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5.52 pm

Mr. Gordon Marsden (Blackpool, South): Brevity can be a virtue in motions that are put before the House, but that is not always necessarily the case. I am afraid that it is not the case for either of the motions tabled by the Liberal Democrats today. The Minister for Lifelong Learning, Further and Higher Education, whom I warmly welcome to his new appointment, made the point that we have to consider the context when deciding on the solutions in a complex financial situation.

It is worth reminding the House of that context. It is one in which university lecturers and professors have seen their pay rise a third as fast as that of the rest of the work force in the past 20 years, in which staff-student

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ratios have almost doubled in that time, and in which we have up to an £8 billion backlog in terms of infrastructure and repairs. I would remind hon. Members that this is an integral part of the debate about student finance, because there is no point in improving access or getting equitable funding arrangements for students if the universities and institutions to which they go cannot do the business for those students. That needs to be taken on board in relation to everything that we say and do.

Something had to be done, and I would like to quote what my right hon. Friend the Secretary of State said when he introduced the White Paper:

"Putting off the difficult choices will not help universities (who have suffered drift for too long), it does not help students (who want a better and fairer system of finance), it does not help parents (who are currently having to find money up front)."

All those issues have to be addressed in the current situation. If there were any doubt as to the seriousness and urgency of that, an audit from HSBC shows that more than one in five British universities are in financial trouble and risk being closed or taken over. That research uncovered a growing gap between the rich and poor institutions. It said that a few well-known ones were forging ahead and capturing international research income, but that others, mainly former polytechnics, were finding it increasingly hard to balance the books. The Government need to take that research on board for two reasons. First, it gives some justification to the fees regimes that they are now proposing; and secondly, it gives a warning about the restriction, in terms of sheep and goats, in relation to higher education teaching and research. I shall return to that issue later.

What has been the response of the Opposition parties in this situation? We shall hear more from Conservative Front-Bench Members in the debate on Wednesday, but what we have heard already is rather sad and depressing. In fact, they have gone for the worst sort of incoherent The Daily Telegraph populism.

Mr. David Heath (Somerton and Frome): The hon. Gentleman was saying a few moments ago that the problem was that the rich, expensive top-quality universities had plenty of money, and that the old polytechnics were falling behind, yet we have heard the Minister say that it is precisely those rich, expensive top-quality universities that will have the top-up fees, and that the others will not. How does the hon. Gentleman believe that that is going to improve the situation?

Mr. Marsden: With respect to the hon. Gentleman, that is not my recollection of what the Minister said. The important point is that we need pluralistic funding mechanisms that address the problems, especially those of the post-1992 universities to which I have referred.

The Conservatives have come up with a rather weak and sad prospectus, and I do not intend to dwell on it at length except to say that, having given a sort of green light—albeit without funding—to the expansion of the old polytechnics in the post-1992 university settlement, they now propose a sentence of death on those universities, because even if their figures added up, the effects of their proposals would be catastrophic. The number of university places under threat would be 90,000 at the moment, and probably 150,000 over time, representing a 20 per cent. drop overall. Indeed, the hon.

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Member for Ashford (Mr. Green), who is not in his place at the moment, said as much in his press release of 30 May, when he stated:

"Under the Conservatives, the university sector would be smaller."

Andrew Selous: Does the hon. Gentleman accept that introducing a specific hypothecated tax on learning is bound to have a disincentive effect? Does he further accept that we already have a form of graduate tax in this country? It is called income tax.

Mr. Marsden: With respect to the hon. Gentleman, he does not yet know what I am going to advocate. I was not aware that the Conservatives were proposing to introduce a hypothecated tax on learning. I thought that they were proposing to scrap a whole series of fees, which would have a catastrophic effect on the funding of the system and the students.

Let me turn to the Liberal Democrats' motion, and to the speech by the hon. Member for Harrogate and Knaresborough (Mr. Willis), for whom I have great respect, having served with him on the Select Committee. His party has produced an ambitious list of the things that we could expect from a Liberal Democrat utopia, including the abolition of top-up fees, changes to the grant system, and all sorts of funding suggestions. The kindest thing to be said about the proposals—as the Minister noted earlier—is that they are a moveable feast. The question of how these things should be funded must also be addressed.

The hon. Member for Harrogate and Knaresborough began the process in an interview with ePolitix on 30 December. I do not know whether it was seasonal good will that was enthusing him at the time, but what he said then was somewhat different from what he has said before the Select Committee and in the House today. In that interview, he said:

"We don't accept the premises on which the government is going into this review; that you have to find billions of pounds and there has to be significantly more students going to university."

With respect, that is not what he has been telling us today.

Let us look at the figures that have come from the Liberal Democrats. The 50p tax rate for earnings above £100,000, which was in their alternative Budget in February, was supposed to produce £4.5 billion, £2 billion of which was to be devoted to abolishing tuition and top-up fees, but at the same time there was a section that dealt with the reintroduction of grants, which was not costed. By the time the leader of the Liberal Democrats took up the theme in the June lecture, the extra money from that tax rise had shrunk to £4 billion. Now we do not have a specific figure on higher education's share. There is merely a commitment that a substantial part of that expenditure will be on higher education.

When the hon. Member for Harrogate and Knaresborough appeared before the Select Committee on 12 June, he was questioned by two members of the Select Committee. There was a discrepancy between what he said the cost of getting rid of tuition fees would be—£436 million—and what the leader of the Liberal

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Democrats said in his speech, it would be which was £700 million. We must look with great concern and some scepticism at the figures that have been bandied around by the Liberal Democrats.

Mr. Willis: Just to clarify that point—the hon. Member for Daventry (Mr. Boswell) mentioned the figure in his remarks, too—it was the Secretary of State who estimated that, by the time the new Government policy came in in 2005–06, the cost of getting rid of tuition fees would be £700 million.

Mr. Marsden: Obviously, as the hon. Gentleman said in his evidence to the Select Committee—I cannot find the exact phrase—the process is an evolving one. Perhaps the unkindest thing that could be said about the Liberal Democrat proposals is that they have to win a general election and to form a Government in order to put them into operation. I do not have a crystal ball; I do not know what the result of the next general election will be—but charity and a love of fantasy allow me to entertain another possibility. It is that what the Liberal Democrats have in mind is something rather dramatic, something along the lines of what the conservative fundamentalists in the United States believe in: a second Liberal coming, where we will all be instantly enraptured in a Liberal Democrat paradise where all those things would take place.

Mr. Willis: Hallelujah.

Mr. Marsden: The hon. Gentleman says, "Hallelujah." He will be familiar with the Book of Revelation. We can envisage the scene of the four and 20 elders robed in white and crowns of gold, among them Asquith, Gladstone and Lloyd George. The hon. Member for Harrogate and Knaresborough would be there too, with his harp and golden bowl of incense. All together they would be intoning the words, "Holy, holy, holy is the immortal penny that is to be spent and spent and spent again to create the Liberal new Jerusalem."

That is a lovely image to conjure up. Perhaps in that enraptured state, as the hon. Member for Tiverton and Honiton (Mrs. Browning) said, we can expect a new miracle of the loaves and the fishes. Perhaps the hon. Member for Harrogate and Knaresborough will be going around with his basket of funding, taking us round and bringing far more money back at the end of the day, as the parable had it.

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