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2.8 pm

Alistair Burt (North-East Bedfordshire): I am grateful to have the opportunity to contribute to this debate on student financing. The debate was ably begun by the hon. Member for Newbury (Mr. Rendel). I am not quite sure how many Liberal Democrat education spokesmen are present. I can count two or three. We are having a short debate, which may be shorter because I am not sure how many Liberal Democrat Members wish to speak. It would be strange if few did speak. We will wait to see how many catch your eye, Madam Deputy Speaker.

It is a great pleasure to shadow the Minister for Lifelong Learning, whose work I observed when she was Minister with responsibility for disabled people during the previous Parliament. Where she is working genuinely to expand opportunities for young people, to encourage and to inspire them to achieve more, she will find me a friend and colleague. Many of those aspirations are shared by hon. Members on both sides of the House. However, I shall look critically at some of the things that she does, one or two of which may come up during my remarks. I am not sure whether the rosy picture that she paints, particularly of the university sector, would necessarily be accepted in every campus, but perhaps we can come to some of the details later.

Conservative Members welcome the opportunity to contribute to the debate on student finance. Our record on higher education is strong. It was a Conservative Government who between 1979 and 1997 drove forward wider access to higher education: from one in eight to one in three of the population—no quota, no fuss, just progress. Nor was that expansion confined to an elite of traditionally higher educated families. The number of school leavers from poorer families entering higher education roughly doubled in the 10 years to 1997, although sadly, as the Minister pointed out, it has remained somewhat static since. UCAS figures quoted in a recent Select Committee report on access show that the number of students in higher education from less well-off backgrounds fell between 1997 and 1999.

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Kenneth Baker, now Lord Baker of Dorking, whose Parliamentary Private Secretary I was proud to be, ended the divide between polytechnics and universities, recognising the thrust and energy in the poly sector. He was one of the first to appreciate the need to match wider access to a change in student funding, realising that a redrawing of the balance between student and taxpayer had to take place. That debate was not easy. It remains a difficult area for politicians, in which the easy answer is not likely to be a serious one, but I will come back to the Liberal Democrats in a moment.

Let us be in no doubt why we are here. The Government's review of student finance—the prompt for today's debate and the first U-turn of the new Parliament—has an undistinguished parentage. The first promise reneged upon, at the very beginning of the previous Parliament in 1997, was that by Labour politicians not to introduce tuition fees. The Prime Minister, the title we used to know him by before he was elevated beyond normal politics, had said clearly during the election campaign that

Within months, that promise to students, their parents and families was conveniently forgotten.

Both arrogance and complacency, with which the country is becoming wearily familiar, characterised the next announcement, which was to reject almost out of hand and extremely rapidly the conclusions of the Dearing committee. To remind the House, Dearing recommended the continuation of means-tested grants in order to ease access for students from a low-income background, and recommended against the introduction of means-tested fees. The then Secretary of State, the right hon. Member for Sheffield, Brightside (Mr. Blunkett), chose to do the opposite to Dearing in both cases. Replying to an Opposition day debate on 4 November 1997, he claimed that he was offering not Dearing but "Dearing-plus". It is now clear what the plus means—increased hardship, increased debt, less access and more dropout. Accordingly, the essence of the Government's embarrassment, which we have already witnessed today, is that the crisis in student finance is almost entirely of their own making, born of deception, clothed in presumption but now sunk by their own failings.

That is not the only crisis in the sector, to remind the Minister of things that she may have forgotten while she was at the Dispatch Box. Universities acknowledge the impact that the crisis in student finance has on access and retention, but they have concerns in other directions. They are irked at being required to succumb to greater and greater regulation—it is estimated that quality assessment alone costs some £250 million—while expecting less and less financial support from Government. They are worried about a crisis in their own funding. They estimate that a gap now exists of some £900 million a year in respect of delivering as they would wish on their students' expectations. They are worried about the demographics of their teaching staff, which foresee them being remarkably short of lecturers in a handful of years. They are worried about recruiting their replacements and attracting students to do PhDs.

The crisis in student funding may not be the only one, but it has the most immediate impact on students of all ages and their families. If it was unexpected by the current Home Secretary and his party in 1997, it was not

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unexpected by others. It was not long before evidence of it began to accumulate. The Select Committee on Education and Employment published two reports earlier this year examining higher education: on access and on student retention. In both, student finance came under scrutiny, resulting from the growing perception that not only fear of debt but real hardship beyond the usual tolerance long experienced by students were having an influence on choices and destinations.

Professor Claire Callender co-authored a report for the DFEE entitled "Changing Student Finance" that was published in December 2000. She said that certain groups of students experienced severe financial hardship and her report found that one in 10 of full and part-time students had thought about dropping out for financial reasons.

Professor Diana Green of Sheffield Hallam university told the Select Committee that the number of student exclusions for debt had risen by 17 per cent. between 1997 and 1999. The NUS student hardship survey in 1999 showed that up to a third of full-time students had considered dropping out of studies at least occasionally.

Margaret Hodge: Does the hon. Gentleman accept that we have the second best retention rate of students among all OECD comparator countries? Does he further accept that there has been no change in our position since the introduction of the reforms in student support?

Alistair Burt: My point is that we want to preserve and protect our very good retention rate. The evidence to the Select Committee shows that the Government's student financing package is putting that at risk. Even if the figures have not yet started to drop away, my quotations from those who are close to students show that it is a real danger. They are starting to see evidence of exactly what the Minister fears.

Joan Ryan: I am astonished to hear that. I understand that since 1993 participation of students from lower socio-economic backgrounds has remained pretty constant at 26 per cent. Perhaps one reason why it has not improved is the fact that the Conservatives cut funding per student by 36 per cent. We are trying to regain that position and improve it.

Alistair Burt: I have two points in answer to the hon. Lady's comments. First, as I said earlier, the number of school leavers from poorer families entering higher education approximately doubled in the 10 years to 1997, which include the years that she mentioned. That information is from table 1.1 on page 6 of the Dearing report. Secondly, the hon. Lady referred to the change in unit funding. She is quite correct, but unit funding was going down as the number of people in higher education increased considerably, at no loss of quality whatever, as the Dearing report commented.

We want more people to experience good-quality higher education. That was the record of the Conservative party when it left office.

Margaret Hodge: The key figure is not the number, but the proportion of young people from lower socio- economic backgrounds who enter higher education. That has not changed. Does the hon. Gentleman believe that the mortgage-style loan scheme introduced by the

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Conservative Government was less inhibiting of students from lower income groups than ours, which is entirely income contingent?

Alistair Burt: I did not say that we are content with the proportion of those from non-traditional backgrounds who enter higher education now. However, we did change it and the numbers were increasing under the Conservative Government. The rapid stop appears to have come round about 1997. Therefore, I am simply asking the hon. Lady to acknowledge that, just possibly, it might have something to do with the new financing arrangements that she introduced.

Mr. Chaytor: I am grateful to the hon. Gentleman for giving way on this point. Given the Conservative party's new-found concern about increasing participation in higher education—[Interruption.] In the period 1992–97 when the hon. Gentleman and his colleagues were responsible for the system, I was one of those responsible for making it work, and our recollection of what happened is not quite the same as his. Does he not share the Government's target of 50 per cent. of young people going into higher education by 2010?

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