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Mr. Rendel: Does my hon. Friend recall that the vice-chancellor of Cambridge university recently came to this place and was asked what proportion of Cambridge students come from the lowest socio-economic groups now, and what proportion she expects to come from those groups under the new scheme? She said that the proportion from those groups on which Cambridge is

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budgeting in order to be able to give this £4,000 bursary is just 11 per cent., and that if the proportion exceeds that, it will not be able to afford any more bursaries.

Mr. Willis: My hon. Friend makes a most telling point. That is the reality. If a cash-rich university such as Cambridge cannot afford more than a 2 per cent. increase, what chance is there across the piece?

Mr. Robert Jackson: The hon. Gentleman has been comparing endowments. He should consider the matter more broadly, rather than just what happens in this country. If he compares the endowments of Oxford and Cambridge not just with Harvard, Stanford, Princeton or Yale but with American state universities, which have been building up endowments, he will find that they pale into significance, and yet those are the universities with which Oxford, Cambridge and a few other universities in this country must compete.

Mr. Willis: As ever, I am grateful to the hon. Gentleman for his intervention. Harvard and Yale, which are the two best-endowed universities in the world—not just in America—achieve through all their glorious endowments and bursaries 4.7 per cent. of students from the lower socio-economic groups in the United States. If that is the vision for the United Kingdom's higher education system, there is no point any of us being here, because it is a travesty in terms of ambition. I want the students whom I have taught for most of my life, who come from very poor backgrounds, to be able to get into the top universities, rather than choosing their course or university on the basis of how much they can afford.

Fees and top-up fees will create a financial market that will be ruinous to our higher education system. If the Secretary of State were proposing variability that was uncapped, his argument would have real integrity. Some people argue that those who spend £10,000, £20,000 or £30,000 educating their sons and daughters in the sixth form of a private school should not receive tuition for nothing when they go to university. That is not what the Government are proposing, however. They are proposing a cap on variability, which is a contradiction in terms. I said that on Second Reading, and I say it again, because that is the reality. By 2010, that cap, by the Government's admission, will starve universities of the cash that they need now—[Interruption.] Labour Members must not believe all the rhetoric that comes out of fairy house down at Millbank—[Interruption.] That was a Freudian slip.

In the first year of variable fees, the maximum additional income that universities will get—all our universities, given the Government's figures—is about £300 million—[Interruption.] That is so. In that first year, only one year of students will pay top-up fees. It will take three years before three cohorts are in and the universities get the maximum amount of money.

Alan Johnson: The hon. Gentleman's proposal would remove £800 million that the universities currently get from fees. He cannot argue that they will have to wait a few years for an extra £1 billion while proposing that they should immediately lose almost £1 billion in revenue, which they receive at the moment.

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Mr. Willis: The Minister has been characteristically honest, but that is not what I am proposing at all. The Liberal Democrat position is clear: we want to raise the higher rate of tax to 50p in the pound. That would apply to incomes of more than £100,000 a year.

Mr. David Chaytor (Bury, North) (Lab) rose—

Mr. Willis: I am trying to reply to the Minister. The hon. Gentleman should not get so excited.

According to the Treasury, what we propose would raise £4.7 billion. The £2 billion that we would spend would give universities £1.1 billion immediately, and would replace the fees now paid by students. The Conservative Front Benchers who tabled the new clause would not give universities a penny extra. They would do no more than decimate the number of university entrants, and they would use the additional resources elsewhere. Please let them not accuse the Liberal Democrats of not having a solution.

Several hon. Members rose—

Mr. Willis: I want to finish my speech, as many other Members wish to speak.

We support the removal of fees and top-up fees, as an issue not of popular politics but of principle. We opposed the introduction of tuition fees in 1997 and 1998, and we stated in our 1997 manifesto that we opposed both top-up and tuition fees. I have here a copy of the Labour party manifesto, entitled "Ambitions for Britain". It states on page 19:

What is in that document is nothing but a deception of the British public. Page 19, like the rest, needs to be ripped out and torn up.

Mrs. Anne Campbell: I shall speak to new clauses 6 and 7 and the consequential amendments Nos. 32 to 52. I shall also speak to amendments Nos. 129 and 130. I understand that the Government are prepared to accept amendment No.129, and I am happy to allow the Minister to speak to it. I am pleased and grateful that the Government have made such an important concession.

Let me explain what my new clauses are all about and why I cannot support amendment No.128. New clauses 6 and 7 and the consequential amendments would remove the provision for variable fees and replace it with a provision for a fixed fee. To that extent they are similar to amendments that I tabled in Committee that were defeated, although they were supported by the Liberal Democrats.

My new clauses and amendments would strengthen OFFA, the regulator. They would remove the basic fee altogether. In order to charge fees at all, universities would have to draw up credible plans to improve access, which would have to be passed by the regulator. Having negotiated that hurdle, they would be able to charge a fee; but it would be a fixed fee. I have not specified the level of the fee, but I would expect it to be set somewhere

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between £2,500 and £3,000. Once fixed, it could be raised only with inflation. I stress that my proposal would leave the Bill intact.

Valerie Davey (Bristol, West) (Lab): I congratulate my hon. Friend on her cohesive new clauses and amendments, which offer a constructive alternative to variable fees. Does she agree that the possible polarisation of universities, which variable fees could allow to develop, is an element that is not addressed in the Bill?

4 pm

Mrs. Campbell: My hon. Friend makes a valid point, about which I have great concern. I represent a city constituency with two universities: Cambridge university and Anglia polytechnic university. I am aware of the wide differences between those universities and I should certainly not want to see them become wider.

I want to emphasise that mine are not wrecking amendments, and if the Government wished to, they would be able to operate within the regime defined in the amendments. In proposing my new clauses and amendments, I believe that I am carrying out the wishes of the majority of my constituents. Although in the constituency survey that I conducted there was considerable support for the student support package in the Bill, many people, particularly students, said that they did not want a variable fee. It is true, of course, that some of those people did not want a fee at all. Most students, when asked, say that they would prefer not to pay fees and for all the funding to come from general taxation. However, that is not the view of the rest of my constituents, and I must also take their views on board. I believe that it is right for students to make a contribution towards the cost of their education, which is the only realistic way of getting the extra money that is so desperately needed into universities.

I do not like variable fees because I do not like the prospect of introducing a market into higher education.

David Taylor (North-West Leicestershire) (Lab/Co-op): Does my hon. Friend believe that there are lessons to be learned from the United States of America, whose marketisation of higher education began in 1979? In that year, four times more undergraduates from the top 25 per cent. by income of the population attended university than their less-well-off compatriots. After 25 years, that ratio has now grown to 10:1. Is that not the real risk of marketisation?

Mrs. Campbell: My hon. Friend makes a valid point, but I do not think that the Government's proposals are as damaging as the provisions in the US. Although marketisation might bring some damaging effects, I do not believe that the damage here will be as great as in the United States.

I am worried, however, that students might choose courses because they are cheap, rather than because they are really suited to those students' aptitudes and abilities. I am also concerned that some universities might decide to charge a lower fee because they cannot

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attract enough students with a high fee. They will not then have the cash to pay for good quality staff and equipment, and standards will begin to spiral downwards.

I am also concerned that the modern universities take by far the highest proportion of lower-income students, and that their ability to pay generous bursaries is compromised to some extent by sheer numbers.

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