Higher Education Bill

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Alan Johnson: Yes, my hon. Friend is right. The figure of £400 million to £500 million is the actual money, net of fee remission, but we pay the fee remission to the universities. The universities receive £800 million, but the students are paying about £400 million to £500 million. The rest is fee remission. It is an important point. My hon. Friend talked about a number of concessions reducing the amount of money going to the universities, a point made by the Opposition. Not one penny has been reduced in relation to the money going to the

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universities. We give the money to the universities up front. We were paying for the fee remission—when it was fee remission, the university got the full fee and we paid for the fee remission for the poorer students—we will pay for the grants, we will pay for the higher threshold. Universities will receive exactly the sum that they were projected to receive when the White Paper was published in January, now that we have gone through the carious phases with the better student support package.

Mr. Collins: The Minister is being genuinely helpful and is elucidating the situation. He will recall that there was a significant exchange at Education and Skills questions a couple of months ago between the Secretary of State and my hon. Friend the Member for South Suffolk (Mr. Yeo), in which my hon. Friend asked the Secretary of State whether all the concessions that had recently been announced would be met from the existing higher education budget. The Secretary of State said yes. The Minister of State appears to be saying no. Which is true?

Alan Johnson: When I say that we are paying for that I mean that the Government are paying for it. I think I explained how that broke down in some detail on Second Reading, in response to an intervention from the hon. Member for South Suffolk. The new arrangements announced on 8 January—the 25-year cap, the expanded loan, and the extra £500 on the grant—would be paid within the existing DFES budget. The rest of the package was coming from Her Majesty's Treasury.

I understand the importance of this group of amendments. I hope that they will be either withdrawn or defeated, although I understand that this is an important point for my hon. Friend the Member for Cambridge and that she will want to press it to a vote. However, I must say that the solution to the problem may be many things, but it is not a fixed, rigid fee. We have debated the issue at length and I hope that hon. Members will reject the amendments.

Mrs. Campbell: It seems a long time ago that I moved my amendments. I think it has been an excellent debate. There have been some very good contributions from all sides of the Committee. I feel that I now understand the issues much better than I did before, and I hope that everyone else feels the same way.

I wanted to take the opportunity to accept the apology made by the hon. Member for Harrogate and Knaresborough, but he is no longer in his place, and I understand why. Obviously things became a little heated on Tuesday, when we were arguing about this, so I want to acknowledge and accept the apology.

I begin by reiterating the point I made in an intervention on my hon. Friend the Member for Bury, North about the nature of the market. We did hear some contributions about the market system and its nature. Many people were saying that there is a market at the moment, and all we are doing by introducing a variable fee is enhancing the market. However, there is a big difference. At the moment, the market is about

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A-level grades. That is the currency used. It is used by the student to try to negotiate the best possible place, and it is used by the university when deciding whether to accept students. It is far from being a perfect market. It is imperfect for many reasons, one of which—and it is one of the most frustrating from my point of view—is the ignorance of the system by the student.

One of the reasons that Cambridge, probably Oxford and many of the other Russell Group universities do not get their full quota of low-income students is that those students do not understand that there is a generous system of bursary support at many of the elite universities, which can be just as welcoming and as appropriate for students from lower-income backgrounds as for those from middle-class backgrounds. It is terribly important that we watch our language when we are talking about this, because I have picked up the Liberal Democrats on several occasions for making remarks that add to the perception that the elite universities are not for lower-income students.

James Purnell (Stalybridge and Hyde) (Lab): Is the market not more complicated than that, what with A-level grades, the cost of the area around the university, the attraction of that university and the quality of its student union? I know my hon. Friend is not saying that the market is purely about the cost of the fee, but if it were, and the amendment were be accepted, the consequences of these new arrangements would be that people stopped applying to Wolverhampton and there would be a surplus of applications to Cambridge. The very fact that that is absurd shows that the market is much more complicated. People going to university, particularly to Russell group universities, are going to be able to weigh up these arguments, understand the grants and therefore make a well-informed decision.

Mrs. Campbell: What I want to achieve by this amendment is a system very similar to the one we have at the moment. I accept that universities need more money, although I have had a little disagreement with my hon. Friend the Member for Leeds, East about the level of the fee. When I first tabled the early-day motion in April last year, my understanding was that a fee of around £2,000 would probably produce about the same income in total for universities as a variable fee of up to £3,000. The Higher Education Policy Institute published a paper in September which suggested the level would have to be about £2,500, and I accept that. That finding was later confirmed by the excellent paper by my hon. Friends the Members for Southampton, Test and for The Wrekin.

I regard the fixed fee as a passport into higher education, payable after the student graduates rather than upfront, so that the student can choose the university that best suits their aptitudes and abilities and offers the course that they want to study. No thought needs to be given to cost or debt.

Mr. Chaytor: Now that my hon. Friend is quite clear that she will accept £2,500 as a fixed rate fee, can she explain to the Committee how she can possibly justify the fact that someone who goes to Cambridge to do a degree in law, or maths and economics, should

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pay exactly the same course fee as someone who does a two-year foundation degree at a local modern university, given the enormous—and, in some cases, stratospheric—differences in earnings potential and career opportunities?

As my hon. Friend said she wants something similar to the existing system, can she also tell us what there is in the system that has positively worked to enhance increased participation by working-class students at any time in the last 50 years?

Mrs. Campbell: Let me start by saying that the fixed fee—the passport into higher education—payable by students who attend Cambridge university or who perhaps do a foundation course, is justified because it is not necessarily related to the amount of money that people earn afterwards. It is perfectly possible for somebody to attend Cambridge university and end up doing a job in the public services which may be quite low paid, so they might never earn more than £18,000 to £20,000 a year. It is also perfectly possible for someone to do a foundation degree and become a plumber, for example. I know from experience that plumbers in London are paid a great deal of money. They can earn a great deal because of the shortage in that subject area. I have no problems with that: it is fair that someone doing a job that they love doing and are doing for the benefit of the community should be low paid and that an occupation that is desperately needed and in short supply should be paid well.

Mr. Chaytor rose—

Mr. Rendel rose—

Mrs. Campbell: I would like to make some further progress. I promised my hon. Friends that I would not take more than 10 minutes and I know that everyone is dying to get away—[Interruption.] My hon. Friend the Member for Halton (Derek Twigg) is looking at me and I would like to win some favour.

There is a point that I should have raised before that I want to raise now, which was made to me by students at Anglia polytechnic university who are worried about the value of their degrees. If a university is known to charge less for its degree courses than another university, it becomes obvious that the university is having difficulty in attracting students, and people attending it are worried that their degree will be devalued. Not only will they have to say to a future employer—[Interruption.]

The Chairman: Order. I have said this before to the Committee. The hon. Lady is gently spoken and the Chairman wishes to hear her. I have the option to suspend the Committee for 15 minutes.

Mrs. Campbell: Thank you, Mr. Gale. I shall try to speak louder. I think I am not near enough to a microphone; perhaps if I move I shall be.

If a future employer wants to know what sort of degree a person has, are they going to ask that graduate how much they paid for their degree as well as what degree classification they have? That is a genuine worry among students, which cannot be ignored.

When I made my introductory remarks, several of my hon. Friends intervened about the variable fees

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and part-time students. The hon. Member for Westmorland and Lonsdale said that he had not found my arguments convincing. I have since carried out some further work and it appears that there is currently little variability in part-time fees. I know that there is no statutory cap, but part-time fees tend to be related closely to the corresponding full-time fees, so that if a student is studying half-time, the payment will be roughly half of the current fixed fee. There is little variability. The problem, of course, is that if there is a variable fee for a full-time course, there is likely to be a variable fee in future for a part-time course. The fact that there is little variability in the fees for part-time courses at the moment does not mean that that would continue if the full-time fee became variable as well.

There are many points I could pick up, but I do not want to continue for too long. However, I want to touch on a point made by the hon. Member for Newbury about the cost of university for a student on a very low income, from a family background where there is less than £15,000 a year. I listened carefully to his arguments and I agree that at the moment that student would probably have a debt of around £15,000 on leaving university. Under the new system, the amount would be exactly the same.

6.15 pm

However, under the Government's debt repayment proposals, that student will be far better off than under the current system. Under the proposed system, the student will repay £8.65 a week on a salary of £20,000 a year. Under the current system, the student will repay two lots of loans. They will repay the loan from the Government and a commercial loan. With the Government loan, they will repay £17.31 a week on a salary of £20,000, but they will also have a very high commercial loan, which presumably they will repay at a much greater interest rate. Although the debt will be the same after three years—I have always praised the Government's excellent student support system—a student will be far better off under the proposed system than under the current system.

It is very difficult, but I have some sympathy with the Liberal Democrats—[Interruption.] It is very difficult for me to sympathise with the Liberal Democrats, but I have some sympathy, in that, in opposing the plans, they often use arguments that are off-putting to students who are potential applicants to universities. I say that having had an argument with the hon. Member for Harrogate and Knaresborough about the supposed £50,000 for medical courses at Cambridge. The hon. Member for Newbury also told the story of his dinner with the master of a college wanting to charge £15,000 to £16,000 a year.

Those remarks are hugely damaging. There is already a perception outside the House that Oxford and Cambridge are very expensive universities, and those remarks can only make that perception much worse. I spend all my time telling people that Oxford and Cambridge are not expensive universities. Certainly to my knowledge, Cambridge is not an expensive university. Very generous bursary schemes are now available. It is important that all responsible members of the Committee tell students that that is the case and encourage them as much as possible to apply.

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Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 13.

Division No. 3]

Campbell, Mrs. Anne Mudie, Mr. George
Rendel, Mr. David Thomas, Mr. Simon

Allen, Mr. Graham Chaytor, Mr. David Foster, Mr. Michael Francis, Dr. Hywel Hall, Patrick Johnson, Alan Laxton, Mr. Bob
Lewis, Mr. Ivan Mountford, Kali Plaskitt, Mr. James Purnell, James Shaw, Jonathan Twigg, Derek

Question accordingly negatived.

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The Chairman: It may be for the convenience of the Committee to be aware that the Programming Sub-Committee will sit at 6 o'clock on Monday in a Room yet to be determined and that it is likely that we shall sit later on Tuesday than the sittings motion currently states. I have indicated to the usual channels that I shall be prepared to sit obviously from 2.30 pm until 5 o'clock and, if necessary, from 6 pm until 8.30 pm and from 9 o'clock onwards.

Further consideration adjourned.—[Derek Twigg.]

Adjourned accordingly at twenty minutes past Six o'clock till Tuesday 2 March at ten minutes past Nine o'clock.

The following Members attended the Committee:
Gale, Mr. Roger (Chairman)
Allen, Mr.
Boswell, Mr.
Campbell, Mrs.
Chaytor, Mr.
Clappison, Mr.
Collins, Mr.
Foster, Mr.
Francis, Dr.
Francois, Mr.
Grayling, Chris
Hall, Mr.
Johnson, Alan
Laxton, Mr.
Lewis, Mr.
Mountford, Kali
Mudie, Mr.
Plaskitt, Mr.
Purnell, James
Rendel, Mr.
Shaw, Jonathan
Thomas, Mr.
Twigg, Derek

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