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Mr. O'Neill: I think that the in some ways perhaps justifiably maligned Department of Trade and Industry is bringing out a White Paper on the subject next week. I imagine that that would be the precursor for legislation later, either in this Session or the next.
Dr. Cable: I sincerely hope that that is correct. The Department told me two years ago that it was bringing out a White Paper. It is taking a long time to write, but I hope that the hon. Gentleman is right and that this rectifies the problem.
I remember three years ago debating with Treasury Ministers about the situation in the banking system. The Chancellor of the Exchequer produced an excellent report under a Mr. Cruickshank. Among other things it highlighted the fact that in the banking system there is a network monopoly, from which considerable excess charges have been earned and eventually passed on to households and business customers. There is a similar monopoly arrangement within the credit card system. The Government promised that they would introduce a pay-com system to deal with the problem. Nothing has happened. There is no legislation and nothing about it in the Queen's Speech. Where is it? Is the Chancellor afraid of the banks? Is he afraid to tackle them?
In conclusion, I shall cover other items in the Queen's Speech. Like the right hon. Member for West Dorset (Mr. Letwin), I welcome the community enterprises Bill. As I understand it, it is designed to take forward the concept of mutuality and mutual ownership. Over the past two years there have been excellent private Member's Bills on the subject and I hope that this will take the matter further. Given that the Government have talked so much about new forms of ownership and mutuality, why are we still so underdeveloped, in relation even to bastions of shareholder capitalism like the United States, in developing credit unions? I suspect that much of that is due to the conservatism of the Treasury, but we shall see the legislation when it comes.
Mr. John Butterfill (Bournemouth, West) (Con): Does the hon. Gentleman agree that given the Government's alleged support for mutuality, it is strange that the FSA is now proposing to introduce rules for the distribution of surplus mutual funds, which would mean the end of mutuality?
Dr. Cable: That is an extremely valuable point. Indeed, it was the Treasury's reluctance to safeguard those funds over the years that has inhibited mutuality so much. That was a helpful intervention, which I hope that Ministers have noted.
We shall probably support the Government on the referendum Bill in relation to Europe. Why now? The reason is that the Government have made it clear that they do not intend to act on it in this Parliament. It is an important initiative. It is important to sustain some of the confidence[Interruption.] The Chancellor has indicated that he has to leave and I accept his apologies. We need some explanation of what is happening. A few years ago the Chancellor set up a Committee on which I sitan all-party group chaired by the hon. Member for Huddersfield (Mr. Sheerman)and we regularly interview members of the business community. They have made it clear to us that the groups of experts that they established to prepare the way for entry and to do the euro preparations are now being stood down because of uncertainty over the Government's intention in relation to monetary union. We want some reassurance from the Government that this process is not now hopelessly and terminally derailed.
The final piece of legislation on which I wish to comment relates to tuition fees. It is the centrepiece of the Queen's Speech and has been debated at length in relation to its educational and political aspects. I should like to say a few words about the economic aspects. It has always struck me as odd that the Government keep asserting that students do not pay for their higher education. They already pay for it partly in maintenance. There is a simple idea in economics called opportunity cost. When an 18-year-old decides to go to college to study for a degree they sacrifice a full-time income. If an A-level student decides not to work as a clerk in a bank for three years, they are making a decision to sacrifice probably £50,000 worth of income over three years. In addition to the debts that they accrue from maintenance expenditure and will accrue from tuition fees, they sacrifice £50,000 worth of income. The investment of a cumulative total of about £80,000 by working-class and middle-income families is a major commitment. Most of the commitment is made on the assumption that when the student graduates they will enjoy the graduate premiumthey will earn extra income. We already know, and knew even before the fee system came in, that many graduates do not have a premium; they have a negative premium. All arts students have a negative premium on their university education. Women who enter education courses have a negative premium. They make up the base of the future primary school teaching staff. The Government are talking about superimposing yet another deterrent to people entering the university system.
Mr. Foulkes: I could argue with the hon. Gentleman about a whole range of the strange things that he has just said, but perhaps he can enlighten the House about why his colleaguesnot just those in the Scottish Parliament, but members of the Scottish Executivesupported something for students in Scotland that is similar to the scheme that the Government are introducing; it is almost exactly the same in principle.
Dr. Cable: My Scottish colleagues behind me tell me that that is not even remotely correct. Of course, I know that our colleagues in Scotland were instrumental in the getting rid of up-front fees, which the Government intended to introduce.
In conclusion, I simply want to develop the point by saying that, of course, there is some common ground between Liberal Democrats and the Government, in recognising that universities need additional funding. Of course, they do. The Conservatives have been silent on that point.
Mr. Alex Salmond (Banff and Buchan) (SNP): May I help the hon. Gentleman, since his Scottish colleagues did not seem to tell him? There are indeed back-end fees in Scotland, but they are not variable between universities.
We take the view that there is choice: either universities can attract additional funding through user fees, or such things can be paid for through progressive taxation. That is essentially the choice that has to be made. If someone goes to, let us say, Oxbridge, gets a first-class degree, goes into commercial law and has a very large graduate premium as a result, it is right that they should pay on their marginal income over £100,000 through their lifetime earnings back to the state the benefits that they have received from their education and that they should pay more than someone who goes into a modestly paid job as a scientific researcher or a teacher, reflecting their ability to pay. That is an admirably equitable way to deal with the problem. It is both equitable and financially sensible because, of course, it raises additional resources.
During Education and Skills questions before the debate, the Secretary of State was extremely evasive about how much money would eventually be required. We have indicated that, from our top-rate tax policy, we would allocate £2 billion to universitiesa sum larger than the upper end of what the Secretary of State indicated that the Government's policies would generate. On top of that, we would find £1 billion to extend the Scottish policy of free personal care. Of the £4.5 billion that would be generated by the top-rate tax, a substantial residual would be left to help keep down local taxation.
I repeat that policy because the Government attempt to ignore what we propose. We can argue the merits of each component. We can argue about the principles of higher taxation on high-income groupsthere is an economic argument for and againstbut, by trying to belittle and ridicule our policy, the Government are trying to deflect the attention of Labour Members from