Tuition Fees

Emily Thornberry Excerpts

Tuesday 30th November 2010 Commons Chamber

[Mr Denham]

We have made it very clear that there are choices to make about the pace of deficit reduction. We would deal with the deficit but would not choose to make the reckless cuts across public services that the hon. Gentleman supports. There are also choices to make within Departments and we would not cut higher education funding by 80%. Neither would we want a system of graduate repayment that put all the burden on middle-income graduates. There are choices to be made and the hon. Gentleman should consider these matters carefully.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Will my right hon. Friend give way?

[Mr Denham]

I must make some more progress; many Members wish to speak in the debate.

Let me address fair access. The proportion of students coming from lower-income backgrounds has steadily increased, but education maintenance allowances are being scrapped for 600,000 students and Aimhigher is being ended. The ladders of opportunity are being chopped down as we debate tonight. What will happen to the widening participation money that institutions receive because it can be more expensive to support students from non-traditional backgrounds to successful graduation? Will they still get it or will they have to take it from their fees?

The Government want universities to fund outreach. How much of that is meant to come from increased fees, essentially charging students extra for the privilege of being encouraged to go to university? The Government say that universities can charge £9,000 in exceptional circumstances; will the Secretary of State tell the House tonight what “exceptional” means? Will universities that currently do well on widening participation be able to charge £9,000 or will it be only those that do not? Will universities be punished for failing to meet their access agreements?

How will the national student scholarship work? Is the £150 million for one year or for three? Will the Secretary of State tell the House how many students it will cover and at what income level? Will it even cover the students on low incomes who are already in the system? The House needs to know the answers to these questions. If it pays for a free year, will that be just for the most expensive courses in the most expensive universities? If so, why should a student taking a £27,000 course get their fee cut to £18,000 while a student taking a £24,000 course will still have to pay £24,000? Where is the fairness in that? If it is available only for some universities, where is the fairness for poorer students in other places?

We all want the Government to ensure fair access, but until these questions are answered all this is only warm words—and the Secretary of State will not answer. All that he will say is that if the fee cap is raised, he

“would expect to write a letter of guidance to the Director of Fair Access.”

Shuffling off responsibility like that will not do. He must know what exceptional circumstances means—he just will not tell us. But if he wants to hide behind the director of fair access, let him write to Sir Martin Harris today asking him to bring forward proposals in the new year so that the House can consider them before the fee cap comes to a vote.

Universities are over-subscribed, so it matters to students how many places there are. The fees that universities charge will depend on how student numbers are controlled and distributed. The Secretary of State says:

“We will need to continue the type of student number restrictions that the previous government imposed in order to control public spending costs”.

That is an extraordinary response because student numbers are tightly controlled both overall and by institution. If that does not change, they will not get their market. There will be no competition and no incentive to change. It will be the worst of all possible worlds with the highest fees, little or no new money for universities and no change. It makes a nonsense of everything the Government have said and we need to know what they really have in mind.

Will there be new private universities competing with public universities and will they get public funding as Browne proposed? The Secretary of State has said:

“We will set out proposals on new providers of higher education in the White Paper”,

but the House should know before we vote on the fee cap. What about part-time students? Yesterday the Government slipped out an impact assessment which said that

“we estimate that around two thirds of part-time students will not be eligible for fee loans. At the same time, the withdrawal of teaching grant might mean that fees are increased across the board (including for students not eligible for fee loans). This could have a negative impact on part-time participation overall.”

Is this what he means by a fair deal for part-time students? What about universities that train teachers? Their funding will be cut and their MPs will be asked to raise fees before Christmas, but the Department for Education’s proposals on funding teacher education will not be published until after Christmas.

We have no guarantees on fair payments, no guarantees on fair access, no guarantees on fairness for part-timers and no guarantees on student numbers. There are all these unanswered questions but the Secretary of State wants to push the vote through so that the hon. Member for Bermondsey and Old Southwark can come out from under the bedclothes. These questions could all be answered by a White Paper before we vote, but the Business Secretary does not have a good record on White Papers. He promised us a growth White Paper in October, but it did not happen. It was then promised for November, but it did not happen. Yesterday, the Chancellor confirmed what officials had already told the Financial Times—that it was not going to happen because there was nothing to put in it.

With higher education we do not know whether the Business Secretary does not know what to put in a White Paper or does not want to tell us. He could publish the White Paper, produce draft legislation on repayments and have the vote on fees all in January. We all have plans for Christmas, but this is the day for him to tell the House that he cares more about the future of our great universities and our young people than he does about the chance to appear in a celebrity edition of “Strictly Come Dancing”.

--- Later in debate ---

[Vince Cable]

What on earth were top-up fees designed to achieve? They were designed to get graduates to pay instead of the state—that was the whole point.

[Emily Thornberry]

If the right hon. Gentleman could have his time again, would he be for or against student fees?

[Vince Cable]

In the context in which we are now operating—an extreme financial crisis—I am introducing a policy that is a great deal more progressive than the one Labour left behind.

There is a problem, and before I move to the specifics, I shall deal with where the Opposition are coming from, particularly their new leader. Last week, he told the press that he was “tempted” to join the student demonstrations. He has had three days praying in the wilderness, dealing with the devil and deciding whether he wants to succumb to temptation. I do not know whether he has, but if he does, and if he addresses the students, I have been trying to imagine what he will tell them. I think the narrative would go something like this: “We feel your pain. We feel your sense of betrayal by the Government and the Liberal Democrats. We have applied our socialist principles, and we are going to produce a fairer system and lead you to the promised land. What are we offering you? What is our policy? Our policy is delay.” The policy is delay—procrastination. There is a new mantra for the National Union of Students executive: “What do we want?” “Delay.” “When do we want it?” “Well, maybe next year—probably.” That is the alternative on offer.

I shall now deal with the core issue—the right hon. Member for Southampton, Itchen himself identified it: how do we finance higher education? The last line of his motion is the only one with any substance; it relates to money and the 80% cut in the tuition grant. That is a serious issue, so let us try to deal with it.

The right hon. Gentleman was an education Minister so he knows perfectly well that there are three separate funding streams for higher education: student support, research and tuition. When we look at the picture as a whole, we see that at the end of the Labour Government about 60% of all student funding came from the state and the other 40% came from the private sector, from graduates and overseas students. As a result of the changes we propose, approximately 60:40 will become 40:60. It is a mixed economy and the state contribution is being reduced.

The question is whether that number is right. Should it be more or should it be less? If the state is to contribute, where should the money come from? The issue we all have to face is this: when we came into government, and I came into this job, I knew that my predecessors were going to cut the Department that I lead by between 20% and 25%. That was the Institute for Fiscal Studies’ analysis, which has never been denied. It is clear from the logic of not having protected Departments that that would have happened. That was in a Department, 70% of whose funding goes to universities. If the Labour Government were not going to cut the tuition grant for universities, we have to ask where the money would have come from.

I shall set out the range of alternatives. A 50% cut in further education was one possibility; another was a 40% cut in science and another was a 45% cut in the innovation and enterprise budget. We know that the previous Government would not have gone down several of those routes; they committed themselves to increasing the science budget by even more than us. I think the Labour spokesman on science made that very clear at our Question Time last week. The Opposition were not happy that we had maintained the science budget; they want to go even further. At BIS questions, they constantly raise the issue of regional development agency funding—they want to spend more money on that. Where will the money come from? Is it from the cuts they were committed to?

There is a choice. We understand that. What could have happened, although the Opposition have been very quiet on the subject, is that instead of raiding the universities, they could have made drastic cuts in the further education budget. That was the real choice: the further education budget for vocational training for young people who do not go to university. It is almost certain—indeed, it was being put in place when I joined the Department—that cuts in further education were already in train. The right hon. Member for Southampton, Itchen has quite properly spoken of the substantial increase in funding for universities under his Government, but he did not point out that the further education budget did not increase at all. I think it actually fell in real terms. That reflects Labour’s priorities.

--- Later in debate ---

[The Minister for Universities and Science (Mr David Willetts)]

We have learned a lot about Labour’s approach in this debate. We have learned that it wants delay; we have learned that it wants careful consideration; we know that it needs more information; and we know that it wants to go slow. As my right hon. Friend the Secretary of State would put it, it wants to go slow, slow, slow-slow, slow. That is the only thing that Labour is offering. That does not just reveal the inadequacy of Labour’s approach to education; it matters, because if the changes that we propose were not in place in 2012, there would be a real financial challenge for our universities. The Secretary of State has made clear our commitment to delivering those changes.

By contrast, we heard from the shadow Secretary of State—

[Emily Thornberry]

rose—

[Mr Willetts]

No, I have only five minutes.

We heard from the shadow Secretary of State that the speed of deficit financing is a matter of choice. He hinted that he would be willing not to make the public expenditure savings and to borrow the money instead. If he is willing to borrow the money instead, we know what Labour’s approach is—it is willing to impose debts on future generations. There is one difference between our approach and Labour’s: Labour’s approach is indiscriminate and would hit everybody, rich or poor, male or female, and ours means that people will start paying back only when they are earning more than £21,000 a year. That is why our approach to university financing is progressive and Labour’s is indiscriminate and unfair.

Of course, the £21,000 threshold that we propose is far higher than the £15,000 threshold that we inherited from Labour. That is not the only feature of our proposals that is fair and progressive. We are increasing the maintenance grant so that it helps families that earn up to £37,000 a year. The national scholarship programme is worth £150 million. Two thirds of first-time students who study part time will also benefit from our proposals.

Labour is completely disingenuous. It is not carefully waiting for more information or a White Paper, but simply playing for time while it tries to work out what on earth its policy is and whether its leader has the guts to follow the advice of his own shadow Chancellor:

“Oh, and for goodness’ sake, don’t pursue a graduate tax. We should be proud of our brave and correct decision to introduce tuition fees. Students don’t pay them, graduates do”—

quite right—

“when they’re earning more than £15,000 a year, at very low rates, stopped from their pay just like a graduate tax, but with the money going where it belongs: to universities rather than the Treasury.”

I could not have put it better myself. The only difference is that under our proposals, the threshold is not £15,000, but £21,000. We know which is the right approach.