Sixteenth Standing Committee on Delegated Legislation |
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Huw Irranca-Davies: I rise to speak on the imperative of the Committee’s work and the importance of the order. Unless we move ahead with the order today, we shall disadvantage the higher education institutions in Northern Ireland and the students—not only those who will study in Northern Ireland, but those who will travel to England and to Wales to study—and we shall significantly disadvantage the massive leverage of funds into the higher education institutions in Northern Ireland that is required. Several hon. Members asked about the reason for the target of 50 per cent. Hon. Members on both sides of the Committee should be and, I hope, are working on the premise that we would not want to deny anyone in Northern Ireland who achieved satisfactory grades and had sufficient motivation the opportunity to move ahead into higher education. I am referring not only to purely academic courses—the high-flying courses—but to the increasing number of courses with a large vocational element. We often talk about the 50 per cent. target in the clichéd context of people studying politics, economics and so on, but that is largely not the case nowadays. Increasingly, people studying for qualifications want to get themselves into work other than City jobs or high-flying legal jobs. That is why the 50 per cent. target is so important. Should it be exactly 50 per cent. or should it be 51 or 49 per cent? That is something of a red herring. We want no student in Northern Ireland ever to be turned away when they can achieve satisfactory grades. On that basis, we do not want Northern Ireland students to be deterred from entering higher education. Column Number: 21 Much has been said about the debt that people will face when they finish their courses, but let me return to my earlier intervention, in which I talked about a graduate tax approach. That is one alternative that could be proposed previously. Of course, the great disadvantage of a graduate tax, whether someone is a high-flying executive working in Belfast or a social worker earning £14,000 a year, is that they are lumbered with the tax until the day they pack up work and retire. Under this approach, however, if someone earns less than £15,000—I do not think that anyone would dispute that many public sector jobs in Northern Ireland are below that threshold; valuable work is done by many people at the lower end of the pay scale—they will not have to pay back until they proceed through the promotional ranks. I have no difficulty with that. In fact, I would define it—at the risk of stretching your patience a little, Mr. Cook—as socialism plus-plus. If someone works in a job that is poorly rewarded financially, they do not pay back, but if someone accedes to serving as a politician in Northern Ireland or being a well paid solicitor, they pay back not only through their taxes but in the way that we are discussing, to allow someone else to climb the ladder towards career progression and a better salary. Mr. Evans: What is the order all about? Is it about clobbering those who, as the hon. Gentleman says, go into the professions and higher up the salary scale, or is it all about ensuring that more young people can go to university? I would like to know. If he wants to have some form of wealth tax, would it not be far better to use the income tax system—so that if someone graduates and gets a higher-paid job, they pay more taxes—rather than the crude tool that he is discussing? Huw Irranca-Davies: Let us be clear that a lawyer representing someone in court or a doctor treating someone is indeed paying back through the general taxation system. However, when a hospital consultant earns not an MP’s £56,000, but £120,000 to £150,000, there may be an imperative for saying that, because they personally have gained so much, they should pay a little more even than their taxation. That is socialism plus-plus. Jonathan Shaw: Was not there a 30-year decline in university funding? We are missing the point: the institutions need investment. If one takes on a debt, one wants it to be for a quality product. If the institutions do not have the lecturers, the infrastructure and good fabric, the quality of the degree that a young person obtains from a university will not be as good as it would be under our proposals. Huw Irranca-Davies: I could not agree more. Despite comments from Opposition Members, the Rees commission, which reported on Wales, concluded that of the half-dozen options that were put forward, the status quo should not be considered. Its other conclusion was that Wales will be at a disadvantage if the Government fail to put in a system that is equal to the English system in terms of levering
In Northern Ireland, as elsewhere, the prime determinant of a young person’s choice to go into higher education is not funding, although that is a factor, but achieving the necessary grades and, helped by parents and schools, having the aspiration and motivation to take the next step. I ask the Minister to clarify what in the package of measures will help specifically to ensure that that is achieved, that youngsters in some of the most deprived areas have the ability to achieve the grades and that when they do there is an open door for them into university in Northern Ireland or elsewhere. Opposition Members mentioned Protestant working-class areas, but it applies to all working-class areas. 4.42 pmMr. Siôn Simon (Birmingham, Erdington) (Lab): As this opportunity will be extended to Northern Ireland, I want to say a word on the important percentages in the order, for the benefit of Opposition Members. The crucial percentage is not 50 per cent., as the hon. Member for Basingstoke said, but 13 per cent., which is the percentage of young people in my constituency who go to university. I have no doubt that the percentage is considerably higher in Basingstoke, Mid-Worcestershire and Ribble Valley. In many parts of Northern Ireland, it will be considerably lower than in their constituencies, but it will be higher as the proposal is extended into the Province. The measure is not about debt; it is an opportunity to extend further education to working-class children in Northern Ireland to enable them to go to university, rather than leaving school to work in a factory—there are jobs under Labour—and paying for Opposition Members’ constituents to go to university, as hon. Gentlemen would like. 4.44 pmMr. Gardiner: I thank hon. Members for their full participation in the debate, which has been very informative. Several extremely important points were raised, and some spurious ones, and I shall try to address all of them. I shall outline again what the order will achieve. Primarily, it seeks to maintain a strong, viable and internationally competitive higher education sector in Northern Ireland. It provides the opportunity for increasing the funding available to higher education in Northern Ireland, and removes the requirement for students to pay up-front fees, so that graduates take on a greater share of the cost of their education at a time that suits them best. The key point is that there is no do-nothing option for Northern Ireland. The Higher Education Act will fundamentally change the way in which higher education is funded in England. That means that, for almost 7,000 Northern Ireland students who go to
As for students studying in Scotland, Scottish Ministers announced last June proposals to increase the fee level in Scotland above the rate of inflation, so that a four-year degree in Scotland will cost almost the same as a three-year degree in England. The effect of that is to prevent any additional influx of students, which would reduce the number of places available to Scottish students. The result of all that would be even greater pressure on our local universities, which can accommodate only 70 per cent. of the Northern Ireland age cohort. Also, as I pointed out earlier, Northern Ireland would be supporting a system that funded English universities while denying similar opportunities to our local institutions. Mr. Luff: Did the Minister say 70 or 17? Mr. Gardiner: Seventy. Mr. Luff: Then there is a higher target for participation in higher education than I realised. Mr. Gardiner: Of all those who apply to university, only 70 per cent. can be accommodated in the higher education institutions in Northern Ireland. Without additional resources, our universities have made it clear that they face a long-term decline in status and quality, despite the significant levels of funding already pro rata higher than for any other aspect of education. I cannot allow our institutions to become underfunded, with the inevitable consequences of the best higher education being available only to those who could afford to travel outside Northern Ireland. I remain, however, fully committed to widening access to higher education and ensuring that financial help is available to those students who need it most. For that reason I propose to maintain a student support system as favourable as the present arrangements, and to introduce access agreements requiring institutions to play their part in promoting access, including the requirement that they provide access bursaries to less well-off students. I shall try to address some of the many important points that have been made during our deliberations. I shall deal with them not necessarily in the order in which they were raised, but in the order that allows me to deal with them most briefly. Will the Government guarantee that all additional money goes to universities in Northern Ireland? There is a very simple answer to that: yes. It is a commitment that I have given many times, and it is one that I stick by. The hon. Member for Wealden raised a question about the provision for maintaining the fee cap. Column Number: 24 Mr. Don Foster: I apologise for intervening. The Chairman: Order. Can we have the right attitude to procedure please? If an intervention is to be made, the request must be put and then the Member must stand to make it. Mr. Gardiner rose— Mr. Don Foster: Will the Minister give way? Mr. Gardiner: I am always happy to give way in a good-spirited debate such as this, and I will, presently, after I have addressed the question raised by the hon. Member for Wealden about providing for the maintenance of the cap at £3,000. Article 4(11) provides that increases beyond the £3,000 cap will only be in line with inflation, and the cap cannot rise in real terms until 2 January 2010 at the earliest. Moreover, such a move would be subject to approval by the Assembly. That is clearly included in the order. Mr. Don Foster: I am most grateful to the Minister for giving way. He referred to the commitment that he made that the entirety of the top-up fee money would go to the universities. The Committee is grateful to him for repeating that commitment. However, what is his, or his officials’, estimate of the administrative costs of collecting those top-up fees, which of course would reduce the amount of money going to the universities? Mr. Gardiner: I shall happily write to the hon. Gentleman with the minutiae of that matter. However, I reiterate that we are talking about approximately £50 million going to those two institutions of higher education in Northern Ireland. They greatly welcome that. Mr. Luff: My reading of paragraph (11)—I may be wrong—is that it is possible to increase the basic amount by more than inflation if the Assembly approves the increase. I agree that that is unlikely to happen in practice, but it appears to be permitted. Mr. Gardiner: My understanding is that the situation is as I have stated it to be. If I am wrong, I shall write to the hon. Gentleman and to you, Mr. Cook, so that the whole Committee can be advised of the accurate position. Charles Hendry: If for some reason the Assembly were suspended at that time in 2010, could this measure be passed through a Committee of this House, or would it not be able to be considered at all? Mr. Gardiner: I shall come to that when I deal with the other point raised by the hon. Member for Mid-Worcestershire (Mr. Luff) concerning article 4(11). Column Number: 25 I now turn the question about OFFA raised by the hon. Member for Wealden. There is provision for an appeal to independent review of the Department’s decision. He was reluctant to see the responsibility for access being given to the Northern Ireland Department for Employment and Learning rather than to a body such as OFFA. He will be aware that the order makes it clear that the Department will work with and seek advice from OFFA as necessary. The costs of setting up a parallel body for only two institutions in Northern Ireland were felt to be wholly disproportionate, particularly given the current success of both institutions in achieving wide access, as has been already referred to by other hon. Members. For that reason, it has been decided that the Department will take those decisions in consultation with OFFA, but that there will be provision for appeal. I hope that that goes some way towards reassuring the hon. Gentleman. I believe that it was also the hon. Member for Wealden who raised the question of the specific effect of the proposals for deferred fees on women and on elderly people who wish to avail themselves of higher education. The proposals mean that those who earn less will pay back less. The consequence is that those earning less may take longer to repay, but repayments will be linked to income, and the outstanding amounts will be written off after 25 years. I am sure that the hon. Gentleman will understand that that is particularly attractive for women, who still, in this day and age, bear the disproportionate weight of family life. The fact that women know that this is not a debt like any other that continues to mount—[Interruption.] The Chairman: Order. I am reluctant to interrupt the debate, but can I be assured that the volume that is causing such interest at the end of the Front Bench is related to Northern Ireland? Mr. Gardiner: Thank you, Mr. Cook, for ensuring that the important points that I am making about the treatment of women and fair access for women can be heard across the Room. I think that they are points that the hon. Member for Wealden will appreciate. Women, who often bear a disproportionate burden in family life, will find attractive the proposals to extend the threshold for repayment. A person may cease to be in employment earning above the threshold, or dip below that threshold because they go into part-time employment. Therefore, the proposals will do a lot to encourage more women to pursue a higher education degree than the previous arrangements. I hope that that gives him the reassurance that he seeks. Charles Hendry: Is it a compound rate of interest? The top-up fee would be, for example, £3,000 a year over three years. Would there be a compound rate of interest? If someone is paying the fee back for longer, far from paying back less, as the Minister said, they would be liable to pay back more. I understand that there are holidays if their earnings drop below a certain amount and that the fee is written off after a certain period, but, in general, if they pay it back for the full
Mr. Gardiner: The hon. Gentleman is right that, if one pays back for a longer period, the actual amount that they pay back in cash terms will be more than if they pay it off earlier. However, what he must take account of is that, in real terms, a zero rate of interest is being applied. Therefore, the amount that will be paid back is the same in real terms. He will appreciate that the thrust of the legislative proposals is that people will pay back what they borrowed for their higher education in real terms. Of course, if that has to be paid back over an extended period, the actual cash paid back will be more, but that is because inflation will have eroded the value of that cash. Therefore, the amount will be the same in real terms. Mr. Michael Foster: I am grateful to my hon. Friend for his careful explanation of interest rates and the length of time in which fees are repaid. Would the situation be made worse if we did not have a nil real rate of interest but commercial interest rates were charged? Incidentally, I understand that that is the policy of the Conservative party. Mr. Gardiner: As ever, my hon. Friend makes a telling point. I am tempted to go down that direction. However, I can see your eagle eye on me, Mr. Cook, and know that we must stick to matters that pertain to the order more closely. The hon. Member for Wealden talked about the possibility of a graduate brain drain. The employment rate for graduates in Northern Ireland is higher in comparison with any other UK region—it is 90.3 per cent. in Northern Ireland, compared to 88.1 per cent. in the rest of the UK as a whole. The demand for graduates in Northern Ireland is, therefore, very strong. That does not suggest that graduates will begin to leave Northern Ireland to find work elsewhere. There is another aspect to both the current situation and the potential situation in Northern Ireland after the order is put in place. It is only fair to the hon. Gentleman that I address it. I made the point in my opening remarks that the 30 per cent. of students who currently leave Northern Ireland to undertake university education do so for a mixture of reasons. Many do so because they are the brightest and best and they can get into institutions of higher education to study precisely the courses that they want. They feel that they will benefit greatly from going to Imperial college London, Oxford, Cambridge or any of the other major universities. What has been tremendously encouraging over the past few years—this is certainly a bonus to Northern Ireland that has come out of the stability there—is that increasingly those young people are returning to Northern Ireland once they have concluded their studies and after perhaps working for a year or two abroad. That is very much to be welcomed. Others who go overseas often cannot get into Northern Ireland institutions because the standards are so high. They will go to universities with less demanding entry requirements such as a lower A-level point score. Column Number: 27 Perhaps the most damaging scenario of all from the point of view of brain drain would be to have a situation that I believe the hon. Member for Wealden and his colleagues will be voting this afternoon to precipitate. It would starve universities in Northern Ireland of the £50 million worth of funding that the order will make available to them, hence driving down investment in those institutions, lowering their standards and preventing them from competing with comparable universities across the water. As a result, even more of our brightest students might go across to institutions elsewhere in the UK. If the universities in Northern Ireland were prevented from charging higher fees, there might be an influx of students from England attempting to get into those institutions and pushing out yet more Northern Ireland-domiciled students from attending the two local universities. If one thing is calculated to do exactly what I know the hon. Gentleman does not want and to increase the brain drain, it is to vote in the way that I suspect he will this afternoon. The hon. Gentleman asked why the legislation was being brought forward when all Northern Ireland political parties have made it clear that they are opposed to it. It is a perfectly fair and reasonable question. I am, of course, well aware of the views of the Northern Ireland political parties. I have considered their views and suggestions but, as I said earlier, they suggested that the taxpayer should pay the additional higher education funding. By 2006, every taxpayer will pay £400 a year towards higher education. The only way to increase that amount would be to raise taxes generally or to divert revenue from other priorities such as primary education or health. The hon. Gentleman and members of other political parties must make clear what their position is and exactly which budgets it would affect. The hon. Members for Bath and for Basingstoke raised questions about the repayment system and, in particular, the proposal to increase repayment levels. The hon. Member for Bath talked about current debt of £9,000. Mr. Don Foster: I said that the total burden of debt would increase by £9,000—three times £3,000. Mr. Gardiner: I do not claim to be a mathematician, but I would have thought that if we have the option of taking away the up-front fee of £1,200 and imposing a fee of £3,000 on a deferred basis, for a three-year degree course, the result would be a good deal less than £9,000. Mr. Luff rose— Mr. Gardiner: I shall allow the hon. Member for Mid-Worcestershire to jump to the defence of the hon. Member for Bath. Mr. Luff: I invite the Minister to join the real world rather than that of his briefings. In the real world, £1,200 fees are sometimes paid in full by parents because they can stretch to that. They cannot stretch
Mr. Gardiner: I am always keen to see Members’ ways to avoid mathematics, but I do not wish to delve into the hon. Gentleman’s personal financial details, fascinating though they may be. Under the new dispensation, parents will, no doubt, continue to help their children as much as possible, so the real effect of the proposals will not be as the hon. Member for Bath indicated. The hon. Member for Basingstoke stated his wish that the repayment threshold were higher still. Although I understand his point, I consider it somewhat strange that he will be voting to maintain the status quo, which involves a threshold £5,000 below the one proposed in the order and a further £3,000 below the level that he would ideally like. He may find that strange as well. I do not want to delay the Committee unduly, but I want to turn to the question of alternatives. The hon. Member for Basingstoke said that it is not the case that there are no alternatives. Let us be clear, there are only two alternatives and they will be the alternatives on which the Committee divides: to have the order or do nothing. The do-nothing brigade are behaving like ostriches. The Higher Education Act will come into force in England and ensure that 7,000 students from Northern Ireland who cross the water each year to study will have to start paying English fees of £3,000 next year. The do-nothing brigade refuse to do anything to help them. They agree that our universities desperately need the additional funding—the £50 million that the proposals will bring—yet they refuse to identify where else they will find the money from the Northern Ireland block grant. It has been interesting to note that the Opposition Members who have spoken, with the honourable exception of the hon. Member for Basingstoke, are not Members representing Northern Ireland political parties—or indeed Members for Northern Ireland constituencies. Mr. Luff: Which Northern Ireland party does the Minister belong to? Mr. Gardiner: The hon. Gentleman can make cheap points if he wishes, but my point is that representatives from the other Northern Ireland parties are not present to argue their case. The way the debate has been conducted has reflected that clearly. We have heard the English arguments—that is, a re-run of all the arguments that we heard on the Higher Education Act. What we have not heard are arguments that pertain to the situation in Northern Ireland as it is now and as it will be for the 7,000 students who will have to pay £3,000 up front every year from September 2006 unless the order is agreed to. Mr. Don Foster: Just so it is clearly on the record, the Minister has argued that the points made have been entirely English. I should like to remind him that my
Mr. Gardiner: That only reinforces my point that the Northern Ireland parties that are not represented here have not put forward alternative solutions to the two problems. Every party in Northern Ireland agrees that the universities need the additional investment of £50 million that the proposals will deliver, but not one of the Northern Ireland parties has been prepared to identify where else it will find that money in the Northern Ireland block grant. Our proposals are better for students, because they remove the existing barrier of an up-front fee and make university free at the point of use. The proposals are better for graduates, because loan repayment will start only when they earn more than £15,000 a year, instead of the current £10,000 a year. That means that every student will be £450 a year better off as they repay. Our proposals are also better for our universities, because they give them the funds that they need to retain their world-class status. Local politicians know that they have no tax-raising powers, so the do-nothing brigade needs to come clean about where it is going to find the extra millions that are needed. Without our proposals, every £1 million extra to students and universities will mean £1 million from health, schools or roads. |
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