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Esther McVey (in the Chair)
Before we begin, I encourage hon. Members to wear masks when they are not speaking, in line with current Government and House of Commons Commission guidance. Please give one another and members of staff space when seated and when entering and leaving the room.
Tom Hunt (Ipswich) (Con)
I beg to move,
That this House has considered e-petition 550344, relating to university tuition fees.
It is a pleasure, Ms McVey, to serve under your chairship for the first time. I thank the petitioner for putting together a petition on this important issue, and the 581,287 people—a very large number—who signed the petition, particularly the 764 from Ipswich. That number does not surprise me, because I have been contacted by many constituents over the past 22 months with concerns about how university education has been impacted by the pandemic and about having to pay full tuition fees, even though, so often, their education and university lifestyle have been disrupted.
The petition first calls for a reduction in tuition fees from £9,250 a year to £3,000. Secondly, it calls for live debates to be held frequently between Members of Parliament and students. Though in principle that sounds like quite a good idea, practically I am unsure how it would be arranged. If we were to have those sorts of debates between MPs and students, where would it stop? Would we have such debates for every interest group on every issue across the land? It is important to remember that we are a representative democracy and that, as Members of Parliament, we engage frequently with higher education students.
Carol Monaghan (Glasgow North West) (SNP)
It is also worth saying for the benefit of those watching the debate that there is the opportunity to visit Parliament and see debates take place. As the hon. Gentleman says, debates between MPs and students may be a little more difficult to organise, although not impossible, but it would be great to see student organisations come and meet MPs and see what goes on in Parliament and how they can influence it.
Tom Hunt
I could not agree more. I have the University of Suffolk in in my constituency, whose students have visited Parliament, and I was very happy to receive them. It provides a good opportunity for university students to engage with their elected representatives and understand how Parliament operates.
The £9,250 fee means that those leaving university have an average debt of £45,000. It is not a particularly pernicious form of debt, but it still has interest applied to it. That debt has to be paid over a number of years, often decades. In fact, it is thought that only 25% pay it back in full—the interest and the amount borrowed—while 75% do not. The concern about the level of fees is that it could put off young people from the most disadvantaged backgrounds from attending university. The Education Committee published a report not long ago on white working-class kids, and found that they were the least likely of any group to be represented in higher education, with only 12% of white boys eligible for free school meals ending up in university. I think the percentage was slightly higher for girls, at around 15% or 16%. That is a point that the Government need to consider.
Repayment does not kick in until someone is earning £28,000, but that can still be difficult for people who are trying to get by. As I saw when I was trying to get a mortgage, it is taken into account by mortgage providers. It does not impact a person’s credit rating, but it does impact their likely success in getting a mortgage. I have sat there and looked at my monthly outgoings and ingoings, and clearly, if a certain amount is going out over a long period, that does not make it any easier to get a mortgage.
There are two slightly separate issues here. There is the question whether, in the medium to long term, tuition fees should be decreased, but there is also the impact of the pandemic and the question whether or not there should be a partial or full reduction for young people who have been impacted by the pandemic over the last 22 months. It is important that we bear in mind how young people and their mental health have been impacted.
We know that university is not just about the academic side of things. It is also about the social side of things. For many young people, the experience of going to university is transformative in terms of their outlook, personal development and access to university societies and everything else. I was fortunate when I went to university. The first year enabled me to get used to living in a large city, away from my family. Of course, the first year is when students make friends, and they are often the people they live with in their second and third years. I feel great sympathy for young people who have had that opportunity taken away from them.
I have also on occasion been quite critical of some universities, lecturers and university unions that in my view have not always done everything they can to get back to proper, in-person teaching. My understanding is that, at the start of this term, only four out of the top 27 universities had actually gone back fully to in-person teaching. I question whether that is appropriate, and I also question whether now is the time to be talking about strikes, when university students have already had their education impacted so much. I appreciate that often it is a hybrid approach, whereby seminars and tuition are done in person while lectures are done online, but I also talk to many university students who would really appreciate in-person lectures because the virtual ones are no substitute for accessing lectures given by experienced academics. It is not quite the same level of tuition as they were getting before the pandemic. In fact, a Times survey of students who started university before the pandemic showed that 60% thought that their education had been either severely or moderately impacted during the pandemic. I think that many students share that view. I understand that some universities have made arrangements for partial reductions, but I am not sure how significant that is and, of course, the majority of universities have not done that.
I have some concerns about whether decreasing tuition fees from £9,250 to £3,000 would be the right thing to do in the long term. As I said earlier in my speech, 75% end up not paying back their debts in full. Currently the Government lend £17 billion in loans. In March 2021, I believe that the outstanding amount was £141 billion, which is a significant amount of money. If we decrease the £9,250 to £3,000, who would fund that? Would it be the taxpayer? Ultimately, I think that is what we would be looking at: more taxpayer subsidy for university education.
Apsana Begum (Poplar and Limehouse) (Lab)
Interim results of a Muslim Census survey show that almost 10,000 Muslim students are foregoing university or are being forced to self-pay. In 2013, the then Prime Minister, David Cameron, committed to looking into options for alternative student finance for those who want to access higher education but not pay interest. Does the hon. Gentleman agree that it is high time that the Government pick up that work from 2013 and look at and present the options for the many students affected across the country?
Tom Hunt
I do think it is important that the Government look at access to university education and ways of making it more affordable, but I also believe that the taxpayer is a key stakeholder. I will come on to that very shortly. There is a fundamental question whether we think it is the right thing for 50% of people to go university. That was the aspiration of the last Labour Government and I am glad that the current Government abandoned that 50% target. I do not think that that was the right thing to do. Many of those 50% going to university will benefit from it, get skills and qualifications, and make a very positive contribution. However, the reality is that, because the education system has not in the past created multiple pathways for young people, including technical education or an apprenticeship, young people kind of meander aimlessly into university, under pressure from their school and their parents, when university is perhaps not right for them. There is no God-given right to go to university for three years, perhaps to study a course that is not of great benefit to the country, so I question whether that is the right approach.
It is critical for levelling up that we invest in apprenticeships and skills. For those growing up, there should be an academic pathway, and those convinced that that is the route for them should be encouraged to go down that route, but people should not end up in university simply because there is no alternative, which often happens. If we are arguing for greater taxpayer subsidy of university education, surely it is reasonable for the taxpayer and the Government to have a far greater say in who goes to university, what they study and how that benefits UK plc, because at the moment there is not always a sense that that is the case.
I think there is great sympathy from all Members for what university students have had to go through over the last 22 months, and there is a reasonable case for their not having to pay full tuition fees for what has been a disrupted educational experience, with almost none of the same advantages, in terms of societies and socialisation. However, in the long term, the Government are right to focus on the further education White Paper and on getting rid of the 50% target, and realising that it is not all about university. It is not unreasonable to consider the taxpayer. Often, those on reasonably low incomes, who work hard, actually subsidise the university education of people from more privileged backgrounds, who may or may not be undertaking a course that is beneficial to UK plc. That is not reasonable.
I do not support the petition with the higher education system as it is currently is. If we had a much smaller pool of university students, perhaps we could consider it at that time, but I do not believe that it is in the taxpayers’ interest to back this petition.
Esther McVey (in the Chair)
We will come to the Front-Bench spokespeople no later than 5.30 pm. Given the number of Back-Bench Members here, I will not set a time limit.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
It is a pleasure to serve under your chairship, Ms McVey. The petition calls for debates between MPs and university students, as the hon. Member for Ipswich (Tom Hunt) highlighted, on reducing university fees to £3,000 a year. Considering that more than 1,800 of my constituents called for this, we might struggle to facilitate that particular demand in Slough—which, by the way, is the youth capital of Britain: the town or city with the lowest average age.
The petition points to a particular issue with higher education today: that students—our constituents—do not feel listened to. For years, the Government and universities have skyrocketed fees at will, without listening to students, robbing them of a voice on a matter that will impact them for the rest of their lives. They simply do not feel heard. I will focus my speech on ensuring that their voices are at the forefront, and I encourage the Minister and her Department to listen carefully to that voice.
When fees were introduced in 1998, they stood at £1,000, but they have now risen to an eye-watering £9,250, with university fees last at £3,000 in 2005. The Government anticipated that their grand plan to triple fees in 2012 would create a market in fees, but in reality almost all universities began charging the maximum amount, in part due to Government-backed loans and a lack of incentive to offer anything lower. Early fears of a reduction in applications were allayed; but, nearly a decade after these new fees were introduced, it is quite clear that they have created another crisis—for recent graduates. Unsurprisingly, students’ expectations of what a university course provides during their studies and once they graduate have risen alongside their fees. If we consider that the decision to go to university, often taken at 17, is one that will have a financial impact for decades to come, I do not blame them.
The perceived benefits seem to be waning. One third of working-age graduates are not in high-skilled employment. Almost half of parents would prefer their child to take up a vocational qualification ahead of university. In 2020, for the second consecutive year, the rate of graduate employment fell—a problem that has been compounded for graduates entering an extremely difficult job market over the past two years.
Many of the conversations around fees were reignited by the pandemic, as students questioned the value for money of online classes. Between September and December 2020, half of students reported that moving fully to online learning would have a negative impact on their academic experience, and one third have indicated that their courses are, and were, poor or very poor value for money. Astronomical fees and subsequent debts have forced students to evaluate whether a graduation gift of an average debt of £45,900 is worth it. That is without considering the cost pressures of accommodation; those who for religious reasons are unable to take an interest loan, as my hon. Friend the Member for Poplar and Limehouse (Apsana Begum) has just noted; and the mental health pressures of university studies. After all that, the Government’s own calculations indicate that only 25% of current full-time undergraduates expect to pay off their debt in full.
On the set thresholds and time limits on debt repayments, I am sure the Minister will say how everyone is treated equally under the system, but I am afraid that is simply not true. Not only have the Government already moved the goalposts on repayment agreements, but they are set to do it again. In fact, most recent reports indicate that Ministers plan on reducing the salary threshold for loan repayments to below £25,000. That, alongside a rise in national insurance, is an unforgivable squeeze on lower and middle earners, while leaving wealthier students largely unaffected. It is no wonder that current students and graduates are concerned about the impact that their studies will have on their future. Will the Minister guarantee that students will be listened to and their concerns about loans, repayments and debt taken seriously? Education has the potential to change people’s lives and provide a better future. It should not limit people’s prospects before their adult lives have even begun.
Apsana Begum (Poplar and Limehouse) (Lab)
It is a pleasure to serve under your chairmanship, Ms McVey.
I know from speaking to students that many face extreme financial hardship as a result of the covid-19 crisis. In fact, the National Union of Students criticised the Government for ignoring the needs of students throughout the pandemic, but this goes back further, because successive Conservative Governments have failed our young people, who have been disproportionately hit by austerity. Under the Tories, young people have struggled, even when they are in work, to get a decent start in their adult lives. The Tories have run down our aspirations and standards and shattered our local communities, so that people increasingly believe that young people’s lives will be worse than their own generation’s.
This is not just about education maintenance cuts, enormous hikes in tuition fees and the burden of soaring debts. The whole current university system compounds inequality. In particular, a 2017 report found that students from poorer backgrounds are deterred from applying to university due to the fear of student loan debt. Meanwhile, in recent decades universities have been treated as private businesses, left at the mercy of market forces while top salaries soar, so it is no coincidence that the University and College Union is currently balloting staff at over 150 universities across the UK on cuts to pensions, pay and the attack on working conditions. As Jo Grady, the UCU general secretary, said:
“If the government pushes through regressive student loan changes,”
it would be
“a tax on education and aspiration.”
Any move to lower the salary threshold at which students repay their loans would be regressive and would further risk less-privileged students being put off entering higher education. At a time when the economy is crying out for a skilled and educated workforce, it makes no sense for the Government to deny young people access to the education that they need.
I agree that tuition fees of £9,250 a year are just too high—I oppose tuition fees altogether. The lesson from the Government’s tuition fee fiasco is simple: use progressive taxation, by taxing wealthy working adults, to invest properly in public universities. That way, every student can access free higher education. We all benefit from an educated society. Education fosters and nurtures people’s talents, and overcomes injustice and inequalities.
Apsana Begum
I agree that a number of different options should be, and are, available for students across the country, but a significant number of young people who would like to go into higher education do not feel that that option is open to them.
Education fosters and nurtures people’s talents, overcomes injustice and inequalities, and helps us to understand each other and form social connections. I am proud that Labour’s 2017 and 2019 manifestoes committed to ending the failed obsession with the free market in higher education, to abolishing tuition fees, and to bringing back maintenance grants at the required level. Education must be a universal right, not a costly privilege. A thriving higher education sector is critical to our economy, our culture and, ultimately, our future.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve with you in the Chair, Ms McVey.
Governments invest in what they value. I am so grateful to the 2,474 people in York who signed the petition, and in particular to the University of York and York St John University, which worked so hard throughout the pandemic to ensure that students were well supported and cared for, and that their financial needs were met.
We have to face facts: we are experiencing a crisis in higher education funding right now. Although the UCU is right to highlight particular concerns about staffing and the fact that staff are consistently being given casualised contracts—which does not represent good investment in a quality university workforce—we also have to acknowledge that pay for our academic and support staff has fallen by 20% over the last decade, pensions have been cut, and inequalities relating to gender and disabilities, and for black, Asian and minority ethnic staff, have grown.
The current higher education funding system is so broken that we have to find a different way of looking at it, and that comes down to the fundamental principle of where we invest for the future of our economy. If we value higher education—as we should—we should invest in it and in the students who want to obtain qualifications and contribute to and progress our economy, so that we can be world leaders not just economically but in research and in the other things of which we have been so proud in decades past.
The pandemic has been the most challenging time not only for academic staff, who had to learn overnight how to deliver courses online, but for students, who have been paying for tuition that they have perhaps never received and for practical experiences that they might never have. I have certainly spoken to many students in York, including archaeology students who were unable to go on digs and science students who were unable to get into the labs. They feel that they have missed out on major parts of their education and are therefore bitter about the fact that they have had to pay for an education that they have not received and that there is nothing on the horizon. I have said previously in this House that the Government should introduce a degree-plus programme whereby after graduating people can continue to access their university by way of catch-up—whether through seminars or through practical experiences—to give them the opportunity to catch up on the valuable education that they have missed.
We have heard about the societies and social activities in which students engage to formulate that holistic perspective on life, which is so valuable in our education system. I thank our student unions, which have made a massive contribution during the last 18 months. In York they have been leading on the support that students needed, putting in place facilities for them to continue their education and get vital wellbeing support, which I know so many people have valued. However, there is a bitter taste in their mouth. They have written to me to say that they want to be included not only in the debates about their future and their contribution to their courses, but in discussions about student financing.
Many students will not pay off their debts, although I know that the Government are tempted to lower the repayment threshold to an earlier point in their career after graduating. Many people who have degrees are very low earners, particularly if they work in the voluntary sector or in public services, whereas many who go straight from school to an apprenticeship or into employment can be incredibly high earners. Personally, I do not support a graduate tax as an alternative to university tuition fees. I believe that we should be investing in the education of young people and, indeed, mature students, and paying for it through our general taxation system. It is a simple formula and principle: the more someone earns, the more they pay and the more they invest in other people’s future. It is fair and proportionate and, I believe, very much the way forward. I would welcome the Government looking again at the whole issue of student finances and removing the penalty that students have to pay for their education, when it should be an investment in the future.
Students have also had to pay for homes they have not lived in over the last year, and lockdown also impeded their opportunity to work. They have faced the jeopardy of having to pay fees and other costs, which has had a terrific impact on students’ financial and personal wellbeing. That must be recognised. We know that young people today have more significant challenges concerning their wellbeing and mental health, and the fees just add to that. When people reach the loan repayment threshold, it is often at a time when they are starting to think about future housing or starting a family. The barrier of having to start paying back student loans pushes those opportunities even further away, and I know that, right now, young people feel that those opportunities are running away from them.
If we train someone to be a soldier, we as a state are proud to invest in that person, who will learn the necessary skills and then work in that field. Yet when we train nurses, they have to pay for that privilege, even though during the pandemic they contributed by finishing their degrees early and working in our hospitals. They had to pay for that education. The same goes for doctors and allied health professionals; they have given so much during the pandemic. My local student body reminded me today not only that students have been asking for financial support, but that they have heard the news that on graduating they will have to make national insurance contributions as well. Therefore, instead of receiving support they will have to pay out even more.
We have to recognise the barriers that fees represent. They are a barrier not just to people with lower socio-economic wealth, as my hon. Friends the Members for Slough (Mr Dhesi) and for Poplar and Limehouse (Apsana Begum) have described. They are also a barrier to mature students, who are very much welcome in the health professions and other spheres. When people have gained experience of life, they then have to decide whether they can give up work in order to study. If the barrier of tuition fees is taken away, we could address the workforce challenges faced by the health sector and many other fields. Our economy is desperate for engineers, teachers and scientists, and for investment in infrastructure and the future of our country. The economy is struggling and we do not have the skills base that we desperately need. As we can see so readily, that is having an impact on our productivity. The barrier of tuition fees is yet another factor deterring us from being the successful country that we long to be.
As we look at wider Europe and, as always, to Germany, we see that, while students may pay a small administration fee at the start of each semester—€150 to €200—their education is free, and yet it has the strongest economy, a growing economy, an economy that we envy so much. If we are to learn from good practice elsewhere in the world, it is important that we look at investing in the right places. Nothing could be more valuable than investing in education, in science and research, and in opportunities for our future.
As we approach the economic events of the year—the Budget and the comprehensive spending review—there is a real opportunity to look at how higher education is valued by the Government, and the investments they want to make in it. Higher education leads into areas such as high-quality research, which has been so hampered over the last year. It is therefore important to get right not just the tuition side, but the research formulas for the future. In exiting the EU, we have lost many opportunities; we want to see those opportunities return so that we can be that place of excellence. That is what draws students from across the world to study here in the UK.
We must recognise the real cost of covid to students and to universities. Universities are constantly trying to balance the books. York has certainly invested in students during this pandemic, and it is now looking to the Government for investment. We know that tuition fees represent a broken system that creates barriers. It is therefore important to take a deep breath, look again and ensure that we have a funding system from Government for our higher education sector, no longer placing that burden on our students, who deserve so much more.
Carol Monaghan (Glasgow North West) (SNP)
It is a pleasure to serve under your chairmanship, Ms McVey. I pay tribute to the petitioners, who have done so well in bringing this petition to the House for debate. I thank the hon. Member for Ipswich (Tom Hunt) for leading it off.
I want to start by saying that in Scotland, of course, education remains free. That makes a massive difference when looking at graduate debt because the average debt on graduation in Scotland is around £12,000, compared with anything between £43,000 and £50,000 in England, depending on where the data comes from.
The hon. Member for York Central (Rachael Maskell) asked an important question: what is education about? Is it for personal benefit or for the common good? That is ultimately what the debate should be concentrating on. In schools, we educate children not just for their own benefit but for societal benefit. Are we simply providing young people who embark on tertiary education—who will go on to contribute economically and societally to our nations—with a service for which they should pay, or is it about more than that? As legislators, we need to be clear.
Post Brexit, the UK’s economic success will rely on a well-educated population. We know that there are skills shortages in many areas, including science, engineering and healthcare, to name but a few. But it is not just at graduate level. It is also at technician level and at apprenticeship level—it is at many different levels. Therefore I do not think we do young people a great service—this has been mentioned by a number of hon. Members—by encouraging as many of them as possible into higher education when it might not be the best pathway for them.
I have mentioned already that in England the typical graduate will start with a debt of anything between £43,000 and £50,000—depending on what source is used—because of tuition fees and, of course, the student loans that they take out. For some, that will be impossible to repay, as has been mentioned by the hon. Member for Ipswich. That was also recognised by the Office for National Statistics, which said that student maintenance loans should be treated as a deficit in the Government’s accounts. That ONS announcement ended the fiscal illusion that kept student debt off the Government’s books. We already know that England has the highest tuition fees in the industrialised world, and the ONS has confirmed what many of us have been saying for a long time—this is not saving public money in the long run.
The Government remind us regularly of how economically astute they are, but we can see that, with student loans to pay for high levels of tuition fees, they are simply shifting fiscal responsibilities on to a Government 30 years in the future. But the real issue for our young people is that the short-term fiscal gains for this Government are won off the back of our young people. Continuing to charge fees of more than £9,000 a year in England is morally wrong. And we know that three quarters of student loans will be written off eventually. The Government need to start looking to Scotland’s lead and slash student fees or, better still, abolish them completely. Of course, with the student loans come spiralling interest rates. That has to be taken seriously as well. We have to look at what, realistically, we are asking young people to pay back.
The hon. Member for Slough (Mr Dhesi) highlighted the difficulties for his young people—they make his the youngest constituency in the UK—in the graduate job market. Many of us and many young people will be asking, “Is the debt really worth it for graduate jobs that might be paying £18,000 or £19,000 a year?”
Often, we talk about apprenticeships and college places. The problem is that there is still not parity of esteem. We hear Ministers advocating college and apprenticeships for young people, but I wonder how many of them are advocating that for their own children, because many parents continue to see apprenticeships as second best. We need to change that; we need to look at countries such as Germany in that regard. When Ministers and parents all consider that university is the gold standard of post-school education, it is no surprise that young people see their place at university as a measure of success, but are we really doing young people any favours by providing unlimited access to courses that may not lead to great employment and will almost certainly lead to debt? In Germany, technical education is considered to be of equal value; for youngsters and their parents, there is no stigma about skills-based courses. That is what we need to get to.
Last week in the Select Committee on Science and Technology, in a session looking at science funding, the Nobel laureate Sir Paul Nurse said that
“we have rushed too much to send everybody to universities”.
We need to think carefully about how we change that.
Often in these debates, hon. Members cite the number of young people going to university as the measure of success, but the metric that we should be using is the number of young people going on to positive destinations. We in Scotland are leading the UK, with 93% of our young people in training, education or employment. The hon. Member for Ipswich mentioned different pathways for our young people, and we need to look at that more.
The hon. Member for Poplar and Limehouse (Apsana Begum) talked about encouraging those from disadvantaged backgrounds and how we can support them to enter the job market. There are lots of things we can do, but we should make university attainable for them by restoring the tradition of free higher education, as we have done in Scotland. We have done more than that: we have maintained education maintenance allowance for those in schools or further education, and bursaries for young people from disadvantaged backgrounds in higher education. This package works: Scottish 18-year-olds from the most disadvantaged backgrounds are 67% more likely to apply to higher education institutions than they were 15 years ago. As others have said, Scottish students graduate with the lowest debt in the UK. We firmly believe that access to university should be based on the ability to learn, not the ability to pay.
We have a problem if we only educate graduates, because we need a full range of different skills. I quite often use the term “tertiary education” because the lines between further and higher education are far more blurred in Scotland, with many other further education colleges delivering degree courses. We also have movement between further education and higher education. For example, a youngster might do part of their training at an FE institution and then enter a third-year university course. We need to look at how we allow access to such courses.
Paying for education is a duty not only of Government, but of business and society, including the taxpayer. We need to ensure that we have a well educated population that can provide economic growth in different businesses and sectors. We have a duty to fund the education of our young people—whether that be further education, apprenticeship education, or higher education—to benefit society and fuel that growth.
The hon. Member for York Central mentioned the Budget and the spending review. That is important because when we are looking at university funding, budgets count and science funding counts, and this Government have pledged £22 billion for research funding. We want to see some movement on that over the next few weeks. It would be good to see a strong statement in the Budget on that funding. We also need clarity on participation in Horizon Europe, which we still do not have. Until we get this sorted, we are putting our research sector at a disadvantage.
Finally, I congratulate the petitioners on bringing the debate to the House. I know it is difficult just now, because we are living with covid, but in the coming few years, it would be good to see some university students observing these debates.
Matt Western (Warwick and Leamington) (Lab)
Welcome to the Chair, Ms McVey, and congratulations on your elevation.
I thank all Members who contributed to the debate, and the hon. Member for Ipswich (Tom Hunt) for presenting it. I listened to him with interest. He is right when he talks about the very interrupted last 18 months that students have endured and the great challenges they have faced. Many Members across the Chamber highlighted the deep frustration among students in this country, which is quite understandable, and perhaps their rising anger about what they have been through. As my hon. Friend the Member for Slough (Mr Dhesi) said when voicing concern about graduate employment, this is a really difficult time for many young people as they emerge from what should have been an amazingly formative part of their lives, only to find their prospects so reduced, despite the difficulty they have faced and the financial commitment they have made. That is the difficulty that some of us were in 30-odd or 40 years ago, emerging from university in the early ’80s when things were so difficult.
My hon. Friends the Members for Poplar and Limehouse (Apsana Begum) and for York Central (Rachael Maskell) also spoke about the issues facing students in the past 18 months. My hon. Friend the Member for Poplar and Limehouse specifically spoke about disadvantaged students and cited the survey about Muslim students and the difficulty they face in financing their higher education. My hon. Friend the Member for York Central talked about how we should fund this in the future and about progressive taxation. Back in my day, that is how a university education was funded. I do not think any of us back in those days saw education as transactional; it was not individualised in the way that it is today. We have to disconnect the current view of education—that it is all about the individual—and make it about what the individual can gain from it, how they can realise their potential and how that potential can benefit not only them but those around them: society, their communities and others. That is what higher education should do.
I accept that higher education should not be for all, but it should be an aspiration and an opportunity for those who have the ability to benefit from it, with society benefiting in turn. My hon. Friend the Member for York Central and the hon. Member for Glasgow North West (Carol Monaghan) mentioned how higher education is viewed in Germany, which has a population 60% larger than the UK’s and where a great many go on to higher education, with nominal admission fees, because there education is seen as being for the greater good.
We also have to bear in mind that higher education is part of our global reputation. We should celebrate and build upon it, rather than seek to reduce it. I say that not only for the institutions themselves. With such a great resource on our doorstep, why would we not use it? We do not want only international students to come to the UK; we want all those in the UK who have the ability to benefit from it.
Almost 600,000 students across the country signing the petition is significant. I have to say to those students who did not sign the petition, why not? They should think about it next time. It is a really important demonstration of the frustration and of the demand for change. The last 18 months have instilled a culture of precarity, uncertainty and instability among students. They have been some of the toughest months that any student in any generation has faced.
I remember what was going on in my community during the Government’s mismanagement of the return to campus in September 2020, when we did not have testing facilities available in towns and cities across the country. The great migration was not anticipated. The uncertainty created by poor guidance affected not just students, but teachers and lecturers. Sadly, this led to regrettable scenes of students being locked up in student accommodation. Demands from the student body were woefully neglected in the road map out of the January lockdown, and we saw unjustified intervention by Ministers in what I regard as campus matters. Among student cohorts and the sector, there is an indelible impression that the Government have failed to support them.
Given that education is devolved and we have heard from the hon. Member for Glasgow North West, we do not have to look far to see how supportive and hands-on the Welsh, Scottish and Northern Irish Governments have been. No wonder the tenor of students has risen; it is more than understandable why such a large proportion of the student body want fees to be cut to the level that was introduced in 2006.
Although I empathise with these calls, I want us go further. As the hon. Member for Glasgow North West said, higher education should be about people’s ability to learn, not their ability to pay. In my opinion, reducing the maximum rate of student fees merely tinkers with the fees’ structure without offering root-and-branch reform. The trebling of student fees by successive Conservative Governments, including when in coalition with the Liberal Democrats, established a funding model that has contributed to the marketisation of the higher education sector, whilst at the same time increasing the casualisation of the workforce and risking the student experience. The fee system in its current guise is holding young people back—we have heard about a great many of them in Slough—and at the same time failing to provide the stable funding that our universities need. It is not even delivering what was promised for the taxpayer.
To those who say that reducing the maximum student loan rate is preferable to not reducing it, I reply that I am not prepared to advocate for a partially effective solution. On the basis of independent analysis by bodies such as the Institute for Fiscal Studies, a policy of reducing fees to £3,000 would have disproportionate impacts on different sections of society. For example, the IFS’s student finance calculator reveals that if a cap of £3,000 is put in place, the top 10% of earners would see their repayments fall by around 40%, while lower earning graduates would see little or no change. Looking at this policy from a gender perspective, we see that for men repayments would reduce by an average of 30%, compared to a reduction of just 20% for women. I am sure you are also outraged by that, Ms McVey. We also heard from my hon. Friend the Member for Poplar and Limehouse that this disproportionately impacts Muslim students. Although the maximum cap on tuition fees is not an inherently sexist or classist policy, in reality it affects many and it has the potential to exacerbate existing inequalities in our society. That is not something that I am prepared to put up with.
I am also not prepared to put up with a fee structure that aggravates precarious student living, does nothing to alleviate the mental health concerns of thousands of students, and alienates working-class young people from advancing to higher education. Faced with fees of £9,250 a year, how could anyone expect a working-class student on free school meals to be instilled with the confidence to go to university? The figures bear this out: last week, the Department for Education’s own figures demonstrated that the gap in progression rates between pupils who receive free school meals and those who do not has increased to 19.1%, up 0.3% since last year and the largest gap since 2005-2006. Again, although the policy of student fees is not necessarily a causal factor in this damning record, it certainly is a correlative factor. I repeat that the gap is the largest since the introduction of tuition fees in 2006.
The effects of the current fees system have also decimated the part-time study model so often relied on by working parents and mature students. Since 2008 the number of part-time entrants has plummeted by 50%.
Matt Western
The current vogue term is outcomes. I often ask, “What was the key outcome of Keith Richards going to art school?” I do not think he actually finished the course, so it was not a terrific outcome. Outcomes can be measured in all sorts of ways, but my fear is that the Government—I am not sure whether the hon. Gentleman supports them—are looking to monetise that and equate it with some sort of financial value for what is being produced. However, as we have heard, we cannot equate that with a monetary figure. I know of many people who were on super-low incomes in their first couple of years post-university but who turned out to be fine entrepreneurs and set up their own businesses. How would we measure that?
Carol Monaghan
I like the word outcomes; I think it is a good way of describing the position we get to. However, I do not distinguish between those from a disadvantaged background and those from a more privileged or affluent background. We will have parity of esteem when the same number of youngsters from different backgrounds are going to the same types of places—so, whatever percentage going to university from that lot, and whatever percentage going to college from this lot. The problem is that those from a more affluent background are more likely to go to university, even though it might not be the most appropriate place for them.
Matt Western
The hon. Lady is absolutely right. Going to university is seen as a rite of passage for quite a few people. It is seen as the obvious next stage of their education. That is fine, to an extent, but what we as a society should be doing is giving encouragement and opportunity to the many who do not aspire to or imagine that they could go to university. I felt that myself back in the day, wondering what was and was not possible for me. I never imagined that that was something I could consider. I am sure that a lot of young people must feel that too, and we have to change that. Other societies do, as we have heard.
We should be much more ambitious about the sort of education system we want. I look at nations such as South Korea, that have a higher proportion going into higher education than the UK. I believe that we can achieve that by changing how we approach our schooling and how we give that opportunity to students, both through civic universities and through programmes such as Uni Connect, which sadly has had its budget cut by a third, but which was doing a terrific job in reaching those hard-to-reach young people who did not think that university was necessarily for them. Those sorts of programmes, along with foundation courses and foundation years, could do so much to help students coming through further education and realising that, maybe, the next step should be higher education. We need to invest more in those sorts of things.
While I understand the many concerns of the thousands of students up and down the country, and sympathise with their calls for a higher education system that is suitably funded while delivering on students’ expectations, I believe that the answer lies in a multi-step approach. First, as I have alluded to, I am committed to abolishing the fee regime in its current guise. That means that debates regarding repayment rates, characterised by Martin Lewis as regressive and a “breach of natural justice”, would be consigned to history. Graduates would no longer be burdened with as much as £57,000 in graduate debt and would start their working lives free from the stress and financial pressures of repayment.
We have only to look at what is happening on campuses across the country and the immense mental health pressures faced by so many young people, due not only to the pandemic, but to the issue of graduate employment opportunity and having that debt hanging over them. Those of us who have ever been in serious debt at any stage of our lives know that it is an awful place to be. Those of us who have ever been in serious debt at any stage of our lives know that it is an awful place to be. The hon. Member for Ipswich described the prospect of having the debt hanging over him and the difficulty it posed when getting a mortgage or other loans. It can make life incredibly difficult, so it is far easier not to consider it. The Government need to rethink their approach to the availability of maintenance grants. That might finally tilt the balance in favour of the thousands of working-class men and women on free school meals, who have been denied the belief that they can progress to higher education due to a burdensome funding model.
I want a culture change to complement a fee system change, such as adequate student mental health provision and funding, and tackling those rogue student landlords in private student accommodation who give the sector a bad name. There is much to address to improve the lives of our students. I want more teachers and lecturers on full-time secure employment contracts, to reverse the drift towards casualisation that we have witnessed in the past decade.
Following the events of the past 18 months, it is critical that the Government work collaboratively with the sector to address the many issues it faces. Through the co-operation of the National Union of Students, individual student unions, the University and College Union and the institutions themselves, so much positive work has been done on our campuses to get through the worst difficulties of the pandemic. We have seen some interesting initiatives, such as the Welsh Government’s support for institutions to improve ventilation in lecture theatres. Those sorts of ways that the Government can help have the effect of shoring up the entire student experience.
I believe the petition is a great call for change. While replacing the student funding model will naturally bring about an improvement in the student experience, it can be fully revolutionised only through a plethora of other initiatives that directly seek to ease the burdens on students. If any generation deserved to have their call for change heard, it is this generation. No wonder almost 600,000 students signed the petition. I add my congratulations to the petitioners on achieving this debate, and I thank the House authorities for allowing it to proceed. I look forward to working with the sector, the students and all stakeholders in the coming months, to address some of the cries for change. I very much see this debate as the first step in that process.
The Minister for Further and Higher Education (Michelle Donelan)
I thank my hon. Friend the Member for Ipswich (Tom Hunt) for opening the debate, which I am very pleased to participate in. The petition, as we have heard, considers a wide range of topics, from tuition fee levels, representation of students in Parliament and accommodation costs to the impact of covid-19 on the prospects of future graduate careers.
My hon. Friend the Member for Ipswich passionately spoke about the importance of the Government’s skills agenda and investment in alternative and vocational options, as well as higher education, which I will come back to. It has been a privilege to work so closely with the higher education sector; it has enabled me to see at first hand the extraordinary way in which students have dealt with the challenges they have faced over the last 20 months. Many Members spoke about those challenges, from the restrictions placed on face-to-face teaching to being in lockdown away from family. All that is on top of students’ fears and concerns for their own health and that of their family and friends, which will be familiar to us all.
I want to put on the record that the resilience that students displayed has been nothing short of extraordinary. Being their voice in Government during this difficult time has been a privilege. I want to sincerely thank staff across the higher education sector, who have faced unprecedented challenges and have shown that they are resilient, resourceful and innovative while maintaining the delivery of teaching and learning at the quality expected by the Government and the Office for Students. I have visited numerous universities and have spoken with many staff over the past 20 months, and I have heard incredible stories of how staff worked to move content online and adapt their teaching almost overnight. To staff and students, I say a heartfelt thank you.
However, I am not here just to thank the sector. Members will be aware that I pledged at the very start of the pandemic to prioritise getting students the support that they need, and students and staff have been given unprecedented financial support as a result. I thank all Members who supported those important interventions. We made an additional £85 million of student hardship funding available for higher education providers to distribute to students in the academic year 2020-21, in addition to the sizeable £256 million of student premium funding already available for providers to draw on to support students experiencing hardship, or to provide mental health support. We also worked with the Office for Students to create a new mental health support platform with £3 million of funding.
Last week, I announced that the maximum under-graduate loans for living costs will be increased by a forecasted inflation of 2.3% for loans issued in the 2022-23 academic year. The same increase will apply to the maximum disabled students’ allowance, to the grants for students with child and adult dependants who are also attending full-time undergraduate courses, and to the non-means-tested loans that the Government provide for students undertaking masters and doctoral degree courses. Such statistics are easy to overlook when they are fired off in debates, but those with students in their constituencies, as we all have, will know the very human and personal stories that make those financial interventions so important.
The first point raised in the petition is the important and complex issue that we have heard about regarding the rate of tuition fees. The petition asks for the maximum cap to be reduced drastically from £9,250 to £3,000. I understand the importance of, and the motivation behind, that view. Like those supporting the petition, the Government want a fair system that offers value for money; is sustainable; and provides enough funding to support high-quality teaching that leads to good outcomes, meets the skills needs of our country and maintains the world-class reputation of our higher education providers. Tuition fee levels play an important part in all those goals, but when we boil it down we cannot get around the fact that tuition fees must be at a sufficient level to achieve those aims. That leads me to the most obvious point: the funding implications of reducing tuition fees by so much.
Higher education providers in England gain, on average, approximately half their income from student fees. Therefore, reducing fees by more than two thirds to £3,000 for domestic students would create an estimated funding loss of a staggering £6.5 billion per year. Total funding for university courses would cover less than 40% of their cost of delivery in that scenario. Positive motivations aside, the consequences would therefore be disastrous for the higher education sector. We would force many providers out of the market overnight, and remaining courses would not have the funds required to deliver the high-quality tuition and experience that students deserve.
The only other option would be to force the taxpayer to pay the difference. To me, that prospect seems incredibly unfair, given that graduates will go on to earn, on average, £100,000 to £130,000 extra during their working lives than non-graduates—a point that my hon. Friend the Member for Ipswich made. That brings me to my next concern: many of those who would benefit would be the higher earners, and it is likely to make university harder to access and to excel at for the lowest earners. Rarely do I agree with the hon. Member for Warwick and Leamington (Matt Western), but I do on that point.
Our student loans system, on which the vast majority of students rely, is rightly based on the principle that those who gain the most will make the greatest contribution. That is why the size of an individual graduate’s loan repayments depends on their earnings—if they earn a lot, they pay more; if they earn less, they pay less. In many cases, people do not finish paying off the debt. A reduction in the amount that graduates need to pay back through a tuition fee cut would therefore benefit higher earners by thousands of pounds, while lower earners would see little to no change on their repayments. In fact, the very lowest earners would see no financial benefit from this at all.
Worse still, those thousands of pounds, now in the pockets of already high earners, would have come at the expense of universities, who would no longer be able to give such generous financial support and bursaries to students. People who know me well will know that I fought tooth and nail for better access and support for disadvantaged students, so the idea that we would do anything that would take away from their ability to go to university if they desire to do so is completely contrary to my views and those of the Government.
I also remind the hon. Member for Poplar and Limehouse (Apsana Begum) that, actually, we have record numbers of disadvantaged students who have gone to university this year, and we had record numbers of disadvantaged students going to university last year. In fact, a disadvantaged student in 2020 was 80% more likely to go to university than they were 10 years ago. That staggering statistic shows that the impact of tuition fees is certainly not the one being painted by Opposition Members.
As I mentioned, I think we all have very similar motivations for being here today. My focus, when looking ahead, is on how we can get the best value for students and support the most disadvantaged while maintaining the highest quality and standards that we are internationally renowned for. Although a cut in tuition fees would not help, it is also clear that raising fees would be equally wrong, so last week I was pleased to confirm that tuition fees will be frozen for the fifth year in a row. Compared with a situation where tuition fees had risen in line with inflation each year, that freeze means that a student on a three-year degree course has saved over £3,400—a real-terms reduction that I am sure supporters of the petition would welcome.
Carol Monaghan
May I ask the Minister when we are likely to see the recommendations of the Augar review implemented, including significantly reducing the student fees that are being paid?
Michelle Donelan
We are considering the remaining recommendations made by the independent panel chaired by Philip Augar, including on fees, funding and student finance, and we plan to set out our full conclusion on that shortly. I urge colleagues not to refer constantly to media speculation, because we have not yet made an announcement, but it will be coming shortly.
Following on from that, as part of our consideration of the recommendations made by Augar, I and my ministerial colleagues are still in the process of building a post-18 education system that massively improves the value and quality of learning and equips learners with the skills they need to get those high-wage, high-skills job opportunities. The way we drive up quality in our higher education system is not by diverting money from universities to high earners, but by investing in a system that focuses on high-value skills. That is the way to promote genuine social mobility. We have already delivered on several of the recommendations made by Augar in our first response to that, including investment in the further education estate, increasing funding to 16 to 19-year-olds, a commitment to introduce a lifelong earning entitlement and the Prime Minister’s lifetime skills guarantee.
Matt Western
This is not a difficult question, but I want to pick up on the point made by the hon. Member for Glasgow North West (Carol Monaghan). When the response to the Augar review is made—I think it is now two years, or two and a half years; I have lost track—will the Minister commit today to making that in the Chamber to us and not through the media?
Michelle Donelan
I look forward to when we announce our response to Augar shortly, and I am confident that there will be several opportunities for hon. Members to question either me or the Secretary of State for Education in the Chamber. I will pledge to ensure that that happens.
Moving on to the next element of the petition, I am very pleased to see the issue of student representation raised here today and I agree with the hon. Member for Slough (Mr Dhesi) on just how important that and listening to students really is. I know that Members present here today are no doubt excellent campaigners. I am sure we would all agree that no one holds us and higher education providers to account on these issues better than students. The view that has driven our work —from the National Union of Students, the Office for Students, Universities UK and the Office of the Independent Adjudicator for Higher Education—is to ensure that students know their rights with regard to higher education and can feel confident in exercising them.
For those less familiar with this, I recommend the excellent work done by the Office for Students’ student panel, which I have met several times since I have been in post. I am meeting it again next week. Over the past two years, the panel has made some really important points, pushing me and other Ministers, and it has certainly been a positive influence in the Office for Students. I am passionate about giving students more of a voice and more direct influence over student life than ever before, so seeing the panel directly inform the policies and decision making of the Office for Students is really inspiring. I know that the panel has played a fundamental role in informing the early development of the Office for Students’ next strategy—on which it will be shortly consulting—in shaping its statement of expectation on harassment and sexual misconduct, and in informing how student hardship funds can best be utilised.
I remind hon. Members that there is a process in place for students who feel that they have not had the expected quality or quantity of lessons, and they can complain to their university. If they are still not satisfied, they can go to the Office of the Independent Adjudicator, which is helping students to reclaim thousands of pounds where the quality of learning has fallen below standards. In fact, the OIA has already made recommendations for financial compensation totalling £450,000—again, showing just how important it is that the student voice is not only heard, but listened to and acted on. I encourage any student with a particular issue or concern to speak up and engage with the process.
The petition also raises the important issue of accommodation costs for students, which was raised by hon. Members. Again, it is an important factor in our mission to achieve genuine social mobility in the wake of covid. Higher education providers and private accommodation providers are of course autonomous and responsible for setting their rent agreements, but that should not stop the Government being there to advocate for and, where necessary, directly support students, which is why I ensured that providers were able to use the additional £85 million of student hardship funding to support students who were struggling with accommodation costs last year. I have also worked hard to ensure that providers’ rental policies have students’ best interests at heart, and that providers are listening to those interests that are being advocated strongly. If students have concerns about any issues relating to university-provided accommodation, they can of course complain to their university and then go to the Office of the Independent Adjudicator.
Matt Western
On accommodation costs, the Minister will be aware that there are many campuses across the country where there is no accommodation owned by the university itself—it is all in private hands. Will she provide the data that show the rate of increase in cost and how that has tracked over the past five years, relative to inflation? My understanding is that it is exceeding inflation.
Michelle Donelan
I will take that away and write to the hon. Member with the specific data that he has requested.
I will bring my speech to a close by picking up on the final point raised in the petition, which is particularly dear to my heart as a result of speaking to many hundreds of students about the uncertainty of their future careers. We have talked a lot today about universities, but job security and our economy also depend on the skills revolution going on in the whole of the further and higher education system. Apprenticeships, higher technical qualifications and T-levels are just some of the skills-focused offerings that will allow thousands of people to gain the skills and experience that they need to secure a high-wage, high-skilled job in future. New skills really are the fuel of social mobility, and universities are just one way to acquire those skills. I am proud to advocate for limitless ambition in what we can achieve through higher education, and I will continue to work to give students the best chance to succeed in the post-covid world.
Tom Hunt
I thank the Minister for her very detailed response to the debate, and I also thank the shadow Minister, the spokesperson for the Scottish National party and the other Back Benchers present. I feel confident that this issue has been debated thoroughly and that many different views have been shared. Clearly, this is a huge issue, and we await the Government’s response to the matter.
It seems to me that a key point here is that there are different views about the £9,250 level and whether it is too high or about right. The reality is that for many people who go to university, it is still a good investment, because students come out of university with a qualification that enables them to earn a good salary and have a very fulfilling career. Sadly, for some that is not case. Some people who go to university might have been pressured into it. I do not underestimate how transformative university can be in a positive way, but it is not for everyone. For many people, going to university might not have been the right decision.
Matt Western
The hon. Gentleman talks about an investment as a personal investment, which is the crux of the issue. It is not just the cost to the individual, because there is a cost to us as taxpayers. Should it be a socialised cost, which is a cost to all of society as an investment in our future generations who might pay our pensions, look after us or teach our children? Or should the cost be paid by the individual?
Tom Hunt
The hon. Gentleman makes an important point. In the first case, many taxpayers would want more of a view on the courses that people were studying at university. They would question some of the courses being studied and whether they offer value to the taxpayer. The system might look very different from what it does at the moment.
I agreed with a lot of what the hon. Member for Glasgow North West (Carol Monaghan) said about technical education and parity of esteem. She is absolutely right. My right hon. Friend the Member for Harlow (Robert Halfon), who chairs the Education Committee, has talked about the dinner party test. He says that people might talk about how good apprenticeships are, but when it comes to their own kids they advise them to go to university. If someone at a dinner says, “Charlie has gone to Oxford University”, and someone else says, “Bella got an apprenticeship with Jaguar Land Rover”, most of the excitement will be about Charlie, not Bella. Ultimately, we need to change that perception.
Higher education is important, but it is just part of the story and part of the debate when it comes to the future of our young people. The FE White Paper and the skills improvement boards are a real step forward. Giving local business more of a role in shaping the FE curriculum is important. It is about an ecosystem approach and linking together schools, FE colleges and universities, if there is one in the area, and local business. I see it as trying to link up young people with opportunities in the country and specifically in their area, because we do see opportunities in different sectors and young people without the skills to take advantage of those opportunities.
A lot of people still look down on technical education. They do not see it having the same inherent value as an academic pathway. It is not about saying to people from lower income backgrounds, “The academic pathway is not for you, so here is the technical route.” It is absolutely about a whole-society approach, as the hon. Member for Glasgow North West said, and taking away snobbishness about technical education. And it is not about downgrading or devaluing a university education; it is just admitting that we must have multiple pathways. That is crucial for the levelling-up agenda that the Prime Minister has made clear time and again. Thank you, Ms McVey, for chairing today’s debate; you have done so superbly.
Question put and agreed to.
Resolved,
That this House has considered e-petition 550344, relating to university tuition fees.