Higher Education and Research Bill

Angela Rayner Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Tuesday 19th July 2016 Commons Chamber

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I, too, welcome the Secretary of State to her place, and I look forward to having constructive dialogue with her in the future.

We have heard many passionate and expert contributions. The hon. Member for Stroud (Neil Carmichael), who chairs the Education Committee, said that he has found himself with an unexpectedly large portfolio. It is safe to say that I know that feeling. On that note, as my party’s spokesperson on equality, as well as on education, I echo my hon. Friend the Member for Walthamstow (Stella Creasy) in urging the Government to make the necessary changes to ensure that loans are Sharia-compliant immediately. I would be interested to hear the Minister’s response to her idea of amending existing legislation instead of making the change in this Bill.

We have spoken a lot about aspiration and supporting the next generation. I cannot help thinking about this evening’s news about my hon. Friend the Member for Wallasey (Ms Eagle). She has been a real friend to me and has been very supportive for many years, both inside and outside this House. She has told many women from backgrounds similar to mine, “Always stand up and reach for your dreams—you can achieve them.” I pay tribute to her.

On the subject of legislative changes, my right hon. Friend the Member for Oxford East (Mr Smith) raised concerns that the office for students will be able to revoke Acts of Parliament and royal charters that establish universities. I hope that the Minister will think again on that.

It was great to hear from my hon. Friend the Member for Heywood and Middleton (Liz McInnes), who highlighted her career as a scientist, on which I congratulate her, and the need—we have heard this many times today—for the right funding and investment for science. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) also made an excellent contribution and spoke of the need for a technical revolution. I hope that the Minister will respond to his proposal for a duty to collaborate.

We also heard from a new Back Bencher, the right hon. Member for Surrey Heath (Michael Gove). We heard from him quite a lot. He did not like the length of the speech made by my hon. Friend the Member for Blackpool South (Mr Marsden), but perhaps that was because it lasted longer than his leadership bid. More seriously, he said that universities must be a safe place for Jewish students. As the shadow equalities spokesperson, I am in total agreement with him.

The right hon. Gentleman also said that he feared that Labour Front Benchers were no longer committed to extending opportunities to enable all young people to access further and higher education. I reassure him and others that we share that ambition. We all agree that no one should be denied the opportunity to study on the basis of their income, background, class, race or gender.

The question is whether the Bill meets that ambition. My hon. Friend the Member for Ilford North (Wes Streeting) was clear that the Bill introduces unnecessary risks at a time of uncertainty. He also frightened me to death, and I am sure many others, with the prospect of a Donald J. Trump university.

Sadly, we regard the Bill as a missed opportunity that will set back the cause of equal access rather than advance it, expanding a higher education free market where profit takes precedence.

First, let us follow the money and look at maintenance grants and tuition fees. University education in England and Wales is already out of reach for many people from low and even middle-income families. The hon. Member for Stroud praised the German economy, but he will also be aware that in 2014 the last of the German states abolished tuition fees in public universities. The Sutton Trust, which campaigns for greater social mobility, has shown that many British students finish university with debts in excess of £50,000. The IFS has said that students will be repaying these debts until they are well into their 50s.

The Bill will directly lead to the uncapping of fees at high-performing universities, and it will effectively introduce a two-tier system of higher education. The best universities will become more expensive and therefore less accessible, at a time when the proportion of low-income students at many top universities is already falling. Quite simply, it is a tax on aspiration. The Government’s equality impact assessment demonstrated the impact on already under-represented groups in higher education. It found that female, disabled, black, Asian and minority ethnic students, as well as mature students, would be disproportionately worse off.

The Secretary of State has made a great deal of the fact that more students from disadvantaged backgrounds are accessing higher education, but she conveniently ignored the figures highlighted by my right hon. Friend the Member for Tottenham (Mr Lammy)—happy birthday, by the way—which showed that the percentage of disadvantaged pupils admitted by seven of the 24 Russell Group universities, including Oxford and Cambridge, fell over the last decade. At the same time, pupils from private schools are still two and a half times more likely than their state school equivalents to enter a leading university. The Government will perpetuate and extend that by enshrining this two-tier system in the Bill. They are slamming the door of opportunity in the face of young people who have high aspirations and the talent to fulfil them.

I listened carefully to the words of the new Prime Minister on the steps of Downing Street just a few days ago:

“If you’re a white, working-class boy, you’re less likely than anybody else in Britain to go to university. If you’re at a state school, you’re less likely to reach the top professions than if you’re educated privately.”

Yet this Bill does nothing to increase social mobility or to create the one nation Britain that she promised. We will judge her Government by actions, not words.

Then we come to the proposals in the Bill to expand the market for private providers, who are in the education sector primarily to make a profit. The Government appear ideologically committed to marketising higher education by promoting competition and introducing for-profit providers. They have taken a similar approach with schools, and I have yet to see any positive impact. This new profit-driven approach is a real threat to academic quality and standards at a time, post-Brexit, when it is even more critical to maintain and enhance the quality and reputation of Britain’s universities, as has been said by many Members from across the House, including my hon. Friend the Member for Cambridge (Daniel Zeichner). Experience from countries such as the USA and Sweden demonstrates that private providers too often seek to compromise quality for the sake of profit.

I am deeply concerned about the impact of the proposals on the terms and conditions of staff. There is already an unacceptable gender pay gap in the higher education sector, alongside the growing use of zero-hours, temporary and insecure contracts. I fear that the Bill will make matters even worse as employers seek to cut costs in order to produce profits.

Similarly, removing the limit on student numbers for university title is likely to lead to an increase in the number of smaller institutions. Perhaps that is the Government’s intention, but there is a concern that the new smaller institutions may be more likely to cut corners when it comes to resources, student-staff ratios, student support and attracting the best academic staff. What safeguards will the Government provide to prevent that from happening? There are many examples of poor-quality private colleges, particularly those that cater for overseas students, failing to provide high-quality courses. The Government must learn the lessons of those market failures and build in proper oversight and regulation to guarantee quality.

The Bill will also reform the research council and funding system, but we believe that that is poorly timed and likely to be ineffective. Brexit has already put the funding of academic research in the UK into a prolonged period of uncertainty.

Because of the time, I will cut my comments short. I share the concerns of my hon. Friend the Member for Sheffield Central (Paul Blomfield) about Horizon 2020 funding, and it is vital that we ensure confidence in our research sector.

It pains me to say it, but this Bill fails to give our young people a chance to soar. It blocks their path not because they lack ability or aptitude, but because they lack the necessary income or background. The Bill promotes a market-driven, two-tier higher education system in which too many of the brightest and the best will be consigned to second best.

On the steps of Downing Street, the Prime Minister promised:

“When it comes to opportunity, we won’t entrench the advantages of the fortunate few. We will do everything we can to help anybody, whatever your background, to go as far as your talents will take you.”

This Bill does not live up to that promise. Let us hold the Prime Minister to her words, and reject her Bill.

Higher Education and Research Bill (Twelfth sitting)

Angela Rayner Excerpts

Committee Debate: 12th sitting: House of Commons
Thursday 13th October 2016 Public Bill Committees

[The Chair]

With this it will be convenient to discuss the following:

New clause 8—Revocation of the Education (Student Support) (Amendment) Regulations 2015—

“The Education (Student Support) (Amendment) Regulations 2015 (Statutory Instrument no. 1951/ 2015) are revoked.”

This new clause would revoke the Education (Student Support) (Amendment) Regulations 2015, which moved support for students from a system of maintenance grants to loans.

New clause 10—Impact of changes to financial support for students on access and participation—

“(1) The OfS must, within six months of the day on which this Act is passed, report to the Secretary of State an assessment of the impact of changes to student financial support arrangements made within the previous twenty-four months on access and participation, and make recommendations.

(2) The OfS may, in making the assessment of such changes as specified in section (1), make recommendations to the Secretary of State about further necessary changes to student support to enhance or mitigate the impact of that change on access and participation.

(3) The OfS must, within twelve months of any change to student financial support arrangements coming into force and after two twelve month periods thereafter, report to the Secretary of State an assessment of the impact of the change on access and participation and make recommendations.

(4) The OfS may, in making the assessment of such changes as specified in section (3), make recommendations to the Secretary of State about further necessary changes to student support to enhance or mitigate the impact of that change on access and participation.

(5) The Secretary of State must lay the reports specified in subsections (1) and (3) before both Houses of Parliament.”

This new Clause would require the OfS to report to the Secretary of State on the impact of changes to student funding on access and participation.

New clause 11—Access to support for modular study—

“The Secretary of State must, within six months of the day on which this Act is passed, set out arrangements in regulations made under sections 22 and 42 of the Teaching and Higher Education Act 1998, as amended, to provide support for students studying for institutional credits, as distinct from working towards a full qualification.”

This new Clause would require the Secretary of State to provide for module-specific loans, rather than requiring people to be working towards a full qualification to qualify for access to financial support.

New clause 13—Student support: restricted modification of repayment terms—

“(1) Section 22 of the Teaching and Higher Education Act 1998 (power to give financial support to students) is amended in accordance with subsections (2) to (4).

(2) In subsection (2)(g) at the beginning insert “Subject to subsections (3)(A) and (3)(B),”.

(3) In subsection (2)(g) leave out from “section” to the end of subsection (2)(g).

(4) After subsection (3) insert—

“(3A) Other than in accordance with subsection (3B), no provision may be made under subsection (2)(g) relating to the repayment of a loan that has been made available under this section once the parties to that loan (including the borrower) have agreed the terms and conditions of repayment, including during—

(a) the period of enrolment on a course specified under subsection (1)(a) or (1)(b), and

(b) the period of repayment.

(3B) Any modification to any requirement or other provision relating to the repayment of a loan made available under this section and during the periods specified in subsection (3A) shall only be made if approved by an independent panel.

(3C) The independent panel shall approve modifications under subsection (3B) if such modifications meet conditions to be determined by the panel.

(3D) The approval conditions under subsection (3C) must include that—

(a) the modification is subject to consultation with representatives of the borrowers,

(b) the majority of the representative group consider the modification to be favourable to the majority of students and graduates who have entered loans, and

(c) there is evidence that those on low incomes will be protected.

(3E) The independent panel shall consist of three people appointed by the Secretary of State, who (between them) must have experience of—

(a) consumer protection,

(b) loan modification and mediation,

(c) the higher education sector, and

(d) student finance.”

New clause 14—Student loans: regulation—

“(1) Any loan granted under section 22(1) of the Teaching and Higher Education Act 1998, (“student loans”) irrespective of the date on which the loan was granted, shall be regulated by the Financial Conduct Authority.

(2) Any person responsible for arranging, administering or managing, or offering or agreeing to manage, student loans shall be regulated by the Financial Conduct Authority.”

New clause 15—Higher Education loans: restrictions on modification of repayment conditions—

“(1) A loan made by the Secretary of State to eligible students in connection with their undertaking a higher education course or further education course under the Teaching and Higher Education Act 1998 shall—

(a) not be subject to changes in repayment conditions retroactively without agreement from both Houses of Parliament;

(b) not be subject to changes in repayment conditions in the event of the loan being sold to private concerns, unless these changes are made to all loans, in the manner prescribed above;

(c) be subject to beneficial changes, principally to the repayment threshold, in line with average earnings.

(2) In section 8 of the Sale of Student Loans Act 2008, for subsection (1) substitute—

“(1) Loans made in accordance with regulations under section 22 of the Teaching and Higher Education Act 1998 (c. 30) are to be regulated by the Consumer Credit Act 1974 (c. 39).””

This new clause would ensure no retroactive changes could be made to student loan repayment conditions without agreement from both Houses of Parliament.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

It is a pleasure, as always, to serve under your chairmanship, Sir Edward. I rise to speak because I think that we have a chance to right a wrong. I hope that the whole Committee will indulge me and vote for our new clauses. I will speak to new clauses 8 and 15, and support new clauses 10, 11, 13 and 14, in the names of my hon. Friends the Members for Sheffield Central and for Ilford North, who will I am sure speak with their usual expertise and eloquence in due course.

New clause 8 would revoke the regulations that made the change from maintenance grants to maintenance loans, and would ensure that students from low and middle-income backgrounds can receive the maintenance grant again. The policy was first announced in the autumn statement by the then Chancellor, and was pushed through in a statutory instrument without the proper scrutiny of the whole House. It is right that we have the chance to scrutinise it here today. The power is in the Committee’s hands.

Far too many students feel that they have been ripped off by this Government—a feeling that, sadly, this Bill seems unlikely to change in its current form. First, the coalition Government trebled tuition fees, leaving students with some of the highest levels of debt in the developed world. They then froze the threshold at which students repay those debts, meaning that those on lower incomes will lose out yet again. Then, in one of the former Chancellor’s last great failures before leaving office, he abolished maintenance grants, replacing them with yet more loans and burdening young people with even more debt.

[Gordon Marsden]

My hon. Friend states our case strongly. Does she share my sense of regret that, despite the inadequate consideration by the Joint Committee on Statutory Instruments and despite our request that the Government bring the matter to the Floor of the House, it took an Opposition day motion to have the change debated? The Government’s majority in that Opposition day debate—from memory, I believe it was 16—was one of the lowest they had in that Parliament.

[Angela Rayner]

I absolutely agree with my hon. Friend. The Minister and his hon. Friends have an opportunity to right that wrong today, so I hope they are all listening and are willing to work collaboratively with us.

New clause 15 would introduce much-needed restrictions on the Government’s ability retrospectively to change the terms of student loan agreements. It would make such a change subject to the approval of both Houses of Parliament, which is exactly how things should be conducted in this place. Although the practical steps we propose are slightly different, new clause 15 has much the same goals as new clauses 13 and 14, tabled by my hon. Friends the Members for Sheffield Central and for Ilford North. Either approach would have our full support.

When we talk about students feeling ripped off by the Government, there can be no better example than the retrospective changes made to student loan agreements. The decision to freeze the repayment threshold so that graduates begin to repay their loans when they earn £21,000 a year, instead of allowing it to rise with inflation as initially promised, shows a brazen disrespect for students and destroyed any remaining trust they had in the Government. Fortunately for the Minister, he has the chance to restore that trust today by supporting new clause 15.

I am sure the Minister agrees that the Government have a great deal of work to do to ensure that all students, regardless of background, can access the education they need. After all, he was the one who said that the fall in the number of students from disadvantaged backgrounds at our elite universities showed

“a worrying lack of progress”

towards widening participation. We agree; that is why we tabled the new clause. He also said that our top universities must

“redouble their efforts…to boost social mobility”.

Our new clause gives him the chance to do that.

I know these Committee debates can feel a little dry, but if the Minister and his party vote with us, we can all leave this Committee Room knowing that we have done something exciting and worthwhile to boost social mobility. I, for one, would love to go back to my constituency tonight and sing it from the rooftops. It would be such a progressive step, but if the Minister cannot accept it, perhaps he can tell us what new steps the Government will take in the Bill to reverse the worrying free fall in the number of state-educated students going on to university.

More than half a million students were able to benefit from the maintenance grants policy and receive the support they needed to meet their living costs. The Government have said that the Bill

“will support the Government’s mission to boost social mobility, life chances and opportunity for all”,

but the Committee has spent a long time scrutinising it and the Government have come forward with no substantive proposals for doing any of those things; if anything, they have made them less likely to occur. Instead, they have offered us an office for students with no students in it, and access and participation plans that will take no substantive steps to improve either access or participation. Although the Government claim that their goal is to increase social mobility, there appears to be nothing in the Bill that shows that they are taking that challenge seriously.

Our new clauses give the Government an excellent chance to meet the goals that they have set themselves in the Bill. The Government have said that they want to boost social mobility. They can do just that by voting for new clause 8 and offering much-needed support to students from low and middle-income backgrounds. The Government have said that they want to improve life chances. What better way of doing that than by giving everyone the opportunity to access higher education if they want to? The Government have said that they want to improve opportunity for all. The Minister will be able to do just that by accepting the new clause. Is he willing to walk the walk of improving social mobility, or is he just talking the talk?

I understand that we are asking the Minister to carry out the dreaded U-turn. After all, he previously said that the abolition of the maintenance grant and the introduction of a new loan helps to balance the need to ensure that affordability is not a barrier to higher education with ensuring that higher education is funded in a fair and sustainable way. It is clear, however, that that will not be the case. After all, figures from his own Department show that since the trebling of tuition fees, there has been a sharp and continuous fall in the number of state-educated students going on to higher education. Perhaps he can tell us today how increasing the burden of debt on students by replacing maintenance grants with loans will improve matters.

The changes that the Government made retrospectively have made the problem even worse, but fundamentally this is not just about the principle of retrospective action; it is about trust. The Government having the power to change loans retrospectively means that every single student in further and higher education will be writing a blank cheque to the Government and, worse than that, they will be writing a blank cheque to a Government that they know they cannot trust—a Government that have already retrospectively changed the terms of their loans once, which, as the independent Institute for Fiscal Studies has shown, will cost the average student £6,000.

The Minister said that the funding for student finance would be fair and sustainable, but this is nothing more than a trick of accounting. The change from maintenance grants to loans appears to reduce the spending on universities, but all it really does is defer the cost. As has been shown by the independent Office for Budget Responsibility—an institution set up by his party’s Government—the change from maintenance grants to maintenance loans will, over the medium term, increase public sector debt by more than 2% of GDP. That is the result of the Government making loans when they know that most students will not be able to repay them. Moving to loans may be a good accountant’s trick to reduce the deficit, but it does nothing for our public finance or for the wellbeing of those students carrying that personal burden. It simply means that it will be the next generation left picking up the tab. We all know that this generation will be the first to be worse off than their parents. Do we really, as a nation, want to make a habit of that? The tab that maintenance loans will leave them with is more than 2% of GDP. That is more than our entire defence budget, more than £34 billion. Perhaps the Minister can tell us how leaving that debt for the next generation is, in his words, “fair and sustainable”.

The Government have made it clear that they want us to use the Bill to improve opportunity for all. We know that the maintenance grant is the way to do that. We saw under the last Labour Government how it was central to helping record numbers of children from disadvantaged backgrounds into universities—a proud record, I might add. The Government plan to scrap the maintenance grant. To simply impose an additional debt on students is a regressive step. Having already burdened students with additional debt, taking the power retrospectively to increase their debt burden again and again will create a dangerous disincentive, as students will not enter further and higher education for fear of what the Government will do to their loans. The Minister may feel that new clause 15 is unnecessary because his Government would never renege on their promises to students and never retrospectively change the terms of a loan agreement, but his Government have already done that once. We know that the Government have not only the power but the inclination, so it is no wonder that students are worried they will do it again.

--- Later in debate ---

[Joseph Johnson]

We have had a lengthy debate about issues that hon. Members and I have already debated on many occasions over the past year. I am sure they are familiar with many of the points I will make in response.

I will start with the overarching position, which is that Britain has some of the very best universities in the world and this Government are committed to putting them on a strong and sustainable financial footing to ensure that that continues. Our student funding regime achieves exactly the right balance between students, taxpayers and universities. Our decisions have allowed us to remove the cap on student numbers; we have increased up-front financial support to students and made above-inflation increases for some of the poorest; and I am proud to say that as a result of our decisions, more people, not fewer, are going to university, including record numbers of students from disadvantaged backgrounds. As I have told the Committee before, the entry rate for the most disadvantaged 18-year-olds has risen under the current system to 18.5%, a record high. Disadvantaged young people in England are now a third more likely to enter university than they were when the coalition Government came into office. The system is progressive; it ensures that those who benefit the most from their education contribute more.

I was struck and a little disappointed that the shadow Secretary of State claimed that the Bill was silent on social mobility and widening participation. I do not think that that is the view of the Committee as a whole. I am surprised that she has not taken into account the various ways in which the Bill moves forward Government policy on widening participation. For her benefit, I will remind her of some of the key ways in which it does so. It makes equality of opportunity a core duty of the OFS. As we were discussing an hour or so ago, it places a transparency duty on providers, shining a spotlight on those that need to go further on social mobility. It introduces an alternative finance product so those who cannot access interest-bearing loans for religious reasons can access student finance. It mainstreams the director for access and participation’s role in the office for students, giving that important function the full suite of OFS levers and sanctions. It ensures that information collected by the admissions body can be used for research on social mobility. It enables new providers to enter the sector, providing greater diversity of provision for a wider range of students. Those are just some of the many ways in which the Bill takes us forward on social mobility, and I was disappointed that she did not acknowledge any of those.

[Angela Rayner]

I suppose the issue is gusto—whether the Bill has teeth and the ability really to drive social mobility. I was hoping that the Minister, instead of just reeling off what he has told us before, would come with me today and do something actually to help social mobility. That is why I am disappointed with his response.

[Joseph Johnson]

As I was going to say, our funding system for higher education has enabled us to put it on a sustainable financial footing and, in turn, lift the student number cap. If we moved back to the old way of funding universities through direct Government grants and the payment of tuition fees and maintenance grants, we would have to reimpose the student number cap, which would inevitably have an impact on widening participation. We have seen in Scotland how the alternative funding model that the Labour party wants to move us back to crimps social mobility. We see that in all the data from Scotland on widening participation and access. The hon. Lady needs only to look at the Scottish example to see how her policies would take us backwards on social mobility. She needs to look carefully at how the record participation of people from disadvantaged backgrounds under our funding system is driving social mobility and will continue to do so in the years ahead.

[Angela Rayner]

I thank the Minister for giving way once more; he is being generous with his time. Does he agree that Labour’s announcement about how we would plan the corporation tax rate to pay for things such as education maintenance allowance to be reintroduced was a really progressive step and would be the best way to help all our students?

[Joseph Johnson]

There is always the option of raising taxation and imposing on the general taxpayer the burden of paying for—

--- Later in debate ---

I understand that there were concerns that the changes might have deterred students from entering higher education, but we have seen that that was a dog that did not bark. The evidence has shown that participation continues to rise following our reforms in 2012. The latest data from UCAS suggest that it will continue to do so.

[Angela Rayner]

The Minister is making great play of his sustainability model and suggesting that the Opposition do not have one. Is he aware that the OBR report on sustainability says that the debt increase by this Government will be 11% of GDP when they write off the existing debt under their proposals?

[Joseph Johnson]

The hon. Lady may want to tell us more about her sustainable model. We have a sustainable funding model and it is delivering record participation for people from disadvantaged backgrounds. Surely she should welcome the level of investment that the Government are consciously and deliberately making in our higher education system. I thought that the Labour party would welcome Government investment in our higher education system but, on the contrary, it seems to be lamenting it. That is extraordinary.

[Angela Rayner]

The Minister fails to understand that I said in my contribution that the Government are increasing debt for future generations and not providing a sustainable model. He is trying to hoodwink the public into believing that that is what he is trying to do. He should be honest with the public.

[Joseph Johnson]

The hon. Lady should look carefully at the benefits that students get from higher education. She will have seen the frequently rehearsed statistics showing that a woman who goes through higher education can expect lifetime earnings that are £250,000 higher, net of tax and the cost of university, than she would have had, with the same qualifications, if she had not gone through university, and the figure for a man is £170,000. The model is sustainable.