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Jonathan Shaw: Was this not also about investment elsewhere in the educational system, including nursery schools, primary schools and secondary schools? Simply to talk about the fees in California and elsewhere is inaccurate. We have to examine the whole picture to understand what determines entry into higher education there.

Paul Holmes: The hon. Gentleman is quite right. He was with us on that trip; he sat in the same meetings and heard the same evidence. He is right to say that the academics, educationists, universities and businesses were all emphasising the massive investment in education across the board, all the way through from early years. They were not suggesting robbing higher education to put money elsewhere; they were saying that they needed money at every level. They did not distinguish, as this Government are now seeking to do, between higher education as something that students should pay for and the other levels of education as something that the taxpayer should pay for.

The hon. Gentleman was in the same room as us when we heard evidence that if, for example, the fees that the "Governator" of California is now proposing were introduced, 100,000 people would immediately drop out of the community colleges—the equivalent of further education—as a result. We heard similar evidence about higher education.

Australia is another overseas example that we should consider, because the Government are copying its fee system. We have already heard that, since variable fees were introduced there, the number of students from low-income families going to university has fallen. What we did not hear earlier is that the state contribution to higher education in Australia has fallen from 90 per cent. in 1996 to 50 per cent. now. In other words, when fees are introduced, students get into debt but the universities are no better off. The students are certainly no better off.

Tonight I shall vote for part of the Labour party manifesto: the part that says that there should be no variable fees or top-up fees at all. I hope that enough Labour Members will come with me to vote not only for their manifesto but for the Liberal Democrat principle that education should be paid for from progressive taxation, not by placing a debt burden on students.

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4.53 pm

Dr. Ian Gibson (Norwich, North) (Lab): One of the pleasures of speaking at this time of the evening is that there is no need to be repetitive, because I have heard enough to be able to find new angles, and I am keen to do that. I declare an interest, in that I have spent quite a bit of my life in universities, both in this country and in the United States. I find the people who work here a better class of people in general than the academics I had to mix with, although the backstabbing is just as vehement in both fields. That prepared me very well for working here.

Jonathan Shaw: That is why you are standing sideways.

Dr. Gibson: That is absolutely right.

I feel privileged to be taking part in this debate because this is a very important issue, as Members on both sides of the House have pointed out. It is important that we take this on and do something about higher education, and realise its great value to the economy and for the education not only of young people but of mature students, who represent an ever-increasing force and who contribute greatly to this country. We encourage that with lifelong learning.

I pay tribute to all my colleagues who have been active over the last 10 months in pressurising, sticking together, putting forward arguments on this issue and moving us to where we are today. We are a long way down the line from where we started, and I think that we should congratulate ourselves on having achieved that in a comradely spirit.

Tonight, a lot of people will be taking a position and voting accordingly because they are worried about variable fees. Most of the people I have talked to find variable fees the least attractive of all the issues that have come up in relation to this policy. I want to say something about that, because it has not been exposed to proper debate. Although I do not have time to do that fully, I shall try to do something about it.

Of course we know that there are variable fees in other aspects of the higher education system, but we must ask this question: by extending them to another sector of higher education, will we increase marketisation, market forces and so on to the point where we start to lose the purpose of what education and higher education are all about? That is true with creeping marketisation in any industry or in any aspect of human activity. People can go too far, and if they do not watch out they can end up selling out the purpose. The financial markets take over; they direct the policies. Many people see that, and it was the subject of a debate at No. 11 last week in which many other people of great eminence—economists from across the country—were arguing that one has to be careful about taking a step too far.

People were also worried that this policy was not part of our radical election manifesto—they are sincere about that. For many, it does not sit with traditional Labour values and principles, and I am sure that people still feel that. I want to encourage them to carry on feeling it, in the sense that these are the values that we were brought up in. There is no reason at all to sacrifice them in terms of the debate. We must carry on and fight for them.

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What really upset me was that we were told the policy is non-negotiable. I thought that everything in life is negotiable. I have been taught all my life that people should argue and negotiate. In doing that, people come to some solution or compromise.

Members may think that there is a strong or incontrovertible argument for establishing the variability principle, but I have been hard pressed over the months to find out what it is. We might have hoped that Ministers would spell out the likely consequences of establishing this extension of the financial market in higher education, but it beats me what they are. Of course, I can ask the Minister tonight to try to convert people, but I doubt whether that will happen after all this time.

Clare Short: The 10 months have gone by, all the arguments have taken place and the concessions have been made. Does my hon. Friend think that it is notable that the Government will not concede on variability, which is the core concern among Labour Members? That suggests that there is a determination to get variability in, come what may.

Mr. Deputy Speaker: Order. Before the hon. Gentleman resumes, may I gently remind him that he should be addressing the Chair?

Dr. Gibson: I am watching my back, Mr. Deputy Speaker. Thank you very much for that. Yes. On the problem of variability, that word has come to mean something magical. People use it and float it about, but what it means in the structure and financing of universities, as well as the setting up of courses and so on, has never really been defined. People have argued that we might be able to use a zero fee to develop courses that are unpopular or that cover shortage areas such as science and engineering. To me, that is absolute madness. Where is the evidence that subject choice can be manipulated by tinkering with fees? Why should students be dissuaded from following their interests and aptitudes by financial penalties?

The exact costs of teaching in universities are unknown. Believe me—I have sat through millions of meetings where people have tried to calculate how much of our money was spent on a course. They added in the cost of technicians and all the other things, as well as students jumping about from course to course, but they never came up with any magic formula. All I can say is that that figure is much more than £3,000.

Science and engineering, for example, are extremely expensive to teach. They need special laboratories and equipment. Compare them with under-fives education: magnetic resonance scanners are not used in primary schools, although perhaps they should be. That is a big expense in higher education, so I am not amazed that the figures are different.

Lower fees will not reflect the real cost, and what we will get in the university structure is cross-subject subsidisation, so all those academics will waste hour after hour arguing about why science gets all the money and all the equipment while those poor arts people, who can charge great sums for creative writing courses, see nothing for that.

Geraint Davies: Does my hon. Friend accept that somebody who faces high variable fees and becomes a

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low-income graduate earner will not have to pay them, whereas someone who becomes a high-income graduate earner will have to pay back the money? Surely that is a fair way for universities to tax higher earners and cross-subsidise back into research.

Dr. Gibson: I thank my hon. Friend for his comment. If I had enough trust in university management and believed that the sort of thing that he outlined would happen, I would agree with him. However, it will not necessarily happen; there is no guarantee that the money will be moved in that direction.

Mr. Allen: I congratulate my hon. Friend on the way in which he has campaigned. Nobody doubts his sincerity and we respect his views. People, for example my hon. Friend the Member for The Wrekin (Peter Bradley), can be stereotyped as both rebels and loyalists. Will my hon. Friend the Member for Norwich, North (Dr. Gibson) acknowledge that he has gained tremendously through the campaign? He has probably got 80 per cent. of what he and his colleagues—in whose number I include myself—were after. Will he therefore consider taking the battle into Committee rather than going into the opposite Lobby from his colleagues tonight?

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