Examination of Witness (Questions 20-39)
14 JANUARY 2004
RT HON
CHARLES CLARKE
MP
Q20 Mr Chaytor: Secretary of State, do
you think that reducing the fee for a physics degree to zero is
an effective way of increasing recruitment of physics degrees?
Mr Clarke: I would not say it
is an effective way. It could be a way of doing it and I think
some universities will do it. What do I think of the ways of increasing
recruitment to physics? First and foremost there has to be an
improvement of science education in schools and the approach we
have taken in those areas, for example through the science specialist
schools and developing better partnerships between the schools
system and industry in this case using physics in a positive way,
and it is raising the excitement students feel in physics. Secondly,
in terms of motivating and incentivising universities, it has
to be to encourage through the HEFCE funding regime proper support
for undergraduate teaching in physics so that universities which
opt to provide physics courses do deal with that in a way that
gets properly funded and resourced. Thirdly, we have to establish
at a research level the relationship between high quality research
and physics, and schools and undergraduate education is very important.
I mentioned I had a meeting with PPARC, part of the Physics Research
Council, just before Christmas talking about ways in which their
fundamental research could tie in with what schools are doing,
because I happen to think that the work that is done on space
is exciting and motivating for students thinking of coming into
those areas, so that whole range of issues is important. But then
the issue comes what does a university do when it sees the possibility
of having to close the physics course because, despite what I
have said, there are not enough applications? It happened in my
own university, the University of East Anglia, about four years
ago that a physics course was closed which was extremely unfortunate
and everybody regretted it but, simply, the number of applications
was not coming through. It might well be in those circumstances
that the university might feel that to reduce the fee for students
going on to those courses might encourage more students on to
those courses and enable them to keep going rather than be closed
as a result of still getting the HEFCE funding stream that comes
through, but I would say the university should be free to do that
if it wished to do so in order to deal with it, and that is an
argument for variability in my view. Do I think it should be the
central strategy? No. I think it should be those other things
I talked about, but just to have a fixed fee which did not allow
that variability would weaken a university's ability to try and
deal with these situations.
Q21 Mr Chaytor: So are really saying
that in terms of the relationship between the level of student
support and widening participation and access, the precise financial
arrangements for student support are not the main factor?
Mr Clarke: That is my view; others
do not agree. But I go back to my reading last year when I read
The Times Guide and the Virgin Guide to British Universities and
a good read it was, because you go through for each university
a great list of issues, including the quality of the beer and
all the rest of it to encourage people to go to particular universities.
There is a great deal of information, including likely career
destinations, how well you do at getting jobs and so on and so
forth, which is in those guides today, and I say to put a bit
of extra information in which is about the fee for the course
is a consideration—but it is a consideration, not the consideration.
Some colleagues argue it is the consideration; I simply do not
think that is the case.
Q22 Mr Chaytor: If you had to choose
between the question of the fee for the course as the determinant
of access and the school to which a young person was admitted
at the age of 11 as a determinant of their chances of going to
university, which is the most important?
Mr Clarke: A school. There is
no question about it, I would say, and I would say that is why
our whole strategy is about achieving but, as I said earlier in
answer to Mr Sheerman, 20% of our university courses are studied
through further education and there is a whole string of means
of access to university education which are not dependent on the
school, and I announced last Thursday our intention to take further
and stronger steps if we can achieve it on part-time and mature
student entrance to universities precisely to reflect that fact.
So I do not think it is just about school but if I was asked to
pick one single measure I would have to say it would be the quality
of schools which would be important.
Q23 Mr Chaytor: In respect of variability,
have you any concerns at all about a variable fee regime being
a deterrent to applicants to university and, if so, is that based
on evidence of variable fee regimes elsewhere, either in the United
Kingdom or abroad, or is it based on general perception?
Mr Clarke: No. The evidence from
abroad is that the experience of variable fees does not deter
and can, in fact, increase access. I met last week because we
had a seminar at the BETT conference at Olympia education ministers
of other countries, the Canadian Minister of Education, the Federal
Minister, and he was very impressed with the package we were putting
forward which he thought put it on to a proper basis, but in the
areas, for example, in Ontario where they have made progress in
these areas, it is the case that the variability is enhanced access
rather than reduced. I do have a fear, and I have had it throughout
and I said to it the Committee before and I will say it again,
that there is a perception of debt in these areas which remains
an issue, and I regard it as my responsibility after this Bill
has Royal Assent to have a major communication to potential students
to explain what the proposals are, because the greatest single
problem we have is that most people in the country do not understood
well enough even how the current system operates, let alone how
the new system would operate, and it was a major obligation on
my department to try and make sure people understand clearly what
it is. In short I do not think it is a point of substance about
what the system is which is the determinant, but the sub-issue
of perception about what it might be.
Q24 Mr Chaytor: Pursuing the question,
what is the difference between a fee regime in which the state
legislates to allow vice-chancellors to fix any fee they like
between zero and £3,000 for any given course and a regime
in which the state fixes a maximum fee and then legislates to
allow vice-chancellors to produce variability by simply discounting
the fee?
Mr Clarke: I think this is a words
game. To talk about a fixed fee with discounts is very different,
certainly in intellectual terms, from talking about a variable
fee regime. They are identical. You could argue, I suppose, that
you could go below zero in some type of variability and that should
pay people to go on certain courses and so on, and that might
be an answer to the physics question that you were talking about,
but assuming you have a floor of zero in a situation I see no
distinction between them.
Q25 Mr Chaytor: Would it not have been
easier for the government to say the maximum fee will be £3,000
and then divert the responsibility and the flak to the vice-chancellors
for their discounting policy?
Mr Clarke: That is precisely what
our Bill proposes to do and perhaps some vice-chancellors do not
want that responsibility. I think that responsibility should be
exercised by universities but some colleagues, for entirely genuine
reasons, fear giving universities that right.
Q26 Chairman: This Select Committee a
long time ago, or it seems a long time ago, Secretary of State,
said to you that we thought most universities would charge the
full £3,000 for most courses. Would it not have given you
a much easier life if you had just accepted that and encouraged
them to do so?
Mr Clarke: Well, I suppose you
would say, and you have said it in the House before, Mr Sheerman,
that my life would be at its easiest if I accepted all Select
Committee recommendations, and maybe I should—
Q27 Chairman: That was not a recommendation!
Mr Clarke: Thank you. It might
have given me an easier life but I do not think it would because
I think that the current £1,125 going up by 2006 to £1,200
flat fee which exists at the moment is just about low enough for
some of the contradictions of this not to become sharp and acute.
If you start talking about a higher fixed fee—some suggested
£2,500, some £2,000 or whatever—then the lack
of flexibility inherent in such a system, in my opinion, becomes
very acute indeed and if you simply said for the sake of argument
£2,500 for every course in every style that happened, then
the vice-chancellors say to me, "What do we do about the
sandwich courses? What do we do about trying to encourage people
on the physics course?"—and my example of that is a
real discussion with a real Russell Group vice-chancellor—"What
do we say about the students spending a year abroad as part of
their foreign languages courses? Are we to be required to charge
them during that year abroad at that same fee level? What do we
say about the foundation degree we are trying to build with some
local employer or business or whatever, and they say they can
do it if we charge £1,200 but not if we have to charge £2,500
or whatever?", and those difficulties would have made my
life very miserable whereas with the Bill that I have published
now, when it is agreed with one bound I will be free and the problems
will be those elsewhere throughout the system!
Q28 Mr Chaytor: Secretary of State, you
said that the level of public funding per student will continue
at the same level after the variable fee regime comes in. Can
you reaffirm that now?
Mr Clarke: Yes, I can. We have
said that.
Q29 Mr Chaytor: But how can you guarantee
that beyond the next election?
Mr Clarke: I have said that is
the policy of this government and it is carrying it through but
it is certainly true following the questions raised by Mr Jackson
that if a Conservative government was elected under the next election
I cannot see how that could be fulfilled. I can say for this government
that it is our intention to do that and that is what we said in
the White Paper.
Q30 Mr Chaytor: Is that for the next
CSR period, or throughout the next Parliament?
Mr Clarke: We are talking about
the next CSR period but this whole process will go into the future,
and the commitment of this government to maintain funding and
extend it is absolute.
Q31 Mr Pollard: I have three distinct
questions, Secretary of State: what is the ratio of graduate financial
input to what the government will be putting in?
Mr Clarke: It is about 1:14 at
the moment. There are interesting issues about what it is legitimate
to contain within that estimate and to what extent you consider
research and teaching, and it is the case that the cost of different
courses varies very substantially, so the relationship of any
fee to the cost of providing a particular course will vary very
significantly, which was one of the points I was putting in answer
to Mr Chaytor about the HEFCE funding systems that move through.
There is not an easy answer but the global answer is about 14,
and the language I have always used is that the lion's share of
university spending will continue to be met, and in my opinion
should continue to be met, by the State.
Q32 Mr Pollard: Following on from that,
the government has raised the threshold at which payments start
back from £10-15,000 which is very welcome, and many of us
argue that it should be even higher than that. Have thoughts ever
been given to London weighting? For example, costs across the
board, housing and everything else, are much higher in London
and your £15,000 will buy much less than in the other parts
of the country?
Mr Clarke: We are ready to look
at that through the Committee stages of the Bill and so on, but
I would not want to sound too optimistic. I know from St Albans,
and I have other colleagues from other seats around London and
in London, that it is an attractive option but the fact is that
every £1,000 you raise the threshold by is an expensive operation—I
do not have the figure to hand—and we made an assessment
about whether it would be better to raise the threshold to £15,000
in terms of repayment or raise the student grant at the beginning,
and the view we came to was that we got more result in terms of
our excess ambitions by raising student grant at the outset than
by raising the threshold and therefore slowing the repayment rate
at the end. We consider we are making a pretty big difference
by raising the threshold from £10-15,000 including for current
students, and we thought it was more important to make progress
on the grant front with the resources we had available than by
increasing the threshold. I would just say that for London, though
this would not necessarily help your constituents directly, the
biggest impact of our decision to increase the median rate of
maintenance loan for students is upon students living in London,
because the difference between what it costs to live as a student
and the maintenance loan you receive for that is greatest in London
according to the statistics we so far have.
Q33 Mr Pollard: One of the main thrusts
of what government has tried to do is increase the number of working
class students who get to university, and in Australia there has
been a system similar to ours in place for many years. The evidence
there is that the working class students have neither increased
nor decreased. Now that says that those who worry about it will
stop working class students—clearly it flies in the face
of that but it does not encourage us to assume that more working
class students will go along. Are there any other countries where
it is contrary evidence?
Mr Clarke: That is the fundamental
reason, Mr Pollard, why we think the Office of Fair Access is
an important development. We have had the system for many years
in this country for a different student support without a tangible
impact on the class basis of what is happening. We think our proposals
with the student grant regime we are establishing, the total £3,000
package, does give us a real chance of making a difference there
and, of course, we are committed to doing it, but all the evidence
is, though there is not any serious discrimination between applications
and admissions by universities, there is a serious differential
across those who apply to different universities from working
class backgrounds, and that is why we think the Office of Fair
Access is an important vehicle to reinforce that. I was massively
encouraged by the decision of Cambridge University which they
announced before Christmas to put a bursary of £4,000 which,
let us recall, is on top of the £1,500 grant and the £1,200
fee omission we are talking about, so a total of the order of
£6,700 for a student going to Cambridge from a very poor
family. I think that is a pretty significant financial incentive.
Now, of course, not all universities will be able to achieve that,
though I do know at least one of the major universities of that
group which is intending to announce similar proposals in the
next few weeks and months, but I think that kind of development
stimulated by this Bill and by OFFA and its approach is the way
to attack these problems.
Q34 Paul Holmes: Is the £3,000 cap
on variable fees to last for three or four or five years depending
on the next Parliament?
Mr Clarke: It lasts indefinitely.
Would it be helpful if I gave my understanding of where we are
on the length of the cap? What I have said is that the £3,000
in real terms would be a cap on all fees at universities. I have
said that, as far as the Labour Party is concerned, that will
be a position that continues until the end of the next Parliament,
come what may. Other parties may have different views on this.
I have said as far as the process of change is concerned, and
I think this would run across parties, that we will have a review
of how the first three years of variable fees has worked, because
there are colleagues of mine—and I know there are many Liberal
Democrats who share this concern—who are worried that the
effect of variability would not be beneficial, and so I have suggested
that we have a review which reviews how it has gone and what has
happened, so if some of the fears of those who are worried are
seen then that can be adjusted. I have said that no change in
fee should be agreed other than on the basis of a recommendation
from that independent commission to Parliament, so there would
be that process and a recommendation would be made to Parliament
in those circumstances. Then I have said that the commitment I
have given for this government is that any decision on that
recommendation would be taken through secondary legislation as
in this Bill but by a full vote of the whole House and not sitting
on the committee corridor with every member enabled to take a
view on what it should be, so there is a kind of double lock before
you get to a position of an increase in the cap, firstly that
it would need to come as a result of the recommendation of this
independent review and, secondly, that it would have to be voted
on by all members of the House. Now, I think that is quite a significant
double lock in the situation and I know there are some members
who are exercised about the possibility of universities coming
along and saying, "Let's go for £15,000 fees or £10,000
fees" or whatever, and people are genuinely worried about
that, but I am saying that the process I have set in place offers,
in my opinion, guarantees which make it very difficult for that
to happen in the way some people fear.
Q35 Paul Holmes: The thin end of the
wedge argument, as you will guess from the question I asked you
last Thursday in Parliament, is exactly the point I want to go
on to: if the cap is only there indefinitely until 2010, let us
say, the end of the next parliamentary term, and then it will
be reviewed, once the principle of variable fees in a market has
been conceded there is obviously going to be a huge pressure to
raise that cap considerably. Universities UK has said £3,000
is too little too late; various vice-chancellors—Oxford,
Imperial College, LSE—have told us about £10,000, £15,000,
£20,000 at various times, and lots of academics have talked
about those sorts of figures, so once the principle of variability
in the market place has been conceded what is to stop, after 2010,
fees going to those sorts of levels?
Mr Clarke: Let me make it clear
that the principle of variability in the market place has already
been conceded. We have variability for part-time student fees,
for post-graduate fees and for overseas student fees, so there
is variability but not for some classes of course at the moment.
I do not think there is a principle position for university education
against variability. There is a practical position based on what
has been and how things have operated, and I think it is right
that we should, if there is to be a change which I think there
should be, examine what its meaning is and, Mr Sheerman, there
has been speculation and your Committee has heard from various
sources about what fees would be charged at what levels, and it
is the kind of thing this Committee would want to look at as any
system went through, as it rightly should. I do not know what
is going to be charged but I think we should make a judgment based
on what has happened. I know there is a thin end of the wedge
argument. I could argue that today a fee of £150,000 a year
could be charged to a post-graduate student going to the University
of Derby to do their MBA which could happen. Why will it not happen?
Not because the Secretary of State has said it cannot happen but
because there is a set of conditions which make it unlikely to
happen. I say let us have a discussion in the real world of where
it is rather than looking at thin end of the wedge arguments,
which are always interesting but not necessarily illuminating.
Q36 Paul Holmes: We have been urged by
yourself and by the Prime Minister, for example, to look at international
comparisons and the Prime Minister talked very favourably today
at Question Time about the American example. In America there
is huge variability in the market between lower quality, cheaper,
state universities and the Ivy League and so on. I had a student
working as an intern, a graduate, for me last summer from Chicago.
She had won a place to an Ivy League university, and a scholarship—wonderful,
but the scholarship paid about 40% of the cost of the fees and
what she had left to pay in fees was still something like $36,000
a year. She could not afford to go even though on ability she
could go and she had won a fantastic scholarship. She still had
a huge sum to pay so she shopped around for the cheapest university,
and that, of course, is the standard practice in the USA.
Mr Clarke: But I am not saying,
Mr Holmes, and nor is the Prime Minister, that the American model
is the ideal model and one to which we should aspire. In fact,
in Questions today he mentioned not only the American example
but the Australian, the New Zealand and the Canadian example,
taking OECD countries not entirely dissimilar from ourselves as
examples to illustrate this point. He could have gone on to other
countries in Europe which had variable fees. There is a whole
range of countries within the OECD which have a network of variable
fees. For me the question is not "variability or not",
as I tried to indicate earlier in answering Mr Chaytor's questions.
I think it is unrealistic to say there should not be variability.
The question is what is the fairness of the system of repayment,
how it operates, whether the bursary system operates, and I certainly
would not take the American model on any basis for that because
it has an entirely different culture and history to that which
we are trying to establish. I hope that the kind of system we
have with the loan and repayment that we have described could
be taken as an example for other countries that are thinking of
doing this without the sharpness, as you have described, though
it is always possible to say, "There is the American example
and we allege"—falsely—"that this government
wants to follow the American example". Well, it does not.
What the American example tells us is that you can have a system
which gives very large amounts of money per head into universities
by this route and they have achieved that in the States compared
to what we do here, and that you can do it in a way that still
allows access to their major Ivy League universities to people
from the poorest backgrounds which they have also achieved, but
I do not hold up America as a kind of model for what we ought
to be doing. I think we need a British system and need to look
at the way that the British systems have operated, and I happen
to think that the proposals we are putting forward do that well.
Q37 Paul Holmes: On that aspect, one
suggestion is that some universities might have an internal market
and that, for example, they charge £3,000 to students who
are on a very popular or over-subscribed course like English,
say, and very little or nothing to students going on to other
courses like physics or chemistry or modern languages, where there
is a shortage of people. Now, the students on the popular course
who have paid their £9,000 of tuition fees and got that debt
to pay back might go into a relatively low paid job or be at the
lower end of the graduate market; the student who has had the
free tuition subsidised by the English student might go on to
a very well paid job and not have to pay that money back. Is that
a fair consequence of the system you want to introduce?
Mr Clarke: I think it is, yes.
The fact is that the paying back, whether of the English or the
science student as a graduate, will depend entirely on the amount
of money that they earn at that time, so if the English student
decides to go off and be a playwright and sell his or her plays
in the streets of London scrubbing together an income to make
it go they will not be paying anything back at all, and as a result
of the statement I made last Thursday if they do that for 25 years
they will not have to pay it back at all and it will simply be
written off. I do not think that is unfair at all. In fact the
way we operate will say you make your life choice after you leave
university; if you want to conduct an occupation which does not
make you very much money then you will not have to pay very much
back, and I think that is perfectly reasonable.
Q38 Paul Holmes: But the whole justification
for what you want to do is that graduates earn more so they should
contribute—fair enough—but here you would have a graduate,
let's say an English teacher, earning on average after seven or
eight years in the job £25,000 a year, and they will be paying
back their £9,000 fees where a modern language student working
in a particular job might earn £60,000 a year and be paying
nothing back. Surely if the principle is that the graduate gets
access to better paid jobs and should therefore pay, what is wrong
with progressive taxation rather than this totally unfair system
that you are suggesting?
Mr Clarke: It is not totally unfair.
First, if you take the English teaching example, I cannot speak
for my successors but I certainly think we would want to continue
the encouragement of people coming into teaching English and other
subjects that we have at the moment which means there is extra
money coming in for students in those areas which deals with some
of these issues, and in other hot supply areas of work. But I
believe it is perfectly reasonable to pay back provided the issue
of your ability to pay is taken properly into account. The other
point, which I think you have acknowledged, is there is a difference
between the totality and the particular so in general most students
earn more throughout their lives and can therefore afford to pay
back. That does not mean there will not be some students who are
not in that position, and in my opinion they must not be penalised
and that is why we have achieved a system which brings those two
things together.
Paul Holmes: I will not go further down
that one!
Chairman: We will move on to student
support.
Q39 Jonathan Shaw: Secretary of State,
the principal concerns of students while they are undertaking
their degree is the amount of money they have got in the pockets,
the cash in their pockets to be able to pay for things, their
day-to-day living, rather than post-qualification paying off fees,
et cetera. Now, we have asked you, indeed I have put to you and
many other people have put to you since then that the totality,
the £2,700, it would be better, rather than having fee remission,
actually to take that money and make it into a grant because as
our esteemed colleague said, you cannot go to Tesco's and buy
much food with the fee remission and the Government is not going
to give you credit, is it ?
Chairman: There is a lot of advertising
in this session.
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