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Mr. Clarke: On the funding aspects, we will continue to put funding in, as we do through the comprehensive spending review and by the process that we have had. As I said to my hon. Friend the Member for The Wrekin (Peter Bradley), we will review the operation of the process from that point of view as from every other. That is the right thing to do. I will tell the hon. Gentleman what I say to the vice-chancellors, and I say it quite directly: this is a major opportunity to transform the resources, funding and standing of universities in this country and to enable them to make the contribution that we all want them to make to research, teaching and local economic development. The Bill will be the means of achieving that. I urge all vice-chancellors to seek support for it for precisely those reasons.

Mr. Kevin Barron (Rother Valley) (Lab): My right hon. Friend knows that the take-up of higher education in my constituency and many others in South Yorkshire is well below the national average. I would like to know what estimate he has made of the difference that the new grant package, in particular the removal of up-front fees, will make to take-up. I recognise that low-income families are not the only issue, but my constituency has a high proportion of them, which must impact on the aspirations of my constituents. Will more of our young adults than at present go into higher education?

Mr. Clarke: The answer is yes, unequivocally. I say, by the way, that that is in direct contrast to the policy of the Conservative party, which wants to reduce the number of students. We are removing two key barriers. Key barrier No. 1 is that we are removing the up-front fee, which has to be paid if someone wants to get even a foot into the campus. The second barrier that we are removing is the fact that the maintenance loan is not enough for many students to fund their living costs while they are at university. I am putting that right through the announcement that I have made today, so our measures will specifically assist people in my right hon. Friend's constituency, and I am glad to say that.

Mr. Patrick McLoughlin (West Derbyshire) (Con): I quote:

In the totality, what does that mean?

Mr. Clarke: I have already dealt with that on a number of occasions and I have nothing to add.

Dr. Brian Iddon (Bolton, South-East) (Lab): I find the concept of variability impossible to accept. I am worried about, for instance, the impact of the policy on the newer universities, which are already struggling financially to the extent that they are chopping the most

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expensive courses in science and engineering. In order to compete in the market economy that we are about to introduce, they will have to charge extremely low fees in comparison with better-off universities. That will make their financial position much worse. Are those universities expected to survive, or does my right hon. Friend expect them to amalgamate with nearby universities that are better off?

Mr. Clarke: I certainly do not expect amalgamation. As my hon. Friend knows, a specific proposal in the White Paper has allowed a higher education college in his constituency to become a university, which was not permitted by the previous arrangements. That is not a policy for merger; it is a policy for strong universities with community roots—and the Bolton institute certainly has those.

We need to invest in the science and engineering-based courses mentioned by my hon. Friend. The fundamental remunerative resource for those courses does not come from fees; it comes from the HEFCE, as a result of decisions made by my right hon. Friend the Chancellor in conjunction with it about the types of course that we want to encourage and support. That can happen only if those courses attract students, however, and that is what we must bring about. We must not erect barriers that prevent universities, such as the one in my hon. Friend's constituency, from doing what they need to do to recruit students.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): Yesterday, the hon. Member for Falkirk, West (Mr. Joyce) said that if the Bill became law Scotland would inevitably have to follow because it would not be able to compete. The Leader of the House has said the same to Welsh Labour Back Benchers. Does that not undermine the whole concept of devolution, given that every single party in Scotland and every single party in Wales is opposed to the proposals?

As an ex-president of the National Union of Students, is the Secretary of State not ashamed of, or at least slightly embarrassed about, introducing a policy that was considered regressive and divisive even by the Thatcher Administration?

Mr. Clarke: Those of us who represent English seats were entirely happy for the Scottish Parliament to decide what system of student support to choose. These matters are devolved, and rightly so. Let me, however, refer to something that I know the hon. Gentleman is seriously considering. One thing that the Bill will do is to devolve higher education student support to Wales, and if it falls that too will go.

Geraint Davies (Croydon, Central) (Lab): Does my right hon. Friend agree that the introduction of a time limit for the repayment of student fees will make the proposals much more progressive from the point of view of low-earning graduates? For example, someone earning £17,000 a year for 25 years because of child care and career breaks will pay only £4,500, the maximum being £9,000. If the fees rise, that person will still pay £4,500. Poorer graduates will meet a falling proportion of the total fee costs over time. However, I urge my right hon. Friend to reduce the 25-year time limit if he can.

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Mr. Clarke: The proposals will indeed have the effect described by my hon. Friend. Let me take this opportunity to thank him for, and congratulate him on, the consistent work that he has devoted over past months to supporting the policy that I have announced today.

Mr. Christopher Chope (Christchurch) (Con): How will the Secretary of State ensure that students who defer their university entry from 2005 to 2006 in order to do voluntary work at home or overseas during their gap year are not penalised?

Mr. Clarke: After Royal Assent, I shall ensure that all students and all families understand the implications of the policy for their own circumstances. The decisions that they make on the basis of that information are a matter for them. I am not going to start telling every student in the country what to do.

Joan Ruddock (Lewisham, Deptford) (Lab): I thank my right hon. Friend for his response to concerns raised by people like me, but may I tell him that the £15,000 threshold for repayments is still too low for graduate workers in London, especially those in the public sector? As for variability, I must tell him with great regret that he has not convinced me; but I am prepared—and I hope we shall be given time for this—to consult sixth-form students and students at Goldsmiths college to establish whether the package will deal with concerns about the future of poorer students.

Mr. Clarke: I am grateful to my hon. Friend for what she has said. We did indeed discuss the matter, and I have tried to take account of some of the points that she made to me then. I think it important for Members to follow her advice and discuss with schools and colleges in their areas what they expect the implications for them to be.

Having raised the threshold from £10,000 to £15,000 we considered raising it further, but decided that it would be better to put the money into increasing the maintenance grant. There is an argument to be had about that, but that was our judgment, and others will have to make their own judgments.

What is significant for my hon. Friend's constituents and for students living in her London constituency is my announcement about increasing the maintenance loan in line with the expenditure survey.

Paul Holmes (Chesterfield) (LD): Most Members—including many who will, with heavy hearts, do what the Whips tell them and vote for this measure—believe that the introduction of a £3,000 variable fee is the thin end of the wedge. They fear that the limit will be removed, and fees will soar to the astronomical levels that we have seen in the United States. The Secretary of State has conceded that he can guarantee the £3,000 limit only into the next Parliament. What would he say to vice-chancellors such as the vice-chancellor of Imperial college London, who said this week that he would like to charge £10,000 a year in tuition fees to all students and £20,000 a year to medical students?

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Mr. Clarke: I will say to those vice-chancellors in public, here in the House, what I have said to them in private: it will not happen. Let me also say to them that they should consider very carefully what support they can provide in the form of bursaries and grants. I made that point earlier in relation to Cambridge university, but I think other universities should do the same.

Mr. Jon Owen Jones (Cardiff, Central) (Lab/Co-op): I agree with much of what the Secretary of State said in his statement, and I think he has the agreement of the House in general, but I do not agree with him about variable fees and I do not think the House does either. May I suggest that, in the time-honoured tradition, he establishes a commission—perhaps under the chairmanship of Sir Ron Dearing—to report in 2006 prior to legislation for 2008? Universities would then lose, at most, two years of extra funding, and the Secretary of State would lose one hell of a problem.

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