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Rob Marris: My hon. Friend has set out the considerable achievements of this Government in higher and further education and employment for young people. We need to protect research and investment in education and
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training to hasten the economic recovery and employment, especially in manufacturing. However, how could that be done with a £915 million cut in higher education? Would further education pick up the slack?

Mr. Lammy: My hon. Friend asks a good question-he raised the same issue before Christmas-and if I may, I will come to that point later. We are supporting graduates at this time. We are committed to internships and I am pleased by the level of applications from young people in the graduate talent pool, and the fact that employers are coming forward in their thousands with internship places. The regions are acting to ensure that young people have something to do and can acquire the skills that industry and business say that they need. A range of opportunities is being provided across the country, and the Small Business Federation-as my right hon. Friend the Prime Minister announced-has been able to support our drive to ensure the provision of internships.

We are also ensuring that there are 24,000 extra places for postgraduate study in the system, as well as more volunteering opportunities and support for young people who want to set up small businesses after graduation.

Mr. Marsden: My right hon. Friend mentioned the importance of the regional dimension in the Government's initiative. I know that the Northwest Regional Development Agency is playing a critical part, together with HE and FE institutions. Does he think that the potential for such action in the future would be helped or hindered by the abolition of RDAs, as suggested by the Opposition?

Mr. Lammy: My hon. Friend is right that we have relied on RDAs to be responsive to the very different industrial and jobs situations in their areas. They have connections on the ground and have drawn up sector plans and engaged with local authorities. That is not something that can come solely from the centre, and I am surprised and staggered that the Opposition would abolish RDAs, which have done so much to ensure that this downturn has been a lot less severe than it might otherwise have been for young people.

David T.C. Davies (Monmouth) (Con): I have had eight years of first-hand experience of one of the Minister's RDAs-the Welsh Assembly-and I can assure him that the only jobs created there were for fellow civil servants at very high public sector rates, and with pensions to boot. I hope that I might one day be able to persuade my hon. Friends that not only should they get rid of the RDAs, but they should follow that up with getting rid of the Welsh Assembly, which purports to do the same thing in the Principality-and the Scottish Parliament, too.

Mr. Lammy: The people of Wales, who democratically elected the devolved Assembly, will be offended by that caricature of it as a regional development agency.

In the grant letter to the Higher Education Funding Council for England that my right hon. Friend the Secretary of State issued last month, he asked the university sector to make relatively modest cuts efficiently. The cuts will be made in a way that reduces the impact on front-line services. For example, the planned reduction in funding for teaching is only around 1 per cent. of the overall budget. It is our belief that, in times of pressure,
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we need to use money effectively. I hope that hon. Members will recognise that families across the country are making cuts to their budgets of much more than 1 per cent.

The Chancellor, in the pre-Budget report, asks for further savings of £600 million in 2010-11 and 2011-12, but we have not yet had the comprehensive spending review. That will come later in the year, so it is wrong to give the impression that there is a £900 million cut in the next financial year. There is nothing of the kind. There is a saving that the sector has to meet, but there will be a small cut of 1 per cent. in the teaching grant. We are committed to continuing to invest in capital spend to ensure that the infrastructure is in place.

The Opposition have said that they would make deeper cuts, quicker and sooner. That is what the right hon. Member for Witney said at the weekend. Previously under the Tories we saw unrestricted and unfunded university expansion, with institutions going to the wall, and that is what would happen if they took £610 million out of the HE budget-as they proposed 18 months ago-and if even more severe cuts were made. We would see failing financial support, stagnating student numbers and the undercutting of research and science. I remind the hon. Member for Havant of the Save British Science campaign of those days. That is the absolute opposite of what we have now, with further investment in science and research-

Rob Marris: I am somewhat reassured by what my right hon. Friend has just told the House. However, he mentioned a 1 per cent. cut, and I agree that, while hard, that is belt-tightening for these difficult times. The shadow Minister referred to a 5 per cent. cut in the unit of funding between that for 2007-08, at £4,140, and that for 2010-11, at £3,950. Can the Minister explain the difference, or has the shadow Minister got his figures wrong, trumpeting a 5 per cent. cut when it is in fact a 1 per cent. cut?

Mr. Lammy: The shadow team has got its figures wrong. In the Budget last year, we asked HEFCE to find a cut of £180 million. In addition to that, we asked for a further £135 million cut in the grant letter for this period, which would account for a cut of about 4 per cent. in the overall budget for this financial year. The £600 million is for future financial years, and therein lies the difference. This is set against a backdrop of a 25 per cent. increase in investment, and against a backdrop in which the Government commit more than £12 billion of funding to higher education and the sector is able to raise more than a further £7 billion in investment from private, commercial and charitable sources. It is able to do that because of the investment that we have made previously.

Mr. Willetts: Will the Minister just confirm that the figures that I gave in my speech were directly taken from the annexe to the letter sent to the HEFCE, which showed that the unit of support had decreased from £4,140 to £3,950? Those are not my calculations; they are two figures that appear in the document. They show the 5 per cent. cut to which the hon. Member for Wolverhampton, South-West (Rob Marris) refers.

Mr. Lammy: As I have said, the cuts in the sector amount to the £180 million to which we referred previously and the £135 million to which we are referring now. Of
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course that affects the unit of resource, but that must be set against a background of further investment. Indeed, we are able to increase that further investment this year, notwithstanding the efficiencies that we have asked of the sector, and that is the point. The picture is very different from the one that we inherited in 1997, which is why we should be proud of the increase in participation and the facilities across the country that have resulted from this Government. We are clear that this sector, like others across the country, has to assist in these difficult times, but it does so against a backdrop of our recognising that higher education is key to future growth and that we must continue to ring-fence science, technology, engineering and mathematics.

Mr. Hayes: I know that the Minister would want the House to understand this fully. He has spoken of a 1 per cent., cut but in answer to the intervention from my hon. Friend the Member for Havant (Mr. Willetts) about the unit of resource he acknowledged that there was a 5 per cent. cut. Is the Minister arguing that other increases mean that there is a net 1 per cent. cut, or was he wrong to start with? The cut cannot be both 1 per cent. and 5 per cent.

Mr. Lammy: The hon. Gentleman has failed to listen carefully to what I have said, because I have made the position clear. We are talking about an addition in the grant letter that we issued just before Christmas. Our position stands in direct contrast to the Conservatives' proposals and attitude to higher education in the past, and to the deeper cuts that the right hon. Member for Witney has outlined already.

Fiona Mactaggart: The facts on the ground in my constituency show that we have made a real difference in improving people's skills. We were a long way behind most of our neighbours, but Slough has really made progress. This is not just about the colleges and the local authority; this is about a real partnership between business, training providers and local community organisations, which was initiated by the then Secretary of State with responsibility for universities when we had a skills summit in Slough, and has made real difference. One of the difficulties that we have recently encountered relates to Thames Valley university. It has chosen to relocate out of the town, which has local people-

Mr. Deputy Speaker (Sir Michael Lord): Order. I am sorry to say that the hon. Lady is starting to develop her intervention into a speech. If she could now turn it briefly into a question, that would be helpful.

Fiona Mactaggart: The last two words that I said were "what can", and they were the first two words of my question. What can MPs, the Government and local bodies do when an autonomous university takes a decision that damages the opportunities for people in a particular area?

Mr. Lammy: These are rightly matters for the funding councils, and all Ministers have to tread lightly with autonomous institutions. I hope that my hon. Friend has made representations to the relevant funding council. I am happy to look closely at the specifics with regard to Thames Valley university, but I am glad that she recognises the investment that has been made and the threat that exists from the Conservative party,
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notwithstanding the half-hearted attempts that it has made, yet again, this afternoon to position itself as the party that supports students. With that, I give the Floor to the rest of the House.

2.15 pm

Stephen Williams (Bristol, West) (LD): I do not know whether this is the case for some or most hon. Members, but the 1979 general election is the first that I can remember, so I shall start by discussing a historical point, just to humour the hon. Member for Havant (Mr. Willetts). That last Labour Government ended with a miserable winter, and a crisis in the economy and in the public finances, so we have been here before. Of course, that was followed by an even worse situation: the recession of the early to mid-1980s, when we saw large-scale industrial shutdowns, mass unemployment and devastated communities, including the one where I grew up in the south Wales valleys. Tragically, many of the people who lost their jobs at that time, particularly if they were over 40, never found meaningful or well-paid employment again.

Unemployment is rising again at the moment. In my constituency, it has almost reached its level 13 years ago, when this Government came to office. In the neighbouring Bristol constituencies, in particular Bristol, North-West, it has exceeded the level at that time. This recession hits the young in particular, who are the topic of this debate.

Kelvin Hopkins (Luton, North) (Lab): The hon. Gentleman refers to 1979 and what happened subsequently. Does he agree that the savage process of de-industrialisation that began at that time has caused terrible damage to our economy and made it unbalanced, and has meant that there are fewer of the opportunities for apprenticeships and training that manufacturing used to provide?

Stephen Williams: I thank the hon. Gentleman for what he said, because I agree with much of it. I particularly agree about the callous indifference shown by the Government of the day to the consequences of their policies. I recall that when I arrived at Bristol university at the end of the miners' strike-arguably the strike made matters worse-I had to explain to many of my new-found friends from other parts of the country what it was like to grow up in a declining industrial area where that decline had been precipitated, and the incline to climb had been made much steeper, almost deliberately as a result of Government policy. We must ensure that we do not fall into that same situation again.

David T.C. Davies: I am grateful to the hon. Gentleman for giving way to the grandson of a miner from the south Wales valleys. Can he confirm that Labour in the 1960s, under one Mr. Anthony Wedgwood Benn, shut down far more coal mines than Mrs. Thatcher did in the 1980s?

Stephen Williams: I thank the hon. Gentleman for his intervention, but I do not think that we want to spend the entire debate discussing what happened in the '60s, '70s and '80s. We want to focus on what is happening in this second decade of the 21st century.

Young people are bearing the brunt of this recession. The unemployment rate among 18 to 24-year-olds is in excess of 17 per cent., 40 per cent. of the total number
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of unemployed people is accounted for by 16 to 24-year-olds and a fifth of young people who are without work have a degree. This is the worst graduate job market for a generation. It is particularly apposite at the moment to remember that this is the first generation of graduates who have left university under the new top-up fees regime, with £9,000 of student debt. I assure the hon. Member for Havant that I shall deal with that point shortly. The recession also compounds the situation of those at the other end of skills achievement who are not in education, employment or training. The number of NEETs is now heading towards 1 million. That truly shocking state of affairs illustrates the stagnation of social mobility after 13 years of a Labour Government.

We need emergency measures to help the young unemployed, whatever their skill set might be. The Minister mentioned that the Government had already amended their own training guarantee. It was originally set at 12 months, so that anyone over the age of 24 who had been unemployed for 12 months could get training. It is now set at six months. The Liberal Democrats have suggested that there should be a 90-day promise, and that no young person should be unemployed for more than 90 days. We would bridge the gap by offering paid, funded internships. Those unemployed people are being funded anyway by the DWP through their jobseeker's allowance, and it would be much better to pay £55 a week so that they could take up an internship in a company.

The public sector, including the House of Commons and the rest of the parliamentary estate, could certainly do its bit on that front. There are many things that we could say about internships, and the detrimental effect that they have on social mobility and fair access to some professions, but Parliament could certainly do its bit and give more funding for the interns that we all rely on-

Rob Marris: Not all of us.

Stephen Williams: Many of us rely on them in order to carry out our parliamentary work, and I am on record as saying on several occasions that our budget for resourcing staff placements in Parliament should reflect that. In the present context, paid internships instead of JSA would provide a much more productive and meaningful experience for those young people at what should be the start of their working careers.

In the longer term, we also believe that there should be more funding for apprenticeship places. There happens to be common ground on this matter between both Opposition Front Benches. We believe that the funding should be found from the Train to Gain budget, especially for the off-the-job training costs of those who are taking up apprenticeships in small and medium-sized enterprises.

Also in the longer term, there should be a fairer way of funding higher education than simply loading more debt on to students. On that note, I have informed the Speaker's Office and those on both Front Benches that, by sheer coincidence, I am going to give the Liberal Democrats' views to Lord Browne for his review of higher education at 3 o'clock today. I am sorry that I might therefore not be here for the final moments of this debate.

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The hon. Member for Havant took us through what he described as the historical journey of our policy development, but he left out several stages. He mentioned Gladstone, who was at one point the rising hope of the stern and unbending Tories but over the course of his career became the people's William. Political parties-the Liberal party, the Conservative party or the Labour party-are not frozen in aspic, never to develop their policies, have a rethink or respond to circumstances. We all change over time. That was the situation in the 19th century, and it is certainly true of the 21st.

Political parties have to respond to events and, occasionally, review where they are coming from. I acknowledge that we had difficulties with our own review of higher education policy. We started that policy review in a completely different economic environment, back in 2006-07, and I do not think that any of us really foresaw the economic catastrophe that was going to come our way. We have been honest, however, in saying that we are now not going to be able to say some of the things that we would have liked to say at the next general election. All three parties are going to have to face up to that economic reality.

On principle, however, I still think that tuition fees are a rotten way of funding higher education. They are unfair to students; it is not good to load people up with debt. If the Browne review, about which I will know a lot more after 3 o'clock this afternoon, leads to increased tuition fees and a market in higher education, many of the things that we have warned about over the past decade will come true, and people will find it increasingly difficult to access higher education.

We would still like to remove tuition fees; that is our principled stance. We recognise, however, that that cannot be done immediately, at the start of the new Parliament in 2010. Instead, we would phase them out over a six-year period, starting with the people who were in the final year of their degree. That would mean that every student would be better off, having reduced their debt burden by the end of that six-year period. I hope that that clarifies matters for the hon. Member for Havant.

Mr. Burns: I am grateful for that clarification. As I understand it, the Liberal Democrats' manifesto commitment will be to phase out tuition fees over six years, rather than to abolish them outright. Is that correct?

Stephen Williams: I am not quite sure what difference the hon. Gentleman is trying to tease out. We would phase out tuition fees so that, at the end of the six-year period, they would be abolished and would no longer feature in the funding mechanism for higher education.

Mr. Burns: I am grateful for that sort-of clarification. Does the hon. Gentleman think that it is somewhat misleading for a Liberal Democrat press release on 18 December to state:

It goes on to say:

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There is no mention of phasing them out over six years. This is a reiteration of the Liberal Democrats' original commitment to abolish tuition fees. Another thing that surprises me is the disclaimer at the bottom of the press release:

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