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4.23 pm

Mr. Robert Jackson (Wantage) (Con): I intend to vote with the Government tonight. As I agree with the arguments made by the Secretary of State, I will not repeat them. Instead, I will say a few words about the two main arguments adopted by my hon. Friend the Member for South Suffolk (Mr. Yeo). I use the word "adopted" advisedly.

My view of the so-called access regulator is that it is an unnecessary development but may be desirable. I rather share the view of the right hon. Member for Newport, East (Alan Howarth), who hinted at improvements to be made in Committee and in the other place. An access regulator is unnecessary because anyone who is familiar with our universities knows that there is no question of their exercising class discrimination in their admissions policy—either consciously or unconsciously. However, a regulator may be desirable because, as the Chairman of the Education and Skills Select Committee pointed out, there is certainly a problem of relatively low demand for university places among young people from underprivileged backgrounds. I believe the reason is the poverty of academic ambitions and attainments in all too many state schools. The regulator may turn out to have a positive role as a useful source of pressure on such schools to raise their game.

The view of my hon. Friend the Member for South Suffolk, on the other hand, is that the access regulator represents a serious breach of the fundamental principle

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that universities should be completely free to determine their own admissions policies. I agree that there should be no political interference in university admissions.

Mr. Fallon: Surely the distinction is that regulators introduced by statute or Parliament are independent of the Department or Secretary of State who establishes them. The regulator established by the Bill "must" follow the guidance of the Secretary of State.

Mr. Jackson: My hon. Friend has made a good point, which I hope will be pursued in Committee.

I would like to return to the point of principle raised by my hon. Friend the Member for South Suffolk. I agree that there should be no political interference in university admissions, but he has deliberately exaggerated—and I suspect that my hon. Friend the Member for Sevenoaks (Mr. Fallon) has too—the threat posed by the regulator to make a debating point against the Bill.

If my hon. Friend the Member for South Suffolk was genuinely concerned about university independence, he would show a better understanding of the implications of abolishing fees, forbidding universities to charge them and leaving universities wholly dependent on the state for funding. I wonder whether he and other colleagues have ever thought seriously about why Conservatives favour lower taxes. We do so not for the indulgence of greed, nor because lower taxes promote faster economic growth. Why, after all, is economic growth desirable? We favour lower taxes because there is a fundamental connection between financial independence and moral and political independence. Tories believe that individuals and civil institutions alike flourish best in conditions of economic and moral freedom. In opposing this important and valuable legislation, Opposition Front Benchers are failing to make that essential connection, which goes to the heart of the Conservative tradition. I do not believe that a concern for university independence and freedoms that fails to make that connection is genuine.

My hon. Friend the Member for South Suffolk also argued that the universities would be financially better off without the new fees. He takes advantage of the fact that, if the Bill is passed, its first year of operation will inevitably fall outside the Government's financial planning horizon. We therefore cannot know—the Government cannot tell us, except perhaps in nods and winks—what the total sum provided by the Government for higher education in that year will be, although there have been welcome assurances that they will continue to stand by the universities.

There is an obvious sense in which my hon. Friend is right. If money is spent on A it cannot also be spent on B. If we spend money on financial support for students from poor families, we cannot also spend it on funding universities.

Clare Short (Birmingham, Ladywood) (Lab): I follow the hon. Gentleman's argument, but does he think that proposals for a graduate tax would prevent the up-front debt that puts people off going to university? Individual

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students would, however, make a lifelong commitment to pay something extra for the privileges that they will get. Is that not a better solution?

Mr. Jackson: No it is not, because a graduate tax would be paid to the Treasury and would be part of the general funding that goes to the Government. It would not provide the financial independence, leverage and margin for manoeuvre that is necessary to secure the universities' independence.

To return to my hon. Friend's argument, it is true that if we spend money on A we cannot also spend it on B. That, however, begs a question. To take an example from another field, if we spend money on the Navy we cannot spend it on the Air Force. However, we need both a Navy and an Air Force. By the same token, we need funding both for universities and for students. My hon. Friend the Member for South Suffolk shed a substantial number of crocodile tears on account of the possible deterrent effect of higher fees on students from poor families. At the same time, he denounced, both explicitly and implicitly, the measures that the Government propose to introduce to address the problem. Would he therefore not take any measures to support poorer students? Would he withdraw the maintenance grant? Would he cancel the interest rate subsidy on student loans? Students and their parents ought to be told. Is he serious about these issues, or is he once again just making a debating point to oppose this important legislation?

My right hon. Friend the Member for Fylde (Mr. Jack) spoke about an endowment policy. I am glad that has made an appearance. It was the Conservative party's commitment in its last election manifesto, referred to by my right hon. Friend the Member for Richmond, Yorks (Mr. Hague). Endowment is a fine thing, but are my colleagues, my right hon. Friend the Member for Fylde included, aware that an endowment fund constructed on the model of the Wellcome Foundation, the foremost education charity in the country, would require capital of some £30 billion simply to match the additional income generated by the fees introduced by the Government?

Where will money on that scale come from? Nobody knows. I certainly do not think my right hon. Friend the Member for Richmond, Yorks knows. Let me tell my colleagues something—donors will not give serious money to what they see as state institutions. Why should I give money to compensate for the abolition of fees, which most of those who benefit from a university education are perfectly able to pay?

Funding universities is not rocket science. Looking around the world, it is obvious that there are only two ways to go. I leave aside the idea of an endowment fund, which is more of a fantasy than a policy. One option is that the taxpayer pays the lot and fails to pay enough. That is the European system, which has resulted in the decline of what were once the finest universities in the world, in Berlin, Paris and Heidelberg. Where are they now? This is the path that we, too, have been treading over the past three decades, with the same dismal consequences staring us all in the face.

The other option is mixed funding, whereby taxpayer funding is topped up by student fees. That is the basis of the immensely successful American university system. It

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has been introduced successfully in Australia and is being debated and developed in many other countries. This is the option that the Government are proposing and which the Opposition will be voting against tonight.

I will go into the Lobby with the Government with my head held high. The time will soon come when the electorate will ask whether the Conservative party is once again a serious party of Government. I must tell my right hon. and hon. Friends on the Opposition Front Bench that when that time comes, I believe that the way they have chosen to handle this issue will be remembered and will be held against them.

4.32 pm

Dr. Alan Whitehead (Southampton, Test) (Lab): The Bill gives us a once in a generation opportunity to deal significantly with the future of higher education. If we are to sustain widening access to higher education, it is important that we underpin it with firm foundations and firm principles that make that access work. As the hon. Member for Wantage (Mr. Jackson) pointed out, 50 per cent. of young people going into higher education by 2010 is not an arbitrary target plucked out of thin air. It represents roughly the number of young people who will in principle have achieved the educational qualifications to apply to take a course of study by that date.

In the 1990s, the number of people who were qualified to take a course of higher education rose dramatically, and the numbers in higher education rose dramatically, as commentators of the time described it, "as if by accident". That was essentially a response to market incentives to expand, but with no long-term underwriting of those results. As we heard, funding per head of students fell by 36 per cent. during that period.

We heard today from the Opposition that they propose not to have a top-up fee and not to cap the number of students going into higher education. I am not sure what they do propose. All hon. Members in the Chamber are equally puzzled. The only explanation that I can come up with from what we have heard today is that the proposal from the Opposition might return us to the 1990s, with market incentives for institutions to expand: money goes per student, but we do not have the fundamental foundation that is needed to ensure that money for teaching expands, and that the universities have the money in their forward resource accounting to make sure that they can take the numbers that they require and ensure that they are taught and that the degrees are worth it after those students have gone through the university system.

What should this opportunity consist of? It should make a reality of the rhetoric of access. It should ensure that the teaching of a wide access regime in higher education is buttressed by proper funding. If we are to require some of that funding to come from fees, it should ensure that the effect of the fees does not cancel out the gain of access.

Access to higher education, of course, should mean access to all courses in all universities, for all those who are able to take advantage of them, not access to some universities for the members of elite families who traditionally send their children into higher education, and not access to newer universities and new degrees only for those who are making up the 50 per cent. figure. It seems to me that market variability in fees is inimical

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to those principles. It may mean that if colleges can charge what they like and access has been secured, a new burden in the shape of price, not qualification, arises for the student wishing to undertake the course for which they are qualified. It seems to me that the proposals for this Bill before Christmas did not make clear how that problem was to be overcome.

That issue is much clearer now, however, because of the £3,000 up-front grant for students going into higher education—money in pocket. The hon. Member for Harrogate and Knaresborough (Mr. Willis) did not explain why there is a fundamental difference between fee remission and money up front. Money up front is money in one's pocket to go to university—to marshal one's resources to get to university and to overcome the problem that many students from poorer backgrounds face, of being unable to contemplate how to get to university let alone how to get through it. That is a fundamental change.

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