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Mrs. Anne Campbell rose—

Mr. Willis: I want to finish.

When the Secretary of State said,

I thought that he was being light-hearted. He was not: he was defining new Labour's utilitarian vision for higher education. By contrast, the Liberal Democrats are a
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party holding true to its liberal past and the liberal promise to expand and not restrict the horizons of human imagination. That means a higher education system that caters for diversity through diversity and one that brings together universities, the further education sector and e-learning.

We as a party have set out our proposals and said how we will pay for them. Under our proposals, no students would end their university days with debts for fees and top-up fees. Next year the electorate will have a decision to make—whether to support two parties that have put our students into debt, or a party that wants to invest in them.

1.54 pm

The Minister for Lifelong Learning, Further and Higher Education (Dr. Kim Howells): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

I am delighted that we have the opportunity to debate higher education today. It is certainly one of the keys to the country's success and it happens to be a subject close to my heart, especially since last Thursday afternoon when I gained this appointment. I am grateful, too, for the opportunity to respond to the hon. Member for Harrogate and Knaresborough (Mr. Willis), and I look forward to hearing the speech of the hon. Member for Westmorland and Lonsdale (Mr. Collins). Both Members invariably make thoughtful and helpful contributions, and the contribution of the hon. Member for Harrogate and Knaresborough was no exception.

All in the House now agree that higher education needs additional funding. That is at least an improvement on last year's position when the Liberal Democrats and the Government both shared that view, but the official Opposition took the view that funding and student numbers in higher education could and perhaps should be cut. So higher education needs more funding: the question is how, and who pays. The Government's position is clear and we spent much of last year debating it. The Opposition parties also have proposals to answer that question, and we have heard
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one of the parties expound them at length today. I shall argue that they are proposals, but not necessarily workable alternatives.

The Government have three main priorities in their higher education reform programme.

Mrs. Anne Campbell: May I congratulate my hon. Friend on his new post? He has a hard act to follow, but I am sure that he will live up to it. Given that universities need more money, what does he think of the Liberal Democrat proposals to abolish the Department of Trade and Industry and therefore the science research funding? How will that help universities and where will the Liberal Democrats get the extra money from?

Dr. Howells: Speaking as a Minister with three years' experience in the Department of Trade and Industry who worked closely with my noble Friend Lord Sainsbury, the Minister for Science and Innovation, I have to say that my hon. Friend asks an intriguing question.

Mr. Willis: I would not want the Minister to go away intrigued, without having an answer to the question. Of course the Liberal Democrats would not abolish the science budget. It would be transferred almost entirely to the Department for Education and Skills, which is where we believe it should be based. That is the interface with our university structure and that is what we believe should happen.

Dr. Howells: I am grateful for that intervention, but I have to say that I did not share that perception when the proposals for the Department of Trade and Industry were first introduced. One assumed that that part of the DTI's budget would be scrapped, so I am glad to hear that it will not be. One wonders how many other parts of the DTI budget will not be scrapped either. However, this is a time for constructive debate and moving forward together. I am sure that the House will not want us to rake over that sort of question, which was dealt with admirably in last Wednesday's Prime Minister's Question Time.

We have three main priorities in our higher education reform programme. First, we want to expand and widen participation. The country's needs, now and in the future, will depend on the knowledge and skills of our people. All the evidence shows that the need for graduate level skills will increase and that we are wasting too much talent, with too many of those born into less advantaged families still feeling that university is not for them, whatever their ability.

Secondly, we want to give universities the freedom and resources to compete successfully in the international market—and it certainly is an international market, which is becoming increasingly difficult for universities the world over. We need to give institutions the financial security and stability to allow them to back our world-class researchers, invest in infrastructure and provide first-class teaching and services to students.

Finally, we need to make the system of financial support for students fairer by abolishing the requirement to pay fees up front, providing for fair and
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affordable repayments for graduates, and helping students from poorer backgrounds with additional grants.

This is a coherent strategy for reform, as set out in last year's White Paper, and the Higher Education Act 2004. The goal is to provide access to world-class higher education for all those with the potential to benefit. I shall look briefly at some Opposition policies, in the hope that we can have a constructive debate about them.

As we have heard, the Liberal Democrats would fund higher education entirely from taxpayers' money, through a new supertax. They have said how much of that supertax they would spend on higher education, but they have not been clear about how much higher education needs to expand, or how future expansion would be funded. When the Liberal Democrat spokesman sums up the debate, I should be very interested to hear his thoughts on that.

Also, there are no guarantees that the funding would be forthcoming if other priorities emerged, and quite a few other priorities have emerged already in the Liberal Democrats' plans. The hon. Member for Harrogate and Knaresborough gave us some comfort when he said that his party would guarantee that HE would get the money. I am sure that we will all remember that in the months to come. However, his party has also guaranteed to provide free long-term care for the elderly, to cut council tax by £100, to cut taxes for the lower paid, to fund an increase in pensions, and to provide £500 million to abolish dental charges. Therefore, whether HE would really get the money is open to question.

Dr. John Pugh (Southport) (LD): Will the Minister give way?

Dr. Howells: I will in a moment, but in many ways that is the nub of the problem. Being centrally dependent on the state means that HE has to take its chances with other competing priorities in public spending decisions. The record shows that that does not work out well in the long term.

Before I give way, I remind the hon. Member for Harrogate and Knaresborough that we may have arrived at our current state precisely because of that strict dependence on central funding. For example, throughout the 1990s there was a very large reduction in unit funding for HE, which fell by 36 per cent. in real terms between 1989 and 1997. I know that the hon. Gentleman is passionate about education, and that he was very concerned about that fall in unit funding.

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