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Dr. Hampson : The United States system, of which I have experience, and systems in other countries are having to be reviewed, because the sheer cost of the loans scheme is forcing them to cut back, as we saw in the Reagan years. They do not want a more costly scheme of full grants for all students.

Dr. Thomas : The whole point of a comparison with the United States system is to consider the level of deferred payments and of defaulting and whether the system is a burden on individual students. We will go down that road if we rely on the loans scheme for our support.

Concern about the total cost of the scheme, and recovery costs in particular, has been stressed. In the United States, total federal spending on the guaranteed student loan programme component of higher education is one third of £3 billion. That is being spent on substituting private sector bank loans to students and the rest is being eaten up by paying the default rates. That gives us a clear warning about a loans scheme. I see that the Minister is indicating dissent. I shall let him do that from a sedentary position, otherwise I shall not complete my speech in the time available.

We are also worried by the fact that the Government regard the scheme as a solution to the problem of access to higher education. We must devise a policy for higher education that makes it much more flexible in terms of access. I refer to flexibility of course structure, and flexibility as between the designations of further, higher and recurrent education, so that students are attracted at all stages of their careers. It is extremely unlikely that a loans system which imposes additional burdens on earners will attract people back to the education system, especially for retraining.

Graduates who return to higher education for further training and others who decide to go into higher education later in life will provide many of the skills needed in the economy in the next century. I know that the Minister cares deeply about this, but any deterrent to people participating in higher and continuing education will inhibit the flexible skilling that the economy needs.

For all those reasons, we shall oppose the Bill. We are especially worried that the existing hardship schemes that are operated voluntarily by student unions and universities are being used to the full. I have been lobbied by students who tell me that such funds are often swallowed up early in the term. Already students in the grant system are having to borrow or take overdrafts of £300 or £400 a year. That shows the pressure that is already on them. A loans scheme will only increase that pressure. The Government want that. They want a clear financial incentive in higher education. They want to turn it into a marketable commodity, as they have tried to do with the rest of the economy.

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9 pm

Mr. Anthony Coombs (Wyre Forest) : I strongly support the Bill because it is right, and it is about time that we asked students to repay some of the investment that is made, often by much lower-paid taxpayers compared with students' potential earnings.

The Bill seems at last to be tackling the new realities at the end of the 20th century and the beginning of the 21st. In the next century, the successful economies will not be those which are natural resource or capital based ; they will be the knowledge-based economies. Charles Handy, of the Institute of Personnel Management, has calculated that 30 years ago 30 per cent. of the population worked in knowledge-based industries, but that 70 per cent. will do so by the end of this century. Because we rely purely on a grant-based system and parental contributions, we have unnecessarily handicapped ourselves.

Mr. Straw : Is the hon. Gentleman suggesting that people who work in factories do not apply any knowledge?

Mr. Coombs : I suggest--I am sure that Professor Handy does, too-- that a significantly higher proportion of jobs in the 21st century will require higher education qualifications. We handicap our scope for economic growth by relying purely on grants and parental contributions.

Student loans are not exactly new. The Anderson committee of 1960 rejected them only because it estimated an increase in higher education to 175,000 students by the end of the century rather than the 400,000 that we now have. In 1963, Robbins said that once the habit of contemplating higher education is

"more firmly established, the arguments of justice in distribution and the advantage of increased individual responsibility"-- through a system of loans--

"may come to weigh more heavily and to lead to some experiment in that direction."

In 1985, Lord Glenamara and others in the Labour party--in a paper entitled "Student Financial Support"--effectively accepted the principle, but rejected loans in practice because they were concerned about repayment difficulties, especially for low-paid groups and people who had career breaks.

The upshot of all that was that nothing was done and Britain was left with a system of student maintenance which was expensive, gave relatively low access and was socially regressive. Britain spends more on higher education than any other European nation except the Netherlands. My right hon. Friend the Secretary of State has already given, at constant 1984 prices, the United Kingdom figures for average maintenance support compared with our industrial competitors. The United Kingdom spent £270 per student, West Germany £70 and Japan only £30. Moreover, grants in Britain are available to 80 per cent. of the student population, which is much higher than anywhere else in the industrialised world, far more than any other country with the exception of the Scandinavian countries. That amply demonstrates the generosity of our system.

Mr. Janman : My hon. Friend was right to quote Lord Robbins. Another aspect of the early 1960s was the Anderson committee which, in 1960, recommended the current system, envisaging about 175,000 grant awards per

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year whereas we are now running at more than 400,000 grant awards per year. The system was first started when people did not realise what the total cost to the taxpayer would be.

Mr. Coombs : That is precisely the point that I was making earlier. I concur with what my hon. Friend says.

The loan system being introduced will be universally available to 100 per cent. of the population. Comparing that with similar loan facilities available in other countries, we find that in Canada they cover only 30 per cent. of the population, in France they are used for emergencies only and cover less than 1 per cent. of the population, and in Japan they cover less than 12 per cent. of the population. Even in the United States, where they were pioneered, loan facilities apply to only 25 per cent. of the population. Despite our generous system of student support, our participation rates are significantly lower than those of our industrial competitors at 14 per cent. compared with 28 per cent. in Germany and 44 per cent. in the United States, and a considerably higher rate is expected in other competitor countries, particularly in south-east Asia. That is the greatest challenge to the mythical proposition that loans will necessarily mean less access.

One does not need a great amount of cynicism to realise that the National Union of Students will not fall over itself to accept loans when it has previously been offered grants. But even its own survey, showing that at present only 7 per cent. would forgo a university education with a loan scheme, is belied by the fact that figures for student entry this year are some 2 per cent. up, despite the fact that the loan scheme will no doubt impact on their higher education in future years.

My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) made the valid point that, although the grant has shown a reduction in real value of some 25 per cent. since 1979, there have been 180, 000 extra students. In the past two years, social security support has declined, as have parental contributions, but that has had no effect on student access--indeed, rather the opposite, as students have, rightly, increased their employment income, as they are expected to do in other countries in the vacations and at other times by more than 51 per cent. in the past two years alone.

As my hon. Friend the Member for Bury, North (Mr. Burt) said, the moral argument is that it can only be right that the 15 per cent. of the population who have the opportunity of a university education, and who are subsidised by the 85 per cent. who have not--especially as a quarter of the income tax paid in Britain is paid by people with incomes below £10,400 per year--should make some contribution towards the university education that they receive. Ultimately, access to higher education in Britain will depend on the numbers suitably qualified in our schools, not on the type of student maintenance available.

The scheme shows no evidence of being a deterrent. It is socially more progressive and it will provide a higher level of income support and encourage independence if parental contributions are halved. Except perhaps in the early-day motion put forward by the hon. Member for Bradford, North (Mr. Wall), which amounts to spending an extra £3.5 billion of taxpayers' money each year, I have heard no credible alternative which addresses the problem of increasing participation in higher education in Britain

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over the next 20 years and does not involve a loan system. It is a practical alternative and one that will be accepted by the people and by future students. I strongly support the scheme and I congratulate the Government on bringing it forward.

9.10 pm

Mr. Harry Barnes (Derbyshire, North-East) : I heard the hon. Member for Cambridge (Mr. Rhodes James) speak in the debate on the White Paper, so I exempt him from the criticisms that I shall now make of the Government and Tory Members. They do not have any serious interest in education. They are interested only in education as real estate. They judge education and educational advances by assessing the real estate of the mind and its development and the price that can be paid for it and the earnings that people can make after receiving a university education. They look at education like that rather than discussing what it is about and how we should be directing it.

Education should be about opening people's minds and giving them the wit and intelligence to turn their hands to anything and to tackle problems in life. Increasingly, the Government are interested only in closing people's minds, limiting and restricting their horizons and making them pick up specific attitudes and regurgitating them. That is contrary to the spirit of liberal education at all levels.

The contributions made by Tory Members made me worry about higher education institutions, because many said that they are products of British universities, but they put forward arguments that had no concern for the values that there should be in an education system, or for the notion that education is about understanding situations. It is not about getting facts and regurgitating them, but about analysing and discussing them. If one analyses situations and understands other people's arguments, it is easier to remember the facts and details.

The hon. Member for Swindon (Mr. Coombs) used many statistics. If one were a university undergraduate going into an exam, it would be difficult to use figures such as those. To do that, one would have to be like Leslie Welch, the memory man, but he did not necessarily understand what he was repeating. The hon. Gentleman had to follow his notes very closely to give us that information. If people investigate and analyse situations, they often find that the information they need is attached to that analysis. Sometimes, they do not understand where it has come from, but they have understood it, not because they have volumes of encyclopaedic information available to them but because they have argued the information out. In education, we need a questioning attitude so that we investigate matters, which will give us an opening into what we are investigating. When we have solved that problem, it opens up far more questions than it answers. Such an attitude and approach would help us to handle the economic problems that the hon. Member for Swindon mentioned, because people would have their wits about them and could advance. The flowering of understanding should take place in higher education institutions in particular.

What is education for? It is to help individuals to develop so that they can lead full lives and realise their potential. In Britain, we place many stumbling blocks in the way of people's progress. We must not find yet another stumbling block in the form of a student loans system. We

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also want an intelligent society. We want people to discuss and argue, to participate in the democratic process and to make collective decisions. We would do well to remember in Britain the flowering of the democratic process that is taking place in eastern Europe.

There is another reason why education is especially important at the moment : we are undergoing a technological revolution. We can no longer depend on raw materials for our survival ; to survive these days, we must begin living on our intelligence. If we fail to educate our people, we shall fail to earn a position in the world. Economic and social factors are both very much to the fore.

I shall not detain the House much longer, as I know that the hon. Member for Cambridge wishes to develop the argument further. Among those who will be hit by a student loans scheme are those adults who are prepared to sacrifice a tremendous amount in the present and perhaps some of their earning potential in the future by giving up good jobs, and who are prepared to take risks. No one ever seems to talk about students who fail. How are they to earn the money to pay back the loans?

No one is in a worse position than women--both those who return to education and those who enter it for the first time later in life. They bear a heavy burden, and when they have completed their education they may have to take time off work to have families and so on. The last thing they need is the additional burden of a loan, especially as they tend also to enter badly paid jobs such as speech therapy.

People from working-class backgrounds and members of the ethnic minorities will also suffer. They already feel that they have to open many doors to complete their education. If we place yet another closed door in their way, they will give up. We should be encouraging them to push open those doors, and that can be achieved only if the state provides the necessary resources.

9.17 pm

Mr Robert Rhodes James (Cambridge) : My right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith), who is not as well as one would wish, has asked me to convey this message to the House.

"If I had been able to attend the House, I would certainly have been speaking against the proposals and possibly voting against them as well. I certainly would not have supported the Government's policy."

I have spoken so often on this subject, in the House, in my constituency and elsewhere, and my views are so widely known that I shall not need to trespass long on the patience of the House. I still find it baffling that, after two years of apparently deep consideration of the problems of student finance, the Government have come up with a widely disliked and extremely complicated scheme, which will be horrifically costly in the initial period and which, in my judgment, will act as a serious deterrent to many potential students. The scheme also runs counter to the Government's declared policy, which I warmly support, of dramatically increasing student numbers. Ministers say that there is no contradiction, but I beg to differ.

We all know that the extravagant hopes and expectations of the early 1960s, when the Conservative Government embarked on an enormous expansion of higher education and introduced student grants, turned into disappointments. We must look back on that period. Certain academics and former students should reflect on

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their roles at that time. However, I fear that that is history. The House and the former Labour Government should share the blame of which there is plenty to go round.

Some time ago, the Prime Minister invited me to take on responsibilities in these matters. I visited every university and polytechnic in the country. I reflect on the fact that I played some part in saving Coleraine from being closed. I learned certain things then. I discovered in certain famous institutions that there were bad debts and in certain not-so-famous institutions I discovered superb debts. I came across wonderful teachers and bad teachers. I was struck by the great diversity.

I strongly supported Sir Keith Joseph's proposals in 1981 because they were urgently and desperately needed. In private,

vice-chancellors told me that they agreed with those proposals, but in public they would denounce the Government. Reforms were urgently needed. I discovered much that was bad and lamentable. However, I discovered a wonderful spirit among students. I attended many public meetings, but did not experience any outcries.

I recall that Durham university at the time was developing a cricket ball for the blind. It was successful ; a superb example of applied technology for a social purpose. In that connection, I sometimes think of Mr. Dexter. [ Hon. Members-- : "Oh, no."] I also recall a professor at Newcastle polytechnic who had the opportunity to go to Cambridge and Oxford, but he decided to stay in the north-east because he had a deep commitment to the area.

If I had been involved in the Government's new proposal, I would have introduced a real top-up loans scheme to be administered by the institutions themselves and not by the banks or some monster in Glasgow. I would not have proposed a plan in which the loans element would be at the expense of the grant. I dislike the Government's scheme in principle and in practice, and I will vote aainst it tonight.

9.22 pm

Mr. Andrew Smith (Oxford, East) : A distinguishing feature of the Government's students loans proposal is that the more time Ministers have to consider it, the less information they are prepared to put before the House. Instead of learning more about the scheme, hon. Members learn less. We might have hoped that Ministers would have carried this "Alice's Adventures in Wonderland" course to its logical conclusion and made the Bill disappear altogether so that only the grin of the former Secretary of State for Education and Science was left.

The present unfortunate Secretary of State for Education and Science, on taking up his office, could have taken the opportunity to dump all his predecessor's ill-judged, ideologically motivated measures and set education on a course that was better for the country and for the Conservative party. As it is, he has chosen to stick to the very worst proposals and dilute what was better. The sympathy that hon. Members might have felt for him is accordingly evaporating even more quickly than the information in the Bill. As my hon. Friend the Member for Blackburn (Mr. Straw) said, it is nothing short of a constitutional outrage that such an important change in higher education which affects the opportunities of so many people should be

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brought forward in this shameful fashion, denying the House the information upon which to make a reasoned judgment.

The key point at issue is that the Bill has been specifically designed to minimise the time and opportunity for public knowledge and debate of the central elements of the legislation to put the scheme into effect. Let us examine some of the important information that Parliament is still not being told about.

Hon. Members are not being told about the amount of the proposed loans, how they will vary for London, outside London or for home students, or how repayments are to be made. We are not given details of the access funds about which the hon. Members for Bury, North (Mr. Burt) and for Rugby and Kenilworth (Mr. Pawsey) expressed concern. We are not told about the withdrawal of social security benefits or any exemptions. We are not being told what the student loans company is, what it is to do, or how it is to work.

Hon. Members are not being given any breakdown of the administrative and start-up costs. As several hon. Members have pointed out, we are not being told anything to mitigate the damage that the Bill will do in Scotland. We are not being told anything about the damage to nursing as a graduate profession. That point was stressed by my hon. Friends the Members for Sheffield, Hillsborough (Mr. Flannery) and for Glasgow, Central (Mr. Watson). We are not being told of any measures to help people such as medical students who are on especially long courses and face even greater outstanding debts at the conclusion of their studies. The Secretary of State's advice that longer repayment periods are being seriously considered will be of scant comfort to people in that position.

We are not being told of any help for disabled students such as the deaf, on whose behalf the Royal National Institute for the Deaf wrote to hon. Members yesterday reminding us that deaf students do not receive social security payments and seeking an access fund and an overhaul of disabled students' allowances. How can Ministers ask hon. Members to approve the Bill without addressing those matters? We are not told much. Hon. Members are being asked to vote in ignorance for ignorance.

One of the main reasons why the Government are in such a mess with the proposal and why they have resorted to this shabby expedient of an enabling Bill is that they are vague and confused about the purpose that they are seeking to achieve in the legislation. We are told variously that it is to save money and that it will do students good. We are told by the Secretary of State that it will not impede access. But the Under-Secretary of State and the hon. Member for Rugby and Kenilworth and others have said that it will extend access--perhaps a significant difference. It bears repeating that, even on the Government's own figures, there will be no cumulative savings for taxpayers to the year 2026 with the 100 per cent. take-up which the Under-Secretary of State has said that he hopes to achieve, and no cumulative savings until 2014, even with 80 per cent. take-up. Over the next two decades the Government are seriously proposing to spend £1.6 billion on giving students less. That money is being taken from the taxpaying pensioners to whom my hon. Friend referred. It is a pleasure to take part in a debate with the hon. Member for Epping Forest (Mr. Norris). He gave an

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excellent exposition of why he fared somewhat better with the more affluent voters of Epping Forest than he did with those of most modest means in Oxford, East.

Hon. Members have heard claims and counter-claims about overseas experience. My right hon. Friend the Member for Halton (Mr. Oakes) and others have argued that is makes no sense for the United Kingdom to opt for loans precisely when other countries, notably Sweden and West Germany, are moving from them by increasing the proportion of grant. That view has much to commend it. Other hon. Members such as the hon. Members for Bury, North and for Hendon, South (Mr. Marshall) have argued, as have Ministers, that loan schemes in various other countries co-exist with higher participation rates than in Britain. There are two important points to make about that. First, if hon. Members consider the number of students graduating as opposed to entering higher education, they will note that Britain's relative performance is much better. Chart H of the Department's own White Paper shows that 27 per cent. of the relevant age group in the United Kingdom have graduate qualifications, compared with 25 per cent. in France, 21 per cent. in West Germany and 18 per cent. in the Netherlands--all countries that operate student loans schemes. That is testimony to the cost effectiveness of the grants system and to the relative efficiency of British higher education in thereby holding down the rates of drop-outs and retakes which poorer financial systems of support foster.

Secondly, it is a plain logical fallacy to suppose that, simply because higher participation may coexist with loans schemes elsewhere, the shift to a loans scheme here would in any way increase participation. The proposition that increasing the effective cost of something will, by some mystical means, increase demand or take-up is an affront to common sense and flies in the face of the evidence available.

Ministers will be aware of the survey that was published yesterday by the National Union of Students which showed that 16.2 per cent. of respondents stated that they would not go into higher education if the Government brought in the scheme. That proportion rose to 23.6 per cent. among students from low-income families.

Mr. Ian Bruce (Dorset, South) : When the hon. Gentleman says that students will not take up university places, does he not find it strange that during the past 12 months, when they have been clearly told that there will be a student loans scheme during their period of higher education, they have come forward in greater numbers?

Mr. Smith : Obviously they have confidence in the prospect of a Labour Government coming to power at the earliest opportunity and repealing the scheme. If the hon. Gentleman had been here for the debate, he would have heard the arguments on that.

Ministers will also be aware of the survey carried out by the British Medical Association Students Group, showing the serious effects of the scheme for those contemplating studying medicine. As for the claim that the scheme will be good for students and, in the words of the Secretary of State, that it will

"reduce students' sense of dependency on the state, and will promote a proper sense of self-reliance and responsibility."--[ Official Report, 20 October 1989 ; Vol. 158, c. 375.]

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the Government cannot have it both ways. They cannot expect the House to accept simultaneously the contradictory assertions--on the one hand, that the scheme will hurt and that students will therefore think carefully about what they are getting and how they will pay the loan back, and, on the other hand, that the scheme will attract people who have previously not taken advantage of grants to take advantage of the loans. The scheme can hurt or it can help, but it cannot do both.

In practice, it will hurt, especially the proposal uniquely to penalise students by taking away their access to income support and housing benefit. There is no doubt that the scheme will most hurt those students from poorer backgrounds, those studying in London and, as the hon. Members for Antrim, North (Rev. Ian Paisley) and for Antrim, East (Mr. Beggs) have said, students in Northern Ireland. The Research Services Limited study, "Student Income and Expenditure Survey", which was commissioned by the Government, showed that 70 per cent. of students from C2, D and E backgrounds receive some money in benefit, as compared with 44 per cent. of those whose parents are in social class A. The sums involved are significant, with average students in receipt of housing benefit receiving on average £286, rising to £310 for working-class students and £499 for those studying in London. There is no doubt that the removal of such sums will cause hardship and that cannot but act as a disincentive for poorer students.

The Government clearly have no idea about how this loans Bill ties in with the previous Secretary of State's commitment to double participation in higher education over the next 25 years. As my hon. Friends the Members for Bridgend (Mr. Griffiths) and for City of Durham (Mr. Steinberg) have ably pointed out in their excellent speeches, there is a glaring inconsistency in the information being provided to the House. All the Government's projections of costs and savings relate to chart 5 in the White Paper, which shows participation of the relevant age group rising from just above 15 per cent. in 1990 to just above 18 per cent. in the year 2000. In the tables estimating the financial effects of the loans scheme it is said :

"The estimate is based on the hypothesis that the number of students eligible for loans grows in line with the projection shown in Chart 5 up to the end of the century, then remains constant thereafter."

Ministers talk about increasing access and about doubling the number of students in the next 25 years, but all the costings that we have been able to squeeze out of them--the £1.6 billion cumulative cost in the next 20 years--are based only on a marginal increase in participation between now and the end of the century. No clearer evidence could hardly be available to show that Ministers either have not done their sums on costs or that they do not understand the implication of what they are saying about access, or possibly both. I challenged the Under-Secretary about that in a letter dated 19 July to which I have not yet received a reply. That silence speaks volumes for the weakness of the Government's argument on how they will pay for the expansion of access to which they say they are committed.

Faced with all that, to say nothing of annual default rates of more than 100,000 after 2010 and deferral rates of more than 700,000 in the same year and onwards, no wonder that the poor old banks do not know which way to turn or what to do for the best. I never thought that I

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would get applause at student rallies for the banks. One need only say the Co-operative bank, Lloyds, Bank of Scotland or Clydesdale to have them cheering to the roof-tops.

The Under-Secretary should say how the scheme will be administered. In a written answer to me he said that students will be obliged to seek a loan at a branch of one of the participating banks. Will he clarify that a student needing to take out a loan will not need to hold an account at the bank providing it? Will he confirm that a Co-operative bank customer can go along to a participating bank, which, in return for the £12 fee paid by the Government, will do all the administrative work and pass the loan amount provided by the Government to that student's Co-operative bank account at no charge to the student or to his bank? The non-participating bank will incur no risks, no additional administrative costs, and will not face queues of students filling in loan claim forms who will then clog up the counters at the beginning of the academic year. It will also not suffer any damage to its reputation in the eyes of students. It appears that the costs, the risks and the administration will fall on the participating banks in return for which they will receive £12 per application and a pat on the back for acting as an administrative arm of the Government. Will he confirm that that is broadly the picture? Is he surprised that some banks would prefer not to take part? Mr. Walden rose--

Mr. Smith : I shall not give way as I am running out of time. The question that has come up time and again is why the Government have not listened to the volume of opposition expressed by all groups that have responded to the White Paper. If the Government will not listen to students, to colleges, informed commentators, the banks or to us, why will they not listen to their colleagues here and in the other place who have no confidence in the proposals?

The House is confronted with an apology of a Bill. Its very omissions speak volumes for the weakness of the case that Ministers have attempted to put to us. If they are really convinced of the strength of their loan proposals, why have they not had the decency, to say nothing of the constitutional propriety, to set out those proposals in full before us? It is not as though the Government have not had enough advice. So far they have spent no less than £451,223 on the consultants, Price Waterhouse. It looks as though that company and debt collectors will be the only ones to get any benefit from the Bill.

I agree with my hon. Friend the Member for Burnley (Mr. Pike) that the Bill is squalid. Frankly it stinks as it reeks of Ministers' fear as to what the House and the other place would do if the full details were included in the Bill. It reeks of the sweat that Ministers are now in because they are trying to meet the Government's self-imposed deadline of having the scheme up and running by next autumn. The Bill shows contempt for the House and the best interests of higher education in this country. It will pave the way for entry to higher education to depend more on ability to pay and less on ability to benefit.

As we heard in the debate on 20 October, many Conservative Members are opposed to the likely practical

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implications of the Bill, its high administrative--and particularly public expenditure--costs. In addition, others such as the hon. Member for Cambridge (Mr. Rhodes James) rejected it for its effects on access and because it starts to dismantle the system of grants which we believe, and Conservative Members were once proud to believe, most effectively opens up opportunities for higher education.

This is a thoroughly bad Bill, as expensive in its costs as it is disastrous in its consequences. It will be bad for our country, higher education, students, and especially those people we wish to attract into higher education. It has been brought before the House in a thoroughly shabby way. It invites rejection from hon. Members on both sides of the House who should stand up for educational opportunity and reject it.

9.41 pm

The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson) : It is always agreeable to follow the carefully prepared diatribes of the hon. Member for Oxford, East (Mr. Smith) and I look forward to our further encounters in Committee when his advice is rejected as it will be today.

We have had an interesting debate which has been notable for the substantial contributions made by Conservative Members. With all respect to my hon. Friend the Member for Cambridge (Mr. Rhodes James), what has been said from this side of the House has been more representative of Conservative opinion than what was said in the previous debate.

Many issues have been raised in the debate and I shall make my way through them in turn. These include the nature of the Bill, international comparisons, access, student attitudes to loans, equity and social justice, the disabled, and housing and social security benefit. I shall try to address all those subjects in the short time that I have.

The structure of the Bill has been raised by many hon. Members, including the right hon. Member for Halton (Mr. Oakes) and the hon. Member for Antrim, North (Rev. Ian Paisley). A great deal of play has been made of the way in which the Bill is drafted. We have been told that it is a constitutional outrage and the hon. Member for Antrim, North compared it with an IRA bomb, which was an analogy in poor taste. The structure of the Bill is identical with the structure of the Education Act 1962 providing for student grants which has not been subject to any complaint during the 20 or so years of its operation.

The hon. Member for Blackburn (Mr. Straw) gave no cogent explanation as to why it was inappropriate to follow the path laid down in the 1962 Act. Anybody who thinks for more than a minute about how to administer a grant or loan system will see that the legal arrangements that we envisage are the only sensible ones. We are taking power to provide money for loans and to table regulations for the administration of loans on the model of the grant provisions. We had a valuable testimony from my hon. Friend the Member for Eastwood (Mr. Stewart) who has been responsible for running the grant regulations in Scotland, as I have in England and Wales.

My hon. Friend the Member for Canterbury (Mr. Brazier) made an important intervention in the speech of my right hon. Friend the Secretary of State when he pointed out how it was possible to use the flexibility given

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by the regulation-making power to the advantage of his constituents. There have been many such cases. Let us hear no more of this totally bogus argument.

Dr. Hampson : When my hon. Friend is putting flesh on this thin skeleton of legislation, will he consider two developments? One is to try to get more of the banks' own money into higher education by co-operation between the Treasury and the Department of Employment in extending the career development loans system that we already have, which uses some Government subsidy to assist the banks in lowering interest rates so that we can help as wide a range of students as possible. The second is not to go to a full 50 : 50 loan and grant but to have a higher grant element, as the United States has in its basic educational grant, to help get more participation from families on low incomes.

Mr. Jackson : I hope that my hon. Friend will assist us in Committee to improve the Bill. It will be open to the House to amend the regulations and it will be possible for the House to take a view about whether it is desirable to have a 50:50 loans scheme or to change it in other ways.

Mr. Straw : How can this House amend regulations?

Mr. Jackson : The regulations come before the House for debate, as they have done for a long time in respect of grant legislation. The issue of international comparisons was raised by, among others, my hon. Friend the Member for Bury, North (Mr. Burt) and the hon. Member for Antrim, East (Mr. Beggs), and much play has been made of that. There are many different systems of student support. Indeed, if one imagines a sort of spectrum of generosity towards the student, the British system, as my hon. Friend the Member for Wyre Forest (Mr. Coombs) pointed out, is almost certainly the most generous in the world. It provides for free tuition, free maintenance grants for nearly all students--certainly for all full-time students--and at a generous level. The result is that Britain is spending a higher proportion of GDP on student support than any other country and spending a higher proportion of its higher education expenditure on student support.

At the other end of the scale, Japan is probably the least generous. The Japanese charge for tuition, they have no grants, only loans, and those loans are available to only 10 per cent. of students. I echo the words of my hon. Friend the Member for Hendon, South (Mr. Marshall) in saying that Japan has more students in higher education than we have, which suggests that there is no correlation between student support arrangements and participation.

Our proposals will create a loans system which will be among the most generous in the world. It will be available to all full-time students. The loans scheme in the Federal Republic of Germany, for example, is available to only 30 per cent. of students. Ours will be at a real zero rate of interest. That is to be compared with the positive interest rates which are commonplace in other loan schemes. We are moving towards a 50 : 50 ratio of loan to grant. Compare that with the movement in the Federal Republic and with the position in other countries in northern Europe.

We are making extensive provision for deferral if incomes fall below 85 per cent. of the national average income--about £10,000--a facility that is not available in United States loans system. In view of what has been said

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about mature students, it is important to remember that under our proposals loans will be available until age 50. Many countries cut off entitlement to a loan at age 30. Our proposals are for a generous loans scheme.

Mr. Salmond : The Minister will be aware that there is a higher participation rate in university education in Scotland than south of the border. Has he seen the calculations of NUS Scotland? Using the Government's figures, but substituting a 6 per cent. inflation rate, at the end of a four-year degree course the outstanding debt will be 60 per cent. greater than at the end of a three-year degree course. Will that not be a substantial disincentive to participate in the four-year Scottish course? Does the Minister accept those figures, and does he intend to do anything about that?

Mr. Jackson : The calculations of the NUS are not correct and I believe that the value of the fourth year to many will be such that they will be prepared to pay a reasonable sum for it.

There has been much discussion about access, and I shall not recite the names of all those hon. Members who referred to that important question. The issue of increasing participation in higher education by students from working-class backgrounds is too important to be left to the superficialities espoused by the Opposition.

Let us start with the facts. Britain has relatively poor working-class participation, despite 30 years of generous grants which have mainly benefited the children of the middle-class--I do not complain about that, but it is a fact. The hon. Member for Burnley (Mr. Pike), having admitted this, asked why it should be but suggested no answer. The answer has not much to do with student support--it is that working-class children are less inclined to stay on at school after 16. My hon. Friends the Members for Lancaster (Dame E. Kellett-Bowman) and for Hendon, South were right to say that the Labour party is in no position to lecture us on this point as it was largely responsible for dismantling the ladders of working-class opportunity.

Rather than emphasise that negative point, I wish to emphasise the positive point that if the most important determinant of access is the staying-on rate, we can look forward to an expansion in higher education because the staying-on rate has risen from 34 per cent. when the Labour party was last in office to 42 per cent. now, and the rate of increase is rising. We believe that the number of children staying on at 18 will increase, and the evidence is that there is no class differential in entry to higher education among those who have stayed on to 18.

Mr. Win Griffiths rose--

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