House of Commons Hansard Debates for 6 Feb 2003 (pt 3)

6 Feb 2003 : Column 424—continued

Higher Education

5. Mr. Andrew Lansley (South Cambridgeshire): When he last met Universities UK to discuss the funding of higher education; and if he will make a statement. [95748]

The Secretary of State for Education and Skills (Mr. Charles Clarke): I frequently meet representatives of Universities UK formally and informally. I have been

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glad to inform them that the comprehensive spending review gave an increase in university funding of 6 per cent. a year in real terms.

Mr. Lansley : I am disappointed that the Secretary of State did not say that he had met Universities UK representatives this week to discuss its report on student debt, which states:

"Debt aversion deterred entry into higher education, especially for the very groups the government most wants to attract."

It said also that

"a key criticism of the White Paper voiced to date is the potential impact of variable fees".

In light of that report, does not the Secretary of State consider it important to think again about the imposition of substantial long-term debt on students? Or does he share the view of his ministerial colleague, the hon. Member for Barking (Margaret Hodge), who said that only rich kids go to Oxford or Cambridge—which is both misleading and damaging?

Mr. Clarke: As I told the House when I made a statement on the White Paper, if the decision were taken to get rid of upfront fees of £1,100 a year in favour of repayment through the tax system, the debt would increase by £3,300—but payment through the tax system would be on an income-contingent basis with a zero real rate of return. I acknowledge also that debt can be inhibiting, but one has to set that against the inhibition of an upfront fee of £1,100; no support in the form of grants and fee remissions; and a repayment system that does not reflect income. I shall carefully study the Universities UK report, but the overall balance of our proposals is positive for access.

Ms Diane Abbott (Hackney, North and Stoke Newington): The Secretary of State will be aware that I was a child from a working-class background who went to Cambridge university, when no other member of my family stayed at school beyond the age of 14. Does my right hon. Friend realise that for such families, the prospect of debt and a differential fee for attending a university such as Cambridge will act as a serious disincentive?

Mr. Clarke: I accept, as I have told the House on many occasions, that we need to take the disincentive effect into account. However, it is important that people contribute. My hon. Friend is an example of someone with a university education securing a well paid career throughout life. She would have to decide the form that her contribution took. In my opinion, if one achieves a good degree and earns on average 50 per cent. more than people without degrees, that should be taken into account in the funding system. Those who have questions to raise should discuss that aspect.

Mr. Phil Willis (Harrogate and Knaresborough): On 9 January, at Education questions, the hon. Member for Isle of Wight (Mr. Turner) rightly asked the Minister for Lifelong Learning and Higher Education what the funding gap was between what the Government thought universities needed and what, in fact, the universities were receiving. Can we have an answer to that question today? Will the Secretary of State explain why he said in his statement that there would be a 26 per cent. increase

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in funding for teaching and learning, yet in the three years of the comprehensive spending review, the actual funding rises are 3.1, 0.66 and 2.89 per cent.? In reality, excluding the Government's initiatives, which are targeted at certain universities, there will be a cut in real-terms funding for the vast majority of our universities, so recruitment and retention and, indeed, support for students will, in fact, decline.

Mr. Clarke: Two things arise. I have nothing to add to what my hon. Friend the Minister of State said on the funding gap at Question Time in January, because there are many claims about what the funding gap is. Universities UK has produced an estimate; other academic estimates have been made. What I say is very simple: we have to increase spending, and that is what we are doing. Indeed, there will be no cut in real terms for any university, contrary to what the hon. Gentleman suggests. We are putting in more money—6 per cent. a year in real terms is the most significant settlement for higher education for decades. That will make a real difference to every university, with the focus on teaching and knowledge transfer, and I would have hoped that the hon. Gentleman would welcome that, rather than publishing his own batty schemes, designed to force children to live at home when they go to university.

Mrs. Anne Campbell (Cambridge): I welcome the extra £2.2 billion announced in the higher education White Paper—it will obviously go a long way to ensure that those universities that are underfunded do better in future—but may I suggest to my right hon. Friend that all universities are feeling the pinch? Would it not be better to raise tuition fees generally across the board, rather than to allow some universities to charge differential fees?

Mr. Clarke: I understand the point that my hon. Friend makes. We have discussed it outside the Chamber on several occasions. First, I appreciate her thanks for the resources that are going in. It is important that she acknowledges that, and I am grateful to her for the fact that she has. Secondly, I am grateful to her for acknowledging that still more money is needed through the fees system from students themselves. That is an important comment as well. Whether that is done by a standard fee increase across the whole range or by variable fees, as we suggest, is a question for debate—there are many views on this—but I believe that we should acknowledge that we now have a multi-tier university system, with differing impacts on possible earnings from the various universities, and that it is reasonable for the fees system to reflect that. However, I am sure that my hon. Friend and I will continue to debate that, both in public and in private.

Mr. Damian Green (Ashford): The Secretary of State is making much of the funding increases under this Government. Will he tell the House what the funding per student is?

Mr. Clarke: I cannot tell the hon. Gentleman the figure that he asks for, although I am happy to write it down and send it to him if he wants to know; but what I can say is that, throughout the whole period of the Conservative Government, funding per student was in

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absolute freefall until 1997. In 1997, we put in the money to flatten that out, so that it did not continue going down. As we set out in the White Paper—I am sure that he has a copy in front of him—we need to start raising it so that funding per student increases. That is why we have a 6 per cent. a year real increase in funding, and we are considering raising more money from fees precisely to address the massive disinvestments that the Conservative Government created.

Mr. Green: Let me enlighten the Secretary of State about what has happened under this Government, based on a letter that the Minister for Lifelong Learning and Higher Education sent to me on 7 December. What they inherited in 1997 was funding per student in real terms of £5,060. This year, after six years of Labour Government, the figure is £4,900—a Labour cut of £160 for every full-time student. This Government have been taxing more and spending more, but the money is not getting through to where it matters: the education of our students. Does not he agree that that sums up the whole new Labour failure on education?

Mr. Clarke: It will not surprise the hon. Gentleman to hear that I do not agree with him. If he considers the years from 1979 to 1997, he will see an absolutely dramatic fall in funding per student. That is set out clearly in a graph in the White Paper. Since 1997, that fall has been flattened out. We are now putting in the money to increase the level of funding. That is what we intend to do.

Ian Lucas (Wrexham): I am organising a conference on the higher education White Paper at my local university college at the North East Wales institute of higher education in Wrexham. My right hon. Friend is very welcome to attend, but can he help me by telling me whether the White Paper applies to England and Wales?

Mr. Clarke: The White Paper indeed applies to England and Wales. However, in England and Wales, the regimes for student funding and control of universities are different. As my hon. Friend knows, an issue that has been discussed—and I referred to this in my statement on the higher education White Paper—is that student funding is not devolved whereas universities are devolved. We should consider that issue. I look forward with great interest to the outcome of the conference that my hon. Friend is organising. I will be interested to hear its conclusions on this important policy question.

Higher Education

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