Previous Section Home Page

Column 450

The order gives the Secretary of State the power to correct that state of affairs. It would be economic and cultural folly to let those disciplines die. I am encouraged by the new priority that Ministers seem to be attaching to that area and I hope that they will use the power conferred by the order to correct the position in time for the start of the new academic year.

9.30 pm

Mr. Gerry Steinberg (City of Durham): The Education (Student Loans) Regulations 1994 constitutes a further attack on students. The student grant has been reduced by 8 per cent. on top of the 10 per cent. reduction last year. As we have already heard, the mature student allowance will be phased out from 1995-96, which means that those students who are 29 years of age at the beginning of their courses will lose about £1,000 in grant. Those students tend to have families to support and other financial commitments. Tonight's order can have only one result: less people will enter higher education in the future.

Student loans are the most unfair way of funding students. The system is morally wrong. Those students who have no real need of a loan can get one at very low rates of interest, but those who need financial help desperately and who have already accumulated large debts often find themselves in even more debt. The Government have destroyed the grants system which, although not perfect, was much fairer than the present system. They deliberately reduced the level of grants and then introduced student loans.

The Government's record in the area of student financial support is absolutely deplorable. Since 1979 they have systematically eroded student support. The level of student support has never been generous, but at least before 1979 students could enter higher education without the threat of amassing huge debts and without constant financial worries. Students also had welfare benefits to fall back on, but the Government have destroyed that position and they continue to erode it further in the orders that are before us tonight. Through a series of measures, the Government have reduced students in the main to living below the poverty level. Student grants were systematically reduced in value by more than 30 per cent. and income support, unemployment benefit and housing benefit were withdrawn. In 1990-91 loans were introduced to substitute the amount of money lost by students through the reduction in grants.

The scheme was so bad--I was serving on the Committee which examined student loans at the time--that the major banks refused to have anything to do with it; they turned it down. As student grants have been reduced, student loans have increased and that trend continues in these orders. The huge reduction in the grant of 10 per cent. in 1994 and more than 8 per cent. this year is an absolute outrage. The full grant is virtually the same as it was 10 years ago and, therefore, in real terms it is worth much less.

It is no wonder that students have acquired large overdrafts with their banks and are also in debt to the Student Loans Company. Before the general election in 1992, the Education Select Committee investigated student hardship. As far as I was concerned, it was quite clear from the evidence that we received that students

Column 451

were finding it increasingly difficult to exist without getting into considerable debt. However, as that evidence was said to be anecdotal, it was ignored by Conservative Committee members. Consequently, the report fizzled out as the general election approached.

But it was clear to those who were prepared to listen to the representations from students, student bodies and university staff--from lecturers to vice-chancellors--that tremendous hardship prevailed among many students. It was also clear that the accumulation of considerable debt was escalating, and that huge numbers of students were unable to meet the costs of accommodation, food, books, travel and so on out of the financial support which they were receiving. They just did not have enough money to meet their basic needs.

We discovered that students were not only working in their holidays, if they could find work--I approve of that--but were having to work during term time to exist, and that is frankly scandalous. Under the orders, a student under 50 will receive a grant of £2,040 and a loan of £1,150, for a total of £3,190. That will provide a weekly income of £61.35. The weekly income of a person under 25 on benefit includes income support of £36.15 and housing benefit of £35, making a total of £71.15 per week. A young person under 25 is £9.80 better off on the dole than in higher education, while a student over 25 is £19.35 worse off than being on the dole.

Huge numbers of students are living below poverty levels. While there is no doubt that many students manage very well because of their parents' contributions, there are many students who have substantial debts and who experience real hardship, particularly older students who will be devastated by the orders. A system which places thousands of young people in severe debt and hardship is fundamentally wrong, and is a deterrent to poorer would-be students. The Student Loans Company is dreadfully inefficient, and that also has a bearing on student hardship. Students get further into debt with their banks as they wait for their loans to be processed. The Minister recently told me in a letter that the present system of student loans eased the burden on the taxpayer. Perhaps he could explain how that works when, in 1993-94, the Government were owed £752 million in unpaid loans and had in fact received only £20 million in repayments. In Committee, I remember clearly that the then Minister told us that the scheme would not break even until after the year 2000. At this rate of non-payment, the scheme will never break even. So much for easing the burden on the taxpayer. The Minister told me recently that the student loans system had reduced in real terms the contribution expected from parents. That may be all well and good in theory, but I assure him from personal experience that it works in the opposite direction. If more students are underfunded and accumulate more debt, more will depend on parental help.

The Minister claimed that students will have a good deal in 1995-96 because their total support will rise by 2.5 per cent. That is a joke. Their grant will go down, their loan will go up and their debts will increase. Is that good news for students? I do not think so. The whole system is morally wrong. It is unfair and, apparently, unworkable. Student support needs to be totally re-examined. Like everything else that the Government have done, privilege and wealth will determine opportunity, and not ability.

Column 452

9.37 pm

Mr. Andrew Welsh (Angus, East): I shall be brief because of the time constraints, and not because I do not have a great deal to say on a subject about which I feel extremely strongly.

As a product of the Scottish educational system, I benefited from--and strongly believe in--the democratic principles which encourage every child to develop as fully as his abilities will allow in an integrated system from primary to higher education, irrespective of income or social background. The Government seem intent on reversing a principle that has been entrenched in the Scottish democratic intellect and that has served my country well over the generations and centuries.

The ability and encouragement of all to benefit from the education system has been a gift to the Scottish people, and the results have been a gift to the wider world. I am afraid that the Government are forgetting those lessons. I fundamentally disagree with the Government's educational finance policy which will eventually and effectively cut vast swathes of the population off from higher education.

The November Budget not only made clear that the 30 per cent. cut was continuing, but proposed the abolition of the allowance paid to students over 26 years old from next year. I was a mature university student, and I am frankly disgusted that the present generation will not be allowed the benefits and the assistance which helped me to undertake a university degree course. Mature students clearly have greater financial burdens and commitments and they carry heavier debts than their younger counterparts. They now constitute 17 per cent. of students in higher education. So the abolition of the mature student's allowance is regressive, shortsighted and unfair to the many students who are committed to courses that began when it was available.

I have heard no rationale for this move, apart from some apparent cash savings. I have certainly heard no educational reasons for it. The Government have offered no rationale for the abolition of the mature student's allowance, so I hope to hear one from the Minister tonight.

For students more generally, the cost of the removal of benefit entitlement and the freezing of maintenance grants has been about £1, 070 in lost benefits and about £810 from the freezing of the grant. That £1,880 loss compares with the maximum loan entitlement of £1,120, and it assumes that students do not find paid work during the summer.

Surveys at Aberdeen and Edinburgh universities have shown the practical effect of the Government's policy. Student grant no longer covers the average yearly rent; even with a loan, students have to look elsewhere for money. According to the surveys, students work an average 12 hours a week in term time. That can only put pressure on their academic work and their health. The Edinburgh results show many students paying rents over the summer to secure accommodation for term time.

Average rents have risen by 41 per cent. in four years--the Government have certainly not covered that increase--and 76 per cent. of all students work all or part of the summer, assuming that they can find work. Most students are therefore unable to cover their debts.

Column 453

Government policy is placing in doubt the whole principle of equal access to higher education for all, regardless of background. My party rejects the Government's position. We believe that education is a right, not a privilege, and that everyone should have proper access to higher education, regardless of financial status.

The SNP is making a commitment to abolishing loans and giving all students a decent grant, index-linked for inflation and independent of parental income. That fits well with Scottish educational tradition. Nothing less will ever be acceptable--a lesson that I wish the Government had learnt.

9.41 pm

Mr. Boswell: With the leave of the House, I should like to say that I have listened with interest to the debate. We take seriously the problems that students may encounter and we shall carefully consider all the points that have been made. But I have not heard from the Opposition parties, in support of their claims for higher expenditure, any realistic appreciation of how it is to be financed. There has been a great deal of discussion of the older students allowance. The hon. Member for Glasgow, Central (Mr. Watson) referred to it at some length. We understand from the Student Awards Agency for Scotland that Jane Pepper, who is on an access course, may be eligible for the older student's allowance as a continuing student. We suggest that she pursue that with the agency.

The hon. Member for Edinburgh, Central mentioned the sum of £35 million for the allowance. I should point out that it is not a small amount; indeed, it is greater than the sum of the access funds. In conclusion, I refer to the helpful and positive contributions of my hon. Friends the Members for Hastings and Rye (Mrs. Lait) and for Worcester (Mr. Luff). I listened carefully to them, particularly to their suggestions for more funding for the arts. There are some practical problems with the route that they have suggested, not least the considerable expenditure involved in extending provision for the mandatory award. But we are concerned about the practical outcome-- It being one and a half hours after the commencement of proceedings on the motion, Mr. Deputy Speaker-- proceeded to put forthwith the Question necessary to dispose of it, pursuant to order [17 February].

The House divided: Ayes 243, Noes 284.

Division No. 84] [9.45 pm


Column 453

Abbott, Ms Diane

Ainger, Nick

Ainsworth, Robert (Cov'try NE)

Allen, Graham

Alton, David

Anderson, Donald (Swansea E)

Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary

Ashton, Joe

Austin-Walker, John

Barnes, Harry

Battle, John

Bayley, Hugh

Column 453

Beckett, Rt Hon Margaret

Beggs, Roy

Beith, Rt Hon A J

Bennett, Andrew F

Benton, Joe

Bermingham, Gerald

Berry, Roger

Betts, Clive

Blunkett, David

Boateng, Paul

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Column 454

Brown, N (N'c'tle upon Tyne E)

Bruce, Malcolm (Gordon)

Burden, Richard

Caborn, Richard

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D N

Canavan, Dennis

Cann, Jamie

Chidgey, David

Chisholm, Malcolm

Church, Judith

Clapham, Michael

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Coffey, Ann

Connarty, Michael

Cook, Frank (Stockton N)

Corbett, Robin

Cousins, Jim

Cunliffe, Lawrence

Cunningham, Jim (Covy SE)

Cunningham, Rt Hon Dr John

Dalyell, Tam

Davidson, Ian

Davies, Bryan (Oldham C'tral)

Davies, Ron (Caerphilly)

Davis, Terry (B'ham, H'dge H'l)

Denham, John

Dewar, Donald

Dixon, Don

Dobson, Frank

Donohoe, Brian H

Dowd, Jim

Dunnachie, Jimmy

Eagle, Ms Angela

Eastham, Ken

Enright, Derek

Etherington, Bill

Evans, John (St Helens N)

Ewing, Mrs Margaret

Fatchett, Derek

Field, Frank (Birkenhead)

Flynn, Paul

Forsythe, Clifford (S Antrim)

Foster, Rt Hon Derek

Foster, Don (Bath)

Foulkes, George

Fraser, John

Fyfe, Maria

Galbraith, Sam

Galloway, George

Gapes, Mike

George, Bruce

Gerrard, Neil

Godman, Dr Norman A

Godsiff, Roger

Golding, Mrs Llin

Graham, Thomas

Grant, Bernie (Tottenham)

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Grocott, Bruce

Gunnell, John

Hain, Peter

Hall, Mike

Hanson, David

Hardy, Peter

Hattersley, Rt Hon Roy

Henderson, Doug

Heppell, John

Hill, Keith (Streatham)

Next Section

  Home Page