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Mr. Andrew Welsh (Angus): Will students' supplementary allowances continue to be in the form of a grant, or will they become a loan that is repayable?

Mr. Blunkett: The additional allowance that we have agreed to make in order to overcome hardship--the extra £250 a year, for which we do not appear to have gained as much credit as I had expected--will be part of the overall loan system. That loan system results in families not having to find more than they currently have to find, because the maintenance and fees elements are bolted together imaginatively to ensure that that is so. The doubling of access funds ensures that provision will be made directly available for those in greatest hardship.

When we publish our lifelong learning consultation White Paper in a few months' time, I look forward to being able to spell out in more detail our

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recommendations backing up the proposals of the Dearing inquiry for a radical programme of opening up access for socio-economic, geographic and cultural minority groups that have suffered from an inequitable system in the past.

Mr. Welsh: May I draw to the Minister's attention my great concern that supplementary allowances being in the form of a loan might act as a massive time bomb in the further education system? It would deter anybody with parental responsibilities--mature students, for example--from undertaking studies. That threatens great potential harm to the entire further education system, so I hope that the Minister will take those concerns on board.

Mr. Blunkett: The difficulty is that further education students are currently denied the opportunity of contingent loans, never mind grants; therefore the contribution made by 2 million adult further education students across the United Kingdom is inequitable in relation to full-time undergraduates. That is one of the issues that we seek to address. We have said that higher national diploma students currently in their courses will not be disadvantaged. In addition, a proportion of the money--£1 million from the £165 million--will be allocated next year to ensure that they are not disadvantaged.

Out of the £165 million £125 million will go directly to the institutions, with the remaining £40 million spread between investment in ensuring greater equity of access, overcoming anomalies, ensuring that disabled students receive grants and not loans to cover their special needs and are not means-tested, and ensuring that part-time students are treated equitably. That is a major package, which I would have expected the shadow Secretary of State to welcome--especially because, on 23 July, he suggested that there would be no new money for universities. He said:

The "some time" took us two months from 23 July--two months to deliver £165 million, which the university sector as a whole has welcomed. Let me make it clear that the resources we are identifying will be delivered for lifelong learning for all those who can take advantage of it in further as well as higher education, so that we can bring about equity, invest in our future and take on the challenge of a knowledge-based society for a new century.

I should also put straight the hon. Member for South Dorset (Mr. Bruce). He might have been able to get the figures for income-contingent repayment on the internet only from 3 October, but I published them--as I did the £165 million package--on 23 September. In fact, I referred to those figures in my speech to the Labour party conference in Brighton on 1 October, in which I spelt out that a student on £17,000 would be repaying only £12 a week, compared with £129 a month under the current loans system. How I could refer to those figures on 1 October when I did not publish them until three days later I do not know. This is just cloud cuckoo land. The so-called confusion or lack of information comes from people taking extraordinarily long holidays and being unable to catch up with the newspapers until it is too late.

Mr. Ian Bruce: I apologise to the right hon. Gentleman if the information was available. However, under his proposals, a student studying for four years in London will, at today's prices, take out a loan in excess of

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£16,000. If that student marries another student, the couple will start their married life with a debt of £32,000. If they are on average earnings, how long will it take them to pay back the loan? Is not such an appalling debt the reason why nobody is coming forward to become a student teacher?

Mr. Blunkett: The previous Government introduced a mortgage-type loan scheme that demanded draconian repayments of up to £129 a month over five years as soon as the trigger came. We propose an income-contingent loan scheme, repayable over a lengthy period of up to 23 to 25 years, according to an individual's income. It is a progressive principle, espoused by all those--including my colleagues--who believe in the progressive principle of income tax. In that way, students will receive resources when they need them without an up-front top-up fee payment, and will pay back when they can afford it. I am happy to produce other figures and put them on the internet so that everyone can share them.

Mr. Bruce: I am grateful to the right hon. Gentleman for giving way again, but he appears to miss the essential point: the debt will be at least doubled under his proposal.

Mr. Blunkett: This may have arisen from a misunderstanding by the shadow Secretary of State for Education and Employment. The figures do not involve a doubling. Students in London must already pay back an increased loan. That was part of the previous Government's grant reductions, which is why I find the shadow Secretary of State's eulogy in respect of grants a bit difficult to take. The previous Government eroded grants year after year: 10 per cent. followed by 10 per cent. followed by 10 per cent.--a 40 per cent. real-terms cut in the amount available in grant. It has been instructive this afternoon to see the shadow Secretary of State say that he whole-heartedly agrees with a non-means-tested £1,000 contribution to fees.

I wish to explain clearly what we have done. We have Dearing-plus. We have Dearing plus our manifesto, which spelt out clearly what we would do in terms of income-contingent repayment for maintenance, but we have changed the Dearing recommendation by exempting those who are worse off from having to pay the fee. We have ameliorated the system for those in the middle-income bracket and we are asking the better-off to pay the £1,000, which they will repay over a period, based on their ability to pay.

Mr. Willis rose--

Mr. Blunkett: I shall give way to the hon. Member for Harrogate and Knaresborough (Mr. Willis), whom I had the pleasure to hear on my local radio station demonstrating in my great city on Saturday.

Mr. Willis: It was a pleasure to entertain you, Secretary of State. One of the real issues, to which you started to allude, is that of getting resources into our universities. You made the point about--

Mr. Deputy Speaker (Mr. Michael Lord): Order.

Mr. Willis: I am sorry. The Secretary of State made the point about--

Mr. Deputy Speaker: Order. I think that the hon. Gentleman is now correcting himself.

Mr. Willis: I apologise, Mr. Deputy Speaker.

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The Secretary of State said that £165 million extra will go in next year. He has made it clear that his policy is Dearing-plus. The Dearing report made it clear that we needed £350 million next year and £575 million the year after to save our universities from collapse. Would the Secretary of State be kind enough to square those two issues, because I do not understand how £165 million bridges the gap which Dearing said desperately needed to be bridged?

Mr. Blunkett: I have not pretended for a minute that we have found for the coming year the amount of money that Sir Ron Dearing had in his checklist. I do not duck that issue at all. We have identified resources from our own Budget, in imaginative ways that previously were not available, which fall within the Government's overall control totals, and which allows us to get the programme into being from September 1998, and immediately to trigger in from 1999 onwards the savings--and therefore the income--which otherwise would not be available.

If we were not doing that, we would lose £100 million in 1999, increasing to £800 million in 2005-06, even under present accountancy procedures. If we moved to resource accounting, the sums would come much earlier, in terms of just over £1,000 million by 2002-03. This is the programme for raising the resources to lift the cap, to open up access, to target under-represented groups, to give opportunity to those who are denied it and to invest in lifelong learning and the knowledge-based society of the future.

I was grateful to the hon. Member for Banff and Buchan (Mr. Salmond) for drawing attention to the interesting division that exists between Conservative Members in their policy on this issue. We have a policy from the shadow Secretary of State, we have a policy from the candidate in the Winchester by-election, and we have a policy from those hon. Members who should know better, who have experience in these areas, such as the hon. Member for Wantage (Mr. Jackson). Responding to my statement of 23 July, he said:

He was an ex-Education Minister, so he would at least have some idea.

Even the forthright right hon. Member for Bromley and Chislehurst (Mr. Forth), the immediate ex-Minister in the Department, said:

What about the hon. Member for Esher and Walton (Mr. Taylor)? He said:

    "The Secretary of State is to be congratulated on grasping some of"


    "radical aspects, including the deferred contribution of students to tuition fees."--[Official Report, 23 July 1997; Vol. 298, c. 955-61.]

I know that there are several Conservative parties on the issue of monetary union and Europe in general. I had not realised, however, that there are three, not two, Opposition parties on the issue of student maintenance and student fees. I do not know what the policy of the former hon. Member for Winchester, Mr. Malone, would be if he were elected for Winchester. I do not know whether he would have a free vote on that issue,

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or whether, if he were co-opted to the shadow Cabinet immediately, it would be demanded of him that he change his mind only when the Leader of the Opposition changes his mind, and never if the ex-Chancellor and ex-Deputy Prime Minister lead him astray. I do know that the shadow Cabinet will remain a shadow for a very long time to come, because it is in a shambles.

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