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Andrew George (St. Ives): Does my hon. Friend agree that if the Conservatives got into power, their proposals announced yesterday would adjust student finance in such a way that student numbers would be slashed and the combined university project and the enhancement of higher education places in Cornwall would be dead in the water?
Matthew Taylor: I do not want to dwell on Conservative policy because I welcome the fact that they oppose tuition fees. They have not done that consistently before and it may help us to defeat the top-up proposals. Some 140 Labour MPs have signed an early-day motion opposing top-up fees. If they have the courage of their convictions and vote with the Conservative party and the Liberal Democrats, the Government will either be defeated or have to withdraw their proposals and think again. That is why I hope that the debate will have an impact.
However, I have to acknowledge that the maths of how the Conservatives will pay for their policy does not add up. Telling students that they will not have to pay a tuition fee is not much help if they also tell them that no places are available. It does raise the question of how we will finance those extra student places planned for Cornwall if they are not funded.
Having said that, there is a more immediate problem for the Labour Government. We welcome and support the need to improve the Cornish economy and to give people new opportunities, but the new university might have to introduce top-up fees. It will inevitably find that its finances are stretched and that it can offer courses only if it charges those fees, but that would be counter to the purpose. The first thing that the poorer students who are meant to be welcomed into the university in Cornwall will be told is that they have to pay thousands of pounds in top-up fees and therefore face debts amounting to a large mortgage—probably larger than any mortgage that their parents have ever had—if they walk through its gates.
I hope that the Minister will at least promise to make every effort to ensure that the combined universities in Cornwall have the funding they need so that they do not have to introduce top-up fees in the county. We want the Minister to pledge that there will be no top-up fees for higher education in the county. If there are, it will contradict every reason that the Government have given
for backing the Cornwall university. Moreover, Liberal Democrats do not believe that tuition and top-up fees are the right approach. We have explained, most recently in our alternative Budget, that the right thing to do is to ask the growing number of very high earners—people earning over £100,000 a year—to pay a little more tax to fund greater fairness in the tax system. That would allow unfair increases in council tax to be cut, and nearly half of the additional revenue could be used to fund improvements in higher education. At the same time, students would not be asked to pay tuition and top-up fees, so would not have to should an unfair burden at the start of their adult lives.It is in everyone's interest that students get that educational opportunity and become highly qualified people who will successfully lead the country through their innovation, skill and business investment. It is of fundamental importance that Cornwall encourages its young people to take advantage of the basic skills that I have described and develop them all the way through university. It is important for the future of Cornwall that we attract those people back so that they can invest in the local community and use their skills to build a thriving and successful county. I believe that the Government believe in all those things too, but if they pause for a moment, they will realise that none of them will be possible if they go down the appalling route of top-up fees for students.
8.26 pm
The Minister for Lifelong Learning and Higher Education (Margaret Hodge): I congratulate the hon. Member for Truro and St. Austell (Matthew Taylor) on securing this debate on an important issue that we have been debating widely outside Parliament today in response to the ill-thought-out proposals finally submitted by the Conservative party.
I had the pleasure of visiting Cornwall recently to discuss with various institutions their proposals for the combined universities in Cornwall. I had the pleasure of visiting Truro college, a further education college which, as the hon. Gentleman will know, recently gained beacon status and is an excellent college. I congratulate everyone associated with it on providing terrific opportunities of a very high standard for a large population in Cornwall. I am excited and interested in the emerging partnership between universities in Exeter and Plymouth, the Open university, the college of St. Mark and St. John, Falmouth college of arts and the FE colleges, which is extremely positive. I hope that the hon. Gentleman agrees that we have demonstrated our confidence in it by saying that we will invest nearly £100 million of Government and EU money to provide the campus and other facilities. I shall certainly do all that I can to encourage that important local provision.
The hon. Gentleman will be interested to learn that since we published our White Paper on higher education I have been approached by six or seven regions, all seeking to establish a university, both because they want to provide higher education for a wider group of people in the locality and because they believe that universities
play an important role in regenerating the local economy. That demonstrates a change in the past 10 years in people's view of the role of universities, and I hope that the hon. Gentleman accepts that that is an important part of the White Paper proposals currently out for consultation.Participation in higher education among young people in Cornwall is equal to the national average. The hon. Gentleman's figures demonstrated a slight fall-off in post-16 education, which is worrying. I shall consider whether the Department can do anything more to support local initiatives to try to encourage more students to stay on, but I hope that he will welcome the introduction of the educational maintenance allowances, which will be available nationally by 2004, as a financial incentive in support of that aim. I am a bit suspicious of his contention that the current fee regime has had a disproportionate impact on people in Cornwall. I cannot trace that in the figures that I have seen. Although we would all accept that there was a blip in applications in the year when the new regime was introduced, there has since been a steady and welcome increase in applications and in attendance in higher education, which demonstrates what we well know—that all young people who go through higher education see it as providing excellent value and good investment in the future. That is why I want the hon. Gentleman to join us in promoting higher education as a way forward in his county and elsewhere.
Matthew Taylor: I do not want to exaggerate the point. The numbers in higher education have fallen back in terms of the numbers who started at GCSE. I am worried about that, as the Minister would be. Nationally, once the initial effect of the tuition fee had worked through, although participation did not rise as fast as the Government would have wished, it continued to rise. In Cornwall, the participation rate has flattened off, and I think that tuition fees had an effect there.
Margaret Hodge: I will take the opportunity provided by the debate to examine that in detail and write to the hon. Gentleman.
I recognise that many of those who participate in higher education in Cornwall come from lower income backgrounds. That is reflected in the fact that almost three out of four Cornish students, many of whom study in the south-west even if they do not study in Cornwall, get full or partial contribution to the fee that currently exists, which is only a contribution to the current costs of tuition.
I do not accept much of what the hon. Gentleman said about the drivers for increased participation. In all the work that I have done over the past 18 months to two years in this job, I have come to learn that if we want to raise participation in higher education—and we do, because of the benefits for social inclusion and for the development of a much more skilled and competent work force—the key is to get more young people to stay on in school beyond the age of 16. Nine out of 10 of those who achieve two A-levels go on into higher education.
The real problem that we have in Britain, which seems from what the hon. Gentleman said to be particularly acute in his county, is encouraging young people to make that extra investment of time and money to stay on in education, so that they can expand their earnings later in life. Staying on in school and achieving the prior attainments necessary to pursue a university education unlock the opportunity that we want for individuals.
The other issue that we need to tackle, and which I am sure is true of Cornwall, is that far too many young people from low income families do not see university as an option for them. They see it as something for other people. That is why today's proposals from Opposition Front Benchers are so deeply damaging. If they were put into effect, we would revert to a situation in which only a few would see university as an opportunity for them, and the many would fall by the wayside and not develop their potential or contribute fully to the economy. Changing aspirations and achieving prior attainment are key to ensuring that the new combined universities of Cornwall are a success and are attended by many local people.
We need an appropriate funding regime. The hon. Gentleman would do a huge service to his constituents in getting them to aim higher and participate if he were a little more honest about what we were proposing. We recognise that debt aversion is a particular issue among young people from low income backgrounds, which is why we have put together a package of proposals that addresses debt aversion among people from low income backgrounds, while ensuring that we get more money into the sector and that those who benefit from a higher education in increased earnings during their lifetime pay a little bit back into the system.
Only four out of 10 people currently pay the contribution to the fee. With our new system, that will continue. Only one in four of the hon. Gentleman's constituents currently pay the full contribution to the fee. If there is no change in the income distribution in his constituency, that will continue, and he should tell his constituents that that is the case.We also believe—he should applaud this—that it is important to get rid of upfront fees, which is why we have said that we do not expect people to pay when they are getting their education, but we do expect them to contribute when they become graduates and earn much more.
We are bringing back grants; let us again have a bit of honesty and straightforwardness about that. A third of our students will get a grant of £1,000. That will be on top of the loan, which, as the hon. Gentleman will know, is offered on extremely generous terms. A student from a low-income background will get a £4,000 loan, will not be expected to pay the £1,100 fee and will get a grant on top of that. That scheme, which reaches a third of students, is much more generous than the scheme that currently applies in Wales, for which his party has some responsibility.
We are also raising the repayment level to £15,000. From a graduate on £20,000 a year, we are asking for a repayment of £8.60 a week, which is about the price of two bottles of wine or three glossy magazines. I believe that that is affordable. The loan scheme bears no real interest and is income contingent, so it will meet the needs of women, who may take time out of the labour
market. People will pay only according to what they earn and pay back only what they borrowed in real terms. I think that that is a fair way forward.On variable fees, I do not accept that debt will double. We have clearly said that we will expect institutions that wish to introduce variable fees to have in place a bursary scheme that will give additional support to people from low-income backgrounds. We will also ensure that, if universities such as the combined universities of Cornwall wish to take that route, they properly engage with their local population to encourage young people to aim higher and go to university.
The Conservative proposals were advanced today, and I agree with the hon. Member for St. Ives (Andrew George) that they would threaten the expansion of place numbers in his county. However, the Liberal proposals do not add up. Interestingly, both Opposition parties
have made proposals that simply do not make arithmetical sense. The Liberals not only want to abolish tuition fees, double grants and pay benefits in the long vacation—we reckon that that would probably cost significantly more than £1 billion—but have said that they will be generous about research and meet the Bett pay settlement. Again, that does not add up.I say to the hon. Gentleman that a 50 per cent. tax rate will not be the magic pot of money that funds every student in Cornwall. Our proposals will ensure fair access and expansion that will give us the inclusion and economic growth and prosperity on which our policy is built.
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