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Mr. McLoughlin: Suppose that two people do the same job and earn the same money. It is possible that one of them will have to pay back the fee while the other will not have to pay anything back. If the proposal is supposed to be based on what the student earns later, will the hon. Gentleman explain the fairness in that?
Dr. Whitehead: The hon. Gentleman has misunderstood fundamentally what is entailed in moving from fee remission to up-front grants, whereby the poorer student pays the fee and has a grant to undertake activities at university when they go there. The fee repayment is therefore identical for all students, and people will pay the same, as far as fees are concerned, when they are sitting next to each other in the workplace. The difference will be that the student who has gained access as a result of having money up front will be able to navigate their way into and through university and to gain their life chances as a result of that up-front money.
Mr. James Clappison (Hertsmere) (Con): Is it not the Government's case that that money is meant to represent the £3,000 towards the fees, and that part of those fees is being paid already? Is it not unfair to the person who is in the same position later in life that the repayment is based on past income?
Dr. Whitehead: With great respect, I am afraid that the hon. Gentleman is also wrong. Under the new proposals confirmed today, all students would pay the same fee later in life, the difference being that a number of students would have a grant to navigate their way through university—quite a different process.
We heard from the Liberal Democrats that they would fund all this from taxation. I heard from the hon. Member for Harrogate and Knaresborough the interesting proposition that for every £1 billion that is put in under the Liberal Democrat proposals, we will save £450 million. As £450 million, under the Government's current proposals, is the resource accounting budget difference between what we put into universities at the front and what we hope to collect—the money that we lose—it is a wonderful concept that by not collecting the money at all we save £450 million. If that is the basis of the Liberal Democrats' calculations, we do not set much store by them.
The other key point that concerned me when the Bill was first published is whether its provisions would rapidly degenerate into a truly market-variable regime, with the effects on access that I described. My understanding of the original pledge on top-up fees was not that fees would never rise, but that we should prevent a free-for-all whereby universities would charge what they thought the market could bear. The £3,000 cap on fees appears to do just that. The Bill does not propose a market in variable fees—if a market in variable fees means that fees go up as well as down—but, in essence, a fixed fee with discounts.
The crux of the debate is this: are the Government about to cut loose and unleash market variables? People may well have been concerned about that before Christmas, but they must surely change their minds given that there will now be a review of the system after three years and a vote on the Floors of both Houses in the next Parliament on any proposals to lift the cap. It is not possible, as some hon. Members suggest, to slip a raising of the cap through under the negative procedure during an afternoon sitting involving a dozen Members.
These changes should reassure all but the most determinedly distrustful of critics. We have to make a choice on whether we throw away this opportunity to move decisively towards an era in higher education where, although we have not solved the entire problem of funding, we have moved a long way towards ensuring that the teaching of students, the pay of lecturers, the circumstances in which students are taught, and conditions and salaries in universities are catered for through a real increase in provision per student over the years ahead. Moreover, we have achieved a breakthrough in terms of maintenance for students from poorer backgrounds, thereby improving their ability to navigate the system.
Do we throw away those gains because of our belief that the Government might resile from what they have said about the way in which the fee will work in future years? This is not an equation that anybody with the interests of higher education at heart can easily balance without concluding that it is right and important to give the Bill a Second Reading, examine it closely in Committee and ensure that it provides the gains that we have heard about, which are important for the future of access to higher education.
4.43 pm
Paul Holmes (Chesterfield) (LD): When I made my maiden speech in this Chamber on 21 June 2001, standing on this spot, one of my subjects was my opposition to tuition fees, which I explained by reference to a couple of examples based on my experience.
I was the first member of my family, a family living on a large council estate, ever to go to university. In 1975, with an unemployed father and a mother who was a part-time home help, I could not have considered going to university under the existing tuition fees system. Before being elected in 2001, I worked as a head of sixth form. The hon. Member for Lewisham, West (Jim Dowd) said that he is irritated by the
patronising and old-fashioned view that debt deters students from lower-income families from going into higher education. I do not know what job the hon. Gentleman did before he was elected, but I was a teacher for 22 years.
Jim Dowd: I am happy to tell the hon. Gentleman that I was an electronics engineer.
Mr. George Foulkes (Carrick, Cumnock and Doon Valley) (Lab/Co-op): And a good one, as well.
Paul Holmes: Well, for 22 years, I was a teacher—a head of sixth form in the 12 years prior to my election. So I do not believe that my views are old-fashioned, out-of-date or patronising. As a head of sixth form, I taught and advised year 10, 11, 12 and 13 students, trying to persuade the bright working-class kids, first, to stay on to do A-levels or advanced GNVQs, then to consider going on to higher education.
From the point at which the Conservative Government started to reduce the value of the grant, when grants and loans were 50:50, and from 1997, when the Labour Government introduced tuition fees, I saw increasing difficulty, year by year by year, in getting children from that background to consider staying on and going into higher education.
In my maiden speech, I did not talk about variable fees. There had just been a general election and the Government who won it had given a cast-iron guarantee in their manifesto that they would ensure that variable fees were never introduced. There was no small print saying "just for the next year or two"; it was a cast-iron guarantee. For the past two and a half years, I have been a member of the Select Committee on Education and Skills. We have published two reports—in 2002 and 2003—on higher education, funding and related issues. During our hearings and while we were drawing up those reports, I repeatedly made the points from my maiden speech to which I have just referred, but I was told by some of the Labour Members on the Committee that it was anecdotal evidence and could not be taken into account. They said that there was no hard evidence of debt aversion among students from non-traditionally academic families and low-income families.
That puzzled me, as the Select Committee had taken evidence from Scotland—the Cubie report—which referred to that problem and led the Scottish Parliament to abolish tuition fees and reintroduce grants. We took evidence from the Rees report from Wales, which convinced the Welsh Assembly—where, as in the Scottish Parliament, there is a Labour majority—to reintroduce grants and to state that, if it had the power, which London has not given it, it would have abolished tuition fees.
Last year, even more recently, we took evidence from Professor Claire Callendar, about whom we have already heard in the debate. In work commissioned by the Government, she said that there was crystal-clear evidence of debt aversion and fear of debt in relation to the loans that the Government have introduced. We have seen a lot of hard evidence, yet the Government continue to say that there is no proof.
The Government are saying, although they do not use these words, "We accept that we made an abysmal mess of the system in 1997. We introduced tuition fees. We
scrapped grants, even though the Dearing report said specifically that they should not be scrapped. We made an abysmal mess and we are going to undo it by removing the up-front element of the fees and restoring grants". The Government expect to be praised for undoing the complete mess that they created six years ago. On top of that, being new Labour, they plan to create a new mess by introducing variable fees.Variable fees will inevitably increase debt. When the Secretary of State introduced that proposal, he said that the average student attending a university charging fees of £3,000 a year would leave with a debt of about £24,000. We heard earlier that Barclays bank estimates that the debt would be £30,000. Whether the debt is £24,000 or £30,000, it is a huge deterrent to the people identified as fearful of debt in the Cubie, Rees and Callendar reports.
Variable fees will deter low-income students. Even more important, as many Members have said, variable fees will mean that students who go to university will not make choices based on their academic ability—as they should—but on their ability to pay. They will attend the cheaper universities.
Will variable fees be the thin end of the wedge? Of course they will. When the proposals were announced, the chairman of the Russell group said that they were too little, too late. The vice-chancellor of Brunel university said that universities needed to make increases of more than £3,000. The vice-chancellor of Imperial college said that the college needed to charge £20,000 for medical students and £10,000 a year for other students. Scores of vice-chancellors have made similar comments. There will be vast pressure to increase the fees beyond £3,000.
The Secretary of State tells us not to worry because there will be an independent review three years down the line. In the Select Committee on 14 January, I asked the Secretary of State whether he was saying that there was no alternative to the proposals, and no way, other than through variable fees, of funding higher education to the level needed. In effect, he was telling us to take it or leave it—there was no pick-and-mix approach and if we voted the wrong way the whole Bill would fall. I asked why, if there was no alternative at present, there would be an alternative three years down the line if the independent commission said that the system was a disaster and we should get rid of it. The Secretary of State answered: "I do not believe the review will come to that view".
An independent commission will look into something to which there is no alternative, and the Secretary of State has already decided that it will not come to an adverse decision about the experiment on which the Government are embarking. So what is the point of an independent commission?
We are told to look overseas for examples. Last week, the Education and Skills Committee went to California—not for the beach and the sunshine, as it is winter. We spent a long time in meetings with academics, business men and people from Californian schools. They agreed unanimously that one reason why California, which has a smaller population than Britain, was the fifth largest economy in the world was the massive investment that has been put into higher education since world war two and, especially, since the 1960s. The Conservative party should note that the
Californian business men, far from saying that they needed a small, elitist higher education system, were saying that, even though about 60 per cent. of people go into higher education, they wanted more to do so. That is because their economy, one of the most successful in the world, needs more highly educated people, not fewer, as has been suggested by one party.We were given evidence of variable fees across America. California has the lowest fees in the USA. We were also shown comparative graphs illustrating the numbers of students from low-income families going to university in the different states. We can predict what those graphs showed—although the Secretary of State appears not to agree—which was that, in the states with the highest fees, the lowest number of students from low-income families went to university. Similarly, the states with the lowest fees, such as California, attracted the highest number of such students.
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