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Column 439the National Commission on Education, and even, fleetingly, the Labour party. The number of students applying for loans continues to rise. The hon. Member for Brightside seemed to regard the increase from 28 per cent. to 47 per cent. as a marginal increase. I call it not far short of a doubling. The signs for this coming year are that participation will reach close to 60 per cent. The loans are a major part of the scene and students generally accept the principle of loans and their part in investing in their future.
The system offers a fair deal for parents, for taxpayers and, because repayment terms are equitable, for students. I warmly commend the regulations to the House.
Mr. Deputy Speaker: In the 50 minutes available for the rest of the debate, no fewer than eight hon. Members hope to catch my eye. I hope that hon. Members who are fortunate to be called early will bear that in mind.
Mr. Mike Watson (Glasgow, Central): I regret that we are having this debate and that it is necessary. I accept your stricture, Mr. Deputy Speaker, on the amount of time available. I shall address my remarks to the mandatory awards regulations.
As I represent a constituency that contains two universities and six colleges of further and higher education, I am only too well aware of the effects of student loans. I served on the Committee that considered student loans. Many of the things that my colleagues and I argued against in relation to those regulations have come to pass. A constant stream of students complain to me about one aspect or another. They complain that they have great difficulty in pursuing their studies, which we never had to face. I suspect that the Minister, when he was a student at New college, Oxford, never had to contribute towards his education. I see no difference between then and now. We are of a different generation. The Government expect today's students to make a financial contribution when few of our generation faced that necessity. We were able to study at a time and within an environment that were much more favourable than today's. Hon. Members should remember that when they consider this matter. The shameful decision to abolish the older students' allowance is perhaps the unkindest cut of all. It hits students who have missed out on higher education the first time around and who are hoping to get a second bite at the cherry. They may have missed out through no fault of their own. Many will now have the door slammed in their face again. The decision is particularly perverse because the number of mature students receiving the allowance has increased dramatically in the past five years.
Figures supplied to me by Ministers in the Scottish Office, Northern Ireland Office and the Department for Education show that dramatic increase. There are some 7,200 such students in Scotland, 500 in Northern Ireland, 32,500 in England and Wales. In Scotland, the figure has increased by 300 per cent.; in England and Wales, it has increased by 250 per cent. in the past five years. Clearly, that shows that demand exists for the allowance, contrary to what the Minister said. He says that students claim for
Column 440it, but that it is not necessary. Of course it is necessary. It is a means of entering higher education for people who have never had the opportunity to do so.
The total cost of the mature students' allowance, aside from the administrative costs, which Ministers have told me they cannot calculate, is £34 million to £35 million a year. That will be the saving when it is abolished. We should put that in the context of the total education budget. The sum barely ripples the water. Clearly, the reason for doing away with the older student's allowance is to save money.
All the evidence we can assemble shows that mature students in higher education have greater financial difficulty and suffer much heavier debt than their younger counterparts. We have recognised for some time that students over the age of 26, particularly those coming from employment, have difficulty in making the transition from a wage to a student income. In many cases, mature students are giving up a job in the hope of ultimately bettering themselves and their employment opportunities through achieving a degree.
Since 1989, the number of mature students has increased. They now form 17 per cent. of students in higher education. I can hazard only a guess as to what that figure will be five years from now. I suspect that it will dramatically decrease. The abolition of the older student's allowance is a regressive step that can be only a disincentive to people hoping to enter higher education.
An even greater injustice is being done to people hoping to enter education this year through the older students' allowance. They applied in good faith before December last year and in the belief that they would receive the allowance. The Government have turned around to them and said, "We gave you that guarantee, but we changed the rules of the game after the game was in progress." The applications are in and a number of potential students are caught in that trap. Whatever the merits, and I cannot see any, of the proposal, it is entirely unjust that people who applied in good faith will not receive the allowance.
Another aspect of concern involves home students aged over 50. Such students are not even eligible for a student loan. Anyone entering higher education at the age of 50 will be especially badly affected. I hope that, if he does reply, the Minister will give some consideration to the people caught in that trap.
I have tried to get some rationale for the cut--I got none from the Minister in his speech. The proposal is clearly an attempt to save money, albeit a relatively small amount. I managed to find two answers that he gave in December last year to questions on the savings that would arise. In one, he said that this was an additional allowance which was not targeted at any specific maintenance requirement that a student might have. As I have tried to demonstrate, that is not true. First, the older student's allowance is means-tested; and, secondly, older students tend to have extra commitments such as families and mortgages, which younger students do not have. The National Union of Students survey on value for money
Column 441found that the total average debt for students aged over 26 was £6, 105. That compares with an average total debt of about £2,500 for those in the 17 to 21 age bracket.
I throw back at the Minister the fact that, when we started studying, our generation did not leave university with a debt around our necks and the burden of having to pay that off. The main problem for us was finding a job. Of course, that problem still exists, but hanging over the heads of graduates now is the fact that if they get a job that earns them more than £14,000 a year--not a massive salary these days--they have to start paying back the debt. We must appreciate that students over the age of 26 have additional burdens over and above the loans which, if they want to go into higher education, they will be forced to take.
The Minister also said in that parliamentary answer that, because of the continuing pressures on public spending, extra support could not be justified. He is saying that £35 million throughout the United Kingdom cannot be justified. The hon. Member for Castle Point (Dr. Spink) may grin and think this is funny, but I wonder how many of his constituents will ask him how he voted when the mandatory regulations were discussed on 22 February. I hope that he will be able to say to them, "Yes, I voted to abolish them because I think that that is in your best interests."
The regulations cannot possibly be in his constituents' best interests. The implications are clearly more important for the public sector borrowing requirement than for the future of education, yet they involve minimal savings.
Dr. Spink rose --
Mr. Watson: I cannot give way because I do not have time. No doubt the hon. Gentleman will seek to catch your eye, Mr. Deputy Speaker. The Minister has already spoken in rather scathing terms about what he has described as hard luck stories about students who will be denied a place in higher education. He may not thank me for doing this, but I intend to refer to the case of one of my constituents, which made my blood boil when it came to my attention.
The constituent is called Jane Pepper and she lives in the Langside area of my constituency. She is 29 years old and has worked in the civil service-- the Department of Social Security--since 1986. She decided that she wanted to broaden her job prospects and opportunities, so this year she enrolled at the Glasgow college of food technology to do an access course. That course has no other purpose than to help people gain access to university. It has no value on its own. It does not lead on to another degree.
While Jane Pepper is doing that course, she is receiving assistance through maintenance, course expenses and travelling expenses of about £3,000. When she applied for a university place--she has been offered places at three universities for the academic year starting October--under the old student's allowance she was entitled to about the same amount--just over £3,000. It was on that basis that she applied for a university place.
As I said, the rules have been changed after the game has started. I want to refer to something, although it may not be within the Minister's direct responsibility. The further and higher education charter for Scotland, which
Column 442was issued in 1993, states that, before applying, a person would want to assess the costs of embarking on a course and how much financial support he or she might get.
The Government trumpet their citizens charters. They tell us that it is all part of open government and enabling people to question the way that the Government govern. Jane Pepper asked those questions, was given answers, applied for a course, was accepted and now has been told, "We are scrubbing what we said; forget it and go back to square one." She cannot go back to square one because she has given up her job. She is left in no-man's land, where she will be considerably worse off. She believes that, over a three or four-year course, she will be about £4,000 a year worse off. I challenge the Minister to tell me how she is supposed to make that up other than through a loan, which will be an albatross around her neck when she finishes her course.
I want to conclude my speech with a quote from Jane Pepper's response to the position in which she now finds herself. It is quite instructive and should be quoted in the House. She said:
"I am now faced with the prospect of a grant of £1975.00 per academic year which I simply cannot manage on financially. I am very angry and bitter, and feel betrayed by a government whom I have worked hard for"--
there is an irony there--
"for many years. If I had known this before I left my post in the civil service, obviously it would have had a bearing on my decision to leave my job. It seems likely that if these grant cuts are imposed I will be unable to pursue my degree . . . What the Government will then be faced with is yet another individual claiming social security"--
that is another irony--
"adding to the ever lengthening list of government unemployment statistics. Consequently, the government, by their actions, are forcing individuals in my situation to become unemployed which seems ironic."
That is the appalling position in which Jane Pepper and, I suspect, thousands of other people throughout the country find themselves, with the rules of the game being changed after they began to play it. It is unfair and unjust and the Government must reverse their decision.
I end with what is, perhaps, a sting in the tail for my own Front-Bench colleagues. The Labour party is putting up a spirited campaign on the regulations. I hope that my hon. Friends the Members for Oldham, Central and Royton (Mr. Davies) and for Sheffield, Brightside (Mr. Blunkett) will give a commitment that a future Labour Government will reinstate the money that is being lost. Mature students are entitled to it. They missed the boat first time around and they must be given a second chance. If the allowance is not reinstated, they may be denied that opportunity. This Government are at fault; it must be for a Labour Government to put matters right. 9.5 pm
Mrs. Jacqui Lait (Hastings and Rye): It is ironic that, yet again, we are seeing the familiar shape of debate, where Labour Back Benchers are demanding more public expenditure and the Labour Front Bench is desperately ducking, diving and weaving to avoid giving any commitment. Labour Members talk about £35 million here and £35 million there as though that is the sort of money that we put in a charity box. The money we put in
Column 443a charity box adds up. Every single Labour Back Bencher is trying to persuade those on the Front Bench to commit themselves to further public expenditure.
As my hon. Friend the Minister said, the various options put forward by the Labour Front-Bench team are contradictory, to say the least. There was the suggestion of a graduate tax. What happens to the poor graduate? Is it every high earner who will pay graduate tax? For how long will a graduate pay tax? [Hon. Members:-- "Life."] Yes, for life. Will it be on top of the normal tax that they will be paying? The hon. Member for Sheffield, Brightside (Mr. Blunkett) said, "That is a good idea, let's investigate it". Talk about putting off decisions--
Those of us who remember our student days and how we were supported have a somewhat rosy view. I was one who benefited from the Robbins expansion, when the new technological universities were established--one of which was in Glasgow. At that time, a number of hon. Members were living on student grants. Indeed, many of us were living on very little. It was almost part of the flavour of being a student. Today's students are pleading poverty when, in fact, they are much better supported than we were in the 1960s. I remember that I lived on £2 a week. If that were uprated in line with inflation, the equivalent now would be £25 a week. There is not a great deal to choose between what I lived on as a student and what students have to live on today. I managed it, I am here and so will they be. Students are broadly better off with the student loans system than they were. I for one would regard it as a total income package, not as an option for a grant or a loan. One takes the whole package and lives within that package.
One need not pay back the loan until one has an income of more than £14,500, which is not what one would expect on leaving university, and the Student Loans Company's terms are that one pays interest at the rate of inflation. If I, or any other hon. Member, were offered interest rates at the rate of inflation, we would all jump at the offer. That system is especially generous.
Column 444constituency, who pays a few pounds a week tax on her pension, be prepared to invest in the student's future?
There is no evidence that students are being deterred by the loans system. There may be an element of becoming used to the loans system, but there is no evidence of deterrence. An increasing number of students from social groups C1, C2, D and E are entering the system, which can only benefit our country in the long run.
I should be grateful if the Minister would tackle an argument concerning discretionary grants. Those grants from local education authorities, especially for the performing arts, have decreased in the past five years. The higher education awards are now about 50 per cent. of those that were made in 1991. The director of the London Contemporary Dance school is a constituent of mine, and he brought that problem to my attention. I should be grateful if the Minister would consider some way whereby the discretionary element could be amended.
One of the great successes of the past 15 years has been the enormous expansion in cultural activity, which is profitable and valuable to our society. Job opportunities therefore exist for an increasing number of people involved in the performing arts. It would appear sensible for our grant and loans system to adapt to that demand in the marketplace and to allow people who wish to take up awards in places such as the London Contemporary Dance school to have access to grants on the same basis as, for example, those who go to conservatoires.
Mr. Peter Bottomley (Eltham): I wish to reinforce what my hon. Friend says. Under paragraph 10(1)(e)(ii) of the Education (Mandatory Awards) Regulations 1994, the Secretary of State has the power to designate courses. If my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) could include music when he was Prime Minister, should we not recognise both the dramatic arts and dance, as my hon. Friend says, and would it not be about time to give at least a limited number of such places, rather than giving so many places at universities, where people can do drama in their spare time rather than doing it properly?
Mrs. Lait: My hon. Friend reinforces my argument, and I should be grateful if my hon. Friend the Minister would peruse the report that I understand my right hon. Friend the Secretary of State has received from the Arts Council for England, to reach some decision to help those schools which are providing high-class education in the performing arts, for which there is growing demand.
Mr. Don Foster (Bath): The Minister was obviously not impressed by the speech of the hon. Member for Oldham, Central and Royton (Mr. Davies), but the Minister can at least claim credit for managing to produce a gasp of amazement from his audience during his speech. He certainly amazed many of us when he told us that we were here debating opposition--to paraphrase his words--to measures that will be of great benefit to students.
In reality, we are discussing two orders that continue the breaking of a clear promise given by Conservative Governments. All hon. Members present know and recall
Column 445that the White Paper that led to the setting up of the student loans system said clearly that the maximum grant would be maintained at the 1990-91 level. In 1990, that was reaffirmed by the Education Minister of the day, Baroness Blatch.
The orders that we are debating are obviously moving in the direction that the Government announced last year, whereby they are breaking that promise, because the level of grants and loans will be broadly balanced by 1996, which means a decrease in grant of 27 per cent. and an increase in loan of 120 per cent.
It is important that the impact of these measures is considered in the context of what is happening in higher education now. The Minister is right to talk about an increase in student numbers in higher education. The former Secretary of State, the right hon. Member for Oxford, West and Abingdon (Mr. Patten) used to boast that the increase in the number of students was the equivalent of 12 new universities. However, both the right hon. Gentleman and the Minister have failed to admit that they have not provided the resources that would have been necessary for the creation of 12 new universities. I am sure that the Minister will not disagree with the figures that show that, in the past four years, public funding has decreased by 26 per cent. per student and, as the Minister said, student numbers have increased by 44 per cent. It is no wonder that there is a worsening of the staff-student ratio in higher education, that students are facing more and more problems when they try to find books in libraries, that there are overcrowded lecture theatres and that there is a growing backlog of repairs and maintenance for university and higher education buildings.
While universities have had to cope with that, they have also had to cope with the problems created by the equivalent of these orders last year. They will now have to face the problems that will be created this year. More and more students will face increasing hardship and difficulty as they are unable to find the means to support themselves adequately.
The Minister constantly fails to acknowledge that, even if we add together the maximum amount of grant and the maximum amount of loan possible under these orders, the combined amount still means that the vast majority of students will have an income that is less than they would have acquired had they been registered as unemployed. They are about £10 a week worse off.
Another way of putting it is that, under these orders, students who take out the maximum grant and get the maximum loan will have about £50 to £20 left as disposable income to pay for food, heating, travel, books and sometimes even the council tax. It is no wonder that the Committee of Vice-Chancellors and Principals--it is fairly independent in these matters- -has estimated that the average annual shortfall of a student's income is well over £1,000.
The growing problem of student poverty is set to rise as a result of these orders, which fail to recognise some of the greater than inflationary increases that students will
Column 446have to face. That includes significantly rising accommodation costs, the increased cost of domestic fuel because of- -
Mr. Foster: I am happy to give way if the hon. Member for Castle Point (Dr. Spink) wants to make a serious point so that students can learn whether he supports measures that, in many cases, will leave them in poverty. The hon. Gentleman may care to say whether he believes that the orders should be altered to put increased money into the pockets of the vast majority of students who have learnt today that they face significantly increased costs for their prescriptions--well above the rate of inflation--because of the disgraceful way in which the Government have introduced prescription increases.
The orders and the figures contained within them continue to break the Government's promise. They will continue to ensure that many students will have considerable difficulties. All the surveys that have been undertaken now show that a growing percentage of students are contemplating having to give up their university course because of financial hardship. Last weekend, I spoke to students at St. Andrews, where a survey showed that 15 per cent. are contemplating giving up. A National Westminster bank survey showed that 21 per cent. of students are considering dropping out.
As has been said by many other hon. Members, the 5,400 full-time students over the age of 50 will be badly hit yet again. Last year, in a similar debate, I said that those people could not apply for loans and therefore suffered considerable reductions in their income. That is the case again. Last year, the hon. Member for Lancaster (Dame E. Kellett-Bowman) intervened on my speech and berated me. She said that what I was saying was putting off older students because I had failed to mention the older students' allowance. I shall certainly have to fail to mention it this year because, of course, the Government have abolished it. I wonder what the hon. Member for Lancaster feels about that.
Hon. Members have touched on another problem that is important to mention again. More and more students, because of hardship, are having to take jobs during term-time as well as during vacations--I have no real objection to that. That is obviously undermining the quality of their work and affecting the quality of our higher education. Many surveys demonstrate that only too clearly. I also agree with the point made by the hon. Member for Oldham, Central and Royton (Mr. Davies) that it is a great pity that the regulations do not extend provision to part-time students. I also agree with his noble Friend Lord Morris of Castle Morris in another place, who said in a debate on a similar issue last month:
"The present system of financial support for students is chaotic, inequitable and inefficient."--[ Official Report, House of Lords , 30 January 1995; Vol. 560, c. 1313.]
Unfortunately, it was a great pity that an opportunity to provide assistance for students by supporting a Liberal Democrat initiative to introduce the possibility of students receiving benefits during the long vacation in that debate
Column 447was not supported by Labour peers. It is hardly surprising, therefore, that we see articles such as that in The Times Educational Supplement .
Dame Elaine Kellett-Bowman (Lancaster) rose --
Mr. Foster rose --
Dame Elaine Kellett-Bowman: Hang on a minute. He may have forgotten that, when he had the great honour of going to the Royal Lancaster grammar school, he was described as being muddle-headed and unable clearly to formulate his ideas. It seems that he has not improved as his tutors thought he could.
Mr. Foster: I am grateful to the hon. Lady for reminding me of that report. Indeed, I shared it with the hon. Lady at the time. Nevertheless, she is right to question how much such initiatives would cost. The Minister has said how much the reinstatement of the older students allowance would cost. That stands on the record and my party is committed to that reinstatement. My party has made an attempt to estimate the cost of the introduction of benefit support during the long vacation--about £250 million if there was a maximum take-up.
The hon. Member for Lancaster is, however, unaware that her Government are unable to provide such a figure. When the Government removed the entitlement of young people to income support and housing benefit and were then asked how much they had saved, they were unable to tell us. Nor, subsequently, have they been able to say how much reinstatement would cost. So I hope that the hon. Lady will not be critical of my party's attempts at least to come up with some figure.
Mr. Foster: No, because many hon. Members want to speak. It is important that we place on record the acknowledgement of the Minister that there have been problems with the Student Loans Company. The way in which the company has been administering student loans has certainly not been right. Many students have got into considerable difficulty because of that failure.
Mr. Boswell: Just for clarification, does the hon. Gentleman accept that I said that I was not satisfied with the administration of the student loans scheme in respect of the autumn term? That remains my view and our position.
Mr. Foster: I am grateful to the Minister for making that clear. Of course he is well aware that, by December, 35,000 students had not received their grant cheques, which caused appalling difficulties. It is not surprising that the Minister acknowledges that that is that totally unacceptable.
It is crucial that we place firmly and clearly on the record that the amount of money available to students while studying is currently inadequate. It is hardly surprising that there is increasing hardship among our student population, that they are therefore taking on jobs
Column 448in term-time, which does not help their degrees one iota and that an increasing number are dropping out or considering it. Those and other problems in higher education will not be solved by the sort of measures being introduced by the Government tonight. Therefore, I hope that hon. Members will vote against the orders.
There has been a dramatic increase in participation rates in higher education, which has been grudgingly acknowledged by the Labour party. The rates have risen to one in eight from one in three, and funding that increase is an enormous challenge for any Government. Maintaining the old grant system would have represented a massive call on the taxpayer and it was right that the Government should seek to strike a fair balance between the interests of taxpayers and the beneficiaries of the education.
If there were any evidence that students were being deterred from entering higher education, I would be worried. But the evidence is not there. In the two years before the introduction of the loans system, the number of students entering our institutions of higher education rose by 10 per cent. per annum. In the two years immediately after the introduction of the loans system, the rate of increase was 20 per cent. per annum--hardly evidence of the scheme being a disincentive.
If there were evidence that the orders had any disadvantageous effect on the lower socio-economic groups and their participation in higher education, I would be concerned. The House would do well to remember that in Germany, where the loan component of grants is higher than here, the proportion of students from lower socio-economic groups is three times higher than in the United Kingdom. What is more, contrary to what we heard from the Labour party's Front-Bench team, the position is improving. More students from less well-off families are entering higher education in this country.
Among first-year students in 1992-93, the proportion of students from A and B social grades fell from about 55 per cent. to 49 per cent., with a similar increase in the proportion of students from C1, C2, D and E backgrounds. That good news contradicts the bad news that we heard from the Labour Front Bench.
Our record internationally is good. The report of the Education Information Network of the European Community, known as Eurydice, published 18 months ago, said that there was a trend towards extending the system of loans in a number of member states. It said:
"the percentage of students assisted in Luxembourg, the `new' German La nder (former East Germany) and the United Kingdom is high (between 76 and 90 per cent.). The proportions of students receiving support in Belgium . . . Spain, France, the `old La nder' of the Federal Republic of Germany and Ireland are smaller (between 18 and 34 per cent.). The proportions of financially assisted students are smallest in Greece, Italy and Portugal (between 2.5 and 10-15 per cent.)."
I would have more sympathy with the Labour party if the loans imposed on students had punitive rates of interest or terms of repayment, but they are the most generous loans that I have heard of in the financial system.
Column 449We cannot underestimate the rate of expansion of the higher education system. In 1993-94, there were 100,000 extra students--the equivalent of 12 new universities. It is only fair to ask students to join the taxpayer in funding that system as they will reap most benefit from it. The student will be the highest gainer.
I would have more respect for Labour Members' opposition to the order if they had a realistic alternative, but they do not. They notably ducked the point made by my hon. Friend the Member for Surbiton (Mr. Tracey) about how much money they would dedicate to their grand, brave new vision of student support. They are muddled on the possibility of a graduate tax on students.
According to The Times Higher Education Supplement of 6 January, the office of the hon. Member for Sheffield, Brightside (Mr. Blunkett) recently confirmed that a tax to be imposed on students throughout their working lives was being considered. But the hon. Member for Oldham, Central and Royton (Mr. Davies)
"suggested this was a `narrow and crude concept' which was unlikely to carry much support within the party."
The Times Higher Education Supplement stated that the hon. Member for Birmingham, Perry Barr (Mr. Rooker)
"described Mr. Blunkett's remarks on graduate tax as `a careless use of language. It was pure ignorance. It was quite clear he said it without thinking the whole thing through'".
I say, amen to that.
The chairman of Conservative Students, Andrew Reid, said in a letter in the same edition of The Times Higher Education Supplement :
"What is typical, though, of the Labour party is that its first instinct is to tax the successful rather than to contemplate less punitive forms of financing our students at university."
That is what the measures represent.
We have heard a lot about vacation jobs and students taking jobs in term time. I wonder what Labour's plans for a minimum wage would do for the availability of work for students, during vacations or at any other time.
I would like to raise a question with the Minister concerning section 10(e)(ii) of the mandatory awards order which gives the Secretary of State the power to designate new courses for which students will be eligible for mandatory grants. It provides statutory footing to address the problem of discretionary grants for students of dance and drama which obviously concerns many hon. Members in the House.
Section 10 lists a bewildering array of subjects and courses which attract mandatory awards. Many of those subjects will benefit the country through the graduates who practice them. But dance and drama are excluded; they are left to the whim of local education authorities.
Students of music receive mandatory awards, but students of dance and drama do not. A sociologist will receive a grant, but a dancer will not; a medieval historian will receive a grant, but an actor will not. Why is that so? The arts, including dance and drama, provide jobs and tourism revenue-- which is more than can be said for many of the academic disciplines which attract automatic mandatory grants.
Our dance and drama schools are among the finest--if they are not the finest--in the world, but student applications to them are drying up at an alarming rate because of the lack of eligibility for mandatory awards.