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Jim Sheridan (West Renfrewshire) (Lab): Some of the lowest earners in the country—certainly in my constituency—are paying taxes so that people can be educated in public services, only for them to take their skills abroad. The taxpayer gains no benefit from his investment in education.

Mr. Jack: One would hope that anyone financed by public funds would give something back to the United Kingdom. I take the hon. Gentleman's point, but an economy that is driven increasingly by cerebral activity

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must invest in its brightest and best. I do not think that variable fees are the best way of proceeding with that agenda.

If the Government were not worried that the increased cost of higher education would put people off, why have they set a level of £15,000 below which they will fund and above which they will not? If the cliff edge is £15,000, a family with an income of £20,000 would face a difficult situation. We have discussed large debts, and in my judgment they will put people off. The magazine "Public Finance" surveyed finance directors of major companies and found that 85 per cent. of them believe that the increased cost of higher education will put people off, which is the reverse of the objective of Government policy.

I am the father of two young men who graduated last year, one as an economist from Loughborough university, the other, after six years of study, as a doctor. I calculate that with top-up fees it would have cost the doctor approximately £50,000 and the graduate economist approximately £25,000. Whatever anybody says, such debt or cost levels are bound to affect people's university choices.

The vice-chancellor of the university of Central Lancashire explained his worries to me about the effect that the advent of variable fees will have on the choices that people make about education, and he definitely anticipates the introduction of a two-tier system. I would not like a bright potential doctor from a low-income background to examine the debt repayments that they would face and decide that they would not necessarily go into medicine and would look for a cheaper alternative. That is not the best way to harvest the human skills in this country.

Alternative sources of funding have not been discussed so far in this debate. The House of Commons Library analysis of the resources of higher education institutions produced some interesting information. In 2000–01, for example, the Oxbridge group of universities achieved 10.6 per cent. of their income from endowments and investments while the totality of universities achieved only 2.2 per cent. from such sources. The same data shows that while the Oxbridge group of universities achieved 33.4 per cent. of its income from research and development through research grants and contracts, the totality of universities achieved the low figure of 16.4 per cent. from such sources. If one considers the income from research and development and endowments as well as the possibility of former university students paying money back to their colleges, it is clear that there are alternative ways to bring in substantial sums of money to assist the universities and make them less dependent on an effectively limited sum of money from general taxation.

We must think carefully about the different ways in which higher education can be gained. The Open university is a remarkable institution. I tabled a parliamentary question that illustrated that under the current arrangements the cost to a graduate of the Open university is £4,400. I know that all young people want to go away and establish their independence—it is a wonderful experience and I am privileged enough to have had a university education. However, in the times in which we live we may have to examine other methods. We should carefully examine expanding both the Open

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university and vocational degrees, which the Government are currently developing, and consider ways to increase access to higher education via extended learning. We should look at reducing the costs of higher education for some people to try to get us off the treadmill that the only way to acquire a university degree is by the conventional route into our current institutions of higher education.

There are inconsistencies. The son of a family friend graduated two years ago from Leeds university with a geography degree. He examined the world of work and decided that by going to his local college of further education and retraining for a plumbing qualification at effectively no extra cost to him he can enhance his salary from what he could have earned as a graduate.

Such inconsistencies point back to an issue that has already been raised by right hon. and hon. Members in this debate: the real key to educational opportunity in the United Kingdom lies in improving the output of our secondary education sector. That is how more doors can be opened to the brightest and best in our society to go forward to higher education. We need innovative and lower cost ways of obtaining that education, but above all we must maintain a high level of public investment in our higher education—our universities—to maximise for Britain the potential in humankind. Investing in people is a national responsibility: it should be something to which we are all proud to contribute, for the collective benefit of the country.

3.50 pm

Mrs. Anne Campbell (Cambridge) (Lab): I speak as a longstanding opponent of variable top-up fees. Indeed, I put my opposition on record as early as 1997. However, we now have a different proposition from the one that came from the universities in 1997, before the election in that year. The proposals are for capped fees and include considerable help for poorer students. I shall come back to that point because although the changes do not satisfy my concerns completely, the present proposals are much better than the original ones, which would have allowed the universities to raise unlimited sums from fees.

The money has to come from somewhere. That recognition is sadly lacking on the other side of the Chamber. Reducing student numbers or trying to constrain how many people can go to university cannot possibly be the answer. To tell a young person with two good A-levels that they cannot go to university because the Government cannot fund enough places would be cruel and unnecessary. It would also lead to poorer economic performance in the long term. The Liberal Democrat proposals to fund higher education completely from taxation are dishonest. If we considered the totality of taxation raised, we would find many other areas that were more important to social equality than higher education.

Dr. John Pugh (Southport) (LD): The hon. Lady uses the word "dishonest". Is she not simply saying that we have different priorities? The fact that we have different

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priorities from you does not make our proposal dishonest. Will she elaborate on what she means by dishonest?

Mr. Deputy Speaker: Order. The hon. Gentleman must use the correct parliamentary language.

Mrs. Campbell: I shall elaborate on what I meant when I described the Liberal Democrats' proposals as dishonest. They pretend that everything can be funded by a small increase in taxation. It is easy to talk about 1p on the general tax rate, or increasing top-rate tax to 50 per cent., but they do not say how that would fund all the different promises that they have made or how much those promises would cost.

Lembit Öpik: Will the hon. Lady give way?

Mrs. Campbell: No, I shall not give way again. I have answered the point.

Because of my opposition to variable fees, but also because I recognise the good aspects of the Bill, I decided to ask my constituents what they thought and I conducted a survey by several different means. The Cambridge Evening News helpfully published one of my consultation survey forms. I also distributed paper copies to schools and asked them to ensure that pupils from year 11 upwards answered my questions. I had an online consultation on my website, and the Cambridge university students union conducted a very similar one on its website.

I found that I received very different answers from different segments of the population. From the Cambridge Evening News, from the hard copies and from my website, which had around 650 responses, the results were as follows: 36 per cent. would prefer to retain the status quo; 29 per cent. thought that I should support the Government; and 36 per cent. were undecided. I also received some very good comments as a result of those surveys, and I shall return to those later.

The Cambridge university students union survey received 835 responses, showing very different results: 73 per cent. were in favour of the status quo, compared with 18 per cent. who wanted me to support the Government; and 9 per cent. were undecided.

Lembit Öpik rose—

Dr. Palmer rose—

Mrs. Campbell: I give way to my hon. Friend.

Dr. Palmer: I am very grateful to my hon. Friend, not just for giving way but for giving me permission to conduct the same survey on the Broxtowe website. I confirm that her results were not a flash in the pan. In Broxtowe, more than three times as many favoured the Government's proposal as favoured the status quo.

Mrs. Campbell: I am conscious that the students union ran a big campaign to try to get people to pressure me into voting against the Government on this matter. The students concerns must be taken notice of. In the past 24 hours, I have gone back to both students union presidents, Ross Tuckley at Anglia polytechnic

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university and Ben Brinded at Cambridge university, to discuss with them in more detail exactly what their objections are. They both told me that their principal objections concern variability—the variable fees—and fall into roughly three categories.

The first is the cap, and fears about raising the cap. I appreciate the promises that have been made and the fact that there are constraints in the Bill. I know that it will take a vote on the Floor of both Houses to raise the cap, and that my right hon. Friend the Secretary of State has made an undertaking, which is very much appreciated, that the cap will not be raised until the election after next. However, as one student put it to me, we would be letting the genie out of the bottle. Whether the cap goes up in 10 years' time or 12 years' time, or whenever it is, that will still lead to a far greater degree of variability between courses than exists at present.

I understand that a possible amendment has been discussed with my right hon. Friend, who is not inclined to accept it at the moment. I would certainly support an amendment in Committee or on Report to limit the raising of the cap to inflation increases. I hope that we shall be able to discuss this matter during the Bill's passage.

The second objection is that variability will lead to a two-tier university system, with cheaper courses leading to an inevitable decline in quality at some universities. My right hon. Friend has written to me about this. I received the letter just a few hours ago, and I am grateful to him for it. He tells me that the Higher Education Funding Council is conducting a review of the way in which it allocates funding for university teaching. That could lead to the possibility of a greater Government subsidy for universities that might be disadvantaged because they cannot attract the same fee. I hope that that is so, because it would be a very positive move.

The third objection is that students will choose their university according to cost, rather than opting for the one that best matches their attitudes and abilities. I am delighted that an independent commission will examine the effects of the new funding regime. It is important that that be done as soon as there is any evidence that there is a basis for this objection. It is a real concern.

My difficulty is that, although I have considerable concerns about variability, I do not want to lose those aspects of the Bill that end up-front fees, reintroduce grants, and produce a higher rate of loans—so that students do not have to take out commercial bank loans—and easier debt repayment.

One of the reasons why I intend to abstain instead of voting with the Opposition tonight is because of two e-mails that I have received from constituents as part of the survey. Both are from Cambridge university students. One, who is the first in his family to enter higher education, having attended a comprehensive school in the north-west of England, says:

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Another student, who is quite active in the students union, says:

club on one of my council estates in Cambridge,

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