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James Purnell: Does the hon. Gentleman recall that the hon. Member for Yeovil (Mr. Laws)—his colleague—did not support the Child Trust Funds Bill because he thought that the priority for funding should be children under five, not children at 18? Given that the hon. Member for Harrogate and Knaresborough (Mr. Willis) could fund only one education pledge, why would it all go on those aged over 18?

Mr. Willis: I am delighted that the hon. Gentleman takes such an interest in our policy—and the consistency of it. My hon. Friend the Member for Yeovil (Mr. Laws) is right. The Government intend to spend up to £350 million giving people such as my hon. Friend baby bonds when they have children, but we would prefer that money to be spent on early-years education. It is a tough choice, but mature political parties have to make tough choices.

I have no doubt that the Secretary of State and the Minister for Lifelong Learning, Further and Higher Education are sincere in their desire to put forward their proposals. I congratulate them both sincerely on their willingness to debate those proposals and to be challenged on them. However, when the Bill is lost tonight, I urge the Secretary of State not to throw his toys out of the pram and say that there is no plan B or C. Plenty of other ideas and devices are available.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab) rose—

Mr. Willis: I should like to make some progress, because many hon. Members want to speak.

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As for the Bill, I have to tell the Secretary of State that it contains elements that are worthy of retention. We applaud the moving of higher education and student support for students in Wales to the Welsh Assembly. That is absolutely right. We support the establishment of an arts and humanities council that will raise the profile of both in higher education. Indeed, that is in stark contrast to the comments that the Secretary of State made earlier about the classics and ancient literature having no great place in higher education.

The proposal for an independent adjudication system is welcome, but I hope that the Secretary of State will seek to widen that so that we have an education ombudsman dealing not only with higher education students, but with further and higher education students and staffing in those two sectors as well. That is overdue, and I hope that the Secretary of State will support it.

Mr. Betts rose—

Mr. Willis: How can I resist?

Mr. Betts: I thank the hon. Gentleman for giving way. I should like to be clear as to where the Liberal Democrats stand when they talk about tough choices. When the hon. Gentleman's party has paid for its extra long-term care for the elderly, its extra for pensioners, its extra for the police, its extra for schools and now extra for further education, how will it fund this higher education policy? Can he be explicit about that, so that we all understand where the Liberal Democrats are coming from?

Mr. Willis: Unlike the hon. Gentleman when he was running Sheffield council, when nobody knew where money was coming from or going to, my right hon. Friend the Member for Ross, Skye and Inverness, West (Mr. Kennedy), the leader of my party, has made absolutely clear what our priorities are for a 50p rate. He has made it clear in the House and in a letter to the Prime Minister. If the hon. Gentleman would like a copy of that letter, I shall make sure that he receives one, because I would not like him to be left out.

Although there are good elements in the Bill, they are not sufficient reasons to support it on Second Reading. Despite the so-called concessions, it fails to meet the primary objectives set by the Government in 2001: to bridge the funding gap in our universities, to widen access and to remove the fear of debt for future students.

We accept the need to resolve the funding crisis in our universities after two decades of chronic under-funding. The question is: will the introduction of a market, supported by variable fees and a cap, resolve the funding gap?

Mrs. Alice Mahon (Halifax) (Lab): I am following the hon. Gentleman's argument very carefully, and I think he will find that I agree with it. Twenty-three years ago, I went as a mature student to Bradford university with a full grant and with tuition fees paid. My eldest son went to Oxford. Today, however, I would not face this kind of debt, and my eldest son would certainly have been looking for a cheaper university.

Mr. Willis: The right hon. Lady—the hon. Lady; she should be a right hon. Lady—is absolutely correct. I

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recently attended, as did the Secretary of State, the student of the year awards, which the Assessment and Qualifications Alliance presented at the Queen Elizabeth II conference centre. Much to my surprise, I met there a girl I had taught nearly 30 years ago in my first A-level group. She came from a very poor home in Chapeltown, Leeds. Her son was one of the students who received an award. She came down to London specifically to tell me that she would never have got to university without the support that she received. Certainly, her son would not have received the award without that support. We should never forget that.

Simon Hughes : Like many of my colleagues, I have a sheaf of letters and e-mails from students, many of them medical and dental students. They already have debts of £20,000, £25,000 or £30,000 under the present regime. What is my hon. Friend's information as to the likely average debt if the proposals go through? Is it morally acceptable to send people off into life after education with that amount of debt round their necks?

Mr. Willis: The evidence that the British Medical Association presented this week of medical students with debts of £50,000 to £60,000 gives a flavour of what we shall see in the United Kingdom.

A better example is to take a student who is basically on a £3,000 fee course for three years. Barclays bank estimates that by 2010 that debt will have risen to £33,700. That is a staggering amount for any student to go into the world with. If we are talking about students having to set up pensions—

The Minister for Lifelong Learning, Further and Higher Education (Alan Johnson): Those figures are wrong.

Mr. Willis: The right hon. Gentleman should take that up with Barclays bank, which prepared those figures and which is a fairly reputable institution.

Several hon. Members rose—

Mr. Willis: I am moving on.

The issue that I want to tackle is that of whether the market, supported by variable fees with a cap, will resolve the funding gap in our universities.

Mr. Allen rose—

Mr. Willis: I want to develop the point, and then if the hon. Gentleman still wishes to intervene he may.

The answer is patently "No". It will be 2009 before the universities receive the £1.1 billion promised from the package. That is the truth—2009. By then, the gap will have increased to a point at which increases in fees will be needed. If the universities are saying that they need £1 billion to £2 billion now, in five years' time what will that gap be? It will certainly not have been bridged by the uprated tuition fees, the top-up fees.The House has to understand that no Government will ever return to plugging that gap purely from taxpayers' money.

Mr. Allen: Will the hon. Gentleman give way?

Mr. Willis: Please let me finish the point.

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When Members vote tonight, they must forget all the promises that the Secretary of State has made. The reality is that by 2009 it will not be possible to go back to a system of state funding our universities with flat-rate fees. That is the truth of what we are talking about.

The right hon. Gentleman's latest concession—to put the matter in the Bill in order to have an inquiry in 2009—is an act of desperation. When before has a Secretary of State had to put something into a Bill just to persuade his own Back Benchers that he is not lying? That is the situation that we have got into.

Although I am vehemently opposed to both the flat rate and variable fees, I recognise that the only way in which a market in higher education based on variable fee income can work is to allow that market to determine the fee level. That is the truth, and it is the point that the hon. Member for Wantage (Mr. Jackson) made honestly and fairly. It is the only logical outcome of the policy proposed today. That is why we as a party—every one of our Members, 54 of us—will be going into the Lobby against the Bill tonight on that issue of principle.

Labour MPs who support the Bill tonight must realise that the cap is not sustainable after 2009 because of the injection of funds that would be needed, and we must also realise that by 2014, the year in which the Secretary of State promised Mr. Paxman—and bet his house on it—that the cap on university fees would be no higher than it is now, the higher education system would be in utter and total chaos without the supporting funds.

The prospect of annual fees in excess of £15,000, as proposed by Richard Sykes of Imperial college, is not fanciful. It is not fiction; it is the reality of what we will actually see, because it is the reality in America. How can any Labour Back Bencher be seduced into thinking that such a policy would assist in broadening access for underrepresented groups, and how could it possibly prevent the establishment of a two-tier university system, where students choose both course and university on the basis of cost? The Prime Minister, of course, claims that that will not be the case.

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