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Mr. Hain: That is a verdict with which I completely agree.

Mr. Tim Boswell (Daventry) (Con): In the interests of justice, will the Leader of the House consider having a word with his Foreign Office colleagues about the situation of my constituent, Ian Nisbet, who, with two other British nationals, has been imprisoned in Cairo since April 2002? His legal process has been constantly frustrated by adjournments, the last one of which took place on Christmas day and is likely to lead to a further 15-week delay. Does the right hon. Gentleman consider that entirely inappropriate in a legal process? If we do not get some action from the Egyptian authorities, it may be necessary for me and other concerned Members to hold another debate in the House on the matter.

Mr. Hain: I appreciate the hon. Gentleman's point, and I know that the Foreign Secretary will want to address the matter as soon as he can. Indeed, he is actively considering the hon. Gentleman's requests and representations at the moment.

Several hon. Members rose—

Mr. Deputy Speaker: Order. We must now move on.

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Higher Education (Student Support)

1.15 pm

The Secretary of State for Education and Skills (Mr. Charles Clarke): Today, the Government will introduce a Bill to reform higher education. Before we do so, I wish to make a statement about the related matter of student support.

Change in higher education is necessary because, first, the barriers to access to university need to be lowered. The measures that I am announcing today mean that disadvantaged students will get financial support to study what they want, where they want. Secondly, universities need more investment. Vice-chancellors will say that these proposals will generate hundreds of millions of pounds of new money for them to spend on improving the quality of teaching and to compete with the best universities in the world. Thirdly, we need to move towards treating students as financially independent from the age of 18.

I believe that there is a broad consensus about the fact that universities need more resources and that it is reasonable for students to make some contribution, after they have graduated, to those resources. Where there has not been consensus is about the fairest way to raise this new funding, so that access from the poorest communities is promoted and not undermined. The Government have listened carefully to the concerns that have been raised and we have discussed this matter widely. Those concerns very much inform the proposals that I make today.

Our original proposals were set out in the White Paper that I presented to the House on 22 January last year. Those are that we will remove up-front fees for full-time undergraduates, so that higher education is free at the point of entry. We will provide loans with a zero real rate of interest, paid back through the tax system at a rate dependent on earnings, beginning at a threshold of £15,000 a year rather than the current £10,000. We will introduce the new higher education grant from September this year.

We will also establish the new office for fair access, to ensure that universities support students from the poorest backgrounds. The focus of OFFA's work will be those universities with the poorest track record in widening participation. No university will be able to put up its fee without OFFA's agreement. OFFA will concern itself not with admissions but with applications. In addition, universities will be able to set fees ranging from £0 to £3,000. We will maintain the £3,000 cap in real terms through the next Parliament.

Those were the commitments in the White Paper. Today, I add the following commitments to meet the concerns expressed by some colleagues. First, I accept that some colleagues have genuine concerns about the impact of variable fees on our university system. The Government will therefore establish an independent review, working with OFFA, to report to this House, based on the first three years of the fees' operation.

Moreover, our legislation will require that any proposal to raise the fee cap above £3,000 in real terms is subject to affirmative resolution. There will be an opportunity for a debate on the Floor of both Houses so that every Member of Parliament can vote on such a

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proposal, dependent on discussions through the usual channels. However, I have to make it clear that we do not agree that a substantially higher fixed fee would be the way to raise additional resources. It would be deeply damaging. We would be denying universities the freedom to incentivise industrial, vocational, scientific, technical, engineering and sandwich courses, or foundation degrees, which are vital for the economic future of this country.

Secondly, I want to emphasise the Government's strong commitment to promoting access to higher education for part-time and mature students. From September 2004, we will provide improved fee support and a grant for part-time students. I welcome the changes recently announced by the Higher Education Funding Council for England to support part-time and foundation degree courses. My right hon. Friend the Minister for Lifelong Learning, Further and Higher Education and the funding council will consult on ways in which the funding system might further support the development of part-time study in higher education.

Thirdly, for full-time undergraduates entering higher education from 2006, we will write off any student loan repayment that is still outstanding after 25 years. On average, we expect graduates to repay their loans in 13 years, but those who have taken on family responsibilities or are on low incomes may need more time. That gives rise to genuine concerns and fears, and I think that a 25-year limit is fair. Fourthly, from September 2006, maintenance loans will be raised to the median level of students' basic living costs, as reported by the student income and expenditure survey. That increase will be modest for most students, but it will be significant for those studying away from home in London. The principle of the decision will ensure that students have enough money to meet their basic living costs while studying.

I emphasise that the student loan is free of real interest. Repayments will be based on money earned, not money owed. It is much better for students to be able to borrow on those terms than at commercial rates. Over time, although it cannot be afforded at this stage, the Government's aspiration is to move to a position where the maintenance loan is no longer means-tested and is available in full to all full-time undergraduates, so students will be treated as financially independent from the age of 18. My fifth and final intention is to ensure that every student from a poor economic background has enough resources to meet even the highest course fee without incurring additional debt. The £3,000 package is achieved by maintaining fee remission at about £1,200; raising the new higher education grant from the £1,000 that I originally proposed to £1,500 a year for new students from 2006; and, through OFFA, requiring universities to offer bursaries to students from the poorest backgrounds, so that the full fee cost of the course will be covered. For example, there will be a minimum bursary of £300 for a course whose fee is £3,000.

The effect of our commitments is that no student from a poor background will be worse off as a result of our proposals, whichever university they attend and whatever fee is charged for the course. Moreover, those commitments will align the level of the higher education grant with that of the education maintenance allowance for 16 to 18-year-olds, which has been very successful.

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About 30 per cent. of students will receive a full grant and a further 10 per cent. a partial grant. A major advantage of this approach is that modern universities with strong records in recruiting students from poorer backgrounds will be able to use at least 90 per cent. of any increased income from fees to improve course quality, rather than about 70 per cent. of such income, as implied in some earlier discussions. Those universities have made, and are making, a first-class contribution to this country's higher education and economy, and I want to encourage, not discourage, that commitment.

On the bursaries, I have invited Universities UK to work with universities and ourselves to develop model bursary schemes to provide a clear offer to students. In addition, I accept in principle the argument of some of my hon. Friends, who have made it very coherently, that there is a strong case for combining the higher education grant and fee remission to give students greater choice up front about the way in which they use the financial support that they receive from the Government. Again, that would be a further move towards financial independence at 18. However, that approach raises policy, financial and practical issues, which we are examining in detail. If they can be resolved, we will adopt that approach.

From the outset, I have emphasised that our changes, which mainly come into effect from 2006, will not affect adversely the level of public funding for teaching and research. My proposals will improve access to university by abolishing up-front fees and re-establishing student grants. They will provide universities with resources that they urgently and desperately need. They will raise the threshold at which repayment begins from £10,000 to £15,000 and, moreover, they move us towards the day when students become financially independent at 18. The abolition of up-front fees, the higher education grants and bursaries, the raising of the interest-free loan, the higher repayment threshold, and the 25-year write-off of debt mean that students will have the money that they need while they learn, and can afford to contribute when they earn. Universities will get the sustainable funding stream that they need to deliver world-class higher education. I can tell the House that this is a coherent package to be taken as a whole or not at all. If it is not supported by the House, none of those benefits will arise. It is not a pick and mix menu. I commend the proposals to the House.

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