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4.55 pm

The Minister for Lifelong Learning, Further and Higher Education (Alan Johnson): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

I thank the hon. Member for Harrogate and Knaresborough (Mr. Willis) for ensuring that I have this opportunity to celebrate my first week in my new job at the Dispatch Box, and for his kind comments. He is a fellow Yorkshire MP, and he has a great heritage—I have found out that his father was a postman—so I hope that the debate will not be the end of a beautiful friendship.

We have the prospect, in fact, of a further debate on the same topic on a motion from the Conservative Opposition on Wednesday. May I note that it is always comforting for a Johnson to stand opposite a Boswell? Historically, the two clans have got on, and I look forward to working in my new brief and to jousting with the hon. Member for Daventry (Mr. Boswell) over the coming—I hope—months and years.

The Liberal Democrats at least accept the need to increase investment in higher education, but they are not willing to accept that the graduates who benefit from university education should make any contribution whatsoever. Meanwhile, the Conservative Opposition oppose extra investment, deny any need for expansion and wish to remove £430 million of existing revenue, thus abolishing up to 80,000 university places and 13,000 lecturers. We accuse both Opposition parties of ducking fundamental issues at the heart of the debate, because those issues are too difficult and too controversial.

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The principal issue is how we can ensure that our world-class universities—ancient and modern—are properly equipped to succeed in the increasingly dynamic and competitive international environment in which they operate today. The hon. Member for Harrogate and Knaresborough argues that with 43 per cent. of the relevant age group now in higher education, we can finance the sector in the same way as we did 40 years ago when only 6 per cent. of students enjoyed a university education. The Liberal Democrats say that we should fund existing numbers through higher taxes, that we should fund future expansion through higher taxes, and that, for good measure, we should provide housing benefit and income support to students during the summer holidays—also, I presume, through the same higher taxes.

I take issue with a number of detailed points made by the hon. Gentleman about the figures and with some of the misinformation emanating from the Liberal Democrats. For the moment, however, let me deal just with the issue of principle at the heart of the debate.

Lord Dearing chaired the National Committee of Inquiry into Higher Education that was set up by the previous Government, with bipartisan support, in 1996. His report, published in 1997, was probably the most comprehensive examination of the subject since Robbins in 1962. On funding, Lord Dearing said that there should be a balance. Funding should come from society through taxation, from employers through the cost of continuing education and training for their employees, and from those who benefit from higher education. Specifically, he said:

I know Lord Dearing; he was the chairman of the Post Office, and I jousted with him on many occasions. He is by no means an elitist who does not want to expand higher education to youngsters from working-class backgrounds. After the most rigorous examination, analysis and appraisal, conducted by an esteemed committee, he made that very fair assessment about future funding.

The Government do not argue that the taxpayer should not make a significant contribution; we do not argue that students should meet the cost of their tuition. We are increasing funding to the sector by 6 per cent. in real terms in each of the next three years. We have halted, and begun to reverse, the 36 per cent. real-terms fall in funding per student that the previous Conservative Government presided over between 1989 and 1997. By 2005–06, we will be spending £10 billion a year on higher education, which is equivalent to £400 a year paid by every income tax-payer in England—whether they went to university or not. We are not proposing to change the situation: the labourer will continue to subsidise the lawyer; the postman will continue to subsidise the philosopher.

Mr. David Rendel (Newbury): Does the Minister accept that there is no correlation between the introduction of tuition fees and the expansion of funding for higher education?

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Alan Johnson: No, I do not accept that; nor do I accept that the evidence shows that the introduction of tuition fees has put children from working-class backgrounds off entering higher education—a point that I shall discuss later—just as, if we look back 30 or 40 years, when there were full grants and no tuition fees, I do not accept that there is any indication that it was easier for children from working-class backgrounds to go into higher education.

UK public-supported financial aid to students is the highest in the Organisation for Economic Co-operation and Development, and that will remain the case if our new funding proposals are adopted. With a record like that, and given the political minefield that we need to cross, the temptation is to do nothing.

Mrs. Anne Campbell (Cambridge): I am grateful to my hon. Friend for giving way, especially as I missed his opening remarks owing to my attendance at a Standing Committee.

Many Labour Members accept the need to get extra finance into the higher education sector, but will my hon. Friend consider the proposal, set out in my early-day motion 994, that tuition fees should be raised across the board instead of being differentially charged by universities? That would certainly achieve his objective of raising money and would do away with the differential aspect of top-up fees.

Alan Johnson: I appreciate my hon. Friend's interest in this matter and her contribution to the debate. After all my seven days in the job, my assessment is that we broke through a voodoo curse in January, because we accepted in our White Paper and in our statement that universities vary, that the quality of their courses varies and that there is a diverse system out there. To introduce a flat-rate system would be unfair, especially to students who may be following a less expensive course, and it would create more problems than it would solve. However, I appreciate that my hon. Friend's argument is different from that being pursued by the two Opposition parties and I shall certainly consider all the points carefully.

Mr. Boswell: In the light of what the Minister has just said, if a situation were to arise—as I anticipate it might—where the majority of higher education institutions wanted to charge top-up fees in order to support their finances and the differential element were to occur in practice, would he be concerned about that and would he feel the need to look into it?

Alan Johnson: The hon. Member for Harrogate and Knaresborough raised a similar point when he talked about all universities putting a £3,000 fee on all courses. We should be extremely concerned about that, but we do not believe that it will happen. We believe that the proposals will create a marketplace, but the situation outlined by the hon. Member for Daventry would be a matter for concern.

Mr. Graham Brady (Altrincham and Sale, West): The Minister says that it would be unfair if students paid more than was spent on their courses. Does he accept that less money is currently being spent on some social

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science courses than is being taken from the students in their tuition fees and that that will get worse under the Government's proposals?

Alan Johnson: I am advised by colleagues who know much more about such things than I do that that is simply not true, but doubtless I shall be able to respond when I have been longer in the job.

We are also convinced that higher education must expand to meet the rising skill needs of the knowledge-driven economy, and we therefore plan to work towards a seven percentage point increase in the participation rate of young people in higher education by 2010.

Peter Bradley (The Wrekin): My hon. Friend mentions the fact that the White Paper recognises the variable quality of universities. Can he explain how introducing top-up fees will close the gap between the best and the worst of those universities; or is that not the purpose?

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