Higher and Further Education

Lord Beith Excerpts

Tuesday 11th September 2012 Commons Chamber

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

It is a pleasure to follow the Minister. He entertained the House enormously as he distracted attention from the core point of the Government’s policy and did his best to misrepresent the Opposition’s policy, so much so that he chided my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) for trying to draw his attention back to the Government policy he is supposed to be defending. If that is the most terrible charge the Minister can make against my hon. Friend, surely his case is weak.

Before coming to my core concern—the level of student debt—I should congratulate my hon. Friend on how she opened the debate for the parliamentary Labour party. It is a pleasure to follow her, just as it is a pleasure to follow the Minister. He did his best to distract attention from his policy and to misrepresent the Opposition’s policy. At one stage I thought he was praising—almost sincerely—the Secretary of State; next he will be writing “Focus” leaflets to deliver around the House of Commons. I have too much respect for the Minister to encourage him to go down that sad and sordid road.

My key point is this: my objection to the student fee contribution arrangements being introduced in this academic year is that the required student contribution is too high. It is as straightforward as that. I am not quarrelling with the Minister over the repayment mechanism: he is right that there are common themes between the Labour party and Conservative party positions, but whatever the arguments about establishing competition and a marketplace through different student fee contributions might have been in theory, the fact of the matter is that the annual student fee contribution for most courses has remorselessly settled already at the ceiling of £9,000 a year.

To that we must add the cost of student maintenance, including rent, and the cost of necessary books, equipment and visits associated with the course. Annual living costs for students are expected to reach £11,000 this year, which is £910 a month—the cost was £561 a month in 2004. With fees, that amounts to around £20,000 per year. That is too much money for young people to carry as personal debt. Of itself, it is unjust.

Other things in life require debt in early adulthood: a starter home and the accompanying mortgage, or perhaps a loan to set up a small business as a new entrepreneur. Any lender will take the student debt into account when looking at the potential for repayment. The 30-year repayment period means that debt follows the young person well into middle age.

The Government’s new regime has brought about a rather obvious response. Before the introduction of the new regime there was a burst of applications, but this year university applications are down by 8.7%. The situation is particularly pronounced in the north-east, which I have the honour to represent—applications are down by 11.2%—and among the poor.

The Office for Fair Access tells us that despite substantially larger bursaries at Cambridge than at Northumbria university, Northumbria’s proportion of students from poor backgrounds is around four times higher than Cambridge’s proportion. That, too, is unjust. Young people are having the opportunity to be everything they could be priced away from them.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Will the right hon. Gentleman give way?

[Mr Brown]

I shall willingly give way to the right hon. Gentleman, who also represents our region.

[Sir Alan Beith]

The right hon. Gentleman and I share an interest in Northumbria university, where there are a large number of part-time students. Under the Government’s scheme, they will be given access to repayment facilities that they did not have before.

[Mr Brown]

I accept that. I am sympathetic to features of the Government’s scheme, and we would find agreement and consensus on other aspects, including those to which the Minister referred. My objection is to the total debt. My contention is that £20,000 a year is just too much money for a young person to take on. The right hon. Gentleman knows that there will be a similar feeling among his constituents, who are no more affluent than people in the community I represent.

For those trying to get into higher education, the situation is exacerbated by the loss of something like 15,000 student places—that is the only election pledge that the Liberal Democrats have actually kept. Young people from economically poorer backgrounds look instead at going directly into employment and making their way without a degree and the accompanying mandatory debt. Even if they do so, the cards are stacked against them, because graduate entry is now much more of a requirement for careers that used to be open to non-graduates.

The argument for the fee contribution is that graduates, over a lifetime, will earn more than non-graduates, and so should make a contribution to their education costs. I accept that, but the argument is about how much of a contribution they should make. Not all graduates will find well-paid jobs. Graduate recruitment is currently running at 6% below pre-recession levels, if we take the high point of 2007, and for every graduate job advertised there is an average of 52 applications. One in five graduates is unemployed.

The remedy seems clear enough: we should cap the fee contribution. The Labour party has pledged to set a cap at £6,000, and to go further in reducing the cap if the reduction is affordable. I say that we should go further and we should face up to the fact that it must be paid for.

The Secretary of State for Business, Innovation and Skills has very little room for manoeuvre in his departmental budget. To achieve his share of the cuts, he has shifted costs from the state to the students in higher education and abolished the regional development agencies, which were the principal regional economic development arm. His Department has cut university teaching budgets by 47% in real terms, from £7.1 billion to £4.2 billion. Combined with the increased subsidy element of student loans, that results in a real-terms cut in higher education funding, excluding research, of 23%, from £8.8 billion to £7.5 billion by 2015.

Dr Wendy Piatt, the director general of the Russell group, warned today that the UK has fallen behind countries such as Mexico, Russia and India in investment in higher education as a proportion of gross domestic product.

We must look outside the Secretary of State’s Department to find the savings dramatically to reduce the cap on student fees. The renewal of Britain’s independent nuclear deterrent and a new generation of Trident submarines are unaffordable and unnecessary public expenditure, not the higher education of our nation’s young people—[Interruption.] To respond to the Minister, at least I can say how I would pay for it.

The coalition Government have made a different choice. They have diminished the importance of higher education, and in that, they are wrong.