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So employers are not saying that they will be willing to finance courses, because the people who want to do a second degree are often people who are trying to change the direction of their life. Many of them come specifically to London because they want to embark on a new career. It is why so many of the institutions that will be most severely affected are in London and why it is a great pleasure to see my hon. Friend the Member for Henley (Mr. Johnson) here in the Chamber. I suspect that this may be something that he wishes to touch on if he succeeds in catching your eye, Mr. Deputy Speaker.

So the policy affects London; it affects women returning to work; but above all it affects part-time students. In fact, 20 per cent. of part-time students will be hit by the Government’s proposal as against perhaps 2 per cent. of full-time students. This proposal thus has a 10 times greater effect on part-time students.

Again, in trying to continue in the spirit of cross-party openness on this issue, we have to recognise on both sides of the House that we have given part-time students a raw deal. We have not cracked the challenge of how we improve the deal, given the amount of money involved, but we all know that part-time students have a raw deal compared with full-time students. That seems to be a shared analysis.

Tony Baldry (Banbury) (Con): The policy affects London and it affects England, but it is yet another instance of a policy that does not affect Scotland. Yet we will doubtless see the Government dragoon Scottish Labour Members of Parliament through the Lobby in support of a policy that is simply bad news for England.

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Mr. Willetts: My hon. Friend raises another important aspect of this tangled debate. I am trying to keep it simple. It seems to me very simple indeed. There is an excellent early-day motion; it has been signed by more Members than any other. It is a cross-party motion brought before the House by two hon. Members in opposite parties. It has been signed by hon. Members from all parties. We would simply like the House to vote for it tonight. That seems to be the right approach. I hope that, as we consider that vote, in the remaining hours of debate we will hear more about some of the groups who will be affected.

I have mentioned the Church. I have received a letter from Relate. Many marriage guidance counsellors trained for marriage guidance having previously obtained a degree. Relate estimates that 70 per cent. of the people it trains have a previous degree and that withdrawal of funding would reduce the institute’s funding by a quarter. Did the Secretary of State for Innovation, Universities and Skills realise that he was doing that to the finances of Relate when he launched his policy without consultation? I very much doubt it. Did he know what he was going to do to pharmacists? Has he seen the letter from the Council of University Heads of Pharmacy, which says that universities train as pharmacists people who have a previous university degree and that his proposal would have a major impact on students studying for the Master of Pharmacy degree and seriously undermine the School of Pharmacy and other schools of pharmacy across the country? Was the Secretary of State aware of that when he took this decision? What were the Government up to?

I hope that tonight we will get a significant change of position from the Government, but I hope that the concessions they announce will be properly considered—better considered than the policy. The Secretary of State may come to the Chamber now and announce more exemptions, but I do not like the game of exempting some subjects but not others and making invidious decisions that some courses are desirable and others are not. This is a fundamental change in the way in which higher education is financed in this country and it should be reviewed as a whole.

The Secretary of State may offer support for particular institutions. He will know of course of the powerful feeling on both sides of the House about the Open university and Birkbeck, but some cobbled together package to help with the transitional costs of one or two institutions would fail to rise to the nature of the problem that he has created. Perhaps I can quote from a letter to The Guardian from the president of the National Union of Students and 27 others on 21 November. It states:

That view, which is the view of many people in the world of higher education, seems right. It is what the Government should do. That is what we are calling for, and I believe that that review should tackle the fundamental issue that many of us on both sides of the House care about.

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We do not want to live in a country where, if at first you don’t succeed, you don’t succeed. We want people to have a second chance. We want people to have new opportunities. We do not want to live in a country where people endlessly ask, “Where did you come from? What did you study?” We want to live in a country where what matters is what one can do in the future, not where someone came from. We do not want to say, “Well, sorry, you did a geography degree 20 years ago. We can’t help you.” That is not the kind of higher education system that we want. I do not believe that it is the kind of higher education system that Labour Members want. I therefore call on hon. Members on both sides to support our motion tonight.

7.58 pm

The Secretary of State for Innovation, Universities and Skills (Mr. John Denham): I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:

Before I begin my response, I should like, with permission, to point out to the House an error in the Government’s amendment on the Order Paper—a matter on which I wrote to Mr. Speaker earlier today and indeed to the hon. Member for Havant (Mr. Willetts). The phrase “equivalent or lower qualification” should of course be “equivalent or higher qualification”. Therefore, the amendment that the Government are moving is in the revised form. I apologise to the House for any confusion caused.

I welcome the debate. It is a subject that has generated a great deal of heat, if not a great deal of light in recent weeks. Tonight, the hon. Gentleman has done his best to add to the heat, without having added any useful light. The House will have noticed that although he tried to give the impression that he opposes the principle of what the Government are proposing, he failed to oppose it. There is a degree of opportunism behind that, which is unfortunate.

The reality is that the principle behind the proposal was announced in September. Since then, the Higher Education Funding Council for England has carried out a consultation, which was completed on, I think, 7 December. Ministers expect to receive advice from HEFCE on the proposals in the near future. I cannot anticipate the results of that, but clearly there has been a consultation. Those with an interest, and the universities, institutions and courses mentioned in tonight’s debate, have had the opportunity to respond to that consultation.

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David Howarth (Cambridge) (LD): I notice that the Secretary of State starts the story in September. May I ask him to start a little earlier than that? Will he explain to the House what options were before him and Professor Eastwood, and why the option that we are discussing was put on the table, especially given the entire lack of consultation with institutions before that point?

Mr. Denham: I think that I will deal with those points in the course of my speech. I want to set out the reasons behind the Government’s proposals, and the practical considerations that we need to take into account. I understand that genuine concerns on the subject have been raised by right hon. and hon. Members of my own party. I believe that my hon. Friends’ concerns are misplaced, but I recognise that they reflect the Labour party’s historical commitment to universities, including the Open university and Birkbeck, and its broader commitment to lifelong learning. I share those values. As I recently told Open university staff,

The OU

That is not a bad record for a Labour idea described by the one-time Tory Chancellor of the Exchequer, Iain Macleod, as “blithering nonsense”.

Mark Pritchard (The Wrekin) (Con): I am glad to hear that the Secretary of State shares the values that he mentioned, but why does he not share my concerns, those of my hon. Friend the Member for Salisbury (Robert Key), and those set out in a letter to me from the Bishop of Hereford today, which concern the fact that all faith communities will be affected by the withdrawal of equivalent or lower qualification funding, including imams and rabbis, and clergymen from all the Christian churches of this nation? Is that what he calls upskilling, and is it, in his view, helpful to community cohesion?

Mr. Denham: Clearly, a number of issues about particular courses that may be affected were rightly raised in the consultation. I will not anticipate the result of the consultation, because we have not yet received the report from the HEFCE, but I acknowledge that a range of issues have been raised, some of them by the hon. Member for Havant, and we will need to consider those issues carefully.

Given the values that I share with my right hon. and hon. Friends, I would not be making the proposals if I were not confident of the future of the Open university, Birkbeck—an excellent institution—and the other higher education institutions that provide higher education to people who would otherwise miss out. We need to deal with two issues tonight. The first is the issue of principle. Are the Government right to reprioritise funding away from students who already hold an equivalent or higher level qualification, in order to support students who have never had the chance of higher education? The second is the issue of practice. Can the changes be implemented without
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causing wider ill-effects on individual institutions, the higher education system as a whole, and reasonable opportunities for learners?

Let us all be clear: there is no cut to overall higher education funding. Spending on higher education will remain at the record levels established by this Labour Government. By 2010-11 there will have been an increase in Government spending of over 30 per cent. in real terms since 1997-98, and there will be 2 per cent. real growth per annum over the next three years. Of course, in sharp contrast, between 1989 and 1997, when the hon. Member for Salisbury (Robert Key) was a Minister, state funding per student fell by 36 per cent.

Mr. Evans: I accept what the Secretary of State is saying, as far as the global budget is concerned, but does he not appreciate that if he carries on with the proposals, there will be unintended consequences? I have received a letter from a constituent, Chris Holden, who wants to be ordained. He gained a degree from Lancaster university a few years ago. He recognises that if the funding disappears, there will be an enormous impact. Does the Secretary of State recognise that there will be unintended consequences if the Government carry on with the proposals?

Mr. Denham: One of the reasons for holding a consultation is to ensure that Ministers understand the consequences. That is why one consults. An initial idea is always put forward, so that we can find out the detailed reaction. I notice that the hon. Gentleman did not make the obvious point that I would make: today, the choices available to the House and to people who want to enter higher education are vastly greater than when the Conservatives were in power. The Opposition have still not acknowledged the damage that they did to higher education in their time in office.

The Government have asked the HEFCE to advise us on how to distribute £100 million of core teaching grant over three years. That money will not be lost to the system. It will be redirected to fund more university places for first-time learners, or learners progressing to a higher level of qualification. Up to 20,000 full-time equivalent students—and so, in reality, far more students, some of them studying part time—will have the chance to start a first degree or higher level course in the first three years. That sets the right priority for individual opportunity, and for the country.

We have to develop the skills of our people to the fullest possible extent, carry out world-class research and scholarship, and apply knowledge and skills to create an innovative and competitive economy. As the noble Lord Leitch made clear, to be in the premier league for skills, our country will need 40 per cent. of working-age adults to have a level 4 qualification by 2020. Today, 20 million working-age adults do not have a degree-level qualification. An extra 5 million people will need to go through university by 2020 if we are to be even on the edge of the premier league for world-class skills. Lord Leitch not only set out the challenge, but was clear about the priorities for funding: the higher the qualification, the greater the level of individual or employer contribution. He argued that that was fair, given the benefits for individuals and employers who gain higher-level skills. Those principles are being applied across the adult education system.

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We took the difficult decision to introduce variable fees. When we face a choice, as we do today, both economic success and economic justice argue that public money should go first to those who have never had the chance of higher education. The choice is between second chances for those who have already enjoyed substantial public funding for their degree, and first chances for those who never have.

David Howarth: I thank the Secretary of State for giving way to me a second time, but I am still confused about how the problem came about. He mentioned £100 million. Did he ask the HEFCE to find him £100 million, and if so, why is he now consulting on how to spend it, or did the HEFCE randomly decide to cut £100 million from its own budget?

Mr. Denham: The position on that is clear, and is on the public record. I wrote in early September, asking for the HEFCE’s advice on how to prioritise funding towards those who had not previously had the chance of higher education. That letter is in the public domain, so there should be no confusion about that.

Let me give some background. Over the next 10 years or so, the number of young people available to go to higher education will fall by about 100,000. There will need to be a massive expansion of higher education opportunities for adults who have already left school, and who never had the chance to go to university; perhaps they did not think it was for them. Most of them will study part time, rather than full time. It is those people whom the Government want to benefit from the change in priorities. I believe that they should be the first priority for a Labour Government. But of course I recognise that it is not as simple as that. There are people who have had higher education, perhaps 20 years ago—perhaps women who have taken time out to have a family. It is necessary to develop the work force that the country needs. The measures on which the HEFCE has consulted offer a balanced way forward.

For those who wish to have vocational retraining because their qualifications are out of date, foundation degrees are protected. They will continue to attract ELQ funding. For those wishing to study science, maths, engineering, modern languages, education, some medical disciplines and other strategically important subjects, ELQ funding is protected. For those wishing to top up their qualification, perhaps from a higher national diploma to an honours degree, ELQ funding is protected. For those whose employers will co-fund their courses, ELQ funding is protected. In other words, many opportunities will remain open to those seeking to obtain higher qualifications.

Not everyone is covered, but for many of those, the value of investing in their own higher education will be well worth the cost of a subsidised career development loan, just as many people at lower levels of skill who have never had the chance of higher education also pay towards the cost of their qualifications.

Mr. Mark Lancaster (North-East Milton Keynes) (Con): The Secretary of State has just issued a long list of exemptions, but he is as aware as I am that that represents just 4.6 per cent. of people currently
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studying at the Open university, which will potentially be affected by the proposal.

Mr. Denham: I believe—I shall return to this later—that the Open university is probably better placed than many other institutions because of its style of work, the ways in which it can reach people who want to study from home or study part time, and its ability to design new courses to appeal to people who do not study there at present. It is true that not every course at the Open university is protected by that list, and clearly, there could not be a reprioritisation of funding if every course was protected. None the less, I am considering first and foremost whether the higher education system will protect a range of opportunities for people who wish to retrain in the way suggested in the debate, and I believe that the proposals do so.

The detailed decisions on the measures that I have outlined must wait until we receive HEFCE’s report, but overall I believe that we have set out the right priorities.

Mr. Marsden: My right hon. Friend rightly reminded the House of the emphasis that the Government have put on upskilling adults. The list of those who will be exempted is formidable and impressive, but will he ask the HEFCE to consider that there is an issue, particularly in our more fluid economy, in relation to self-employed people who may wish to take a further degree? They will not automatically be covered by the exemptions that he described.

Mr. Denham: I respect my hon. Friend’s knowledge on the matter and would be happy to discuss it after the debate. [Hon. Members: “Why not now?”] Without prolonging the exchange, I am not entirely clear about the point that my hon. Friend is making. Many of the routes that I have described as being protected would be available to those who are self-employed. The particular route of co-funded courses, for obvious reasons, may not be available, but that was not by any means the only route that I proposed.

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): My right hon. Friend mentioned that he was awaiting the outcome of the consultation. Many of us who want to be persuaded by the arguments would be happier to hear from both the HEFCE and the Select Committee. There is no rush. Could we not wait for the Select Committee to make its recommendations?

Mr. Denham: As a former Chairman of a Select Committee, I can hear myself making a similar argument if I were in my hon. Friend’s position. The Government believe that it is important to press ahead with the beginnings of the change. If that is to be done, we must take decisions on a timetable that enables higher education to plan for next September. We cannot put ourselves in the hands of the Select Committee inquiry, because that is likely to put us beyond any reasonable time scale. We are, of course, interested in discussing issues with the Chairman and other members of the Select Committee and other knowledgeable and interested parties, but I cannot commit myself to the time scale that my hon. Friend has asked for, as we must make progress.

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