Higher Education Bill

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Alan Johnson: The hon. Gentleman has a point, but there are two types of RPI—one includes mortgages and one does not. We increase student grants by one because, by and large, students do not have mortgages, but we increase thresholds by the other because it applies to families and not students. That is a complication, but it is a reasonable point.

My argument may be more relevant to clause 24, but it is entirely relevant to this debate. Many hon. Members have said that the problem is a question of trust. I understand that. I have heard so many speeches not against what we propose but against what we might propose in future—and against what we propose might lead to. I am well aware of the concerns expressed about what will happen in future. I shall press the amendment to clause 24 so that the assurance given in the White Paper can be included in the Bill. With or without that amendment, we say that any change to the fee cap must be made by the affirmative resolution procedure, not the negative procedure. Although we cannot do it in legislation—if we could, we would—we give an undertaking that if Labour is in government, the statutory instrument dealing with the matter will not be taken in a Committee but on the Floor of both Houses. That will ensure that all Members have the opportunity to speak if called, and they will all have the right to vote on the matter.

Chris Grayling: That is obviously important, but I seek an undertaking from the Minister, in his capacity as the lead Minister in the debate, that the Committee will have adequate time to debate and fully understand the Government amendment to clause 24, so that we can be totally satisfied with the guarantees that they are giving.

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Alan Johnson: I look along the Bench to where the Whip usually sits, as I am not totally in command. Hon. Members are in command, with the Chairman and the Whips. I want to get to those debates, and I want the debate on those amendments to be full and I want to provide as much information as I can. That is the only reasonable reassurance that I can give.

In relation to amendments Nos. 3 and 120, the Government believe that we have given as much reassurance as we can, given that Parliament will make the decision. The people who argue in the meetings that I hold around the country that the provision should be in primary legislation have a valid point in terms of where they think these things should go, but parliamentarians will have the opportunity to vote on this. That is an important safeguard.

The cap stays until 2010. The feeling behind the amendment is that it might shoot up into the stratosphere thereafter. From my experience last June, I doubt that any Government, of any political persuasion, could lift that cap willy-nilly to some figure plucked out of the blue. If they thought that before the experience of the debate since last January, I do not think that they will think it in future.

Mr. Mudie: I understand the point that my right hon. Friend is making and I am not unsympathetic to it. When the statutory instrument comes to the Floor of the House, will we be confined to a debate of an hour and a half as in Committee? That somewhat limits the concession in terms of hon. Members' ability to participate in the debate.

Alan Johnson: You, Mr. Gale, and my hon. Friend know more about these procedures than I do. I am advised that we can put two together and have a three-hour debate. [Interruption.] The hon. Member for Westmorland and Lonsdale laughs. That is what I am told. The rules allow two debates on a statutory instrument, one following the other, which adds up to three hours. The decision will be on one issue: should the fee cap be raised? Other issues will be raised, but the decision that Members will be asked to make in such is a debate will be simple.

Mr. Patrick Hall (Bedford) (Lab): May I just clarify whether any discussion about raising the cap will not be around a figure that is plucked out of the blue, but around a figure that is based on research and analysis and a report from the commission that the Government hope to institute if they win the next election?

Alan Johnson: I am enormously grateful to my hon. Friend, who made a very good contribution on Tuesday, for asking that question. I would have missed that point. He is absolutely right. The independent commission that will report directly to Parliament will be set up in 2009, after three years of operation. If our debate takes place after 2010, it will be informed by that report.

Mrs. Anne Campbell (Cambridge) (Lab): Will my right hon. Friend clarify remarks that he made on Second Reading? He was responding to my hon. Friend the Member for Birmingham, Northfield (Richard Burden), who said:

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    ''He has guaranteed that the cap will not rise during the course of the next Parliament and that it would require primary legislation to raise it within that time. It has also been said that if the commission recommended significant changes thereafter, it would be likely that primary legislation would be required. Would an increase in the rate of variability count as a significant change?''

My right hon. Friend replied:

    ''Yes, it undoubtedly would.''—[Official Report, 27 January 2004; Vol. 417, c. 268.]

Could he clarify whether that means that a significant rise in the level of the cap would require primary legislation, even though it may come after the 2011 deadline?

Alan Johnson: As my hon. Friend will be aware, the discussion I was having with my hon. Friend the Member for Birmingham, Northfield was about a rate of variability idea that he had in which the maximum fee should always be a multiplier of the standard fee. That related to the rate of variability discussion that we had had that very morning. His question to me was very focused and dealt not with fee caps, which we are debating now, but with the rate of variability. Hon. Members will have received a paper about the rate of variability from the Campaign for Mainstream Universities, which thinks that there should be a floor and that, instead of £0 to £3,000, the rate of variability should be higher. If the independent commissioner considers the issue and says that the rate should change, it will be a matter for primary legislation—it will be a much more complex matter than simply lifting the cap.

Mr. Allen: Will my right hon. Friend also concede that lifting the cap and introducing a different level of fee is wholly separate from that of who pays the fee? By 2010, 2015 or 2020, the system will not necessarily be the same as the one that we will have now, under which we will expect graduates to repay the whole fee charged by the university. There are many other ways forward, but that is a separate issue from the proper, real or market level for fees. In fact, that already exists, whether people like it or not, in the form of charges to international students and others.

Alan Johnson: My hon. Friend is right, but I will come to those points when I deal with the other amendments grouped with amendment No. 82.

My hon. Friend intervened just as I was coming to his contribution on Tuesday. We dealt with a group of amendments about the need for universities to have a bursary scheme and to dedicate at least 10 per cent. of the relevant funds to it. Other amendments dealt with a national bursary scheme and with increasing the fee cap by RPI plus half of 1 per cent. I shall deal first with the amendments relating to bursaries.

I agreed with many of my hon. Friend's points. He was speaking from the heart about his experience in Nottingham, North, and many of us with similar constituencies would identify with that. I appreciated his point, but the amendments are unnecessary—[Interruption.] Perhaps someone is ringing to tell me that things have changed and that they are totally necessary. Let me spend a bit of time explaining why the approach that we intend to take makes the amendments unnecessary.

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We floated the idea of a national bursary scheme in discussions. A formal proposal was never made, but the idea was reported in the press. In our discussions with the university sector, everyone, including the vice-chancellors, agreed that a fair chunk of the new money would go to student support in the form bursaries, grants, outreach activities—a point raised by the hon. Member for Ceredigion—the Aimhigher stuff and building aspirations. They all intend to use a large chunk of the money to meet the pay and conditions of those who work in universities and to deal with infrastructure problems, which have existed for many years.

I put it to those involved that we should make a necessity out of a virtue. My idea—I take the blame for it—was that it would be fairer if we set out in statute that 33 per cent. of the money should be put into a national bursary. In that way, universities with a larger proportion of youngsters from non-traditional backgrounds, to use the parlance, would not have to pay out more than other universities. Mea culpa—I was totally wrong, and the idea won the support of absolutely no one anywhere. Universities felt very deeply, and quite rightly, that the whole point of setting up a separate string of funding was to give them control over it so that no one could interfere with it. They thought that it went against the whole spirit of what we are trying to do for us to be prescriptive and to insist in legislation that a percentage of the new money should be siphoned off.

That said, we have been absolutely clear in the guidance to OFFA, which we have circulated to members of the Committee, that there will be a regulator. Universities UK and vice-chancellors accept that and, although I would not say that they were wildly happy about the regulator, they would rather deal on an individual basis. We said in the circulated draft letter from the Secretary of State to the director of OFFA—underlined, in block capitals—that we expect any poorer student on a £3,000 course with £2,700 provided by the state to have that £300 gap met. From our modelling, which no one in the sector has contradicted and with which they seem happy, that would not take any more than 10 per cent of the income coming through.

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Of course universities like Cambridge, Exeter and Imperial—others are following suit apace—are saying that they will put in £4,000 a year as a bursary. We will come back to that later, but it equates to around 33 per cent of their income. The whole point is that we believe universities are genuine in wanting to help us with this widening participation agenda. They have been helping us for the last four years, with some good effect, incidentally. This should be a matter of trust, given the understanding that we want to have that £3,000 met if there is a £300 gap in the way that I described. In case anything goes wrong in future, there is a reserved power, under clause 31(4) of the Bill, that we could introduce such a requirement. I again counsel my hon. Friend the Member for Nottingham, North that, if we were to go down the route suggested in this group of amendments, we would totally lose the support of the university sector—all universities, right

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across the spectrum. I say this having felt the hot air coming out of the oven after floating this idea a few months ago.

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