Higher Education Bill

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The Minister for Lifelong Learning, Further and Higher Education (Alan Johnson): He should have been the leader of his party.

Mr. Mudie: I will not take up that comment.

Mr. David Rendel (Newbury) (LD): The hon. Gentleman is making a brilliant speech. I bring to

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his attention a point that he may not quite have picked up yet. There may be couples whose children are coming up to university age. One parent may be in full-time work and the other in part-time work. Does he agree that that it may eventually pay for someone to give up work and their salary so as to reduce their household income?

Mr. Mudie: That is a very good point, and I hope that the Minister will consider it. We have this battle all the time—whether about pensions or whatever other part of life—when we meet our constituents. Some people who choose to drop their job and pick up a lot of benefits often end up better off. That is where the working families tax credit has been so good. Our entire approach should be to encourage people to go to work, to make their contribution and to help their families prosper.

Kali Mountford: My hon. Friend talked about the postman. May I tell him about a care assistant who is on £16 a week more than income support? She will benefit when her son goes to university because of the widening access that is available to him. More university places will be funded by this total package, and it must be considered in its totality. It would allow the son access to discounted courses that he could not conceive of entering at the moment.

Mr. Mudie: I have every sympathy with my hon. Friend. She makes a very valid point. I shall not repeat myself, but I refer her back to what I have said. She is in no position to say that either that what she described will happen or that it will not happen only because of the Bill. We do not have the financial information. I do not know why we are putting in the figure of £3,000, because I do not know whether it is for the past funding gap and or whether it is for an extension.

3.45 pm

Mr. Allen: One of the things on which we have information is the number of young people and their families who would benefit from a grant of £3,000 a year. There is currently no grant whatever. My hon. Friend rightly talked about concern for postmen and others in that percentage of people who may not benefit or who may be on the taper, but he should be very careful indeed not to throw the baby out with the bathwater. Despite his strongly views about variability, I hope that he will consider not only the 55 per cent. of families in his constituency who will qualify for a £3,000 a year grant, but the 65 per cent. of families in my constituency whose youngsters, if they claw their way up the ladder, will also qualify for that amount. There are principled points to make, but there is also a great deal to lose.

Mr. Mudie: That is a good point and I shall deal with it. Social inclusion has not been helped in that respect. I would applaud the Government if £3,000 were being given without the £3,000 tuition fees being charged. We have had a complicated discussion about that, and I think that overnight the hon. Member for Harrogate and Knaresborough finessed the figures on the cost even more than I did. I appreciate the concerns that my hon. Friend the Member for

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Nottingham, North raised—that is what we are in politics for.

We should consider what is being offered to working-class kids. They are being charged £3,000 in deferred fees, which means that they will have a bill of £9,000. Hopefully, the kids to whom we are giving £3,000 in a grant will pay off their fees and then call in the normal loan. However, I fear that there will be a worrying temptation to leave the £9,000 as a debt to be picked up when they graduate and to take their grant and the normal loan. My hon. Friend the Member for Warwick and Leamington and I have spent a useful six months getting into the ribs of Mr. Barrett, of Barclays, over credit cards and how blithely we are racking up debt. I appreciate that that is a different kind of debt, but the principle is the same. We heard some horrifying tales of spiralling personal debt.

Jonathan Shaw rose—

Mr. Plaskitt rose—

Mr. Mudie: I am not going to talk about the difference between the debt that we are discussing and credit card debt, because the Chairman would be on me in a second.

Mr. Chaytor: Will my hon. Friend give way?

Mr. Mudie: I must go on, because I have already overstayed my welcome. My hon. Friends feel comfortable, because there will be a regulated market, but exactly how will we regulate it? Are we going to interfere with the regulator? Are we going to give the regulator instructions? What is our starting point? I repeat: we need to know before we establish the system. The White Paper says that the level of fees must be low enough to be manageable, but I would welcome it if the Minister could say what that meant, either in terms of a percentage of tuition fees or an amount. Otherwise, it is meaningless, because the word ''manageable'' is open-ended. The Government's answer to everything is to employ regulators to take decisions away from Ministers, because they can be blamed and we cannot. However, regulators sometimes do what they want, so I would ask the Minister to consider the issue.

I understand that the review board will make an announcement about the cap before 2010. To follow on from my previous question, do the Government intend to be proactive with the review board? Will they spell out what they regard as reasonable and manageable and what percentage they regard as the maximum?

I have some technical questions about differentiated fees. Some have come through by fax and I may deal with some later. I am happy for the Minister to confirm that this is wrong, but there is concern that the Bill gives no details about the way in which institutions may vary fees. How will they be able to vary them in and across academic years, or in the lead-up to an academic year, as part of a marketing exercise? I am keeping all my fingers crossed that the Minister will not ask me to explain any of that, although I am sure that he, with his expertise, will not need me to. How will institutions be able to charge students different amounts, based on their financial backgrounds?

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It is also claimed that the Bill fails to cover the right to charge whole or partial fees to students who transfer between institutions part way through a course. There is no legislation to cover the issue and practice varies significantly. Indeed, several students have been charged the full tuition fee twice for one year when they transferred between institutions. Although I would not use such strong words, some people say that that will be simply intolerable under a system in which fees go up to £3,000 and that we should legislate against that.

Mr. Boswell: Given the hon. Gentleman's argument, would he also agree that it is important to reach an understanding about the fees chargeable to students who withdraw during the year, given the potential for real inequity as well as academic failure?

Mr. Mudie: The hon. Gentleman makes his point, and the Minister is already looking for the answer.

There are also no measures in the Bill to prevent institutions from charging additional course costs for the use of, for example, library and computer facilities. Such costs can have a significant impact on the overall cost of studying. The Bill also neglects to provide for compensation for students who are over-charged, but perhaps we should deal with that later. I should be grateful if the Minister's efficient staff, whom he pays so little, could provide us with the usual good answers.

Finally—everyone will give a sigh relief—I want to deal with the serious issue of social inclusion. I have already dealt with the point about whether students are being given a good deal, which was raised in an intervention. However, there are some worrying issues, one of which I want to put to you—not you, Mr. Gale although I am sure that you would give me a better answer, but the Minister. Actually, I do not mean this Minister, who is beyond comparison, but the Secretary of State. I want to make a serious point about youngsters.

I started off by saying that, as the objective of the Bill was variability, other matters followed. I hope that I am not being unkind when I say that the Secretary of State discovered the working class. All the concessions came through in that area and they have all, sadly, been tied to accepting variability. Committee members should take a dim view of that.

I do not expect social inclusion, the power to help poorer students and widening access to be an afterthought in a higher education Bill. I expect those considerations to be central to it. I do not expect that the help given to youngsters should be concessions, nor that it should be given on the basis that it will be withdrawn—or may be withdrawn—if the central feature of variability is accepted. That is what we have heard from the Secretary of State on the Floor of the House. He cannot have his cake and eat it.

If we, as a Parliamentary Labour party, feel strongly about social inclusion and the need to get youngsters from poor and aspiring backgrounds into university, then some one has shown a lack of intention. A lot of the improvements were included because my hon. Friends the Members for Warwick and Leamington and for Cambridge had strong

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doubts about those terms and were prepared to negotiate. Can the Minister assure me that those concessions—those agreements in the Bill—will not be withdrawn if common sense prevails and variability is taken out? They should stand on their own.

It would be outrageous if there was any suggestion that I, as a Labour Member of Parliament, was blackmailed into accepting variability because help for my least well-off constituents would be withdrawn if I did not vote for it. Will the Minister put that on the record? It is an important part of the Bill.

Even though I am in no position to do so, I should like to put a proposition to the Minister. I am worried about that situation. In the discussions that we have had, some Committee members are adamant those are great concessions and that it is a golden age for the worst-off kids. It is a window of opportunity that might close in 2010. I am sure that Committee members would want me to put that on the record and that the Minister will reassure me.

There is a suspicion in my tortured mind that, because we agreed on the figure £3,000, the objective of going for variability fees affected the other objectors. We were going with £3,000. There was uproar from Members on the Labour Benches, because they were concerned what that would mean to the poorest, working-class kids. There was a great response. My hon. Friend the Member for Warwick and Leamington played a part in that.

Immediately, a grant and a bursary were introduced and the fee element was agreed, which added up to the magical figure of £3,000. So we had no problem with those working class kids. But there is nothing in the Bill that indexes the £3,000—the maximum payment—to any increase when the cap is lifted. So it is indeed a golden age. Any working class youngster from the poorest sector can get that grant of £3,000 to match the fees.

Let me present a wee scenario to Committee members. It is not outlandish when the behaviour of Oxford is considered. The Sunday Times ran a front page story before the White Paper came out. That was bad timing. It was embarrassing. It put pressure on Ministers—vice-chancellors should not do that. The newspaper ran an embarrassing story saying that £5,000 was not enough, they wanted £10,000 and upwards. They felt that they could justify that. Let us take 10. Is there a Member who is brave enough to stand up and say that Oxford, with its traditions, research record, endowments and prestige, will not be able to charge £10,000 if the cap is lifted? What if a working-class youngster from an estate wanted to go to Oxford under those circumstances? The grant is not automatically index-linked to the highest figure. This has been cobbled together to get us to vote for the Bill by taking those poor working-class kids off our consciences.

I want working-class kids to go to Oxford for the next 30 years. That would be great. It would be a revolution. However, if variable fees were established and Oxford's fees became two, three or four times

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higher than others—£10,000 compared with £4,000, for instance—as the Bill stands poor working-class youngsters would be faced with fees of £30,000 plus loans to pay on top of that with a grant of £3,000 per year, which I presume would be index-linked. I would be happy to be reassured that that would not be so.

I am thinking about the future. If the Minister is going to force variability through, Labour Members should at least demand the concession on behalf of the poorest that the grant should always be linked. I think that that gives the Minister some problems. Maybe not: maybe he has money. That gives a blank cheque to the universities, backed up by the Chancellor. I will be interested to learn whether the Minister can give us an assurance on this. If he cannot, there will be a golden age—a window of opportunity between 2006 and 2010—for working-class youngsters. They should use it, if the cap lasts that long; if they do not, they may have lost their opportunity.

I am grateful for your patience, Mr. Gale. I am sure that you are praying that I have covered all the points that I have got to make, and I have.

4 pm

 

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Prepared 26 February 2004