Funding Higher Education

Gordon Marsden Excerpts

Wednesday 28th February 2018 Westminster Hall

[Gordon Marsden (Blackpool South) (Lab)]

You might get a cheque in the post.

[Mr Streeter]

It would be a little bit late, but I thank the hon. Gentleman for the thought.

Repayment of loans is a shared responsibility between the Student Loans Company and Her Majesty’s Revenue and Customs. The Student Loans Company receives all its funding from the UK Government and the devolved Administrations. Therefore, the system is based on the student owing however much money he or she needed to borrow to get through university and gradually paying it back during their working lifetime. Perhaps not surprisingly, 93% of all students in England take up student loans.

The total amount of debt that an average student who completes a three-year undergraduate course will owe has now risen to around £50,000, according to the Institute for Fiscal Studies. That sum will include just under £6,000 in interest accrued during the period of study, at a rate of up to 6.1%. A student who has taken out a loan will begin repaying 9% of their income when they are earning higher than the repayment threshold, and any unpaid debts are written off after 30 years. Broadly, that is the system.

The Government announced in October 2017 that the repayment threshold on student debts would be raised from £21,000 to £25,000, commencing from April 2018. At the same time, the fee cap was frozen at £9,250.

--- Later in debate ---

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Hosie. I congratulate the hon. Member for South West Devon (Mr Streeter) on securing the debate. He spoke thoughtfully. We are both of the Kinnock generation, so I understand some of his points. He talked about his experiences in schools and people going to university. We must recognise the heart of the debate is not just the people who speak about what they might be deterred from, but the people who keep silent. The people who keep silent, whether they are older or younger learners, are being put off by the current financial structure that the Government have put in place.

The hon. Gentleman made a number of interesting suggestions about graduate tax and cutting the interest rates from 6.1%. There is consensus on that across the piece. We would have more sympathy with the Government if they had not been so intensely relaxed, and indeed complacent, when the interest rates were introduced. It was very clear that the previous Universities Minister—no doubt because he was a keen remainer—did not take into account in any shape or form the implications of Brexit in that respect. Two months before the referendum, inflation stood at 0.4%, but it is now 3.1% and rising. That is one of the reasons why the interest rate is 6.1%.

I welcome the thoughtful comments made by the hon. Member for Northampton South (Andrew Lewer). He made very sensible points about governance in higher education. He rightly touched on the impact on post-1992 universities if fee aversion hits the disadvantaged students they cater for, and talked about his experiences with the two universities he is associated with—the University of Northampton and the University of Derby. I support all that, but I remind him and the House that fee aversion is an issue not simply for students but for the taxpayer. My hon. Friend the Member for Manchester Central (Lucy Powell) made exactly that point in response to last week’s statement. The Government have tried to make a virtue out of necessity by saying, “Oh, you don’t really need to repay all this money,” but we are irresponsibly laying burdens on future generations and on the tax system now. The Government should not be complacent about that in any way.

[Mr Gyimah]

I look forward to hearing the hon. Gentleman outline the Labour party’s policy. His concern is burden on the taxpayer, but there would be an even bigger burden on the taxpayer if higher education were made free—that is my understanding of the Labour party’s policy—unless places were rationed.

[Gordon Marsden]

There were several completely unproven assertions in what the Minister just said. He would do better to stick to this debate, which is about his policies rather than—

[Mr Gyimah]

rose—

[Gordon Marsden]

No, I am not going to take another intervention. The Minister will have plenty of time to say what he wants to say.

My hon. Friend the Member for Sheffield Central (Paul Blomfield) rightly talked about the sustainability of the sector and some of the key issues in terms of Brexit. My hon. Friend the Member for Coventry South (Mr Cunningham), who is no longer in the Chamber, absolutely rightly drew us back to further education and nursing bursaries, and the hon. Member for Glasgow North West (Carol Monaghan) spoke about issues post-Brexit.

The point is very straightforward: since coming to office in 2010, Conservative-led Governments have repeatedly raised tuition fees. They trebled fees to £9,000 and subsequently increased them to £9,250. That agenda has hit students—particularly those from disadvantaged backgrounds—harder and harder since 2012. The cutting, one by one, of all the concessions that David Willetts introduced to temper the impact has been just as damaging. Those concessions were dismantled deliberately. The National Union of Students lists them in its briefing for the debate: the Government abolished maintenance grants, NHS bursaries, the disabled students allowance and the education maintenance allowance, and ended Aimhigher.

The Minister has inherited that. He is not responsible for it, but he would be wise to show due humility about its incremental impact on the people concerned. If he reads the “Fairer Fees” report published by the Sutton Trust late last year, he will see, as Members have already said, that the average debt for students in England is higher than the European average and twice the US average. As a result, the Government have racked up an unenviable record of nudging people away from, rather than towards, aspiration in higher education and chipping off many of the rungs of the ladder of social mobility that were designed to protect them.

The July report by London Economics for the University and College Union suggested that thousands of graduates would suffer a mid-life tax crisis, analysis undertaken last year by the Institute for Fiscal Studies shows the level of debt, and only this week the Sutton Trust gave us figures that show disadvantaged students across the UK are more than three times more likely to live at home while attending university. The hon. Member for Glasgow North West made that point, too.

The Prime Minister finally admitted last week, after months of us, the Sutton Trust and an impressive range of stakeholders all saying the same, that the current funding system leaves the most disadvantaged students with the highest debt, yet behind the warm words and soft soap that were ladled out by the Prime Minister in Derby and by her Education Secretary in the Commons, it seems that no new money is available and there is the potential for HE funding cuts. In her speech, the Prime Minister tried to talk the talk on social mobility and aspiration, but she did little to walk the walk and address either the FE sector, in which 10% of HE is delivered, or the problems with 16-to-18 provision that many colleges are suffering, including the one in which she chose to make her speech. It will take more than a brush-by in Derby one afternoon in February to remedy those issues.

The terms of reference published by the Department state that the review cannot make recommendations on tax policy and must make recommendations in keeping with the Government’s fiscal policies. Will the Minister confirm that that means there will be no new money for the policies in the review? Does it mean that savings will have to be found elsewhere in the FE budget if changes are to be made? My hon. Friend the Member for Sheffield Central challenged him and, to give him credit, he made a commitment that access and widening participation funding will not be diminished as a result of the review. I warn him that the Treasury has a long reach and he will need a stout shield to resist it in this area and others.

[Dr Blackman-Woods]

Does my hon. Friend agree that, unless the Government are at least prepared to put more money into the sector, it is difficult to understand how we will get a sustainable system for funding universities? The Minister needs to be clear about that.

[Gordon Marsden]

I absolutely agree. As the Minister is eager to explore our policies, I remind him that Labour’s policies and our message of progression were taken on board so strongly by would-be and existing students, their families and their parents during the recent election because we had a cohesive narrative. Whether we were talking about adult learning, college learning or traditional cohorts of young people going into higher education, we said that we wanted to lift barriers and financial burdens to make a step change in social mobility. The Conservatives did not put that message across, and suffered accordingly. Given the restrictions on the review, they will miss another opportunity.

The Conservatives continue to falter on the reintroduction of maintenance grants, to which we have been committed for nearly two years. The Prime Minister engaged with that tortuously last week. Our position is echoed by the education sector, Universities UK, MillionPlus, the Chair of the Education Committee, the Treasury Committee and even the vice-chancellor of the private University of Buckingham, Sir Anthony Seldon. UUK has said that there are ways in which the current system can be improved, such as by reintroducing maintenance grants, as has MillionPlus, but it is likely that colleges and universities will be expected to cover any extra costs. The Prime Minister implied that in her speech last week when she said the Government will have to look at how

“learners receive maintenance support, both from Government and universities and colleges.”

We have some idea of how that extra funding might be delivered under her policies: by robbing Peter to pay Paul. We saw the same sleight of hand from the Secretary of State in The Sunday Times, on the BBC and in his statement last week, when he talked about cutting the cost of tuition fees.

The bottom line is that those who already have a lot will be given more. Wealthy students and graduates will benefit the most, because they can pay off debt the earliest. Over the next 10 years, there will be 13 million vacancies but only 7 million school leavers to fill them, yet great swathes of our university extramural departments, institutions such as the Open University and Birkbeck, and new providers, have been swept away or at least crippled by the tripling of fees since 2012.

There is a social dimension. One in five undergraduate entrants in England from low-participation neighbourhoods chooses or has no option but to study part time. The Government need to address that. However, when the Prime Minister talked about lifelong learning last week, there were no words of contrition for what the Government have done: tripling fees, scrapping maintenance grants and introducing adult learning loans, half of which have been handed back unused to the Treasury.

What we need to know from the Minister—apart from why, curiously, there has been no reference to 16-to-18 education—is what he is going to do to reassure people. No direct grant has been available for university courses in the arts and humanities, social sciences, computer science, design, architecture or economics since 2014-15. Will there be anything in the review to support those? The Prime Minister and the Secretary of State have talked about two-year courses easing financial burdens on students, but where is the commitment to the continuous professional development that will be necessary in HE if those are to go forward correctly?

Finally, what are the principles behind the timing of the report? Of course, the report will not be independent but will have input—that is all it is—from the panel. However, that input may be quite weak. Why will there be no consideration of that? What will the Minister do to reassure us all that it is not just a PR exercise?

Henry Ford famously said that a customer can have any colour so long as it is black. If the Minister and his Government do not take proper regard of the various elements described in the debate, they will be just as guilty of that as Henry Ford.

--- Later in debate ---

[Mr Gyimah]

Well, the suggestion from the Opposition spokesperson, the hon. Member for Blackpool South (Gordon Marsden), was that somehow we have pursued policies that are damaging higher education and the aspiration and prospects of our young people as far as the university sector is concerned. On the contrary, we have pursued policies that have put no cap on aspiration.

[Gordon Marsden]

rose—

[Mr Gyimah]

I will take the hon. Gentleman’s intervention in a second.

I will end this myth-busting section by focusing on Scotland, where controls on student numbers continue to restrict the aspiration of young people. The Sutton Trust recently stated that Scottish 18-year-olds from the most advantaged areas are still more than four times more likely to go straight to university than those from the least advantaged areas, compared with 2.4 times in England. Audit Scotland has stated:

“It has become more difficult in recent years for Scottish students to gain a place at a Scottish university as applications have increased more than the number of offers made by universities.”

That is not an example I want to copy here in England.

[Mr Gyimah]

Audit Scotland clearly does not share the hon. Lady’s view.

[Gordon Marsden]

The Minister speaks about rites of passage. Those are fine words, but fine words butter no parsnips. The truth of the matter is, he should be focusing on not just the number of people from disadvantaged backgrounds getting to university but what stops them staying there. He should also focus on the groups who never even think about getting there because of what his predecessors’ tuition fees policies have done, particularly for mature and part-time students.