Higher Education Funding

Debate between Greg Clark and John Denham

Thursday 8th January 2015 Commons Chamber

[Greg Clark]

Every Member takes great pains to encourage young people to register to vote. Through the online registration system, it is easier than ever, and I think that everyone in the House, over the next few months, will encourage people in schools and universities to register. The hon. Gentleman mentioned the university of Keele, but he has to accept that without the reforms that my right hon. Friend the Member for Havant introduced, there would be fewer students going to Keele university in the future than is now possible. That would be bad for the university, which I had the privilege to visit just before Christmas, and bad for the hon. Gentleman’s constituents, who benefit substantially from the presence of that fine university.

The system is excellent for universities too. It is an extraordinary achievement, at a time of financial stringency, that, according to the Institute for Fiscal Studies, the resources available to universities for teaching have on average increased significantly. It estimates an increase from £22,000 under the previous system to about £28,000 per student under the current system. The Institute for Public Policy Research, which tends towards the left in its assessments, said that the main strengths of the current system are that it has increased the resource flowing into higher education, which has enabled institutions to maintain or enhance their level of provision. This led the OECD to conclude that the UK is probably the only country in Europe, and one of the few in the world, to be able to support and sustain a big increase in participation and yet raise unit costs. No wonder that recruitment increased last year for all university types with higher tariff providers to record levels.

Our system of university finance offers extraordinary opportunities to students, universities and the taxpayer, which is why it is mystifying that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) called for a review. It was not clear to me in his response whether that was the Opposition’s new policy. They have had four and half years to come up with a policy, but now it seems to be a review. Just a few weeks ago, he was speculating vaguely, just as the success was being recognised, about turning turtle on it. It is completely unclear what his policy is. Is it a review or a change? He has previously said that fees would be reduced by £3,000, but that would blow a £3 billion black hole in the public finances and force universities to go cap in hand to the Treasury every year just to maintain their funding. It would decimate that stunning social progress I referred to earlier, since it would obliterate the funds from the access agreements, which will be worth £718 million next year—I was surprised that the right hon. Member for Southampton, Itchen (Mr Denham) did not think they were worth having—and impose pressure to cut student numbers. The IPPR said that the pressure to cut student numbers would crowd out students from disadvantaged backgrounds.

[Mr Denham]

For the record, I judge that of the roughly £700 million, £300 million is replicating the work that Aimhigher used to do and is of real value in encouraging social mobility, but £400 million is spent on fees, reductions and bursaries, which has almost no value in persuading somebody to go to university.

[Greg Clark]

Those funds are available through the access regulator to be invested in the best way. Social progress has been made and people from my background now have the chance to go to university in increasing numbers. To rob universities and our young people of that help and assistance is an extraordinary suggestion from the Labour party.

For what purpose? It would reduce the payments not for poorer graduates but for the very richest. Those who pay off the £9,000 loans in full would be the only beneficiaries. I am talking about the richest 20% of earners, who would pay off their loans on average 28 years after graduation, when they are in middle age, and when they are earning on average £78,000, according to a think-tank. Ironically, this debate has been largely focused on the concerns that too high a proportion of loans is notionally projected to be written off, yet the Opposition want to write off 100% of loans over £6,000 for all graduates, even the ones who can comfortably pay.

I am not instinctively a partisan politician, and I believe it is strongly in our interest that policy questions about our universities should be, wherever possible, rooted in consensus and stability. That was the intention behind the Browne review, which the hon. Member for Huddersfield (Mr Sheerman) referred to, and which the previous Government set up. My right hon. Friend the Member for Havant implemented that dispassionate and thorough report. I hope that the right hon. Member for Birmingham, Hodge Hill will reflect on the ever more obvious success of the system, get behind it and drop his temptation to engage in a stunt that would plunge the financing of higher education into chaos.