Higher Education and Research Bill (Twelfth sitting)

Debate between Gordon Marsden and Angela Rayner

Committee Debate: 12th sitting: House of Commons
Thursday 13th October 2016 Public Bill Committees

[Angela Rayner (Ashton-under-Lyne) (Lab)]

It is a pleasure, as always, to serve under your chairmanship, Sir Edward. I rise to speak because I think that we have a chance to right a wrong. I hope that the whole Committee will indulge me and vote for our new clauses. I will speak to new clauses 8 and 15, and support new clauses 10, 11, 13 and 14, in the names of my hon. Friends the Members for Sheffield Central and for Ilford North, who will I am sure speak with their usual expertise and eloquence in due course.

New clause 8 would revoke the regulations that made the change from maintenance grants to maintenance loans, and would ensure that students from low and middle-income backgrounds can receive the maintenance grant again. The policy was first announced in the autumn statement by the then Chancellor, and was pushed through in a statutory instrument without the proper scrutiny of the whole House. It is right that we have the chance to scrutinise it here today. The power is in the Committee’s hands.

Far too many students feel that they have been ripped off by this Government—a feeling that, sadly, this Bill seems unlikely to change in its current form. First, the coalition Government trebled tuition fees, leaving students with some of the highest levels of debt in the developed world. They then froze the threshold at which students repay those debts, meaning that those on lower incomes will lose out yet again. Then, in one of the former Chancellor’s last great failures before leaving office, he abolished maintenance grants, replacing them with yet more loans and burdening young people with even more debt.

[Gordon Marsden]

My hon. Friend states our case strongly. Does she share my sense of regret that, despite the inadequate consideration by the Joint Committee on Statutory Instruments and despite our request that the Government bring the matter to the Floor of the House, it took an Opposition day motion to have the change debated? The Government’s majority in that Opposition day debate—from memory, I believe it was 16—was one of the lowest they had in that Parliament.

[Angela Rayner]

I absolutely agree with my hon. Friend. The Minister and his hon. Friends have an opportunity to right that wrong today, so I hope they are all listening and are willing to work collaboratively with us.

New clause 15 would introduce much-needed restrictions on the Government’s ability retrospectively to change the terms of student loan agreements. It would make such a change subject to the approval of both Houses of Parliament, which is exactly how things should be conducted in this place. Although the practical steps we propose are slightly different, new clause 15 has much the same goals as new clauses 13 and 14, tabled by my hon. Friends the Members for Sheffield Central and for Ilford North. Either approach would have our full support.

When we talk about students feeling ripped off by the Government, there can be no better example than the retrospective changes made to student loan agreements. The decision to freeze the repayment threshold so that graduates begin to repay their loans when they earn £21,000 a year, instead of allowing it to rise with inflation as initially promised, shows a brazen disrespect for students and destroyed any remaining trust they had in the Government. Fortunately for the Minister, he has the chance to restore that trust today by supporting new clause 15.

I am sure the Minister agrees that the Government have a great deal of work to do to ensure that all students, regardless of background, can access the education they need. After all, he was the one who said that the fall in the number of students from disadvantaged backgrounds at our elite universities showed

“a worrying lack of progress”

towards widening participation. We agree; that is why we tabled the new clause. He also said that our top universities must

“redouble their efforts…to boost social mobility”.

Our new clause gives him the chance to do that.

I know these Committee debates can feel a little dry, but if the Minister and his party vote with us, we can all leave this Committee Room knowing that we have done something exciting and worthwhile to boost social mobility. I, for one, would love to go back to my constituency tonight and sing it from the rooftops. It would be such a progressive step, but if the Minister cannot accept it, perhaps he can tell us what new steps the Government will take in the Bill to reverse the worrying free fall in the number of state-educated students going on to university.

More than half a million students were able to benefit from the maintenance grants policy and receive the support they needed to meet their living costs. The Government have said that the Bill

“will support the Government’s mission to boost social mobility, life chances and opportunity for all”,

but the Committee has spent a long time scrutinising it and the Government have come forward with no substantive proposals for doing any of those things; if anything, they have made them less likely to occur. Instead, they have offered us an office for students with no students in it, and access and participation plans that will take no substantive steps to improve either access or participation. Although the Government claim that their goal is to increase social mobility, there appears to be nothing in the Bill that shows that they are taking that challenge seriously.

Our new clauses give the Government an excellent chance to meet the goals that they have set themselves in the Bill. The Government have said that they want to boost social mobility. They can do just that by voting for new clause 8 and offering much-needed support to students from low and middle-income backgrounds. The Government have said that they want to improve life chances. What better way of doing that than by giving everyone the opportunity to access higher education if they want to? The Government have said that they want to improve opportunity for all. The Minister will be able to do just that by accepting the new clause. Is he willing to walk the walk of improving social mobility, or is he just talking the talk?

I understand that we are asking the Minister to carry out the dreaded U-turn. After all, he previously said that the abolition of the maintenance grant and the introduction of a new loan helps to balance the need to ensure that affordability is not a barrier to higher education with ensuring that higher education is funded in a fair and sustainable way. It is clear, however, that that will not be the case. After all, figures from his own Department show that since the trebling of tuition fees, there has been a sharp and continuous fall in the number of state-educated students going on to higher education. Perhaps he can tell us today how increasing the burden of debt on students by replacing maintenance grants with loans will improve matters.

The changes that the Government made retrospectively have made the problem even worse, but fundamentally this is not just about the principle of retrospective action; it is about trust. The Government having the power to change loans retrospectively means that every single student in further and higher education will be writing a blank cheque to the Government and, worse than that, they will be writing a blank cheque to a Government that they know they cannot trust—a Government that have already retrospectively changed the terms of their loans once, which, as the independent Institute for Fiscal Studies has shown, will cost the average student £6,000.

The Minister said that the funding for student finance would be fair and sustainable, but this is nothing more than a trick of accounting. The change from maintenance grants to loans appears to reduce the spending on universities, but all it really does is defer the cost. As has been shown by the independent Office for Budget Responsibility—an institution set up by his party’s Government—the change from maintenance grants to maintenance loans will, over the medium term, increase public sector debt by more than 2% of GDP. That is the result of the Government making loans when they know that most students will not be able to repay them. Moving to loans may be a good accountant’s trick to reduce the deficit, but it does nothing for our public finance or for the wellbeing of those students carrying that personal burden. It simply means that it will be the next generation left picking up the tab. We all know that this generation will be the first to be worse off than their parents. Do we really, as a nation, want to make a habit of that? The tab that maintenance loans will leave them with is more than 2% of GDP. That is more than our entire defence budget, more than £34 billion. Perhaps the Minister can tell us how leaving that debt for the next generation is, in his words, “fair and sustainable”.

The Government have made it clear that they want us to use the Bill to improve opportunity for all. We know that the maintenance grant is the way to do that. We saw under the last Labour Government how it was central to helping record numbers of children from disadvantaged backgrounds into universities—a proud record, I might add. The Government plan to scrap the maintenance grant. To simply impose an additional debt on students is a regressive step. Having already burdened students with additional debt, taking the power retrospectively to increase their debt burden again and again will create a dangerous disincentive, as students will not enter further and higher education for fear of what the Government will do to their loans. The Minister may feel that new clause 15 is unnecessary because his Government would never renege on their promises to students and never retrospectively change the terms of a loan agreement, but his Government have already done that once. We know that the Government have not only the power but the inclination, so it is no wonder that students are worried they will do it again.