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Mr. David Chaytor (Bury, North): If there is a direct relationship between cost and access, will the hon. Gentleman explain why, during the long period when there were no tuition fees and there was a 100 per cent. grants system, the proportion of young people from working-class backgrounds going to university did not increase? When such education was free, working-class people still did not go to university. Why was that?

Mr. Rendel: I am delighted to answer that intervention, because the hon. Gentleman raises an important problem. There are clearly reasons other than the fear of debt that influence the question—one of which is the number of children who go on to post-16 education. That is a particular problem for the sort of children to whom he referred. I am sure that the fear of debt and especially of having to pay tuition fees—even if, in practice, such students will not have to do so—are at least part of the important problem that we face.

The facts speak for themselves. According to the Barclays student debt survey, since the 1998 reforms, average student debt has roughly doubled from about £3,000 to about £6,000, and average debt on graduation is expected to rise from £6,500 in 2000 to around £10,000 in 2001. The National Union of Students estimates that that figure is more in the region of £12,000. It points to a recent debt survey by the University College London student union, in which only 12 per cent. of respondents expected to be debt-free on graduation. Of those expecting to be in debt, 38 per cent. expected to owe up to £10,000, 50 per cent. between £10,000 and £20,000, and 12 per cent. more than £20,000. Of those surveyed, 18 per cent. had considered dropping out altogether as a result of financial difficulties.

Even before the new arrangements were introduced, the student income and expenditure survey for 1998–99 found that 87 per cent. of full-time students experienced financial difficulties, and that 60 per cent. thought that such difficulties had damaged their academic performance. So why has it taken the Government so long to reach the conclusion that debt and the perception of debt represent a barrier to access?

At least we Liberal Democrats can now welcome the Government's decision to conduct a review—and we do. At last the Government have recognised that a disincentive is

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built into the system. Until now, they have maintained that there was no disincentive. Students, they say, can look forward to higher incomes later, but many students never receive those higher incomes. Even for those who do so, the costs are up front, while the benefits are three or four years down the line.

Alistair Burt (North-East Bedfordshire): I appreciate that the hon. Gentleman welcomes the review of student finance—we all would—but does he share my substantial concern and surprise that the review is being conducted entirely internally and cross-departmentally, so the very people who devised the system about which we are all complaining are devising the new one, too?

Mr. Rendel: I am grateful to the hon. Gentleman for making that point. I certainly share that concern, and I shall make a small offer in relation to it in a moment.

It is not just those who see themselves going into low-paid jobs who fear mounting debts. A recent British Academy report of graduate studies in the humanities and social sciences made two points. First, the United Kingdom is failing to attract sufficient numbers of the best British students to take PhDs in the arts, humanities and social sciences, and, secondly, debt is a major deterrent to potential PhD students.

Sadly, debt causes damage not only as a disincentive. It is clear that student finance has an impact on the quality of the university experience. The experience is valuable not just because it improves career prospects, but because it offers wider educational benefits—the pursuit of knowledge for its own sake, the coming together of people from different backgrounds, exposure to new ideas and ways of thinking and, of course, the gaining of greater personal independence and freedom.

So what are the implications of the fact that close to two thirds of students take up part-time work to help fund their way through university, or of a growing number of students opting to live at home because it is cheaper? Clearly, those trends mean less time to engage in the wider experience of university life, with all the extra benefits that that can bring.

The central problem is that the Government are committed to expansion but not to providing the money to pay for it. If they are serious about widening participation, they must address the funding issue. We know that that can be done. How do we know that? We know because it has been done. In Scotland, tuition fees have been abolished; grants for students from poorer backgrounds have been reintroduced. We Liberal Democrats are delighted that our Scottish colleagues were able to persuade the Scottish Executive to make those changes. The Liberal Democrats and the Labour party in Scotland have jointly proved that a better system is possible and can be afforded.

Diana Organ (Forest of Dean): Will the hon. Gentleman give way?

Mr. Jon Owen Jones (Cardiff, Central): Will the hon. Gentleman give way?

Mr. Rendel: I shall give way in a moment.

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The Scottish system is not the only possible way of financing students. Indeed, it may not even be the best one. We on the Liberal Democrat Benches are not dogmatic about that.

Mr. Jon Owen Jones: Well, give way then.

Mr. Rendel: If the Government wish as part of their review to discuss alternative proposals with us, we shall be happy to do so. I make that offer freely.

Diana Organ: The hon. Gentleman referred to the value of higher education and the Government's desire to increase participation in and access to it. Do he and his party agree, therefore, with the target of 50 per cent. of young people having access to higher education? Is he committed to that, as his party should be?

Mr. Rendel: The important issue is that students must have a quality university experience. There is no point in a target that results in more and more people going to university if the Government fail to meet the need to maintain unit funding for those students. If funding can be maintained, we would of course like the maximum number of students to go through university—if possible, even more than 50 per cent. of young people. If they can derive some value from their university experience, let us do that. However, without such valuable experience, doing so would be a waste of money.

Several hon. Members rose

Mr. Rendel: I have taken enough interventions for the time being.

In replying to the debate, perhaps the Minister will take the opportunity to confirm or deny the rumours that the following options are under consideration in her review: first, the abolition of tuition fees; secondly, a graduate tax; thirdly, the restoration of maintenance grants, at least for students from less well-off backgrounds; and, fourthly, whether student loans will still be made available.

I hope that the Minister will also assure us that universities will not receive less money if extra resources are to be directed towards student support. The Government delude themselves if they believe that they can expand student numbers and deliver a world-class higher education system without a substantial boost in funding

The Secretary of State rightly said in her speech on 22 October:

However, wider access to a bargain basement higher education system would be a betrayal of the young people the Government say they want to support. Just as higher education should not be a birthright of the middle classes, we must ensure that quality is available to all.

Our country needs a world-class system of higher education; our students deserve it. We need to provide grants, at least for students from less well-off backgrounds. However, tuition fees have no part to play in such a system.

Madam Deputy Speaker (Sylvia Heal): I call Mr. Jon Owen Jones.

Mr. Jon Owen Jones: Has the hon. Gentleman given way or has he finished his speech?

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Mr. Rendel: I have finished.

Madam Deputy Speaker: I apologise. I thought that the hon. Gentleman was giving way.

1.41 pm

The Minister for Lifelong Learning (Margaret Hodge): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:

I am not surprised that hon. Members were not sure whether the hon. Member for Newbury (Mr. Rendel) had given way. It was not clear whether he had finished his contribution or, indeed, what he was talking about. However, I am delighted that the Liberal Democrats have given us the opportunity today to engage in a short debate on higher education. It gives me the opportunity, early in the lifetime of the Parliament, to set out the Government's vision for expanding higher education.

I shall have to ignore much of the Liberal Democrat contribution because, in my simple little way, I do not understand the difference between a Scottish graduate endowment of £2,000 and payment towards the cost of education in a tuition fee. They may be called different names but they are the same.

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