter of concern, especially to those who have read the huge document, "The Higher Education Demands Survey : Final Report" commissioned by the Department of Education and Science, when the reseachers Cormack, Miller, Osborne and Currie, looking at the proposed change from a grants to a loan-grant system, said that one third of students had reported that they would reconsider their decision to enter higher education in the event of a loans scheme replacing student grants.

The final paragraph in the chapter dealing with student loans said :

"Overall, therefore, it must be concluded that the introduction of a loans policy as a replacement to the existing grant system could radically alter both the size and social characteristics of participation in higher education by Northern Ireland students." The survey did not take into account the precise loan system being promoted by the Government ; it came to general conclusions, however, that back up the fact that there is a real risk that students from poorer backgrounds and Roman Catholics would be more likely to reconsider entry into higher education.

If the loans scheme is introduced to Northern Ireland, it will more adversely affect the prospects of students from working-class backgrounds of getting into further and higher education than it will affect those of students in Great Britain. At present in Northern Ireland, entrants into higher education reflect a good balance of Protestants, Roman Catholics and females. To deny opportunities to Roman Catholic students from poorer families will lay the Government open to allegations of discrimination against Catholics and provide the very evidence that is needed to confirm them. I firmly believe that no student should be denied the opportunity to realise his or her full potential in our education system, but I have nothing in common with the small Republican group of graduates who offensively dishonour the state that has provided them with a full and free education.

The proposed system of student loans will not encourage greater participation by students in further and higher education in Northern Ireland. The Government must further examine international evidence which shows that loans schemes and a desire to avoid debt are

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diminishing the proportion of poorer students entering higher education. There can be no comparison betwen the ability of wealthy West German parents to support their students and that of parents on low incomes in Northern Ireland to do so.

Dissuading less well-off students anywhere in the United Kingdom from entering higher education may well sentence their offspring in succeeding generations to missing the obvious advantages of higher education. Acknowledging the fact that demand for higher education outstrips its provision in the Irish Republic, can the Secretary of State give us an assurance that the high level of entry qualifications demand in Northern Ireland and the increasing demand from students from the Irish Republic are not already disadvantaging many able Northern Ireland students and preventing them from obtaining places in higher education?

Ulster Unionists want legislation in this House to be applied to the United Kingdom as a whole, but we cannot welcome this Bill, which will be applied later to Northern Ireland through the Order in Council procedure. All hon. Members should be concerned that we are being asked to approve a blank cheque to cover any sums required by the Secretary of State for making payments under the Act. I fear that the estimated low costs of introducing the scheme may prove higher than those of the present grant and maintenance system in the long term.

Finally, I ask the Secretary of State to review the additional burden placed on parents in Northern Ireland, who are already paying much higher rates for their homes than are paid in some parts of Great Britain for similar properties and whose children are required to pay the poll tax when studying in Great Britain. That injustice should be removed by exempting Northern Ireland students from the poll tax while they are studying in Great Britain.

I urge the House to reject this scheme. The Government are gambling with the educational prospects of many potential higher education students. We cannot risk losing opportunities of higher education. 8.4 pm

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