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Mr. Tim Collins (Westmorland and Lonsdale) (Con): Let me begin by adding my words of congratulation to the new Minister on his appointment. I do so warmly and for two reasons. The first is the cause of the vacancy—the deserved promotion of his predecessor. I am delighted that my recommendation that he should be promoted to the Cabinet, which I made on the record in the House some months ago, did not blight his chances. He engaged admirably with both Government and Opposition Members and thoroughly deserved his elevation. The second reason is that I enjoyed the exchanges I had with the new Minister when we both had responsibility for the Transport portfolio. He is a thoroughly nice and decent person and, like his predecessor, he is one of those Ministers who genuinely engages with the points made to him. I wish him well in his new job.

I do not doubt for a moment the passion or sincerity of the hon. Member for Harrogate and Knaresborough (Mr. Willis), who opened this debate in his
 
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characteristically robust fashion. He clearly genuinely cares for the future of higher education and for the life chances of our students. I hope that he would accept that he does not have a monopoly on concern over such issues. We may, and do, differ on the best means of securing our objectives, but we all wish to see a stronger financial position for our universities and an affordable pathway ahead for our students.

All three parties have now set out their policies for funding higher education. We all acknowledge that our universities are badly underfunded and have been for many years, both before and since 1997. We all agree that unless that is reversed major damage will be done to this country's academic and economic standing, that universities therefore need a substantial annual extra injection of cash, and that that should be found in ways that ensure fair and equitable access to higher education, but there are important differences between us, too.

The Government believe that the way forward is to impose top-up fees. That is a clear and open breach of Labour's 2001 manifesto, which stated:

"We will not introduce 'top-up' fees and have legislated to prevent them."

Well, now they have legislated to bring them in. The Government's plans do not make sense for taxpayers, who will have to pay out £1.1 billion extra every year in order to give universities an extra £900 million a year, for students, who will face far higher debts under Labour's plans than under either of the other two alternatives, or for universities, which will face political control of their income, the creation of the widely loathed university access regulator, and no guarantee at all that Labour's second version of fees will be additional to, rather than a substitute for, existing grant. After all, Labour's first version of fees was clawed back in its entirety by the Treasury.

There is an intellectual argument for unrestricted fees and a genuine market mechanism, and that is what some vice-chancellors and others would like to see.

That is not what the Government legislation offers—indeed, Ministers have specifically ruled it out. Many of those who most enthusiastically support fees do so because they want, and hope, to see fees of not £3,000 a year but £5,000, £10,000 or even £15,000. Ministers cite some of those who hold that view in support of their case for fees, but then they turn round and tell their Back Benchers that, of course, there is no question of fees rising above £3,000 a year for many years. Somebody somewhere is being badly deceived.

Then there are the Liberal Democrat proposals. They agree with us that there should be no fees but believe that more money for universities should be provided by raising income tax, at a time when every other G7 country is cutting it. While the rest of the world is following the UK's example of the 1980s and realises that lower tax rates, especially at the top, generate more revenue, increased investment and stronger competitiveness, the Lib Dems want to return to the days of the 1960s and 1970s when Chancellors revelled in asserting that the rich should be squeezed until the pips squeak. As both Abraham Lincoln and John Kennedy recognised, we do not make the poor rich by making the rich poor.

Furthermore, as we have already heard, Lib Dem plans would leave universities wholly and solely dependent for their income on the good will of the
 
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Treasury. Universities would have no independent revenue stream, no insulation against the ups and downs of the economic cycle, and no protection when funding higher education becomes a less fashionable cause than it is today.

Both Labour and Lib Dem plans conceal an unhealthy obsession with class. The Lib Dems want to wallop the rich through taxes, and Labour believes there are too many middle-class people at our top universities. Only Conservatives believe that working hard and doing well are not sins for which people's children should be punished.

Mr. Adrian Flook (Taunton) (Con): Does my hon. Friend agree that it is patronising, and merely Lib Dem wailing, to continue to consider as statistically tied to his low-earning parents a student who is over 18, has left home and is probably about to earn more than the national average?

Mr. Collins: I very much endorse my hon. Friend's point. The issue of fairness has already come up and it would not be going too far to say that earlier the Minister issued a challenge—I do not think he objects to that claim—when he said that it was the responsibility of those of us who disagree with the Government's plans to explain how ours would be fairer. To pick up my hon. Friend's powerful point, we do not believe that it is right for a dustman's son who becomes a merchant banker to be treated better by the system than a teacher's son who becomes a teacher. That is inherent in the Government's plan but not in ours.

Mr. Rendel: The hon. Gentleman said that the only way to make universities independent is to ensure that they have their own funding stream, but surely as long as the Government are giving anything towards the cost of universities their overall funding will always be dependent on a Government decision as to how much the Government portion of that funding will be.

Mr. Collins: The hon. Gentleman seems to be saying that as long as the Government hand over even a penny to universities they might as well hand over 100 per cent. of the funding and control universities' income. I do not agree. Indeed, it would seem that his own colleague does not agree, because if I understood the hon. Member for Harrogate and Knaresborough correctly, he said earlier that he could see a scenario, albeit over a long time—I think he spoke of a period of 20 years—in which the top universities would become more independent. If he thinks that is desirable and possible, we should welcome progress in that direction. Although the Government's method is not the same as ours, both we and the Government agree that it is sensible to give universities some form of income that is not dependent simply on the view taken by the Chancellor of the day.

Mr. Sheerman: The hon. Gentleman briefly alluded to the fact that the Government believed that too many middle-class students are in higher education. The Select Committee has taken much evidence on that subject over the past two or three years and the message that has constantly come from the Government is not that there are too many middle-class students but that too few
 
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students of ability across the classes are entering higher education. If he ponders that, I think he will agree that it is a better interpretation.

Mr. Collins: I always enjoy interventions from the hon. Gentleman, who is a distinguished Chairman of the Select Committee. However, it is always important in the House to listen very carefully to what we each say. In fact, I said that Labour believe that there are too many middle-class people at our top universities. That is an unarguable interpretation of Labour's view, because our top universities neither want to expand nor are capable of significantly doing so. Thus the Government's proposal—to change the social mix of those who attend our top universities—would mean that to put some other categories in, some of those currently there would have to come out. That is the logical and unavoidable consequence of what the Government are doing. His point about wider access to higher education as a whole is valid, but I chose my phrase carefully, and he must accept that it is a fair interpretation of the Government's view on the matter—indeed, it is the only logical one.

Mr. Willis: First, may I thank the hon. Gentleman for the generous comments he made at the beginning of his speech? Does he agree that under previous Conservative Governments and under two terms of the Labour Government no legislation has prevented any university from raising money privately? In fact, the systems are not mutually exclusive and many universities raise funds privately, especially Oxford and Cambridge, which have a proud tradition in that regard. The United States pays more of its gross domestic product to its universities than we do, so I do not understand how increasing the state's contribution to higher education would prejudice giving.

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