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Mr. Clarke: The reason is simple. When there has been previous legislation—for example, I think, in 1988, but I am open to correction—there has been controversy in both Houses about these matters arising from rural interests, local government and sometimes the Churches. It seemed to me that rather than simply saying that the power to innovate, to which the hon. Gentleman refers, could apply, allowing me to overrule legislation in some specific way, it would be more appropriate to have a proper parliamentary discussion and to hold discussions with all interests to see whether there is a consensus on what can be achieved. I have had discussions with, for example, all parties in local government, with the Churches and so on, to see whether there is a will to move, and I have to report to the House that there is, provided we can reach agreement. Perhaps we will not be able to get to an agreement. My approach is to seek to see whether we could introduce reform to improve things.

Anyone with children will know that in many parts of the country the congestion that surrounds school runs is such that we should be working, in my opinion, to

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encourage children to the extent that we can to walk, cycle or go by bus, including yellow buses, when they go to school.

Mrs. Jackie Lawrence (Preseli Pembrokeshire) (Lab): We are talking about primary legislation, which I welcome. I represent a large rural area, which has pockets of congestion that raise safety issues. I ask my right hon. Friend to confirm that if Welsh local authorities apply as part of the 20 authorities they will also be considered as part of the pilot project. It is an important issue for areas such as mine.

Mr. Clarke: I appreciate that intervention. I am happy to confirm to the House that it is a matter that we can discuss with the Welsh Assembly and the Welsh Executive. If appropriate, and if it is felt to be supported, it could cover England and Wales. We could proceed by the draft route. The nature of the Bill is consultative, which we consider appropriate.

I turn to the main piece of education legislation in this Session, which is the Bill to reform higher education. The Bill is vital for the future of our economy and society, in a world of global economic competition where the success of our economy, as well as that of our main competitors, will rest upon our ability to ensure that our population is highly educated and highly skilled.

Mr. Patrick McLoughlin (West Derbyshire) (Con): Will the Secretary of State give way?

Mr. Clarke: I shall give way in a moment. I shall give way freely throughout the discussion.

One aspect of this approach is our policy for skills; we set out in our White Paper one dimension of the means to address the issue. I believe that it is even more important to understand that the future of our universities is central to that ambition and that the reforms that we propose are vital to make that succeed.

Mr. Chaytor: Will my right hon. Friend give way?

Mr. Clarke: I shall give way in a moment.

The arguments for the Bill rest on three central pillars, which I intend to articulate. These are, first, that universities need more money; secondly, that it is reasonable that graduates should make a contribution towards the education from which they benefit; thirdly, that that contribution should be levied and repaid in a fair way. That is the structure that I intend to follow, but before doing so I shall give way first to the hon. Member for West Derbyshire (Mr. McLoughlin), and secondly to my hon. Friend the Member for Bury, North (Mr. Chaytor).

Mr. McLoughlin: There seems to be some confusion. The Prime Minister says that only three options are available. He says that there is the Government's option, the Opposition's option and the Liberal Democrats' option. There are rumours that the Department for Education and Skills has studied more than 40 different options, and there is an early-day motion asking the Secretary of State to put all this

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information into the public domain. If the right hon. Gentleman wants a big conversation and a true debate on these matters, will he put the 40 different options into the public domain, plus the back-up work that has been done by his civil servants?

Mr. Clarke: We shall continue to put more information into the public domain. However, it is worth establishing what an option in this context is. In each of the areas that we talk about, whether it is the graduate tax idea, the variable fee idea, the flat fee idea or the tax increase idea—whatever it may be—there is a vast range of different options about how one does it. There is the Liberal Democrat approach of introducing extra tax for those earning more than £100,000. Another option would be to apply that to those earning more than £90,000, £110,000 or whatever.

There is an enormous range of approaches to each of the main options. We are quite happy to contribute information to the public debate, and have already done so. Many think-tanks working on these issues have produced information, which is also fine. The Library, too, does excellent work in making information available. However, there are relatively few main options, about which we have already published a great deal of work, and I commend the Education and Skills Committee on its work on trying to draw the issues out. We have no inhibitions whatsoever, as the Prime Minister said, about publishing more information, but it is a question of the value of information as people go into increasing detail about the options that need to be pursued.

Mr. Chaytor: In all the debate on variable fees for full-time undergraduates in the past few months, has anyone, whether inside or outside the House, suggested to my right hon. Friend that we end the variable fees that have always been charged to part-time undergraduates, postgraduates, undergraduates studying directly in further education colleges, undergraduates on courses franchised by universities to further education colleges and students on any other course in further education colleges? If not, why not—[Interruption.]

Mr. Clarke: Or, indeed on apprenticeships. I must tell my hon. Friend that such a suggestion has not yet been made, but I am confident that in the course of our forthcoming discussion a number of such proposals will be made. However, that underlines the answer that I gave the hon. Member for West Derbyshire—there is an enormous range of options. I appreciate the point made by my hon. Friend, and I shall return to it when I come to discuss variability.

Mrs. Anne Campbell (Cambridge) (Lab): I am grateful to my right hon. Friend for giving way and for his willingness to engage in a conversation with Government and Opposition Back Benchers. If a university feels that it cannot charge the full top-up fee, but continues to charge the current fee of £1,125, how will it get extra money so that it can pay its staff what they deserve?

Mr. Clarke: That is a judgment for the university. When we discuss variability, I shall use the illustration of a Russell group university that is considering

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charging a zero fee for people doing a physics course, because it wants to encourage people to study the subject and knows that, under the arithmetic of the funding regime administered by the Higher Education Funding Council for England, that is a better option than closing the course. Those choices will be made by the universities, and it is critical that we appreciate, as my hon. Friend the Member for Cambridge (Mrs. Campbell) does, that a university's income comes not only from the fee that we are proposing but from the HEFCE and a wide range of other sources. The judgment that each university makes on each course will depend on balancing those factors.

David Taylor rose—

Mr. Clarke: I shall give way to my hon. Friend the Member for North-West Leicestershire (David Taylor), but shall then develop this part of my argument. I am happy to give way later as I make progress.

David Taylor: Earlier, the Secretary of State justified the proposal that graduates contribute at higher levels towards their academic courses by saying that on average they earn more than the national average wage. Does he not think that it is logical to increase the trigger for repayment from £15,000 to £25,000—the national average wage which, he says, graduate earnings will generally exceed.

Mr. Clarke: I shall come to that point later, but it is certainly reasonable to raise the threshold from the current £10,000 to £15,000 for the reasons that my hon. Friend gave. The figure of £18,000 has been widely circulated, but one could pick another one. Graduates earning that salary would be paying £5 a week towards their university education, and that is not a ridiculous amount to ask anybody to pay at that time. There is a perfectly legitimate discussion about pushing the threshold up or down a bit and the consequences of doing so. However, I think that we have got it about right in our proposals.

Mr. Yeo: In his answer to his hon. Friend the Member for Cambridge (Mrs. Campbell), the right hon. Gentleman gave the example of a Russell group university proposing to charge no fee for someone wanting to study physics. He said that that might be a way of attracting people to such courses. If he believes that, why does he not believe that charging a much higher fee will deter people?

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