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5.57 pm
Mr. Allan Stewart (Eastwood): What was interesting about the speech by the hon. Member for West Lancashire (Mr. Pickthall) was that he actually put forward a policy, in marked contrast to the hon. Member for Oldham, Central and Royton (Mr. Davies). After 16 years of deep thought and consideration, his policy is to say that the issues are complex. We all know that they are complex, but that hardly amounts to a policy. He was unable to tell the House whether a Labour Government would increase, maintain or reduce the total level of expenditure on higher education funding. He was unable to give the House any indication whether the Labour party in government would favour the continuation of a loan scheme, would abolish the loan scheme, would extend the loan scheme, or would bring in a graduate tax.
The hon. Members for Oldham, Central and Royton and for West Lancashire both said that they opposed the Bill. I am not yet entirely clear why. This is an extremely modest Bill. No bank or building society is forced to do anything. No student will be forced to do anything that he or she does not wish to do.
Perhaps I can help the hon. Member for Oldham, Central and Royton in his continuing consultation process by reminding him and the House of the essential case for student loans. It is really quite simple; higher education usually benefits society--although not when a student leaves the country--but it also benefits the student himself directly.
Suppose we take two 17-year-olds, one of whom--let us call him Algernon--wants to be a Labour Member of Parliament. The other, his friend Fred, wants to be a garage mechanic and owner. Under a grant system, Algernon does the obvious thing: he goes to college or university to study politics, philosophy and economics, or sociology. He then goes to London, rents a flat in Islington--to ensure that his career prospects are as bright as possible--and becomes a Labour Member of Parliament.
Fred, meanwhile, becomes a successful garage mechanic and owner. I wish to be charitable, and I will not differentiate between the benefits to society as a whole of Labour Members of Parliament and garage mechanics. Let us assume that both benefit society. But under a grant system, what in effect happens is that Fred subsidises Algernon through his tax payments. There is no social
justice in that, and that is why I believe that there is a strong social justice argument for a loan element within the provision of finance for those in higher education.
Mrs. Fyfe:
Does the hon. Gentleman think that there is a strong social justice argument for reducing the grant from £1,795 in 1993 to £1,257 in the next financial year?
Have any of the hon. Gentleman's constituents complained to him that student grants are exorbitantly high? None of my constituents has done so.
Mr. Stewart:
The point is that the Government have made it clear that they are aiming for a balance between the grant element and the loan element. Recent figures show that the average income of students with loans in 1992-93 was 31 per cent. up on the figure for 1988-89.
The Bill follows the Education (Student Loans) Act 1990. I was a member of the Committee which discussed the Bill, and I recall the arguments that were put again and again to the Committee. Student loans, we were told, would limit access, and would lead to lower numbers of entrants into higher education. As my hon. Friend the Minister of State has pointed out, the reverse is true. There have been steady increases in student numbers, both north and south of the border.
Hon. Members on both sides of the House have referred to the past difficulties of the Student Loans Company, and have stated--rightly and properly--that they believe that the problems are behind the company, which is located in Glasgow. I believe that that is the case, and I pay tribute to the staff working in the Student Loans Company, who have worked extremely hard.
The advantages to the student of the involvement of the banks and building societies in the loans system come from their branch networks and the possibility that the involvement of a bank gives a student to develop a relationship with a particular branch of a bank. That is an important potential benefit to students.
Mr. Don Foster (Bath):
A few minutes ago, we heard a thoughtful and provocative speech from the hon. Member for Wantage (Mr. Jackson), and I had considerable sympathy with a number of his remarks. I certainly share his view about the need to reinvigorate the powers of local government, and I accept his argument about the need for a redefinition of the public sector borrowing requirement. The hon. Gentleman might be surprised that I agree that there should be no objection in principle to transferring some of the public debt and some of the risk-taking to the private sector. I do not object to the Bill from those particular points of view.
My objections to the Bill are rather that it fails to address the problems of student poverty and hardship, and fails to address the problems with the current procedures
for supporting students. The Bill does not even begin to acknowledge the concerns which have been expressed during the limited and somewhat desultory consultation process that is going on at present. The Bill simply tinkers around the edges without addressing the key issues affecting students and the higher education system today. Those problems are leading to a significant reduction in the quality of higher education provision.
That students are facing growing problems cannot be in doubt, and I hope to have an opportunity to discuss some of those points in more detail later tonight in the Adjournment debate. The problems centre on the growing level of student hardship and poverty, evidence of which is illustrated by the huge increase in the number of students suffering from stress--largely through financial worries--and seeking counselling and medical support. There has also been a huge increase in the number of students applying for access funds, designed for students with severe hardship problems.
The growth in the large number of students taking on term-time jobs has been mentioned and, sadly, the proportion of students dropping out of their courses and citing financial hardship as the main cause has grown to one in eight. All of those problems are, in part, responsible for the real concerns about the ability of students to gain the maximum benefit from their studies.
My biggest concern is the Minister's inability to respond to a number of points put to him during the debate. The Minister cannot begin to understand the problems of student hardship if he does not even know whether the Bill is, for example, designed to address the problems faced by part-time students. When the hon. Member for Lancaster (Dame E. Kellett-Bowman) raised a real concern about intercalating students, the Minister said that he would have to go away and look the matter up. When the hon. Member for Colchester, North (Mr. Jenkin) asked about the level of access funds, the Minister appeared not to know whether anything could be done about them.
Mr. Forth:
The hon. Member for Bath (Mr. Foster) is exhibiting the charming naivety of those who have been in the political wilderness for many decades, but I do not hold that against him. The hon. Gentleman should think for a moment about the points he has made rather quickly. I replied to the questions by saying that they could be taken account of only against a background of the Government either redistributing the existing amount of money available in higher education or finding more. Before the hon. Gentleman says that his party would find more money for education generally--as I suspect he will in response to that point--will he tell us the amounts of money that he would allocate to pre-fives, higher education, school buildings and other matters, rather than skating over that as he usually does?
Mr. Foster:
The Minister is right to say that he raised that particular point. My point about the Minister's response to his hon. Friends' questions is that in most cases he said that he did not know the answer and would have to take advice. He said that he would tell us later in the debate. A Minister who comes to the Dispatch Box without knowing whether his Bill will help or not help students studying part time or students who are
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