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Hon. Members: Hooray!

Claire Ward: I am very grateful to the hon. Gentleman for giving way. I know that he has a rather burdensome work load, being shadow Secretary of State for Health and Education. Has the extent of his portfolio meant that he has been unable to formulate an alternative policy on these issues? So far, I have not heard any alternative proposals. I have heard his opposition, but I have no idea what his policy is.

Mr. Yeo: Well, that was a pretty pathetic effort from someone who is on the Government's payroll. Let me

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remind the hon. Lady that it is the Government's Higher Education Bill that we are debating today. I certainly look forward to debating with her and other hon. Members the Conservative policy on higher education in the Second Reading debate of the higher education Bill that the next Conservative Government will introduce early in the next Parliament. The big difference between that Bill and this one will be that—[Interruption.]

Mr. Deputy Speaker: Order. I hope that I shall not have to keep getting to my feet. There is a great deal of interest in this very important matter, not only in the Chamber but in the country outside, and hon. Members should be aware that the nation is watching not only the debate but their behaviour in the House of Commons this afternoon. I shall intervene if I have to, but I hope that I do not have to do so again.

Mr. Yeo: The big difference between this Bill and the one that will be introduced by the next Conservative Government is that ours will honour the pledges in our manifesto. That is in contrast to the Bill that we are debating today, which breaks the pledges in the Labour manifesto.

Simon Hughes: The hon. Gentleman is quite right to criticise the Labour party, as many others in the country have done, for saying at the general election that it would do one thing and now doing something that takes it in the opposite direction. On the specific issue of top-up fees, can he give the House a pledge today that, if elected at the next election, his party would neither support nor introduce standard top-up fees or variable top-up fees during the first Parliament when it is in government?

Mr. Yeo: Yes, I can.

I turn now to the detail of the Bill. It creates a new regulatory structure—[Interruption.] Do Labour Members want to hear about the Bill or not? It creates a new regulatory structure which removes, for the first time, the freedom of universities to decide which students they should admit. It imposes huge new burdens on the vast majority of students, which, in many cases, will affect their families too. Let us be clear: we still do not know how much, if any, of the money that students will pay in top-up fees will represent a net increase in funding for universities.

Several hon. Members rose—

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

If fees average £2,500 a year, about £1 billion will be paid to universities by students in top-up fees. Of that £1 billion, at least 10 per cent. will have to be paid out by the universities in bursaries to students from poorer families. The Secretary of State would like us to believe that that will leave about £900 million in the hands of the universities. However, the Bill and all the last-minute changes that the Government have announced to try to bolster their support will also impose costs, including £635 million a year to cover the cost of subsidising the new loans. Another £450 million a year will be required for student grants, along with £30 million a year to cover the cost of writing off loans that have not been repaid

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within 25 years. Those costs exceed £1.1 billion, although it is unclear whether the further announcements made in the Secretary of State's speech today have added still further to that total.

Several hon. Members rose—

Mr. Yeo: In a moment. I have not finished this point yet.

On 15 January, the Secretary of State told the House that those costs would be met from within the existing higher education budget. If he wants to tell us that that is not the case, and that extra money will be available, now is the moment for him to do so. The House, the universities and the nation will see his refusal to deny that point. If he sticks by what he told the House, universities will find the cash that they thought they had been promised as hard to lay hands on as weapons of mass destruction in the Iraqi desert.

Michael Driscoll, the chairman of the group of mainstream universities and vice-chancellor of Middlesex university, warned in The Times Higher Educational Supplement the day after the Bill was published:

The Government did indeed dupe them last time. Last year, funding per student was less in real terms than it was in 1997–98, the year in which tuition fees were introduced. All the income from tuition fees has been clawed back by the Treasury. Whether universities receive a penny of extra money as a result of this Bill and all the other announcements still depends entirely on whether the Chancellor of the Exchequer agrees to increase the total spending limit of the Department for Education and Skills. That is something that he has conspicuously refused to say that he will do. If he were here now, we could ask him about that ourselves. His absence from the House, like his refusal to be a sponsor of the Bill, does not bode well for the universities. Of course, one reason why he may be so reluctant to cough up the cash is that he can see just what a disastrous deal that would be for the taxpayer if he did so.

Several hon. Members rose—

Mr. Yeo: I will give way in a moment. If enough extra money is given to the Department for Education and Skills to cover all the new costs that the policy will impose, for every £1 received by the universities the Chancellor would have to sting taxpayers for £1.20. Let me remind the House that all those calculations were done before account was taken of the extra £1 billion a year that the Institute for Fiscal Studies estimates will be required to fund the costs of meeting the Prime Minister's arbitrary target of sending half of young people to university.

Mr. Clive Soley (Ealing, Acton and Shepherd's Bush) (Lab): We really have to try, but I am grateful for small mercies. The hon. Gentleman is talking about the finances, so may I put a question to him? This is the answer that my party and this Parliament want to hear

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from the Conservative party. Do the Conservatives intend to cap the number of people who can go to university, regardless of what qualifications they have, or are they saying that they will pay all the money that he says is needed through the taxpayer? We need an answer. What is the cap? If there is no cap, where will the money come from?

Mr. Yeo: It is not our intention to cap the number of people going to university. As I have just pointed out at some length, Government policy—through the Bill and the associated announcements—does not contribute a single penny either to meeting the costs of increasing the number of students or even to addressing the shortfall that universities say they suffer from. In fact, it is under Labour that we have seen a fall in funding per student—

Several hon. Members rose—

Mr. Deputy Speaker: Order. There is little point in Members standing to seek to intervene when the Member addressing the House is still responding to a previous intervention.

Mr. Yeo: I am not surprised that Labour Members are reluctant to hear these facts, because they expose the flaws at the very heart of Government policy. They expose more clearly than we have been able to achieve until this morning the extent to which the Government have misled universities. They have tried to persuade vice-chancellors that the Bill addresses their funding needs. It does not. They have tried to persuade students and their families that the Bill might finance an increase in the number of people going to university. It will not. It has a number of other flaws, which I shall explain. First, I give way to my hon. Friend the Member for Esher and Walton (Mr. Taylor).

Mr. Ian Taylor (Esher and Walton) (Con): My hon. Friend is right to probe the Government on what their legislation actually means, but can he offer some clarification? Given that he has made it clear that there is a genuine funding gap—vice-chancellors are very concerned about the finances of universities—and that the Conservative party apparently will not ask the students to make any contribution under its policy, are we therefore to conclude that all the burden of the underfunding that the Conservatives would have to remove will fall on the taxpayer?

Mr. Yeo: My hon. Friend will have to contain himself a little longer, because it is a curious constitutional doctrine that says that an Opposition cannot oppose a Bill as deeply flawed as this before they have laid out their alternative policy in every detail. He was with me in the House in 1988 when the Bill that introduced the poll tax was being considered. I do not remember the Labour Opposition explaining in every detail how they would finance local government when they fought against the poll tax.

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