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Mr. David Rendel (Newbury) rose—
Mr. Green: I shall give way to the hon. Member for Eltham (Clive Efford) first.
Clive Efford: Will the hon. Gentleman confirm that his party would pay for eradicating fees by reducing the number of people who may go to university?
Mr. Green: I have already said that we would abolish the 50 per cent. target—I am glad that the hon. Gentleman is paying attention. The university sector would be smaller and better focused under a Conservative Government than under the Labour Government.
Mr. McLoughlin: I do not think that we should be apologetic on this point. Back in 1979, one in eight people went to university. By the time we left government in 1997, the figure was one in three. Our party has an incredibly good record on widening access. We should provide access for those who deserve the education.
Mr. Green: Absolutely. We need fair access based on merit alone. I shall deal later with problems of access for poorer social groups that have persisted throughout the long period of expansion under both Governments. Those problems deserve serious attention. I know that the Government are trying to solve them simply by expanding the rate of participation and I shall demonstrate to the House that that is not working.
Mr. Rendel: The hon. Gentleman is arguing that the main reason for abolishing tuition fees and top-up fees is that they discourage people from wanting to go to university. He also admitted that under his scheme there would be fewer university places than there are now. Surely it is perverse to encourage more people to go to university but to provide fewer places for them.
Mr. Green: We will encourage everyone who has the potential and who will benefit from it to go to university. The rising drop-out rate makes it clear that some people being enticed to university do not benefit from it. It does not need politicians and planners to tell them that, because they drop out in rising numbers and know that they are not benefiting.
I half agree with the hon. Gentleman that the growing debt crisis is the reason why the Government have assembled such a powerful coalition in opposition to their proposals. Penny Hollings of the National Union of Students said:
- "The Conservative Party has correctly identified just how unpopular tuition fees have been and the catastrophic effect that top-up fees would have".
- "We would welcome the abolition of university tuition fees, which are particularly problematic for low-paid graduates going to make their careers in the public services".
- "The Conservatives' proposal to scrap university fees is a welcome move in the right direction".
- "one that many people in the Labour party agree with".
Michael Fabricant (Lichfield): Does my hon. Friend realise that this goes further? Is he aware of studies undertaken by Loughborough university, Warwick university, the university of London and many others that show that although the number of people from poorer middle-class backgrounds who go to university is increasing—I am sure that the Secretary of State will point that out—the number is decreasing as a percentage of the whole student cohort? As a percentage of the total number of people who go to university, people from poorer backgrounds are being deterred because of the debt that would arise.
Mr. Green: My hon. Friend is right, and common sense suggests that that would be true. People who come from families that are not used to dealing with large debt are more likely to be discouraged by the prospect of long-term debt.
The Royal Academy of Engineering, which speaks for many of the professions, commented on the Government's proposals:
- "There is a fear that proposals contained within the White Paper regarding student debt and the setting of course fees will deter students from undertaking courses in more expensive subjects, including, particularly, science, engineering, and technology."
Mr. Tom Harris (Glasgow, Cathcart): Why does the hon. Gentleman not include in his list of quotes what Professor Nicholas Barr of the London School of Economics said in May 2003:
- "If places are rationed, then the middle class with their sharp elbows will monopolise them, so it is inequitable. If middle-class students go to university proportionately more than they do now, then they will be paid for by poor people"?
The debt problem is real, but the Government's response has always been that it is worth getting into debt because graduates earn so much more. In that context, the previous Minister for higher education, now the Minister for Children, whom I am delighted to see in the Chamber, came up with the risible figure of £400,000 extra. I would advise her successor to pay serious attention to a number of pieces of work carried out over the past few months, some of it by the Government themselves. The latest edition of an annual survey by High Fliers Research of 15,000 students graduating this summer shows that starting salaries, which have risen for the past decade, are now falling. The typical starting salary expected by a graduate has dropped from £18,700 in 2002 to £18,500 this year.
The Government's own Higher Education Statistics Agency says that more than a third of graduates last year could not find a job at all or had to settle for a low-skilled job. Some 40 per cent. of 2002 graduates thought that their degree was more or less a waste of time, money and effort. As I am going through Government publications, Ministers might also want to take a look at "Labour Market Trends" to see the variation in earnings of students who left school with two or more A-levels. Those with degrees in some subjects, like law, maths and economics, can expect earnings about 25 per cent. higher than average, but returns on other subjects are sharply lower. Social studies brings about a 10 per cent. premium, but education and languages have returns close to zero. On average, arts degrees show a negative return. Those graduates earn less than if they had not done a degree at all.
It seems likely that Government policy, which has pushed up the proportion of young people going to university—as I said, they plan to increase that by 50 per cent.—has also had an effect. At present, students leave university with debts on average of £12,000. If the Government have their way, that average debt will rise to £27,000, but if the returns on higher education continue to fall as the price of higher education rises, will people want more of it or less? The Government's policy is perverse even in their own terms. The idea that graduates should be uniquely penalised for their learning because a degree always and everywhere leads to future riches is nonsense.
Our policy is justified not least by its effect on reducing the burden of student debt. I was interested to read the work of the Institute for Fiscal Studies, which is publishing a report today showing that the average graduate with no career break would be relieved of the burden of debt three years earlier under our proposals than under the Government's proposals. That in itself will act as an encouragement to potential students from less well-off backgrounds to apply for university.
Mr. Chaytor: But is it not the case that that IFS report also criticises wholeheartedly the Conservative party's proposals precisely because they shift responsibility for financing higher education on to poorer people?
Mr. Green: Is that on the basis of the assumption, which the IFS is clear about, that poor people will not be deterred by the extra burden of debt, because I
disagree with the IFS on that? As my hon. Friend the Member for Lichfield (Michael Fabricant) explained, and as common sense would suggest to the hon. Gentleman, people who come from families with no tradition of dealing with mortgage debt or large debts are more likely to be deterred. I agree with some of the IFS report, but not all of it.
Michael Fabricant: We need not believe my hon. Friend on that matter. We can take the advice of the former Secretary of State for Education and Skills, who said in her news release:
- "for many lower income families"—
- "the fear of debt is a real worry and"
- "act as a bar to higher education".
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