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Dr. Whitehead: Does the hon. Gentleman accept that amendment No. 130 would enable the House to decide, with a debate and by resolution, and with the possibility of amendment, how to deal with a ceiling on the fee charged after 2010? His concerns that the ceiling may well disappear and that we have much higher fees in the near future should be allayed, and I invite him to support that amendment.

Mr. Boswell: I was about to conclude my remarks, and the hon. Gentleman in a sense anticipates my argument. The Government's safeguards up to 2010 are a clause thick. If they were so minded, it would take only a very short Bill to remove the cap, and I think that the pressures to do that would be irresistible. It makes no

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sense within the Government's own terms to have a cap of such a nature because it neither contributes enough to universities to bail them out of their financial problems nor does it drive the agenda of social justice. It fails on both counts. It would take legislation only a clause or two thick to change things. I accept the Minister's good faith on the matter; he handled the Committee with panache and made an unacceptable brew a little more acceptable. Nevertheless, Ministers' assurances are about as convincing as they were last time we debated this.

The path will be clear irresistibly for future increases in top-up fees, which in a sense are beyond the immediate concern of present students but will form the next tranche of concerns that future students will have. That is the basis, in my view, on which the Bill is founded. If it has any supporters or friends, they are probably to be found among the 100 or so vice-chancellors, not all of whom agree but they are giving the Bill their support, fingers crossed, in the hope that it might do some good and that it will not break down while they happen to be in charge, any more than the Minister is, of this difficult and sensitive sector.

We need to examine higher education funding but we do not need to do so through the means of charging that the Government propose in the Bill.

5.45 pm

Mr. Jon Owen Jones : I am grateful for the chance to speak for a few minutes in a five-hour debate on an England and Wales Bill on the Welsh aspects of the measure, which have not been discussed to date. So far we have had more discussion on higher education policy in New Zealand than we have had on that in Wales.

I intend to support the amendment of my hon. Friend the Member for Norwich, North (Dr. Gibson), who, appropriately for this debate is my former lecturer. I do so because I take the Government at their word. I have been told by many Government sources that if I support the amendment and it is agreed to, it will wreck the Bill. That is why I am supporting it.

Many of my right hon. and hon. Friends will not understand my point of view because there are many good things in the Bill. If they listen, I will tell them why I am doing what I am. If the Bill falls as a result of my vote, I hope that it will be a salutary lesson. The Government and Parliament have abrogated their responsibility to Wales during the passage of the Bill so far.

I oppose the idea of variable fees, in particular because of their effect upon Wales. This is an interesting test case for the limits of devolution. To what extent can we have policies that are different from the context of English policies? There will be different issues from policy to policy. On some issues, because of the effect of the market on a particular issue—this is one such issue—it is not possible to devolve effective powers, which would be implemented differently in Wales from how they would be implemented in England. I shall explain why.

We have an extremely integrated system. About half the students in Wales are English and about half of Welsh students are in English universities. That is because there is a market already, but the Bill will increase the level of marketisation. Students have a right

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to move from whichever constituency they are in and from whatever side of the border. I note already that, because I am speaking about Wales, there has been a loss of interest in the Chamber. If anything, variable fees will increase marketisation, but just as price differentials between universities will influence the choices of students as between universities, price differentials between England and Wales will influence the decisions that students take in England and in Wales.

Wales is extremely vulnerable to distortions that will come about through divergent policies. In the 2006 cohort of students, Welsh universities will be charging a £1,250 up-front tuition fee. English universities will be charging up to—the better ones will mostly be charging—£3,000. That will be a variation of £1,750 per student per year.

If we do the mathematics, the cost to the Welsh Assembly is £48 million a year in total to subsidise its institutions for not charging the variable fee, but they will not be able to charge it for three years, so the cost is £146 million. That money must come from the Welsh block, which is the money for schools and hospitals in Wales. The assumption is that there will be no market distortion, but there clearly will be a market distortion. If Cardiff university—a Russell group university—charges the £1,250 up-front fee, whereas Bristol university charges £3,000, there will be a £5,000 difference over three years. Naturally, Cardiff university will be more attractive to those who need to pay the full amount, so there will be a distortion and English students who have to pay the full amount will move to Wales.

Given the size of the market—690,000 students in England and 40,000 students in Wales—[Interruption.] No, sorry, I will make these points because they have not been made so far. I have to disappoint the Whips. There will be a distortion and people will move, but about half the students in Wales are already English. The number will rise, so the Welsh Assembly will be put into the perverse position of subsidising the education of the better-off English students—who would otherwise have to pay the full rates but prefer to go to Welsh universities to avoid doing so—from the money that would otherwise be spent on schools and hospitals in Wales.

What a perverse and ridiculous position to be in, and it could be worse because Welsh universities will not be able to pay the £2,700 bursary grant, which should go to the clever, poor students who can get into university. Poor Welsh students will be unable to find places in Welsh universities because they will suffer increased competition as more English students are tempted into Welsh universities. The Welsh students will have a big incentive to try to get into English universities because that is the only place where they will be paid the grant.

I put it to Parliament that that consideration is worthy of debate and discussion, and that the Ministers would have some comfort for me if they could explain how the Bill, which will devolve the power that causes

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that to happen, will work in Wales without resulting in the ridiculous position that I have tried to explain in my shortened speech.

Mr. Simon Thomas: Will the hon. Gentleman give way?

Mr. Jones: I will give way once because the hon. Gentleman is another Welsh Member who has not spoken so far is this debate.

Mr. Thomas: I am grateful to the hon. Gentleman for giving way. He is making a cogent argument. Although it is strange for me as a Welsh nationalist to say this, he is not quite correct to suggest that those arguments were not debated in Committee—they were debated. However, he is nevertheless right to make these arguments on the Floor of the House. I hope that the Minister listens carefully to what he is saying, but I wonder whether the hon. Gentleman has factored something into his consideration that he has not yet mentioned. He refers to the market distortion, but there is surely a further distortion, given that the money that, in effect, will be added to the English university block grant will come directly from the fees raised in England. That will not be reflected in the Barnett formula, thus further distorting the situation.

Mr. Jones: That point was made by an SNP Member during the debate, so the hon. Gentleman did not need to make it a second time.

The Bill applies to England and Wales. Every piggyback Bill applying to England and Wales has had the same problem. Ministers and Members believe that it is not their responsibility to discuss Welsh issues. It is their responsibility because the issue is not devolved and Parliament must find a better way to debate such matters.

Alan Johnson: May I intimate at the outset that the Government are prepared to accept amendments Nos. 129 and 130, with the permission of my hon. Friends who have put their names to those amendments? I shall say a little more about that in the course of my remarks.

Mr. Barnes: My right hon. Friend mentioned the amendments that he will accept. Presumably, therefore, he does not accept the other amendments, including those that I tabled. It is important for me to know that, so that I can look for a procedural device whereby I can move one of the three sets of amendments in my name, which call for a student holiday from debt of 15, 10 or five years. I hoped that the Minister might be tempted by the five-year provision. I may now seek to move the amendment specifying 15 years and press it to a Division, but I will need to understand the procedural devices available to me.

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