Higher and Further Education

Gareth Thomas Excerpts

Tuesday 11th September 2012 Commons Chamber

[Shabana Mahmood]

I am afraid not; I have no desire to respond to a Whips’ question.

The trebling of fees is not the only thing that this Government have done to destabilise and put at risk the quality of our higher education sector.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Is there not another reason to be concerned about the current admissions data? For example, has my hon. Friend seen today’s report suggesting that even vice-chancellors of universities that have done reasonably well in applications continue to be worried about a decline in the number for humanities and languages?

[Shabana Mahmood]

My hon. Friend is absolutely right. There are worrying signs of perverse things happening as a result of the Government’s policies. Of course, there has been a focus on STEM subjects—science, technology, engineering and maths—which are very important to our continued economic growth, but that should not happen at the expense of modern languages or humanities. It is very worrying that we are seeing drops in the number of applications for those subjects.

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[Shabana Mahmood]

My right hon. Friend, who is Chair of the Home Affairs Committee, has been speaking up powerfully on behalf of genuine international students at London Metropolitan university, and I commend him for his efforts in trying to protect them from the impact of the decision to revoke its highly trusted status. He is absolutely right. Genuine international students who have paid huge sums of money for the privilege of a UK higher education and who have come to the end, or almost the end, of their studies at London Met should at least have been given the opportunity to continue and complete them there rather than have to scramble around to find an alternative institution that might take them. It seems entirely right that new international students are prevented from coming to London Met until these issues are resolved, probably through the courts system, but those who were already here and were genuine international students should not have had to suffer in this way.

This is one of the hardest years for universities, which begin the year 20,000 places down thanks to 10,000 places being directly cut by the Government and a further 10,000 being taken away because of the discredited, and frankly chaotic, core and margin policy. Core and margin was a deliberate attempt to force fees down—but crucially, not to benefit students but because the Minister got his sums wrong when he, the Business Secretary, who is sitting next to him, the Deputy Prime Minister and the Prime Minister were busy telling everybody that £9,000 would be the exception rather than the norm and that the average would be much more like £7,500. We now know that that is not how things panned out. To cover that up, and no doubt to get the Treasury off his back, the Minister introduced his core and margin policy. That policy does not put students at the heart of the system. First, it sends a dangerously conflicting message about the cost of tuition. On the one hand, the Government tell students that they can afford £9,000 a year because of the repayment terms, but on the other they try to show that cheaper courses are a good option for those put off by the top level of £9,000. It also acts as an inverse pupil premium. Incentivising poorer students to take up cheaper courses means that they are entering into a higher education experience with the least being spent on them, their learning resources, their activities and their institution. This undermines the Deputy Prime Minister’s pupil premium policy, and there is a risk that it will further entrench educational inequality in the UK.

[Mr Thomas]

Some of the cheaper courses to which my hon. Friend refers are clearly intended to be provided by commercial, for-profit universities. Why does she think that Ministers believe that commercial, for-profit universities should be regulated to a lower standard than mainstream universities?

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[Mr Willetts]

Let me continue to make progress.

The final item, and the biggest on the shadow Secretary of State’s list, is in some ways the most curious. Some £500 million is to come from the top 10% of graduates. I quote the shadow Secretary of State, who wishes to ask

“graduates earning over £65,000 in each year of their working life—to pay more through a combination of a higher interest rate…and to continue to pay for an additional two years.”

That is £65,000 in each year of their working life. The shadow Secretary of State is possibly the only person in the Chamber who could have imagined earning £60,000 a year in each year of his working life. The idea that a levy on people earning £60,000 in each year of their working life could raise £500 million is absolutely incomprehensible. Does the Labour party perhaps mean that when someone’s earnings eventually reach £65,000, they will be charged a higher rate or be charged retrospectively? Again, however, there is no way in which such a measure could raise anything like £500 million, not least because in a free and voluntary system in which we have—quite correctly—protected the right of people to make early repayments of their loan, people whose earnings are heading that way will simply repay their loans. The idea that they will find themselves trapped in penal repayment terms when they are earning over £65,000 a year is complete fantasy. There is no £500 million.

I am, incidentally, offering the hon. Member for Birmingham, Ladywood a free briefing on her policy, and I hope she appreciates how helpful it is. I am trying to explain it to her. In addition, if she were to move to anything like the commercial terms envisaged by the Opposition, consumer credit legislation would come into force and she would find a whole host of new regulatory requirements placed on her scheme that it would not be able to meet because of the design of the scheme that we inherited from the previous Government. It would simply become unworkable. There is no £500 million to finance the Opposition’s proposal, and they have no way of financing fees of £6,000.

[Mr Thomas]

Perhaps I can bring the Minister back to the Government’s own policy—or lack of it. Perhaps he will explain why it is fair for a student and their family to be able to probe the offer from a mainstream university using freedom of information legislation, but not that of a commercial, for-profit university.

[Mr Willetts]

It has come to a pretty pass when a loyal Opposition Back Bencher has to help those on the Front Bench by diverting attention from his party’s own policies, but that is what it has come to. The fact is that there is a black hole in the Opposition’s accounts, and we need to know whether they will cut £2 billion from resources that are now going to our universities. How are they are going to provide an extra £2 billion that is financed properly and honestly, and not by the slick accounting tricks used in the only attempt that they have so far made to explain their policy?

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[Mr Bailey]

The right hon. Gentleman mentions a number of issues that I wish I had sufficient time to deliberate upon. The point I am making is that those from lower-income backgrounds whose local university is not one that higher-aspiration students might wish to attend are suffering a disadvantage. A two-tier system may therefore be emerging. More lower-income students will want to stay at home regardless of the nature of their local university. I should stress that I think Wolverhampton university is excellent, and I would recommend it to prospective students, but it may not be the most appropriate institution for those seeking professional and academic qualifications. Not only will such lower-income students be missing out on the broader university experience of living away from home—although it is debatable how important that is—but they are less likely to have a good home learning environment.

[Mr Thomas]

If there is an increase in the numbers wanting to stay at home and go to their local university, there is also the risk of distortions in respect of choice of subject. In that context, has the hon. Gentleman seen the comments of the languages professor at Southampton university who is worried about the lack of provision of languages courses in the east of England, with the sole exception of Cambridge?

[Mr Bailey]

My hon. Friend makes an important point. I have alluded to the lack of choice such students would have. Their local university may well not offer the appropriate course for them to be able to optimise their educational development. That is a further example of potential disadvantage.

People from lower-income and lower-aspiration backgrounds will also be disproportionately disadvantaged as a result of the further education loans measures. They are more likely to have missed out on their original educational experience. They are also more likely to be in jobs where they need to upskill, so they will have greater need of support to study for enhanced qualifications. The Government are seeking to shrink the public sector in order to benefit the private sector, and the lowest-income areas are often those with the highest proportion of public sector workers, who are most at risk, and most in need of support to acquire the skills to enable them to transfer from the public sector to the private sector, in furtherance of Government policy. This is an example of disjointed government. People who will need to change jobs as a result of Government policy in one area will have the support that they need to fulfil the Government’s objectives kicked away. The end product could well be that their lives are devastated, along with the Government’s economic objectives.

I would like to discuss many other aspects of funding and the economics of this issue, but my great concern is supporting educational aspiration and fulfilment, and the need to do that to benefit our economy. That will not be achieved under these proposals.

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[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

My hon. Friend the Member for Sheffield Central (Paul Blomfield) is spot-on about the effect of such high tuition fees on those wanting to apply for postgraduate courses. Like him, I want to focus on one particular issue, which is clearly linked to the Government’s plans for higher education and their policy of £9,000 tuition fees, but which has not been given such a high profile in the debate so far.

As others have mentioned, Ministers wanted students to consider degrees costing less than £9,000, to reduce the Treasury’s exposure to student debt. What has not been highlighted in the debate is Ministers’ plan significantly to increase the role of commercial, for-profit universities owned by private shareholders to help to achieve that objective. They have significantly increased the number of courses run by such institutions for which students can secure a student loan.

I should say that there are already a large number of students studying and doing well at private universities in the UK. However, it is far from clear that Ministers have grasped the scale of risk involved in allowing an even bigger expansion of access to student loans for commercial universities without proper safeguards. In the US, the for-profit higher education world has been rocked by a series of scandals involving very high drop-out rates, very low degree completion rates and aggressive recruitment practices. Indeed, according to a recent American Senate investigation, in the three previous years almost 2 million students had withdrawn from for-profit institutions without completing a degree but with significant personal debt. One such institution had a drop-out rate of 84%.

I accept that Ministers have said that some safeguards are needed as the commercial, for-profit part of the universities sector grows. It would be helpful if the Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock), whom I congratulate on his appointment, set out in his response a little more detail about the Department’s plans.

For-profit commercial universities are still much less well regulated than mainstream universities. Surely Government Members would want the marketplace, as they describe it, for university education at least to be on a fair basis. Surely all for-profit companies offering a university education that want to recruit students who can access publicly backed loans should be subject to the same information and publication requirements as public universities. Those requirements should include student data and financial information and, as I made clear in my intervention on the Minister—uncharacteristically, he resorted to blather and ducked the question—be subject to freedom of information legislation.

When he replies to the debate, I encourage the Minister not to follow the example of his right hon. Friend the Minister for Universities and Science but to answer the question: when will Ministers bring forward plans to require commercial, for-profit universities to be subject to freedom of information legislation? When will they be required to provide the same level of data and information as mainstream universities so that they can be held to account in the same way?

[Mr Willetts]

Briefly, we are using the designation power—the power to designate courses and institutions—much more actively than the previous Government. That will ensure both the financial strength and the quality of provision in courses at alternative providers. There are still differences in the regulatory regime and it cuts both ways—FOI legislation cuts one way, equalities cuts the other, but that is the power we are using.

[Mr Thomas]

I say gently to the Minister that it is interesting that he and his colleagues in the Treasury are examining whether commercial, for-profit universities should be exempt from VAT in order to create a level playing field, but other sensible regulations, such as the requirement to be answerable to FOI legislation, as mainstream universities are, do not apply. Our collective experience of banking regulation and its failings, about which hon. Members across the House have uncomfortable memories, ought to encourage Ministers to be wary of market failure. As I have said, surely commercial universities that want exemptions should be properly held to account.

In her excellent opening speech, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) set out clearly how this policy of higher tuition fees exemplifies the Government’s failures in a series of other areas. Our motion outlines a clear, sensible alternative, and on that basis, I commend it to the House.