Student Maintenance Grants

Gordon Marsden Excerpts

Tuesday 19th January 2016 Commons Chamber

[Mr Gordon Marsden (Blackpool South) (Lab)]

I beg to move,

That this House calls upon the Government to abandon its policy on replacing maintenance grants with loans for lower income students.

The Government’s proposal to scrap maintenance grant support for disadvantaged students and replace it with a loan system is not an isolated proposal. It is part of a pattern that can be seen in other areas of government. It mirrors, for example, changes that were debated eight days ago, which removed NHS bursaries for nurses and other staff, and it has been foreshadowed by changes that the Government have made in support and protection for further education over the past three or four years. The truth of the matter is that the Government have ducked and dived to avoid further debate on their direction of travel on the grants issue, and on freezing the payment threshold for five years, which is not specifically part of the regulations although it is referred to in the assessment that comes with them. That is also likely to hit disadvantaged students.

We have called this debate today to hold the Government to account over this major issue. They have refused to bring these changes to the Floor of the House themselves, and preferred instead to sneak them through in delegated legislation, which can be debated and voted on by only a handful of MPs.

[Ian C. Lucas (Wrexham) (Lab)]

Does my hon. Friend agree that it is particularly shameful that this proposal did not appear in the Conservative party manifesto? It is being sneaked into the House of Commons and without the knowledge of the people of this country.

[Mr Marsden]

My hon. Friend makes a striking point. That is only one of a series of delinquencies that I want to move on to.

The Conservatives have shied away from the light of debate, challenge and scrutiny on this issue, preferring instead to use a legislative sleight of hand to ensure that the sweeping changes were made in Committee in the hope that no one would notice. All the way through this process, they have been defensive. They have been less than candid and they have systematically resisted the path of openness. There was little detail to be had when the Chancellor first mooted this change in the summer, and not much more in the autumn statement. It was only when the National Union of Students raised the alarm about the impact of the process and threatened a judicial review over the lack of consultation and the failure to publish the interim equality assessment—which the Government have still not done—that a separate equality impact assessment was slipped out.

My hon. Friend the Member for Wallasey (Ms Eagle), the shadow Secretary of State of State for Business, Innovation and Skills, wrote to the Business Secretary explaining our concerns and asking for a full debate on this matter. This was reflected in early-day motion 829, which attracted a number of cross-party signatures. However, the Business Secretary’s reply largely ignored the issues. The issue of failing to bring the matter to the Floor of the Commons was raised by the shadow Leader of the House in December, and at that time the Leader of the House intimated that there should be a debate on the Floor of the House, but no such debate has taken place. A question from my hon. Friend the Member for Sheffield Central (Paul Blomfield) was ducked by the Prime Minister last Wednesday. Colleagues raised the issue again in last week’s business questions, and I put a series of detailed questions to the Minister in the Delegated Legislation Committee. I and the other members of the Committee would like to see the responses to those questions in due course.

It is perhaps no surprise that The Independent led today on the way in which this Government have been using statutory instruments systematically to force through profound and controversial changes to the law without proper debate and scrutiny. Nor is it surprising that my hon. Friend the Member for Wallasey told the newspaper:

“This is arbitrary rule that massively decreases the power of the Commons to effectively scrutinise the Government.”

The equality impact assessment was slipped out with a relative lack of ceremony at the end of November. As I said last week, this is the document that almost dare not speak its name, not least because the detailed evidence of the negative impact was tucked away in its central pages, to which I will refer later, and was rather belied by the bland conclusions appended to the front of the document. What is driving these panic measures from the Government—the £1.5 billion raid on grants and the threshold fees—is their belated recognition that the whole set of financial assumptions about repayment that underpinned their trebling of fees in 2012 is producing a black hole for them and for future taxpayers.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Did not a Tory Minister stand at the Dispatch Box in 2012 and assure us, on the question of tripling the fees, that increased maintenance grants and the national scholarship programme would protect students from the poorest backgrounds? Now the Government are scrapping both and trying to sneak the measures through. Is this not an absolute betrayal?

[Mr Marsden]

My hon. Friend is absolutely right, and he obviously has the power of telepathy, because I intend to refer to that later.

[Mr David Lammy (Tottenham) (Lab)]

My hon. Friend refers to the impact statement. Does he agree that, in 2016, it is a scandal that the impact statement, which the NUS had to drag out of the Government and which confirms that the measures will disproportionately affect black and minority ethnic students, women and disabled people, does not merit a proper debate and vote in this House?

[Mr Marsden]

I entirely agree with my right hon. Friend, who was a distinguished Schools Minister. His points are absolutely valid, and I shall deal with them in more detail in due course. These measures are not simply incidental tinkering with existing financial regulations.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Can my hon. Friend confirm that 45% of the student loan book, amounting to some £5 billion, is suspected to be delinquent in some way or other? These measures would add a further £1.6 billion to that amount. Are not the Government building up a huge unfunded liability in their national accounts?

[Mr Marsden]

I am grateful to my hon. Friend, who has great experience in these matters. The Institute for Fiscal Studies and other organisations have commented on that matter.

[James Cartlidge (South Suffolk) (Con)]

It is wonderful to hear Labour Members talking about unfunded liabilities. The hon. Gentleman mentioned the £1.5 billion cost of this measure, which is the money that will be saved. Is it his party’s policy to reverse the measure, and if so, where would it get the money from?

[Mr Marsden]

I am delighted that the hon. Gentleman is so looking forward to the arrival of a Labour Government that he is already asking us detailed questions on this matter. I would remind him, however, that today is a day for the Government to be held to account for their failures.

[Helen Whately (Faversham and Mid Kent) (Con)]

Will the hon. Gentleman give way?

[Mr Marsden]

I am sorry, but I must try to make some progress. I will take more interventions later.

These measures are typical of the ideology-driven but evidence-lite approach that this Government have too often employed. This is a major reversal of policy only four years after they hailed those maintenance grants for students from disadvantaged backgrounds. The statistics from the House of Commons Library tell me that the measures will affect around 500,000 of England’s most disadvantaged students. This amounts to a Domesday book listing the numbers of students who will lose their grants under the new rules. Universities across England, old and new, will be affected, as well as other higher education institutions. Further education colleges will also be affected, because they make an increasingly valuable contribution—10% and rising—to higher education, and a disproportionate number of their students will be affected.

[Andrew Gwynne (Denton and Reddish) (Lab)]

rose—

[Yasmin Qureshi (Bolton South East) (Lab)]

rose—

[Mr Marsden]

I will give way to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) and then briefly to my hon. Friend the Member for Bolton South East (Yasmin Qureshi).

[Andrew Gwynne]

I commend my hon. Friend for bringing this debate to the House of Commons so that we can have a vote on this important issue. He has talked about the impact on universities and colleges. Perhaps he has seen the information released by UCAS in December that shows that, even today, twice as many young people from advantaged backgrounds as from disadvantaged backgrounds go to university. How does he think removing £3,500-worth of grant a year is going to assist social mobility?

[Mr Marsden]

The reality is that it will not. I will have more to say about social mobility later.

[Several hon. Members rose—]

[Mr Marsden]

No, I will not give way again, as I have already indicated. A large number of people wish to speak, and I need to give them a chance to do so.

[Yasmin Qureshi]

Will my hon. Friend give way?

[Mr Marsden]

Yes, I have already indicated that I would do so.

[Yasmin Qureshi]

Does my hon. Friend remember that, in the last Parliament, the Government abolished the education maintenance allowance for 16 to 18-year-olds going into further education? They are now abolishing the maintenance grant for poorer people going into higher education, yet they managed to find tax cuts for millionaires in the last Parliament. Does this not show that this Tory Government are really not concerned about the poor and disadvantaged people in this country, whether in relation to housing, to universal credit, to disability or to education? They just don’t care.

[Mr Marsden]

My hon. Friend refers to the abolition of the EMA—

[James Morris (Halesowen and Rowley Regis) (Con)]

Will the hon. Gentleman give way?

[Mr Marsden]

No, I am sorry, I will not give way. I have already said that.

The EMA is not the subject of our debate today, but that point illustrates the problems affecting further education colleges. There can be a cumulative effect for the future of such colleges because these measures can result in people no longer applying to them. That is why the Association of Colleges said in a specific response to these regulations:

“We have real concerns about the proposed change as many of the students may never earn enough to pay back the money and the policy does appear to penalise poorer students.”

[Several hon. Members rose—]

[Mr Marsden]

I have already indicated that I will not give way at the moment, but I will do so in a little while.

The expansion of higher education opportunities in further education colleges after 1997 was one of the most significant advances made under the Labour Government in this area, and it was a crucial part of beginning to address the lack of balance for higher education in the English regions outside the areas of the traditional clusters of long-established universities. It was part of a joined-up strategy to embed higher education and skills in our local economies and via the regional development agencies at that time. My local Blackpool and The Fylde College gained an excellent new higher education block in that period, where more than 2,800 students are now in higher education. We know that many further education students come from precisely the non-traditional backgrounds for participation in higher education.

[James Morris]

The hon. Gentleman is deploying the same argument that was deployed against the introduction of tuition fees, which was carried out by the previous Labour Government and developed by the coalition, but we have actually seen an increase in the number of students from disadvantaged backgrounds going to university. His argument, therefore, just does not stack up.

[Mr Marsden]

Perhaps if the hon. Gentleman listens as I talk further about the way in which these things have changed, he will understand that what was introduced in 2012 and the explanations—I will not call them apologies—that his Government gave for tripling tuition fees were based on a series of quid pro quos, all of which they have now abandoned. The pattern I have talked about is also seen in the number of people doing higher education in the so-called “post-92” universities and receiving the maintenance grant. That is why million+, whose membership contains a significant number of those post-92 universities, has expressed its alarm in the briefing it prepared for today’s debate. It said that

“by virtue of nothing more than household income, some students will be saddled with debts far in excess of their fellow students.”

It continued:

“the freezing of the earning repayment threshold for five years will also exacerbate this problem and will hit lower earning graduates the hardest.”

My former colleague Bill Rammell, who was a higher education Minister and is now vice-chancellor of the University of Bedfordshire, made precisely those points in an excellent piece for Politics Home today.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Erdington is one of the poorest constituencies in England, but it is rich in talent, and maintenance grants mean a great deal to students who want to get on—42% are dependent on them. Does my hon. Friend agree that the Government are both breaking a promise, and dashing the hopes and dreams of a generation of strivers?

[Mr Marsden]

I absolutely agree with my hon. Friend. Of course, he comes from and speaks for a distinguished part of the west midlands, which is in the process of trying to gain control over areas of activity in their local economies. What the Government are doing for people in Birmingham and elsewhere is confounding their own devolution prospects.

[Helen Whately]

rose—

[Mr Marsden]

No, I will not give way at this stage, but I might a little later.

We know now, thanks to a question I tabled to the Minister for Universities and Science to establish the extent of this issue, how many people will be directly affected by the withdrawal of the maintenance grant in further education. The statistics show that some 33,700 English applicants were awarded maintenance grants for higher education courses at further education colleges. Within that 33,700 figure, we have a roll call of the English regions, where it is not just the individuals but the local economies, through the growth of skills there, that have benefited from this expansion of higher education and further education.

Let me cite some of the statistics that the Student Loans Company has produced: in the north-west, Blackburn College has 1,842 students on maintenance grant; in the north-east, Newcastle College Group has 1,669; and in the south-west and Cornwall, Cornwall College has 931. The list goes on, but a crucial subset comprises the numbers in those areas where, as I just mentioned to my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), the Government are encouraging combined authorities and local enterprise partnerships to take up their devolution offers and, therefore, potentially to have control of or take a role in higher skills initiatives. Greater Manchester has 410 on maintenance grants at Stockport College and 1,060 on grants across The Manchester College network. In Merseyside, 542 in total are on grants at The City of Liverpool College and the Liverpool Institute for the Performing Arts. In Leeds, 1,604 are on these grants, spread between Leeds City College, Leeds College of Music and Leeds College of Art. London has a huge further education sector, which caters to so many of the groups identified in the equalities assessment, as my right hon. Friend the Member for Tottenham (Mr Lammy) said. At a time of pressure already, from area reviews and cuts to ESOL—English for speakers of other languages—this new proposal could be toxic. If the effect of these changes, introduced without consultation, is to blunt those skills and that empowerment, this Government will be cutting off at the knees the very strategies for English devolution, for skills and for social mobility that they claim to be promoting.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Last week, the Prime Minister said that his Government’s mission was

“to look each…child in the eye, and say, ‘Your dreams are our dreams. We’ll support you with everything we’ve got.’”

Does my hon. Friend agree that scrapping grants to half a million people, including more than 5,000 young people in Tower Hamlets in my constituency, is a cap on aspiration and that it stinks of hypocrisy?

[Mr Marsden]

I certainly agree with the point about the potential threat to my hon. Friend’s constituents, and it underlines what I said about London.

[Several hon. Members rose—]

[Mr Marsden]

No, I will not give way until I have finished dealing with the intervention. On my hon. Friend’s point about hypocrisy, it is not for me to judge, but I would recall that fine old English proverb, “Fine words butter no parsnips.”

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

On social mobility, will the hon. Gentleman welcome the fact that more and more people from disadvantaged backgrounds are accessing higher education? That has increased from 13.6% when the Labour Government were in power to more than 18% this year.

--- Later in debate ---

[Mr Marsden]

Of course I welcome that fact. The point I am trying to establish today, which I hope the hon. Gentleman and his colleagues will accept, as I am actually trying to help them, is that these are fine words about an increase in social mobility and all the rest of it, but things will go in the opposite direction if they do not reconsider this measure.

[Several hon. Members rose—]

[Mr Marsden]

I am sorry but a great number of people wish to speak. I have taken a number of interventions already and I really must make progress.

[Mr Speaker]

Order. Just so that the House is aware, on present trends there will be only about an hour in total for Back-Bench speeches and 18 people are wanting to speak. I am underlining the potency of the point that the hon. Gentleman has just made from the Front Bench.

[Mr Marsden]

Thank you, Mr Speaker. There is a nudge factor here; it is a nudge away from progress, from that regional growth and from those opportunities for groups and individuals who traditionally have been debt averse. Asking people on higher education courses at further education colleges to take on up to £50,000-worth of debt in areas such as the north-east, where in some parts that sum could equate to the price of a small house or flat, concerns colleges such as New College Durham. Its principal, John Widdowson, has said that

“nudge can work both ways—especially for people who’ve signed up for foundation courses and are considering going for honours—the more complex you make the funding process the more it can seem a barrier.”

Those sorts of concerns were recently echoed by the Office for Fair Access. But it is the individual life chances that may be blighted or disrupted by these changes that should weigh heavily on all of us, which is why the NUS and its student bodies have been so passionate in campaigning against this change. For me, all those individual cases in FE are summed up by the email I received only yesterday from a student in Blackpool, who said that she would like to thank me

“for defending the students who will be affected by the loss of grants. I am from Blackpool and in my second year of my degree with UCLan, and a married mature student with two children.”

She said that she had been plagued by illness as a child, which is why she was having to study in her late 30s, and stated:

“The complete U-turn by the Government who said education should not just be for the privileged and should not exclude the poor has now done exactly that.”

The changes will also affect significant numbers of students in the traditional university sector, including 14,000 at Manchester Metropolitan University, 8,000-plus at the University of Manchester, nearly 11,000 at Nottingham Trent and 3,738 at King’s College London. As I have said, it is a potential list of lost opportunities.

We can only speculate on what impact the regulations will have on future cohorts of students. The National Education Opportunities Network and the University and College Union are currently undertaking research with more than 2,000 final year A-level and level 3 students to look at how costs influence the higher education choices that those students make. The interim findings from that research show that more than half the students who are deciding not to go into HE are taking that decision because of the lack of direct financial maintenance grant support that they had envisaged for the year ahead.

The equality assessment states:

“At an aggregate level there is no evidence that the 2012 reforms, which saw a significant increase in HE fees and associated student debt levels, has had a significant impact in deterring the participation of young students from low income backgrounds.”

That is now debateable, because the safety net of maintenance grants, which was introduced in 2012 with that tripling of fees, is now being removed. That is why, in her letter praying against the regulations, the shadow Secretary of State wrote:

“Labour is concerned this change won’t improve Government finances in the long term.”

That echoes the view of the Institute for Fiscal Studies, which said:

“The replacement of maintenance grants by loans from 2016–17 will raise debt for the poorest students, but do little to improve government finances in the long run.”

The IFS states that, in the short term, Government borrowing will drop by around £2 billion a year, because current spending on grants counts towards current borrowing, while current spending on loans does not. In the long run, savings could well be less than that. The amount of money lent to students will rise by about £2.3 billion for each cohort, but the IFS says that only around a quarter of those additional loans are likely to be repaid. In the long run, therefore, the net effect is a reduction in Government borrowing by around £270 million per cohort, and a 3% decline in the Government’s estimated contribution to higher education. In a fair and balanced way, the IFS said:

“Students from households with pre-tax incomes of up to £25,000 (those currently eligible for a full maintenance grant) will have a little more ‘cash in pocket’…But they will also graduate with around £12,500 more debt, on average, from a three-year course. This means that students from the poorest backgrounds are now likely to leave university owing substantially more to the government than their better-off peers.”

It also states:

“The poorest 40% of students going to university in England will now graduate with debts of up to £53,000 from a three-year course, rather than up to £40,500. This will result from the replacement of maintenance grants”.

As I have already said, when the Government tripled tuition fees in 2012, they tried to sweeten the pill, by talking up the centrality of the maintenance grant to ensure that the most disadvantaged could still access higher education. They promised three things: a national scholarship programme; the maintenance grants for the disadvantaged programme; and the earnings-related threshold that would be uprated with inflation. The then Minister of State for Universities and Science, David Willetts, said:

“The increase in maintenance grant for students from households with the lowest incomes, the National Scholarship Programme, and additional fair access requirements…should ensure that the reforms do not affect individuals from lower socio-economic backgrounds disproportionately.”

That is what the Minister’s predecessor in the Conservative-led Government said in 2011-12, but the regulations that the Government passed in Committee last week will disadvantage the same groups of students that the Government promised to protect two years ago. David Willetts previously lauded the measures as a quid pro quo for the trebling of tuition fees, saying:

“Our proposals are progressive, because they help to encourage people from poorer backgrounds to go to university, because of the higher education maintenance grant, and because of the higher repayment threshold.”——[Official Report, 3 November 2010; Vol. 517, c. 940.]

Now all three elements of those promises have been broken by this Government. The Minister’s colleague, now Lord Willetts, must be revolving in his ermine at the way in which his promises have been so lightly regarded by the Government.

The Government and their predecessors set great store by the principle of “nudge”—actions that persuade people to change their behaviour for the better. Let me remind the Minister that it is possible to nudge people away from desirable outcomes rather than towards them. A new Department for Business Innovation and Skills study shows that more than half the applicants said that they had been put off university by the costs. That is backed up by the Sutton Trust, which said:

“Shifting grants to loans may move them off the balance sheet, but it could also put off many low and middle income students and tip the balance against their going to university. Since grants were reintroduced, there have been significant improvements”—

and we welcome that, but those will be—

put at risk by today’s Budget plans.”

Research from the National Union of Students, which was published last week by Populus, shows that parents are concerned that the Government’s plans to scrap the maintenance grant will discourage their children from applying to university. Two fifths of those with a combined income of £25,000 or less believe that to be the case. The range of the groups affected by the changes is daunting. The assessment concedes that black and minority ethnic students in particular will be disproportionately worse off. On older learners, it says:

“Mature students will be disproportionately impacted by the policy proposals to remove the full maintenance grant and replace with additional loan as well as the freezing of targeted grants.”

The Government have also conceded that disabled people will be disproportionately affected by the decision not to protect the real-terms value of disabled students allowances. The assessment spells out the potential for discrimination because of religious beliefs, stating that there is evidence to suggest that there are groups of Muslim students whose religion prohibits them from taking out an interest-bearing loan. Finally, the impact assessment also states that female students will be particularly affected by the freezing of childcare grants, parents’ learning allowances and employment and support allowances, given their significant over-representation in these populations.

Further to that, the scrapping of 24+ loans in further education is particularly relevant to the case before us today, because it is indicative of what has happened in previous circumstances when the Government have gone down this road. As the Minister knows, the Government released figures in October 2015 that showed clear evidence of the deterrent impact on learners that I and others warned about when these loans were introduced as replacements for grants in January 2013. The figures showed that in 2014-15 only £149 million of the £397 million allocated for the process had been taken up. It is no wonder that people in the FE community have lamented the lost opportunity of £250 million that could have helped some of our most disadvantaged learners. The very group of people who benefited from the concessions given in 2013 by the Minister’s predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes)—that those who went on access to HE courses would have the outstanding amount written off in their access course loan—face another knock back. The damning details from the Government’s own impact assessment should surely give Ministers pause for thought, given that they threaten to affect the most debt-averse groups.

Worryingly, it appears that the Government have yet to produce an up-to-date estimate of the impact that the shift from grants to loans will have on the resource accounting and budgeting charge, which calculates the cost to the Government of the higher education funding system, based on how much students are ultimately expected to repay. Having heard the evidence that we have presented so far and the comments from around the Chamber, will the Government tell us why, if they were so confident about these policies, they did not bring them to the Floor of the House? More to the point, why did they not consult independent experts and various representative organisations? Why did they not commission research from any of the reputable independent policy bodies?

Last month, along with a number of other MPs, I sat in the corridor of this place listening to hundreds of students who had come to lobby us. Their message was consistent: scrapping maintenance grants will leave people struggling to go to university. People in the Chamber today have talked about consequences and people will talk about their own experiences. I was a tutor for the Open University for 20 years and I know that many of the students whom I taught had been put off higher education at an earlier age by the costs. Such things do not alter just because we are now in the digital world of the 21st century, and the impact of the changes, particularly on mature students, cannot be divorced from the precarious position of so many of those who study part time in HE.

Statistics published by the Higher Education Statistics Agency have shown that the number of first-year part-time students in 2014-15 is down 6% on previous years. The number of part-time higher education students since the Conservatives came into office has fallen by nearly 40%. No wonder the NUS is exasperated about that, and it relates it to the trebling of student fees since 2012 for England and English students in HE in Wales and Scotland. No wonder also that the president of Universities UK and the vice-chancellor of the University of Kent, Dame Julia Goodfellow, said that the decline in part-time numbers was a serious concern. I acknowledge, as they do, that the introduction of maintenance loans to some part-time students from 2018-19 announced by the Government is welcome, but in the meantime the nudge factors are very strong against such study. No wonder the Open University has also expressed its alarm, commenting on the Minister’s higher education Green Paper that flexible learning provision is also at the heart of Government policy development. Are not those concerns precisely why we need a proper discussion and are they not reasons why we need a commitment to bring a Bill to this House? I invite the Minister to give that in his response.

There is a lack of balance, as well as a nudging towards negative outcomes, and the issue will not go away. It is not surprising that connections have been made between the specific ways the Government have tried to dodge scrutiny in this matter. No wonder the Minister appeared relatively ill at ease in Committee, but to tell the truth perhaps the blame lies elsewhere. The article in The Independent reminds us that it was the Chancellor who tried to use a statutory instrument to smuggle through his tax credit changes, and we all know what happened to them. The Chancellor is proud of promoting himself as the Government’s master builder—all his rhetoric is shot through with the image. He preens as he boasts of the march of the makers and of how the Government, on his watch, is fixing the roof while the sun is shining, but the truth is that the Chancellor is a man with whom we always need to read the small print. He has consistently missed many of his debt and other targets, and as far as building a secure future for Britain’s learners is concerned, he is Mr Dodgy, whose actions are unlikely to get a certificate from the Federation of Master Builders. While the sun is shining, he has dislodged slates on the way down and has disguised cuts to adult skills as efficiencies, as his Newspeak officials call them.

He is pushing those students off the ladder of social mobility. It is time for him to get real in the real world, where the elasticity of demand eventually snaps and where stretching the envelope can finally break it. The direction of travel is threatening to deliver not a northern powerhouse but a northern poorhouse, undermining his regional strategy. We want no part of the narrative of failure, nor should this House, and that is why this afternoon we are calling again for Ministers to think again, to support the motion, and to annul the misguided regulation that this Government tried to hide away.

[Several hon. Members rose—]