Higher Education Policy

Graham Stuart Excerpts

Wednesday 27th April 2011 Commons Chamber

[Mr John Denham (Southampton, Itchen) (Lab)]

I beg to move,

That this House condemns the failure of the Government to deliver the commitment made to Parliament that £9,000 a year student fees would be ‘exceptional’; further notes that the Office of Fair Access (OFFA) has said that it has no powers to set university fees or determine university admissions policies; notes with alarm the warning of the Secretary of State for Business, Innovation and Skills that average fees higher than £7,500 would mean reducing student numbers or further cutting university teaching funding; condemns the failure of Ministers to explain their policies by publishing a Higher Education White Paper; believes that Ministers are putting at risk the success of universities and the future of generations of students; further believes that current policies are unfair, unnecessary and unsustainable; and therefore calls on Ministers, as soon as practicable, to set out to Parliament how they will meet the promise that fees of £9,000 will only be in exceptional circumstances, to guarantee that there will be no fall in the number of university places or further cuts to university teaching budgets, and to outline what powers, if any, they propose for OFFA on determining fee levels and enforcing access arrangements.

I am glad to see the Secretary of State for Business, Innovation and Skills in his place, although I understand that he is not following the usual courtesy of responding to my opening remarks. I am nevertheless grateful to him for attending the debate.

I make no apology for raising for the third time in an Opposition day debate the dismal record of this Secretary of State and the Minister for Universities and Science on university fees. Nothing is more important to this country’s future than the rising generation of young people, including all those who are working hard as we speak on their GCSEs and A-levels. We owe it to them to give them the best opportunities, to make the most of their talents, the most of their abilities, the most of their willingness to work hard and do the best for themselves. All of us depend on them to ensure that, through their innovation and creativity, this country can pay its way in the world and create jobs in the future. Despite fashionable sneers, we need more people, not fewer, educated at a higher level. That is what is happening in every country with which we compete. Young people will benefit from their higher education, but so will the rest of us. That is why our young people deserve a fair deal and good opportunities.

Under the last Labour Government, the number of students in English universities increased by almost 380,000, and 51% of young women now go to university. Now, however, the ladders of opportunity are being kicked away. The education maintenance allowance has been scrapped, and Aimhigher, which persuaded countless young people that they could go to university, has been scrapped. Sir Peter Lampl of the renowned Sutton Trust said:

“I think these fees are going to put a lot of children from lower and middle-income homes off universities.”

A poll today shows that more than half of final-year students at 14 Russell group universities in England would not have enrolled if annual fees had been £9,000.

For those who do aim high, fees are being trebled—to the highest average fees of any public university system in the world, and all because this Secretary of State decided to cut the higher education teaching grant by 80%, to make most students pay the whole cost of their higher education and to embark on a bizarre ideological experiment devised by the Minister for Universities and Science. It was always a bad idea, but these Ministers have implemented it with truly staggering incompetence: they have lost control and are making it up as they go along. Instead of being open and honest about finances and open and honest about their future policies, they are resorting to veiled and not-so-veiled threats, planning the biggest ever interference in the autonomy of universities.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

If a Labour Government had been re-elected, would tuition fees have risen?

[Mr Denham]

We have made it quite clear in every debate since the Browne report was published that it would be unrealistic to say that higher education budgets would be untouched by the deficit reduction that we would have had to introduce. However, we have also pointed that if, for the sake of argument, the reduction in higher education spending had been in the order of 10% to 20%, as faced by most public services, we would certainly not have been talking about tuition fees above about £3,800—and certainly not the £9,000 that this Government are implementing.

Since Parliament voted to treble tuition fees in December, Ministers have ensured through their actions that record numbers of disappointed students will be turned away from university this year, with perhaps 150,000 applicants missing out on places. More of the students across England who are studying hard for their A-levels today will be rejected than ever before, because tens of thousands are rushing to avoid the trebling of fees, and because Ministers have already cut 20,000 places for 2012 from the number that Labour had planned for 2010—and that is before any more cuts that may be in the pipeline.

On 3 November, the Minister for Universities and Science told the House:

“We… are… proposing a basic threshold of £6,000 a year, and in exceptional circumstances there would be an absolute limit of £9,000.”—[Official Report, 3 November 2010; Vol. 517, c. 924.]

That was the solemn promise on the basis of which the House was asked to treble fees. The Minister did not say, “Most universities will charge £9,000 or as near as makes no difference”; he said that £9,000 would apply “in exceptional circumstances”, and that is not going to happen. Of the universities that have made declarations, 71% have declared fees of £9,000 and 85% have declared fees of £8,000 or more.

The Minister continues to live in a world of his own. In March he was saying of arts and humanities degrees:

“Most institutions should only need to charge £6,000—or perhaps a bit more once inflation has been accounted for.”

So where are those £6,000 arts and humanities degrees in the most sought-after universities? Where, for that matter, are the £6,000 arts and humanities degrees in less sought-after universities? The truth is that the Minister and the Secretary of State have lost control of the system through their own incompetence. They have created a system in which there is every incentive for universities to charge high fees and virtually no incentive for them to charge low fees, and it is young people who will pay the price. Some will be put off university altogether, while those who go to university will face 30 years of debt repayments, with middle-income graduates paying more money and a larger proportion of their incomes than the wealthiest. They will still be paying off their student debt when their own children have started university.

The Minister is now trying to say that what matters is the average once the reduced fees for some students have been taken into account. How disingenuous can you get? When the Minister promised fees of £9,000 “in exceptional circumstances”, I do not believe that a single Member of the House thought, “Oh—that means that most universities will charge most students £9,000, or as near as makes no difference.” That is not what Members thought; they thought that he meant “in exceptional circumstances”. I do not think they thought that middle-class, middle-income students would have no choice but to pay close to £9,000 a year no matter which university they chose to go to. The Minister’s failure to admit that he got it wrong does him no credit.

--- Later in debate ---

[Mr Willetts]

I give way to my hon. Friend the Member for Beverley and Holderness (Mr Stuart).

[Mr Graham Stuart]

Will my right hon. Friend nail the misinformation, peddled not least by Opposition Front Benchers, about the increase in fees putting people from lower-income backgrounds off going to university? The truth is that the payments per month will be lower under the new system, that those who earn lower amounts will pay less, that the new system is more progressive and that Opposition Front Benchers, who cry crocodile tears for caring about those from the lowest incomes having access to a university, are scaremongering and providing misinformation. Will he please put them right?

[Mr Willetts]

That was an excellent intervention. After this debate, I hope that Members on both sides will agree to commit ourselves to visit, between now and the summer, the secondary schools and colleges in our constituencies and explain to them that not a single young person is going to have to pay up front for their higher education. They will repay only if they are earning more than £21,000 a year and that means that their monthly repayments under our proposals will be lower than under the system we inherited from the previous Government.

--- Later in debate ---

[Lilian Greenwood (Nottingham South) (Lab)]

I am grateful for the opportunity to speak in today’s debate, as I am very worried about the Government’s plans for higher education and their impact on many of my constituents and the city I represent.

I was deeply concerned when the Government announced their intention to raise the cap on fees, and like every Opposition Member I voted against that rise. I did so not just because of my pledge during the general election campaign but because I felt that the Government were rushing through their plans without proper thought and consultation. Like many Members, I felt that fees of £6,000, £7,000 or £8,000 would deter many bright and able students from low and middle-income families from applying to university, or from applying to the university or course that would best suit them. As university after university has announced its intention to charge fees of £9,000, my concern has only deepened. Far from being the exception that the Prime Minister promised, £9,000 fees are becoming the norm. Why? It is because universities have to fill the huge hole left by the cut in the teaching grant.

[Mr Graham Stuart]

Will the hon. Lady confirm for the benefit of her constituents that the monthly payment that each of them will have to make will be lower under the new system than it was under the previous system? The monthly payment will be lower at all times. The bad news is that people will have to pay for longer, but the payments will be more affordable and people will have to pay only when they are earning £21,000. Her constituents need to hear that so that they are not put off. I hope that she agrees.

[Lilian Greenwood]

The concern that many of my constituents express is that they will have to pay back at least three times more than they would if they were a student now or had been recently.

--- Later in debate ---

[Lilian Greenwood]

No, not at the moment. Under the Minister’s scheme, those who earn the most will pay less, because they can pay their loans off quickly, before they have substantial amounts of interest to pay on top.

Sir Martin Harris, the director of the organisation charged with improving access to higher education, says that there is a “real risk” that teenagers from low-income homes will feel unable to attend university, which makes me even more convinced that this Government’s policies are not properly thought through.

[Mr Graham Stuart]

Will the hon. Lady give way?

[Lilian Greenwood]

No—I am not taking another intervention.

Unfortunately, my concerns were further confirmed when I recently met staff from Nottingham and Nottinghamshire Connexions services. Careers advisers were not only demoralised by cuts to their service when young people most need advice and guidance to help them to make difficult choices, but deeply concerned about the impact of Government policies on the teenagers whom they are committed to assist. They told me that fee increases are having a clear impact on many young people, and that many young people in Nottinghamshire feel that they can no longer afford to study for a degree.

The problem is heightened by the increase in youth unemployment. Young people are worried not only that they will rack up debts of £30,000 or £40,000, but that they may not even be able to secure a job at the end of it. It was particularly sad to hear a member of staff of the Aimhigher campaign, which supports young people from disadvantaged backgrounds who have the potential to go on to higher education, tell me that it has become increasingly difficult to convince such young people that university is for them.

Young people and their parents frequently bring this issue up on the doorstep. On Monday afternoon, a constituent asked me how he could afford to send his children to university.

--- Later in debate ---

[Mr Wilson]

I thank the right hon. Gentleman for making that point, because there are certainly questions still to be answered, which is something I will come to.

I am concerned that the restrictions on student numbers will mean that we fail to realise the full benefits of competition in the higher education sector, which would have encouraged universities to achieve greater efficiency and offer more value for money. As a recent report by Tim Leunig for the think-tank CentreForum put it,

“because government restricts the number of students that each university can take, this is not real competition”—

and indeed, it is not. I am sure that my right hon. Friend the Minister will agree that the Government must devise a system in which universities and courses that are popular and economically important can expand, if necessary at the expense of unpopular courses and institutions. Does he therefore share my concern that capping student numbers will threaten one of the key benefits offered by the Government’s reforms? What further action does he propose to take to ensure that courses that students want to take, at a price that they want to pay, can expand at the expense of courses that they do not want to take, at prices that they do not want to pay? In these difficult times the Treasury is keen not to spend more on subsidies for students than it absolutely has to, which provides the Secretary of State and the Minister with a big challenge if they want real competition in the higher education sector. If the Minister cannot convince the Treasury that removing the cap on student numbers will reduce overall HE costs, there will be no genuine market in HE.

However, I hope that the Government are thinking creatively about seeking micro-solutions to the problem. In particular, I would recommend that they look at three areas that are perhaps worthy of further consideration. The first is how we encourage private sector institutions to enter the HE sector and offer degree courses. There is no reason why they should not be allowed to enter the sector and overcome any real or perceived barriers to entry, which can easily be removed. Secondly, the further education sector needs to be encouraged to offer more degree and higher education courses. The changes that we have made in the HE sector offer huge opportunities for FE colleges to offer high quality, affordable, specialist courses. Once again, we can look across the Atlantic at what is happening in the US community college system as an example of the model that we need to strive to follow in this country.

[Mr Graham Stuart]

My hon. Friend is making a powerful speech, the content of which I agree with. Does he agree that many FE colleges are now delivering the quality that should enable them to confer degrees, rather than being dependent on universities, which in times of financial uncertainty tend to reduce what they allow FE colleges to do? We need to give them freedom if they are to compete properly in the market.

[Mr Wilson]

Indeed I do agree with that. There are some fabulous FE colleges that could easily deliver high quality higher education degrees.

Thirdly, if we are to have a Treasury-imposed affordability limit on student numbers, we need to think more creatively about how we tease the best out of a more limited market system. As I have said, we need to encourage the best high-quality, sought-after courses that students actually want to take. We have to design a system that allows good universities with good courses to expand, and poorly performing universities with poor quality courses to decline, or at least take action to improve their offering.

--- Later in debate ---

[Mr Bailey]

Yes, it certainly was and I was just coming to that. We should have had a White Paper, followed by a full debate, which would have enabled the Government to put forward their proposals and the Opposition and others to probe them. A range of educational institutions —there are an enormous number of them—would have been able to contribute their expertise. What we have had, however, is this seismic shift in Government funding, carried out without adequate research and debate.

I spent 10 years on the Government Benches listening to lectures from Conservative Members about the dangers of hasty legislation and the unintended consequences that almost inevitably arise from it. If ever there was a case in point, I honestly think this is it. Hasty legislation, or hasty regulation in this case, is usually bad legislation, or regulation.

The lack of research and work done highlights a number of issues. The first is the setting of the fee levels. The Minister’s hopelessly optimistic estimates, on which the financial model was predicated, have been demonstrated as completely incorrect. The repayment implications are considerable. A whole range of expert research has been done to demonstrate that the income stream on which the Government predicated their financial model will not be met. There will therefore be a long-term financial liability, possibly an expanding one, that the Government will have to meet.

Another issue that could and should have been explored far more comprehensively if we had had a White Paper is of course the role of the Office for Fair Access. When Ministers were pressed on the setting of the level of tuition fees, they seemed to ascribe to OFFA powers that were completely beyond it, as my right hon. Friend the Member for Southampton, Itchen (Mr Denham) said in his opening remarks. The fact remains that OFFA is an organisation of four people, to whom responsibility was attributed by the Deputy Prime Minister for setting the tuition fee levels of all universities. That is totally beyond their resources, and they could not do it anyway, because they do not have the legislative basis to do so. This could and would have been teased out in a full and open debate of a White Paper, but by virtue of the Government’s actions it has been precluded.

The outcome is that the figures in the financial model do not appear to stack up. I mentioned the potential long-term financial implications earlier. As the Minister has acknowledged, the options are to cut funding for universities further and to reduce student numbers. I believe that if tuition fees averaged £8,000 per annum, it would be necessary to reduce the number of students going to university by 17,000 in order to stay within the model. There is actually a third option: the Government could change graduates’ repayment conditions. I think that that would open another can of worms, and would provide the basis for further research to assess the possible outcome.

[Mr Graham Stuart]

Will the hon. Gentleman give way?

[Mr Bailey]

No, I will not give way again.

A reduction in student numbers is inevitable, either because the Government decide to ration them or because of the deterrent effect of the higher fees on student recruitment. I should like the Government to make it clear whether, if the figures indeed do not stack up and the average fees exceed £7,500, they will limit student numbers. I do not know the answer and I am not sure that the Government do, but I should welcome their opinion none the less.

I should also welcome some sort of statement on when we will see the White Paper so that we can debate the issues further. It was originally to be published in January, we were then assured that it would be published in June, and I understand that in subsequent speeches to the civil service the Minister has referred to the summer. It is a bit like Billy Bunter’s postal order. I pressed the Secretary of State on the matter in the Select Committee this morning, and even then he would not give a commitment that the White Paper would be published in June. What I should like him to do today is tell us when it will be published, and whether it will deal with questions raised not just by me but by a range of Members about the funding implications of the current proposals.

Other countries recognise the value of higher education and the number of graduates who make an economic contribution. Other countries, even those that have suffered from the same sort of financial problems that we have experienced during the recession and are subject to the same sort of financial constraints, are investing more in higher education. The long-term implication of not getting this right and reducing the number of graduates is very serious indeed. On the basis of the picture that is emerging at the moment, I think that we are in danger of having fewer graduates, of damaging our economic growth, and of adopting a financial model that will make our public sector deficit far worse in the long term.