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28 Nov 2002 : Column 448—continued

Top-up Fees

6. Mr. Eric Illsley (Barnsley, Central): If he will make a statement on his policy on top-up fees for universities. [81972]

9. Mr. John Grogan (Selby): If he will make a statement on the Government's policy on student top-up fees. [81975]

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11. Tony Wright (Cannock Chase): If he will make a statement on the review of higher education funding. [81977]

The Secretary of State for Education and Skills (Mr. Charles Clarke): We will publish in January a strategy document setting out our 10-year vision for the development and reform of higher education. After that, there will be further opportunity for interested parties to comment.

Mr. Illsley: I am grateful to my right hon. Friend for his response. Given the funding crisis in the university sector, does he accept that top-up fees could have a perverse effect, as students might avoid the institutions that are charging higher fees? I understand that applications to Imperial college have fallen dramatically. Does he accept that in Scotland, which is a tuition-fee-free zone, applications to higher education have increased to a 50 per cent. target, whereas in this country, our applications have stayed at the 1998 level? Will he look to a graduate or alumnus tax and to collective provision for the crisis in our education sector?

Mr. Clarke: I am grateful for that question and I agree with my hon. Friend that there is a funding gap for higher education that is serious and that we must address. We must sort out the question of what the precise funding is, and it is important that individuals who pass through higher education make a contribution. The various arguments about a graduate tax, top-up fees, or whatever are very important. I share his concern that any system that we introduce should not have any intended or unintended consequences in terms of reducing access, as my hon. Friend the Member for City of Durham (Mr. Steinberg) mentioned in his earlier question.

Those are precisely the issues that we are considering in detail. We are having a substantial discussion about such questions, which is a good thing. We also need to discuss the nature of the university system and how it should evolve as a whole between its research, teaching and economic regeneration functions. I hope that we will have those discussions.

Mr. Grogan: When my right hon. Friend signs his name to the White Paper in January, will he make a tough political choice and reject the unelected siren voices of those who advocate student top-up fees, such as that chap Andrew Adonis, and instead bring new year joy and jubilation to the majority of Labour Members, the Secretary of State for International Development, probably most of the Cabinet and, most important, millions of youngsters and parents in hard-working families throughout the country with just enough hard-earned income to ensure that they have no chance of top-up fee abatement?

Mr. Clarke: The hon. Member is a good friend, and I appreciate the way in which he put his question. If the matter were as easy as he suggested, we would already be in the position that he suggests. I like to call Mr. Adonis XMr. Xoffice" after Professor Ted Wragg's article, which said that I had to choose between the advice of

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XMr. Tony's Office", whoever he may be, and me. Mr. Adonis is slightly misrepresented in my hon. Friend's question.

Neither my right hon. Friend the Prime Minister nor his staff are wedded to top-up fees. They want to solve the problem that my right hon. Friend the Prime Minister and my hon. Friend the Member for Selby (Mr. Grogan) identified—of raising money so that world-class, excellent universities such as York obtain the resources that they need. They have considered the various options and reached views on the potential merits of top-up fees, the graduate tax and so on. We are examining that now. The suggestion that a group of people is madly focused on top-up fees against all reason is false. We are assessing the options in the hope that we can present the country and the House with decent proposals in January.

Tony Wright: Is not the fundamental fact that our university system is in crisis? Student numbers have doubled in a generation, while the unit of resource has halved. Many universities are bankrupt, staff salaries are stagnant and some of our most distinguished researchers are leaving the country. If we say what we oppose in funding, we must also say what we support. Do we not need a wider review of the university system that goes beyond the narrow parameters that the Government have announced?

Mr. Clarke: My hon. Friend overstates the case a little, although I acknowledge that the 36 per cent. reduction in funding per full-time equivalent student from 1989 to 1997 has intensified all the pressures that he describes. As he implies, it means that we must confront the choices.

For 35 years, there has been a sense of drift in the definition of a university. We need to identify much more clearly the great research universities, the outstanding teaching universities, and those that make a dynamic, dramatic contribution to their regional and local economies. The funding system flows from the conclusions. The Department's website therefore includes a series of issue papers that cover a range of subjects, not simply student finance. I accept the thrust of my hon. Friend's comments, that one cannot resolve the finance issues without views on tackling the other relationships. I am determined to do that.

Mr. Andrew Mackay (Bracknell): Is not the genuine problem the fact that we have become hooked on increasing student numbers in higher education? That has led to awful funding effects. Would not it be better to fund properly students who will benefit from higher education? We would not then have to consider top-ups.

Mr. Clarke: I know that some hon. Gentlemen, especially on the Conservative Benches, subscribe to the Xmore is worse" school of thought on higher education. I do not. Our economy will succeed or fail in the next 20 or 30 years, depending on the productivity, effectiveness and education of our people in a competitive world economy. We were right to set our manifesto target of 50 per cent. of the population obtaining higher education qualifications.

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I agree with the right hon. Gentleman that there has not been enough serious thinking for a long time about the nature of the higher education qualifications. For example, I believe that higher education in further education colleges and two-year foundation degrees make a major contribution. We need to consider a method of getting the academic and vocational streams to work far better. That matches the announcement that my hon. Friend the Minister for Lifelong Learning and Higher Education made earlier, following the Chancellor's announcement yesterday. However, it is wrong to say that we should simply abandon an ambition for a large proportion of our population to get higher education.

David Burnside (South Antrim): The Secretary of State will realise the importance in university funding of the allocation of funding for research, both for educational purposes and for the relationship with industry and inward investment. Does he share my alarm at the expenditure per head across the four parts of the United Kingdom? In Northern Ireland it is only £15 a head; in England, it is £19; in Wales, £22; and in Scotland, £35. What will the right hon. Gentleman do to increase the research expenditure in universities in Northern Ireland and England?

Mr. Clarke: I have not studied the particular national comparisons that the hon. Gentleman has just given me, but I will certainly do so. I agree with him that research is an absolutely vital dynamic aspect of the regeneration of economies in all parts of the United Kingdom. Universities need to be better—there are issues about the governance of universities in this regard—at going out and identifying the kind of research that will enable them to succeed, and at making things happen in a much better way. We already concentrate our state research allocation, through the Higher Education Funding Council and the research councils, very sharply indeed on a relatively small number of universities.

The only general conclusion that I shall give beyond that is to say that when investors in research—major companies and corporations—are considering their investments, they examine both the quality of the institution and the social and political environment in which it lives. The hon. Gentleman and his colleagues need to work, as I know that they are, to get the best possible environment in Northern Ireland, so that people will want to invest there, in research and in other areas.

Mr. Damian Green (Ashford): It is understandable that the Secretary of State does not want to comment on every speculation that we hear about top-up fees, even—or perhaps especially—those floated by his own Cabinet colleagues. Will he, however, rule out at least one of them, which came in briefing papers from his own Department? It is the idea that every student, including those from poor families, should be paying fees. That sits very oddly with every other part of the Government's rhetoric. Will the right hon. Gentleman disown that idea now?

Mr. Clarke: There is not an idea to disown. What I will disown is any idea that we intend to put in a system that will discriminate further than the current one

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already does against people wanting to come through from poorer families. There is a massive waste of talent at the moment, involving people who have the capacity to benefit from a university education and to contribute to the economy, but who simply do not come through. The biggest possible indictment of the way in which the university system has evolved over these last years is that, as it has expanded, the proportion of children going into university from working class backgrounds has stayed the same. That is an indictment that we have to address, and I hope that we will do so.

Finally, I am getting representations from various people on the Conservative Back Benches about the issues that we should be addressing, and I would advise the hon. Gentleman as a candid friend, if I may, that he should talk to his colleagues to ensure that he can speak in a united way for the Conservative party in this debate.

Mr. Green: I would like to think that the Secretary of State can speak with a united voice for the whole Cabinet, but that is not true either, so he needs to look closer to home at his own problems. Indeed, it seems that he cannot even speak for his own Department. If he will not disown the document that I have here, all his talk about increasing access to higher education is so much hot air, given the ideas that his own Department is floating, his admission this morning and the admission of the Minister responsible for higher education last week. She said that the Government had not just failed, but widened the social divide in higher education. Does not that show that, six years in, the Government have failed miserably to meet their aim of getting disadvantaged students to university? Will the Secretary of State therefore answer the central question: why does he think—

Mr. Speaker: Order. When I rise to my feet I expect the hon. Gentleman to sit down. Perhaps we might also have a shorter answer this time.

Mr. Clarke: My short answer, Mr. Speaker, is that there was a 36 per cent. reduction in funding per student under the Conservatives.

Mr. Colin Pickthall (West Lancashire): Does my right hon. Friend agree, as I do, with our noble Friend Lord Hattersley, who wrote last week that a graduate tax was the only fair way of resolving the problems of funding in higher education, and that, to be effective, it would have to apply not only to future graduates but to present graduates such as my right hon. Friend and me?

Mr. Clarke: I read what our noble Friend said with great interest, and I think that he has a real point. That is why, in the article that I wrote for The Independent on Sunday on this matter, I referred to the contribution of alumni to universities. It is striking to see how alumni in the United States make a major contribution to the endowment of universities—massively more than happens in this country. That raises precisely the question that my hon. Friend has asked, and we need to look at that matter directly.

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Mr. David Rendel (Newbury): On 8 February last year, in answer to a question on top-up fees from my hon. Friend the Member for Somerton and Frome (Mr. Heath), the previous Secretary of State said:

What has changed?

Mr. Clarke: What has changed is that we are having an overall review of all the various funding sources in the round. What remains the case in all respects is that the state will continue to provide, under any possible picture, the absolutely giant lion's share of university funding. The question that arises then is the balance between the contribution that the individual should make—if so, how much and by what route, which is the issue that we talked about earlier—and that which any alumnus might make by the process that we have discussed, as well as that which the economy should make in relation, for example, to business that moves forward. The best way to address that issue is to have a very open debate on it, which is what I am trying to stimulate and encourage. That is the way to proceed, and I wish that other opposition parties would participate openly in the debate rather than simply make opportunist points as they come up.

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