---

Mr. John Bercow (Buckingham) (Con): The hon. Gentleman is demonstrating very eloquently how sharply to the left of the Government his party stands on these matters. Given the huge funding gap that undeniably exists in higher education, and his and his party's stated opposition to all student payment, can he explain how he would tackle the very real problem of
 
14 Sept 2004 : Column 1146
 
recruitment and retention of the highest quality staff, and how he would stop the brain drain of high-quality academics to the United States?

Mr. Willis: I am grateful to the hon. Gentleman, who is always incredibly courteous in his interventions. I have long enjoyed debating with him.

Let me give a simple answer to the hon. Gentleman's first question. Every single member of our party was elected on the basis of a pledge that we believed in social justice—that we actually believed in what we said in our manifesto—that we wanted to see students from lower social groups gain access to university, and wanted to see those with the necessary qualifications and ability go there. That is what we stand for. What we do not stand for is telling those students after winning seats in a general election "Now we are going to change our minds, and send you out of university with huge debts of £30,000." Nor will we say, as Conservative Front Benchers have said, that we will add commercial rates of interest to the debts of the poorest students who must take out the largest loans.

I am proud of what our party is doing. I am proud that we are saying that to pay for that, and for social care for the elderly, we will tax the 1 per cent. who are the wealthiest in the land, earning more than £100,000 a year, and make them pay a little more. I am not ashamed to tell the hon. Gentleman that I believe in social justice, and that I believe in progressive taxation to pay for it.

The hon. Gentleman's second point is important, and has been made constantly by us and by the Government. We believe that our universities do need more money. Academic salaries cannot remain at their present level. We cannot have PhD research students working on less than £8,000 a year, which has been happening in many of our universities. We must stop that drain.

We believe that we must match the amount—roughly £1.1 billion—that the Government say they would provide in top-up fees. The hon. Member for Epsom and Ewell has said that he will do more or less the same. It is the assumptions made by Conservative Front Benchers that I now wish to examine. We need to arrive at a fair balance.

Will the Conservative proposals mean extra investment? The Conservatives make two claims: that their proposals will not cost the taxpayer an extra penny, and that their policy will generate an extra £21 billion of investment for universities over 20 years. If it does not come from the taxpayer, where will the £21 billion come from? For one thing, £9 billion of it does not exist at all. It will supposedly be generated by the universities themselves in endowments. If the Liberal Democrats had said "We are going to magic £9 billion which does not exist", you would have roared. Well, you would not, Madam Deputy Speaker, because you are too polite; but the House would have.

After seven years, we hear this proposal to magic £9 billion. Let me tell the House what it actually means. It means the provision of £500 million a year for the next 20 years—and it assumes that private giving to our universities will rise to the level experienced in the United States, not in 20 years' time but on day one!
 
14 Sept 2004 : Column 1147
 
Many of our universities are struggling to receive even meagre amounts, but because this will be a Conservative Government, they will flood the universities with money on day one.

Chris Grayling: What about the Thomas report?

Mr. Willis: Well, let us take the Thomas report. [Interruption.] A lot of sedentary interventions are being made.

Madam Deputy Speaker (Sylvia Heal): Order. If Members wish to make interventions, perhaps they will do so in the usual way.

Mr. Willis: Thank you for your protection, Madam Deputy Speaker.

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): The hon. Gentleman is probably being a little unfair on the Conservative party. He may recall that in its last manifesto, the foundation sum for every university that was to be magicked out of another sort of proposal was far more extreme and far more magical than this. The Conservatives' present proposal brings us slightly closer to reality.

Mr. Willis: The hon. Gentleman is most unkind. I thought that we should just forget that episode. The idea that every one of Britain's universities could be endowed by the sale of Channel 4 struck me as immensely fanciful, although it was very exciting at the time.

The hon. Member for Epsom and Ewell mentioned the Thomas task force. He was right to do so. Its report on voluntary giving to higher education states

"The potential for growth is significant . . . if higher education can raise its share of donations to the proportion seen in the USA, the sector would receive £600 million annually."

That is the basis on which the proposals come to us. The report goes on, however, to make it clear that that is an aspiration—perhaps one that could be achieved in 20 years' time. Our universities need the money now. The idea that they could generate income on the scale imagined and in the time scale suggested by the Conservatives is an illusion worthy of their backer Paul Daniels.

Mr. Robert Jackson (Wantage) (Con): People give money to universities in the United States because they are seen as independent institutions—independent of the state, and requiring support from civil society. Does the hon. Gentleman think it likely that people in this country will give money on any reasonable scale to institutions that they see as state-owned, state-run and state-controlled?

Mr. Willis: The hon. Gentleman is partly right. The trouble with basing the UK model on the US model is that the original bases are totally different. With the exception of a very small number of British institutions, our universities depend almost entirely on state funding for not just teaching but research. Although a small, elite set of Russell group universities are already
 
14 Sept 2004 : Column 1148
 
bringing in significant amounts of additional resources, the vast majority of British universities are not capable of being independent from the state, certainly in the short term. The idea of their receiving donations such as those described in the Thomas report is therefore illusory and fanciful.

If the hon. Gentleman is saying that all our universities should be independent institutions—there is a fair argument in that—and that we need to think about how to create them, I believe that some of them could move in that direction over 20 to 25 years. However, if we are thinking about the US, outside the Ivy league and other more prestigious state universities, a significant amount of higher education is supported at a very local level and is certainly not supported by huge voluntary giving.

I come back to the Thomas report, which makes it clear that it is talking about an aspiration. Having established that £9 billion of the £21 billion promised by the Conservatives does not exist, it follows that a further £9 billion out of the total is also an illusion, since it is promised only as matched funding from the proposed student loans corporation. Some of our poorest universities, which prove unable to raise any of those resources, would, under the Conservative proposals for matched funding, not get any money. The new universities in particular, which are contributing the most in terms of expansion and have the largest number of part-time students, would lose out. How much money goes to universities depends entirely on how much they can raise themselves, and the most prestigious institutions are the ones most likely to benefit since they will find it easier to generate funds.

With university income dependent on an institution's ability to raise matched funding and expansion almost entirely dependent on our mainstream universities, the Conservatives are proposing a redistribution of resources based on prestige, not need. Perversely, while the Conservatives have rightly criticised Government proposals for increasing student debt, their own proposals to provide extra investment depend critically on the poorer students taking out the maximum loans on which they will have to pay the maximum interest and accrue the maximum debt. If that is not a classic Conservative proposal, I do not know what is. Their detachment from reality is truly classic.

For the Liberal Democrats, our fundamental criticism of both Conservative and Government proposals for higher education is the poverty of their vision of what higher education should be about. For both, our universities are to become little more than high-class employment exchanges, where degrees are valued by their market currency, where students are consumers and minority academic courses are to become the province of the wealthy.

---