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We have a plan B. It is fully costed and meets the Government's objective of putting more money into universities. It would broaden and deepen participation and ensure that graduates who gain a lot financially from their degrees pay back more towards the cost of higher education. What is more, our figures have been analysed by the Higher Education Policy Institute, and its director agrees with them. Our proposals are not difficult to understand. We would abolish fees, abandon any plans for top-up fees, and reintroduce proper maintenance grants of up to £2,000 a year for students from the least-well-off backgrounds. Crucially, we would invest an additional £1 billionmatching the Government's moneyin our universities from 2005, not from 2009 when the full impact of the top-up fees policy will happen. There would be more money with less bureaucracy for universities and less debt for students. There would be a saving to the Treasury of at least £450 million for each £1 billion put in to service the debt.
We would pay for our proposals with a concept that has been sadly missing from new Labour ever since it came to power in 1997: fair progressive taxation. We would not use general taxation to find more money for higher education, as the Prime Minister tries to pretend, because we would have a higher tax band for incomes of more than £100,000 a year. Let me remind Labour Back
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): During the hon. Gentleman's earlier comments, he made great play of the fact that Labour's plans for tuition fees would not meet the escalating costs that might develop over the next five or 10 years. Will he assure me that the current proposal of the Liberal Democrats for a 50 per cent. taxation rate on incomes greater than £100,000 a year would fully fund the scary figures that he projected without prejudicing any of their myriad other spending commitments?
The first part of the hon. Gentleman's question is very genuine, and it is something that all political parties have to answer. My argument is that the Secretary of State certainly does not agree with all that the universities ask fornor do we as a partyand I am pretty sure that those on the Conservative Front Bench would not agree either. Much of the expansion in resources that they want is for capital projects; some of it is for research, some for teaching. We would have to disaggregate that. The Secretary of State has reached the conclusion that £1 billion is about the right sum to raise from differential fees to put into the universities. We broadly agree with his assessment. The difference between us is that the universities need that money now. Under our proposals, they will get that money in 2005; they do not have to wait until 2006, 2007, 2008 or 2009four or five years later. By that time, we will have put £5.5 billion extra into the universities to plug that gap.
The Prime Minister argues, in true right-wing style, that a 50p rate would drive high earners out of the country and that all the evidence supports that. Well, it does not. The Prime Minister cannot find a single piece of evidence from a reputable economistother than one in the United States in 1974who can, in fact, support that view. Richard Adams, writing in The Guardian last Friday, said:
Jim Dowd (Lewisham, West) (Lab): Thank you, Mr. Deputy Speaker. I recognise that far more hon. Members want to speak than we have time to fit in, so I will not take any interventions and will just make a couple of points.
First, I congratulate my right hon. Friends the Secretary of State for Education and Skills and the Minister for Lifelong Learning, Further and Higher Education on the way in which they have engaged in this process, which involves what is undeniably one of the most difficult and contentious issues with which we have had to deal since the Government came to power on that glorious day in 1997. I sincerely hope that that process of engagement, of listening, of concessioncall it what you likehas not reached a conclusion; that, as we gain a Second Reading for the Bill this evening and as it progresses through its other stages in Parliament, we are able to improve it; and that my right hon. Friends recognise that it can still accommodate improvement.
One of the differences that we have been grappling with this afternoon is that we are talking about equity and opportunity. It strikes me, coming from a very working-class part of inner London, that the gravest inequity is between the higher education sector, which seems to exercise people disproportionately, and the further education sector, largely because the FE sector is almost overwhelmingly working class and does not have the HE sector's clout or influence. I speak as a member of the majority of people in this country who did not have the benefit and advantage of a university education. However, in the House, I am in a singular minority. Even though I have not done the precise calculations, I suggest that the number of hon. Members who have been through higher education is about the reverse of the national figure of 80 per cent. who have not, so I shall consider what the proposals mean for people in my part of south-east London. I am not sure what the Tories propose, but it seems that they want to retain elitism, have no cap and find all the money from public funds in the fullness of time. If student numbers fall, it is patently obvious that it will not be middle-class kids who go without: it will be the working-class kids who we are trying to get into university who will miss out yet again, and higher education will remain the divisive and elitist institution that it has been for far too long.
The famous Liberal Democrat proposal of a 50 per cent. tax rate on salaries of more than £100,000 is a replacement for their magic penny in the last Parliament, which was supposed to fund everything; it is a marvellous commodity because they can spend it time and time again. Even as the hon. Member for Harrogate and Knaresborough (Mr. Willis) was speaking, he added another pledge. He blithely said that, as he
Of course it would be general taxation. If the economic illiteracy displayed this morning is any reflection of the rest of the Liberal Democrats' plans, it is small wonder that nobody believes them and that they will never be in a position to implement their policies.
If there are additional priorities for public money, I entirely agree with my right hon. Friend the Secretary of Stateas I am sure do most of my right hon. and hon. Friendsthat money should go into the early-years, primary and secondary school sectors, where the building blocks of education and progress are created.
The big issue in my part of the worldwhich I am sure is shared in urban and working-class communities elsewhereis not young people being fearful of debt or its consequences in later life but getting working-class kids even to think that they can get into university. A couple of weeks ago I was privileged to visit Forest Hill school in my constituency to see the Aim Higher roadshow, which opens the eyes of kids in south-east London by saying, "If you want to do this, you do not have to be intimidated and think it is something that only kids better off than you can do."
If all the Government were doing today was introducing top-up or variable fees, even I would have great difficulty giving that my support. I congratulate my right hon. Friend the Secretary of State because the Bill goes way beyond that by realigning the whole system of student support across the country. I shall support that balancing act this evening because it will change the prospects for many thousands of young people in my constituency by giving them an opportunity that they have previously been denied.
I particularly welcome the abolition of up-front fees, which are a bar to students from families on lower incomes, and the reintroduction of maintenance grants. I also welcome my right hon. Friend's acknowledgement today that fee remission will be bundled up to provide an even bigger incentive. The 25-year cap will mean that debt will not be for life, with repayments reflecting earnings over that time.
The Liberal Democrats say that 82 per cent. of people who earn more than £100,000 a year went to university, so it is fair that they should pay. What about the other 18 per cent. who did not go to university? And if 82 per cent. of high salary earners went through higher education, that shows what a good investment it is, with incomes considerably uprated as a consequence.
Mention of debt aversion really irritates me. It is old fashioned, patronising and condescending: the assumption seems to be, "Working class people don't really know how to handle money. That's why they've got so little." They know how to handle money all right. And they know a bargain when they see one. Higher