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SITTINGS OF THE HOUSE
Motion made, and Question put forthwith, pursuant to Standing Order No. 25 (Periodic adjournments),
- That this House, at its rising on Thursday 22nd May, do adjourn until Tuesday 3rd June 2003.—[Mr. Jim Murphy.]
- That at the sitting on Thursday 22nd May, the Motion for the adjournment of the House in the name of the Prime Minister relating to matters to be considered before the forthcoming adjournment may be proceeded with, though opposed, for three hours, or until Six o'clock, whichever is the later, and shall then lapse.—[Mr. Jim Murphy.]
Student Finances (Cornwall)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Murphy.]
8.8 pm
Matthew Taylor (Truro and St. Austell): I very much welcome this opportunity to raise a subject that has, to say the least, been of some controversy on both sides of the House: tuition fees and the Government's plans for top-up fees. I shall say a little more on both in a moment, but I want to focus on the impact that tuition fees have already had on Cornish students and, more specifically, on the impact on Cornish students of top-up fees in future.
I am delighted that my three Liberal Democrat colleagues from the county are in the Chamber, as we think that the matter is of the utmost importance in relation to the Government's wider policies on social inclusion, to give poorer students the opportunity of higher education and to ensure that people with a high level of skills and qualifications can work, set up and expand businesses and make the Cornish economy successful. That, too, forms part of the Government's wider policies, through objective 1 programmes at European level and in other welcome respects, to try to tackle the acknowledged poverty in Cornwall, which is the poorest county in the country.
The existing policy of student tuition fees has already led to typical students amassing a debt, by the time they graduate, of £12,000—a substantial amount for anyone embarking on life and a career. Although the Government argued originally that that was a way of getting extra money into higher education, those extra funds never materialised. Looking at the graph of expenditure, it is clear that it substituted the trend growth from the Treasury in terms of investment in higher education for money from students in the form of tuition fees. Now, however, the Government propose to allow top-up fees of up to £3,000. For a typical student having to meet those top-up fees, the debt that they could expect on graduation would double from the existing £12,000 to £24,000. It is true that the Government say that they will reintroduce a grant system, which has been taking place—grants of £1,000 a year, some £20 a week, which are substantially less than the grants that young people in my constituency currently receive if they go to further education college, which are £30 a week. Again, the Government have said that it is all about getting further money into higher education. Simply put, doubt exists in all our minds about whether that will happen, given that it has not really happened in the past.
In deprived areas such as Cornwall, amassing a debt by the time of graduation of £24,000 gives rise to the question whether students from poor areas such as mine will be able or willing to take up such a debt at the start of their lives. A couple starting a marriage, having children and looking for their first home, if both were graduates, could have a debt of nearly £50,000. Not so long ago—within my time in Parliament—that level of debt would easily have bought a house in Cornwall, yet, now, before such a couple even start to have thoughts of a house, they will be saddled with such debts.
Of course, given rapidly rising house prices and the gap between local wages and house prices in Cornwall—one of the greatest in the country—and the fact that
mortgage companies will take into account the debt that students have as a result of getting through university in deciding how much they can extend for a mortgage, the chances of even professionally qualified graduate couples on local incomes in Cornwall affording a house are next to none.
Mr. Paul Tyler (North Cornwall): My hon. Friend is too young to have had the same experience as me of getting two children through university. My point is that the disincentive factor in Cornwall is already very strong. The number of contemporaries of my daughter and son who simply could not contemplate higher education, even now, is considerable. I therefore think that the starting point is even worse than he describes. With new increased costs, and therefore increased debt, the situation will deteriorate further.
Matthew Taylor: I am sure my hon. Friend is right.
I want to turn for a moment to what is happening in Cornwall already, because the figures are significant. If we look at educational achievement in the county, at GCSE level, Cornwall has been consistently above the national average. For that part of education that is not optional, through which all young people go, it outperforms substantially the national average. By A-level, as the poorer students start to peel away, trying to earn some money within the family and perhaps contribute to the family home, we start to see that advantage worn away.
At A-level, Cornwall compares almost exactly with England. Therefore, although we know that young people in Cornwall start off doing better, by that stage, fewer of them are taking and getting A-levels or other vocational qualifications. There is an almost exact match between Cornwall and England, however. By the time we get to higher education, when people start to contemplate the debt that they are taking on, Cornwall falls behind the national average.
The key is that, until the introduction of tuition fees, the proportion of Cornwall's young people who went into higher education was gradually increasing. However, at the point at which the fees were introduced, the number fell back and since then there has been no trend upwards. The figure for participation levels has bounced around at about 20 per cent. By 2001, fewer 18-year-olds were entering higher education than in 1997. The reason for that appears to be directly linked to income levels.
It is not possible to extract from the data nationally specific figures for Cornwall, but we know what has happened nationally because the Department has commissioned research. Participation in higher education among people from professional backgrounds increased by 21 percentage points in the 10 years between 1991 and 2001. However, the increase in higher education participation by young people from manual and unskilled backgrounds increased by only 7 percentage points. Therefore, the existing system, which already discriminated against the young people from poorer backgrounds who are typical in Cornwall where there are relatively few professional managerial jobs and very low incomes, has widened social divides. The problem is directly linked to the debt situation that has accumulated, and top-up fees can only make it worse.
I have asked young people in the county what they think. Over the past few years, I have written to all young people at the age of 18 and asked them about their choices in relation to education and how they are affected by tuition fees. Consistently, year by year, half of them have said that tuition fees make them less likely to go to university. That is even without top-up fees. Of last year's cohort, 46 per cent. specified that tuition fees deterred them from going to university. Near on 60 per cent. also believed that, in five years, they would not return to or work in Cornwall, because they would go elsewhere to earn higher incomes. They would not be able to afford to live in Cornwall because of the high home ownership costs and the low wages. Again, that is even without the threat of top-up fees.
Clearly, the large debts associated with top-up fees will make these problems very much worse. That is a double whammy for the county, because there will be two effects. The fees will deter young people from going to university in the first place and, when they have graduated, they will be deterred from coming back because it is a low-income area where it is harder to repay the debts. The county will be locked into a low-income, low-wage economy that has few graduates. In other words, that is a definition of the problems that we already have, but made worse.
The Government say that students should be expected to pay the high top-up fees because of what they term the "graduate premium". The Department claims that a typical graduate will earn £400,000 more in their lifetime as a result of the opportunities granted by university education. Those figures are, of course, flawed, because they are based on a study of the existing graduates in the work force. Most of them came through when only 12 or 15 per cent. of the population went to university. They are therefore a premium section of the work force and they are understandably and typically in the top 12 to 15 per cent. of earners.
The Government are now aiming for a figure of 50 per cent., and 50 per cent. of the population cannot have a £400,000 lifetime premium in their earnings ability. In fact, if the figure is 50 per cent., many of them are likely to be on average earnings even though they have gone through university and graduated. The Government's justification is certainly flawed.
The position is not necessarily uniform across the country. If one lives and works in the south-east or London, one may get a very high return on the investment involved in going to university. One may get a high return simply because of where one lives. Wages are very much higher in that part of the country. If people choose to live and work in Cornwall, their wage expectations will be substantially lower. Even skilled wages in the county are 20 per cent. below the national average. That has a significant effect on those students who have built up large debts because it takes significantly longer to repay them.
An average male graduate could expect to take 14 years to pay off a debt of £24,000. It could take a woman 17 years to do that because women's earnings are typically lower, something that the Government do not mention when they talk about the graduate premium. In Cornwall, men could take 17 years and women 20 to pay off the same debt. The Government are hanging a mortgage around those young people's necks. Students who return to the county will not only sacrifice income
and have to find a way to pay for much higher than average house prices, which are forced up by people moving out of the south-east and buying retirement or holiday homes, but face possibly 20 years of hard labour before they pay off the debts that they have run up as a result of the Government's top-up system.The Government need to think hard about that. They are about to open the new Cornwall university base at Penryn. That big investment has been made possible by European funding, a great deal of Government commitment, and support from the Liberal Democrats and just about everyone in the county. The justification for that investment is that it will create opportunities for the poorer people in the county to study locally and not to have the same costs that they might encounter if they went away. It would also bring graduates into the county.
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