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The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis): Will the hon. Gentleman clarify yet more spending commitments from the Liberal Democrats? He wants us not just to narrow but to close the funding gap between the pay of teachers in schools and the pay of teachers in colleges. He also wants us not only to invest significantly in capital for schools and colleges, but to go even further and dramatically expand the amount of capital spent on colleges. I thought that it was the whole basis of the position taken by the leader of the Liberal Democrats that they would make no additional spending commitments other than those that appear in the letters that he is exchanging with the Prime Minister. Can the
hon. Gentleman clear up why the Liberal Democrats keep alluding to aspirations and pretending to people outside the House that they can deliver utopia?
Mr. Rendel: I do not think that I was promising utopia; I do not remember using that word. I was suggesting that there should be a fairer allocation of the funds available between the different sectors. The Government seem to be preparing to give all the money to the school sector. They are not prepared to treat all the sectors as one and as part of education as a whole.
Mr. Rendel: I have answered that point. I now want to make a bit of progress.
Mr. Sheerman: I am genuinely trying to assist.
Mr. Rendel: It is kind of the hon. Gentleman to offer, but I have dealt with that point.
We know that there has been an historic battle between the Department for Education and Skills and the Chancellor over who should deliver the new skills strategy. We welcome the extension of the employer training pilots, but surely the role of colleges also warrants a proper mention. After all, that sector educates or trains 4 million people each year, and more 16 to 18-year-olds study in it than in our schools. It provides 200 million training days to industry each year and, while helping 300,000 adults to gain basic literacy and numeracy skills, provides our universities with 43 per cent. of their higher education students. Therefore we have to ask why, compared with schools, it has been ignored in the Budget.
The Secretary of State is, of course, right to point to the new deal for skills announced in the Budget and the commitment to provide level 2 training to any adult in or out of work. However, that is an old promise, which the FE sector could deliver now, but is being prevented from doing so by Government restrictions. The Association of Colleges, which is hardly at the forefront of educational militancy, warned in November that 70,000 courses would have to go this year and that thousands of people would be denied the training and education that they needed and deserved. If the new deal for skills is to work, it must be backed by a cast-iron guarantee of resources. When the Secretary of State reveals the content of the Department for Education and Skills resource budget, I hope that the FE sector will receive that commitment.
It would be difficult for me to conclude my remarks without referring to the current problems being created by the Government in higher education. Given the huge investment in the education system and the £20 billion-worth of savings expected by 2008 through manpower reductions in Government Departments, why on earth are the Secretary of State and the Government still determined to push through their HE funding reforms? The amount needed is pitiful in comparison with the amount being spread around in the Budget. Of course I welcome the extra funding for higher education and the commitment that fee income will be genuinely
additional; I only hope that the Government manage to stick to that, because that did not happen after tuition fees were introduced. Are we as a nation saying that we are so desperate for what will be less than £500 million of net additional income that it is worth plunging the whole sector into a divisive marketplace in which there will be few winners and possibly a great many losers? The variable fees that are expected to be introduced are guaranteed to make it more difficult for those from poorer backgrounds to go to the most prestigious universities—it will not be worthwhile for them to do that.Are the Secretary of State and the Chancellor so consumed with their new market dogma that they are ignoring all the problems associated with the policy? The Secretary of State's advisers have warned him that fear of debt will deter students from entering higher education. He knows as well as I do that this year's figures for applicants already show that there are fewer applicants to university than would be expected in that cohort, even given the current level of fees.
The Secretary of State appears not to have calculated the impact on wider society of the actual debt that graduates will bear when they enter the workplace. I readily concede that the annual repayment of student debt—even at the income level of £21,000 that was conceded by the Minister for Lifelong Learning, Further and Higher Education—will be income contingent. It will be income contingent in terms of annual payments, but not in terms of what must be paid in the long run, of course. However, the total tax and national insurance take for even modest salaries in the low £20,000s will still be 42 per cent. The figure will climb to 50 per cent. for incomes over £35,000, despite the fact that the Government tell us that it would be irresponsible and unacceptable for such a rate to apply to incomes over £100,000.
Those same graduates will be attempting to enter the housing market, which, according to a recent International Monetary Fund report, is currently overvalued by between 30 and 35 per cent. Graduates represent the vast majority of first-time buyers, and they are entering the housing market some five years later than they did a decade ago. The only way in which teachers, nurses and other public sector graduates can purchase a home is by taking on mortgages that are several times greater than their annual salary. Given their disposable income, how does the Secretary of State expect the majority of graduates, especially those who live in the south-east, to purchase a home at all? Traditionally, they form the largest part of the first-time buyer market and recently, the number of first-time buyers has fallen rapidly. Last week, I asked the Prime Minister what effect he thought that would have on the housing market, but he did not even attempt to answer my question. When the Paymaster General winds up the debate, will she tell us what effect the fall in first-time buyers, which is caused by a change to the amount that they may borrow, will have on the housing market? There is a significant chance that a collapse in the housing market might begin in the next few years and that that will be caused by a rapid reduction in the number of first-time buyers.
There is a great deal for education in this week's Budget, and Liberal Democrats applaud the Government for ignoring the calls of other parties to abandon steady, prolonged investment in education. My party does not denigrate what is on offer, but we want better use of the resources available. We look forward to engaging in the debate when the comprehensive spending review is announced in the summer.
2.34 pm
Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): The debate has been interesting so far. One or two things have been said that touch on my role as Chairman of the Select Committee on Education and Skills—I had to say this during the previous debate on education in which Conservative Members raised the matter. I know of nothing in the Standing Orders, procedures or traditions of the House that suggests that an hon. Member should become a political neuter when taking over the chairmanship of a Select Committee. I take unkindly and badly to Opposition Members saying that I should not be partisan in my remarks about where former Ministers and shadow Ministers send their children for their education.
I have never believed that a Select Committee Chairman should be neutral. My job is to scrutinise the Executive and, with my Committee, to do a sound job of calling the Government to account. If anyone wants to scrutinise my role as a Select Committee Chairman or examine evidence such as the kind of questioning that Ministers get or the reports that my Committee makes, I hope that they will read the reports and then, perhaps, apologise. I apologise to no one in the House for having a strong opinion on this.
Mr. Mark Field: When the Select Committee conducts further analysis of the Higher Education Bill, I hope that its Chairman will make it plain that the Government should have absolutely no truck with the idea of discriminating against university students on the basis of which school they attended.
Madam Deputy Speaker: Order. The debate is on the Budget, not the Higher Education Bill.
Mr. Sheerman: I shall come to that point a little later. If the hon. Gentleman reads the Select Committee's commentary on the White Paper on higher education, he will find strong criticisms of the Government's policy—not on top-up fees, but on their focus on investment in research at too few institutions. Will he please read the report before drawing conclusions?
Mr. Greg Knight (East Yorkshire) (Con): Knowing the hon. Gentleman as I do, I would not suggest for one moment that he be non-partisan, but will he at least be fair? He made reference earlier to the number of Conservative Members in the Chamber. Is it not the case that he is currently the only Labour Back Bencher in the Chamber?
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