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Dr. Lynne Jones: It would be interesting to know whether Conservative Members accept Dearing's recommendation on the move to resource accounting. In that regard, I wish my right hon. Friend good luck in his negotiations with the Treasury because, as he admitted, beyond 1998-99, unless there is a change of that nature, we shall have difficulty in giving the extra resources to universities, the £165 million that Dearing recommended--

Mr. Deputy Speaker: Order. I remind the House that speeches have been limited today to 10 minutes for Back Benchers because time is very limited. That means that all interventions should be extremely brief.

Dr. Jones: May I briefly ask my right hon. Friend what his projections are for 1999-2000? As he is aware, the extra £165 million was obtained by rephasing student loans.

Mr. Blunkett: I am grateful to my hon. Friend for her good wishes and support in this matter. I have indicated that the immediate yield from the new proposals would have been £50 million in 1999-2000 from Dearing and £100 million under our proposals. We are discussing with colleagues in the Treasury a plan to enable us to ensure that the universities are not disadvantaged and that--as I am sure that hon. Members would want--further education is supported and enhanced as well. It is very important that, in the wider debate, we see higher education in terms of lifelong learning, which has been grossly neglected.

Mr. Tam Dalyell (Linlithgow): Will my right hon. Friend the Secretary of State, before he ends his speech, or my hon. Friend the Minister for Education and Industry, Scottish Office, give us the latest position on the financing of the four-year Scottish honours course, which greatly bothers Stuart Sutherland, the vice-chancellor of Edinburgh university, and many others in Scottish education?

Mr. Blunkett: My hon. Friend the Minister for Education and Industry, in winding up this afternoon's debate, will respond directly on issues relating to the decisions taken by the Scottish Office, but--

Mr. James Wallace (Orkney and Shetland): rose--

Mr. Dorrell rose--

Mr. Blunkett: I shall finish my sentence and then give way to the shadow Secretary of State. We are talking about the 25 per cent. of students who would have had to pay the full premium, because others would have had it ameliorated or alleviated anyway; and we are talking

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about a situation in which A-level students from England or Wales, not wholly but substantially, find themselves able to enter the second year of university courses in Scotland.

Mr. Dorrell: First, can the Secretary of State confirm that the number of students going from England to Scottish universities and claiming exemption from the first year of a four-year course on the ground of their A-levels is 10 per cent. of all the English students entering Scottish universities? Secondly, does he accept that it is not good enough to say that his hon. Friend the Scottish Office Minister will deal with the matter when he winds up? The Secretary of State is the United Kingdom Education and Employment Minister. We are talking about students who live in England, Wales and Northern Ireland and it is for the Secretary of State to explain why, on behalf of his right hon. and hon. Friends, he supports a policy that discriminates against his constituents.

Mr. Blunkett: I can now see why the right hon. Gentleman got himself into such a tangle when he went to Scotland before the general election, to talk about constitutional issues. The Scottish Office is responsible for the university sector in Scotland; that is the historic difference in terms of responsibilities for education in our country. That was before the referendum, of course; it has nothing to do with proposals for further decentralisation and devolution, welcome although they are. That is why I referred to my hon. Friend the Scottish Office Minister responding at the end of the debate.

However, I have explained the position. Many more students than those who currently take up the option of entering in the second year could, would be able to and I hope will, take advantage of that option, given that highers--I realise that they have now changed to "higher stills"--and A-levels were and are different. This afternoon we are discussing a package of measures addressing equity, access, the unfairness that has existed and investment in the future of our higher education and lifelong learning system.

Mr. Wallace: Although the Minister for Education and Industry is responsible for Scottish universities, the Secretary of State is ultimately responsible to local authorities for student awards and student payments made by students in England and Wales who attend Scottish universities. The Committee of Scottish Higher Education Principals is expressing considerable concern that the change might frighten away a number of students from England and Wales, to the extent that it says that it could threaten the survival of courses, departments and even, in the long run, whole institutions. Will the Secretary of State acknowledge that that matter should be looked at again in terms of English, Welsh and Northern Ireland students attending Scottish universities?

Mr. Blunkett: I shall address myself entirely to the first part of the hon. Gentleman's question. He asks whether there is fear, and there is. I want to confront that fear head on. Fear is generated by misunderstanding about what the Government will introduce. There is fear among those who believe that they will have to pay top-up fees, when we have explicitly ruled them out. There is fear among people who believe that they will have to find the money immediately rather than paying it back over a

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lengthy period according to their incomes. Many fears have been whipped up. Even those who have the best intentions in seeking to oppose our proposals are contributing to the danger that young and mature students who were contemplating attending university next year may now not do so.

I have written letters to all students in colleges, in further education, sixth forms and tertiary colleges--which will be delivered in the next few days--advising them of the Government's true proposals and asking them to take up places as they had intended. We ask those students to acquire the resources that will enable them--through the higher average earnings that higher education leavers achieve--to pay a contribution that will enable a future generation to enjoy the benefits and the privileges of higher education. What they have now, others will have in the future.

We seek to open access to new groups that have been denied it by targeting particular socio-economic, cultural and geographic groups. We appeal to people to take up the challenge to invest in their future and to ensure that both they and the nation gain in the approaching new century.

4.51 pm

Mr. Don Foster (Bath): There is clearly much disagreement in the Chamber about the Government's proposals for the future funding of higher education. However, it is important to place on record the fact that there is also much agreement.

I hope that all hon. Members welcome the Secretary of State's announcement of an additional £165 million for education and the uses to which that money will be put. I hope that all parties agree that there is a significant measure of support for many of the proposals in the Dearing report, and we should be pleased that the Government have accepted them. We should also support the Government's proposals to introduce a new, fairer income-contingent loan scheme. Perhaps most important, I hope that all hon. Members welcome the expansion of higher education in recent years, from an elitist system for 5 per cent. to a mass 30 per cent system. We must surely welcome the Prime Minister's commitment to lift the cap and increase the number of students in both further and higher education.

I hope that we might also agree that the expansion of further and higher education was seriously underfunded by the previous Government. The Secretary of State has already referred to some relevant figures. For example, four fifths of our universities have obsolete or inadequate teaching equipment, and one in six students drop out, many because of problems associated with poverty. My hon. Friend the Member for Harrogate and Knaresborough (Mr. Willis) referred to Sir Ron Dearing's finding that universities will need £350 million next year and £565 million the year after merely to stand still. I hope that we also agree that there is an urgent need to widen access to universities and to attract more people from under-represented groups--particularly those from less well-off backgrounds and from certain ethnic minority groups.

If we agree on all of those points, we can surely agree that the tests of whether the Government's proposals--or

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any other proposals--are right are: will they truly widen access; will they provide much needed urgent funds to our universities in order to meet the current crisis; and will they avoid creating additional problems and inequalities in the system? Sadly, I believe that, in relation to the Secretary of State's proposals, the answer to all three questions is no.

First, as to whether the proposals will widen access, I understand the Government's argument that those from lower socio-economic groups and certain ethnic minority backgrounds are particularly averse to debt. Therefore, while introducing fees, the Government propose to means-test parents and offer lower fees and greater maintenance loans to the less well-off. I understand the reasons for it, but I believe that the Government's approach is fundamentally wrong.

Means testing is socially regressive. The Liberal Democrats believe that, from the age of 18, everyone should be treated as an independent adult. After all, at 18, people are old enough to vote, marry, drive and even to die for their country. However, when it comes to being assessed for paying for their university education, people are treated like little children. It is the students, not the parents, who benefit directly from higher education. Therefore, the students should contribute to their education from future earnings rather than from the family's current earnings. Means testing is good for the factory worker's son, who pays no fees, gets a higher maintenance loan and goes on to a highly paid job in the City. However, it is not so good for the managing director's daughter who becomes a social worker. The system is simply not fair.

More important, I believe that means testing is wrong because it misunderstands the nature of under-representation in higher education. Those from less well-off backgrounds tend not to attend university simply because they do not stay on in education after age 16. Therefore, the key to widening access to higher education is not means-tested fees, but boosting the staying-on rate post-16.

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