Higher Education: Funding and Student Finance
Debate between Lord Triesman and Baroness Wilcox
Lord Triesman
My Lords, I thank the noble Baroness, Lady Wilcox, for repeating the Statement and for providing another opportunity to look at this matter. I hope it is also an opportunity when some of the questions that have been pressing the whole way through might be addressed.
I probably ought to also say that, unlike normal circumstances where you see the Statement about half an hour or so before—it was in the other place earlier—we had what I ought to describe as the benefit of hearing it made by a Minister not responsible for this area at all, Michael Gove, on the radio this morning. I was surprised by that because I am an avid fan of the coalition document. I have read it many times and hope that I have become more illuminated as a result. I recall that on page 26 it talked about a very much more open and transparent parliamentary process in which it would not be the case that vital statements were made first for the benefit of the “Today” programme rather than in Parliament. I regret that this announcement was, because it diminishes the authority and the importance that we ought to place on this matter in Parliament.
We have had in effect four announcements on this subject in three weeks. The first, by the Secretary of State, welcomed the Browne report unreservedly—Browne was in. Then there was the formal Statement in which a number of the issues that the noble Lord, Lord Browne, had raised were thought not to be appropriate—he was out. Then we had the debate last week in which his status was restored once again—he was in. Now we have the whole of the mechanism in which there is going to be a cap, and a number of the other proposals that he made are out again. The process strikes me as more like the hokey-cokey than the making of serious policy. It also does not surprise me that we have arrived at this position despite the very clear view that had been expressed by at least one of the coalition parties. I wish briefly to quote its manifesto to its Members, because it must be important to stick to some kind of values in this. They said that they would:
“Scrap unfair university tuition fees for all students taking their first degree, including those studying part-time, saving them over £10,000 each”.
I will not carry on with the quote but there was also a “financially responsible plan” which dealt with the alternatives.
I once watched a very bold young man from this country go down the Cresta run as fast as he could on a bicycle. He did not get the whole way down. When I said it was an act of complete madness, I was told it was just an extreme sport. We have got into the period of extreme policy-making. It is not thought through. It has none of the fundamental elements in making vital policy for higher education. I appreciate that it has been welcomed by some institutions and I am hardly surprised. Anybody stripped of 75 to 80 per cent of their unit resource for teaching will welcome the lifeboat as their ship goes down.
I do welcome parts of the Statement. I welcome what is said about part-timers. The noble Baroness is right to say that that had the support of all parts of the House and it is true. I also welcome what has been said about foundation year development. That was always an area where a good deal more work would be useful. At the heart of this, however, it is so thoroughly piecemeal that it is about as sensible as going down the Cresta as fast as you can on a bicycle. There are no decisions on any of the mitigating factors which would produce the fairness that should go alongside—it is said—these highly inflated fee figures. The fee figures are there because they have to be—we know that prospectuses are about to be written—but none of the rest is there and there are no guarantees that any of the rest ever will be. Nothing is said about the way in which decisions among some universities to push toward fully privatised status will result from this, although it is quite clear from a number of vice-chancellors that they intend to do precisely that. In that sense, as we said last week, this is not about fees. It is about the ending of the concept of the public infrastructure role of universities. There is no serious debate on what that means or where it will lead. If we debated it, we might choose that road. What I know is that we have never once debated it.
I have looked through the Statement, as many noble Lords will have done. I can see now more clearly what a number of the figures are and, for those reasons, I shall make a couple of comments because I do not think that all the things said should pass unchallenged. I will turn then to the questions which, once again, I believe must be answered. I am astonished that the idea of treating the payment system like a mortgage system should have been raised at this stage without any firm information about whether it is going to be introduced and whether it would iron out unfairness. Saying that it is an attractive idea is quite different from introducing it. I am surprised by what is said about the “generous” increase in maintenance grants for lower-income students. The generous increase is £6.70 a week. I do not know what that buys nowadays—not a great deal, I suspect.
I turn to the questions which I believe must be answered today. I ask again about middle-income families and the longer time it will take for those in the second and third quartiles of income distribution to pay than those in the top quartile, because if the figures are as we believe it is not a progressive arrangement and could never be described as such. How much longer is it? I hope that the noble Baroness will not direct me to the BIS student loan repayment ready reckoner—the most obscurely written document that I have read in many a long year. Can she just tell us whether it is right, broadly speaking, that it would take someone from those two quartiles 14 years longer to make the repayment than somebody from the top quartile and whether it is the case that, unless you had some kind of mortgage penalty system to correct that, the outcome is as I have described?
I ask another question again. Are women, with the career patterns that they have—they are for reasons that we all know—being discriminated against and is that actionable discrimination? Is the assumption that higher fees will not adversely affect participation rates evidence-based or based on the anecdotes of some of those in the higher education system? I do not believe that there is good evidence, but I may well stand corrected. What is the Government’s impact study? What is the elasticity of demand? We should know that today.
What is going to be done about the arts, humanities and social sciences, which are the heart of our culture and, indeed, of world culture? The downgrading of these subjects to non-priority status is an astounding reversal of the very idea of a university. How will they be encouraged and protected as subjects? Will the Government fund the cash-flow and balance sheet deficits that will occur because there is a gap between the cuts that they are going to impose and the first receipt of these higher-level student fees, which are timed to come in in 2013? That is a penalty which no university could reasonably have anticipated. Will the Government pay it or will a still greater cut simply have to be absorbed? What do the Government recommend to make up the shortfall in the teaching unit of resource—approximately £1,500 per year—for those universities that face the cut and charge just £6,000? Is it okay, today, in our universities to slash the unit of resource in that way?
What are the Government’s plans for the problem of Islamic finance approaches to usury, for which most of the things here suggested are abhorrent? Will the Government tell us how they will handle the growing pressure from universities, freed of any significant government expenditure on teaching, to become private—the issue which I think lies behind all these announcements? Finally, will the Government tell us their view of the rate of return on investment in university teaching with the fee at its current level, and whether the damage to investment is something that this country really ought to avoid?
Baroness Wilcox
This is a big subject, my Lords, and I want to answer as many of the questions of the noble Lord, Lord Triesman, as possible. I thank him for his comments and for his questions on what is a very important subject. I want to avoid turning this into a yah-boo-sucks time; I do not think that that sits well in this House. I could talk about the fact that the Leader of the Labour party and his supporters do not speak from the same hymn sheet, but I do not think it is the right moment to be doing things like that. Instead, I shall try to answer some of the questions the noble Lord has asked me.
We feel that the Government are placing universities on a more stable footing and allowing institutions to flourish. Our universities, as we know, are internationally renowned, but many of the strongest have told us that they need further investment in order to maintain their position, and so it is that we are taking this brave new stance, based, of course, upon a piece of work commissioned from the noble Lord, Lord Browne, by the noble Lord, Lord Mandelson, and the Labour party, and supported by us at the time. We are basing this upon six principles that he outlined.
The noble Lord talked about the arts, humanities and social sciences. Does ceasing their funding mean killing them and sabotaging some of the key sectors to drive us out of recession? We do not think that we are cutting the income of these departments. They are just going to have the money flow into them from a different route; it is going to be directed by the choices made by students. Those courses will still be there; they will be well promoted, and we hope that the young at school will better understand what choices are available to them, so that they bring the money with them. It will flow into those departments, as it always has; it will just be coming from a different direction.
I was asked why we are being less generous than the noble Lord, Lord Browne, for people earning over £35,000. Is this not another hit on the squeezed middle? We are committed to ensuring that higher education is affordable for everyone. This is a system that provides adequate support for students from low-income and middle-income families, but is also financially sustainable for the nation. We will give more maintenance grant to those with household incomes up to £37,000 and make available some non-repayable maintenance grants for those with household incomes between £25,000 and £42,000. This means that, compared with now, there will be more overall maintenance support to those with household incomes up to £45,000.
This is a generous package that benefits the vast majority. More than half a million students, as I have already said, will be eligible for non-repayable grants for living costs, as they are now, and almost a million students will be eligible for more overall maintenance support.
It was asked, given that over half of undergraduates are women, what the differential impact of today’s announcement would be on men and women. It is no pleasure to any of us to know that women still earn less than men do in the marketplace, and I hope that we will be able, in the time that we are the Government of this country, to help that to change. Because of that pay differential, women are less likely to be high earners. They will pay less and their repayments will be frozen when they are not earning—when they are having children and taking time off—and because of the long repayment time, the chances are that after 30 years they will not have finished paying and therefore it will just fade.
What about loans from Muslim students who believe that it is wrong to take out student loans because they attract an element of interest, and the payment of interest is against Islamic Sharia law? We want a single student loan system that can meet the needs of the majority of students, of course. The Government heavily subsidise the student support system and will continue to do so; we do not make a profit from student support. In circumstances where students feel that loans offered by the Government are against their law, students can take out a Sharia-compliant loan offered by one of the commercial banks at the moment, such as the Islamic Bank of England, Lloyds TSB and HSBC. I have spoken to my Muslim friends about this and they do not seem as exercised about this as maybe we think they are, because they do not see that there is a profit element in it to cause them great distress. I hope that I have been able to answer that question.
I shall see if we have any more answers; it is easier if we can get more answered now. I was asked if we will do what the noble Lord, Lord Browne, says and allow private providers to access public funding. We want to remove any undue barriers and make it easier for private providers to enter the market. We are committed to a level playing field for all providers. This will mean more and better choices for students and better value for money through new and potentially innovative and lower-cost approaches to teaching. We will consult further on this through a higher education White Paper this winter.
I doubt that I have answered all the noble Lord’s questions, but I will write to him with any answers that I have not been able to give now. No doubt other noble Lords in the Chamber are looking forward to asking questions that I hope I will be able to answer on my feet; if not, of course I will write.
Small Businesses: Invoice Payments
Debate between Lord Triesman and Baroness Wilcox
Baroness Wilcox
I agree. Previous legislation brought in the five-day payment. I must say that when I looked through these questions and saw that we were paying within five days, and then saw that some of the contractors further down the line were contracting to pay within 30 days, I asked myself, “Where is that money going for those 25 days?”.
Lord Triesman
My Lords, I do not want to make the noble Baroness’s life more difficult and I appreciate what she said about Sir Philip, but I wonder whether an entirely novel inspiration might have flowed from the question. Will the Government consider using Sir Philip Green’s proposals the reverse way round and use the extraordinary leverage that Government plainly have to make sure that they and everyone else pay their bills on time to help small businesses? If that leverage counts, make it count.
Baroness Wilcox
I think the answer is that we should pay when payment is due.