Higher Education Policy

Debate between Catherine McKinnell and John Denham

Wednesday 27th April 2011 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Does my right hon. Friend share my concern about a matter that was brought to my attention by a constituent? She is so concerned about the level of fees that her children will have to pay for the rest of their lives if they go to university that she is looking into retiring early to prevent them from being burdened with them. That could be an unintended consequence of this policy across the board—people could be incentivised not to work.

[Mr Denham]

Although this does not apply to the case that my hon. Friend raises, she has touched on an issue that will need to be examined in greater detail on another occasion. It has long been an oddity that the incomes declared to the Student Loans Company by those applying for loans appear to be rather low if they are set against the statistics about the social class from which people come. There is a financial incentive for minimising declared income when applying to the student loan system, and we must acknowledge that that was present to a degree under our system, too. Any sensible person will have real concerns that as fees rise towards £27,000 for a typical degree, with possible significant differences in the maintenance awards available and significant fee advantages for declaring a lower income, the temptation creatively to declare household income, shall we say, may well rise.

I think that it is a tragedy if, in a legitimate way, people take a household decision that takes somebody out of the labour market to enable somebody to take advantage of such opportunities. I am just flagging up this point without developing it further, but there is an issue here that the whole House will have to consider in the years to come.