Higher Education Fees

Jim Shannon Excerpts

Thursday 9th December 2010 Commons Chamber

[Dr McDonnell]

I agree with the hon. Gentleman. It is difficult for those of us who come here attempting to encourage devolution and work to create a bridge between the devolved Governments in Scotland, Northern Ireland and Wales and the Government here in this House, because this action in many ways erodes and undermines the devolution that has taken place.

That is compounded by the problems with the Barnett formula and the implications for Barnett formulation. The consequential cuts to university teaching budgets have already been passed on to the Executive, so we are being hit twice in advance of any changes that might be made to student fee arrangements. We need considerable clarity on the new arithmetic that is being used in Barnett formulation if we are to understand the knock-on effects of the proposals.

Why should the Northern Ireland Executive face the penalisation of students through the student funding proposals, while their budget is already being penalised through the Barnett formula? We are forced to tread the nearly impossible path of protecting our students who wish to study at universities in England, while providing the funding that is necessary to sustain the universities in Northern Ireland. All too often, the argument is framed only in terms of the impact of the measures on England, rather than in the context of the devolved nations.

Thanks to Social Democratic and Labour party colleagues who have served in the Northern Ireland Assembly and as Ministers in previous Northern Ireland Executives, there has been since devolution a reduction in the number of people who pay fees. We reduced the amount of money that people had to pay and we were the first to bring back student grants to widen access for those on the margins and those who are impoverished in our society. That shows that progressive elements can be injected into the existing system without having to triple tuition fees or radically alter the system.

The measures proposed by the coalition Government will place enormous pressure on universities in Northern Ireland to raise their fees to match the fees in England.

[Jim Shannon (Strangford) (DUP)]

I understand that the proportion of students from Northern Ireland who go across the water is up to a third. There will be an impact on the Northern Ireland Assembly and on its budget. There will be an impact on moneys that are already set aside, and we have made no allowance for that.

[Dr McDonnell]

The hon. Gentleman endorses exactly the point that I was making—we will be hit both ways. My party has campaigned ardently to protect the cap on fees for Northern Ireland universities, but we would be naive to ignore these measures. When fees go up in English universities, it will have a knock-on effect and fees will inevitably go up for Queen’s university and the university of Ulster.

As I am sure you will have read between the lines of what I am saying, Mr Speaker, we do not believe that the measures are the right way to go about managing third-level education. We are not persuaded that they will improve access to higher education, particularly for those on the margins. We must oppose the measures, because we do not know what the fallout for Northern Ireland will be. We have set third-level education as a matter of the highest priority. We believe that the high-tech, high value-added economy that we want to see built in Northern Ireland can be delivered only through a high standard of third-level education that is accessible to all. Again, I repeat that it should be accessible, in particular, to bright young people from disadvantaged backgrounds, who struggle already to enter third-level education—these measures will further cut off such people.

The Government will cut spending on higher education and place the burden of payment on future generations of students, who, as they begin their careers, will face mountainous debts that they will spend much of their lives clearing. I was once a medical student, but I cannot imagine any medical student or student of architecture—as the hon. Member for Ipswich (Ben Gummer) suggested—now emerging from university with debts of less than £100,000.

There is also the problem that educational maintenance allowance has been withdrawn. That will massively compound the crisis for many of our poorest potential students, who may forgo the option because the threat of debt is much too high. The proposed increases to student fees run counter to our vision for third-level education and we will therefore oppose the proposals today.

--- Later in debate ---

[Sammy Wilson]

Quite right.

Of course, there are other things that the Liberal Democrats could have compromised on. Was a referendum on a voting system that happens to benefit their party—although perhaps no voting system will benefit them in future—a higher priority than their manifesto pledge on fees? Given the choice between increasing fees by 200%, despite making a firm commitment not to do so, and creating a voting system that happens to benefit their party, I suspect that most people would say that the priority ought to have been to stand firm on fees.

People may say, “What’s this got to do with people from Northern Ireland, because after all, under devolution, it is up to the devolved Administrations in Scotland, Wales and Northern Ireland to decide their higher education policy?” but that is factually incorrect, because ahead of this vote the Government decided that resources that would have been taken out of higher education were taken out of devolved budgets. Northern Ireland will therefore lose more than £200 million as a result of a decision made on the basis of a vote that has not yet been taken. That restricts the ability of devolved Administrations to set their own policies.

[Jim Shannon]

My hon. Friend is in a unique position, because he is the Finance and Personnel Minister in the Northern Ireland Executive. Will he indicate what impact the increase in tuition fees will have on the Executive’s budget?

[Sammy Wilson]

I have indicated the impact of the policy on the budget, but the policy also impacts on the ability of the Executive to restructure the economy. It is important for us to have a supply of skilled labour that will attract inward investment.

Let us consider two of the arguments that have been made today. First, people have said that the policy has everything to do with helping to reduce the deficit and dealing with the economic mess that was left. However, the proposals will lead to more borrowing. The flow of money from graduates will not come through immediately —it will take a number of years—so the deficit will not be reduced. That is not even good economics, let alone good politics. The Browne report says that 70% of those who take loans over the next 30 years will default on all or part of them. Who will pay for that? It will be the taxpayer. Therefore, the public finances will be no better off, unless the plan is to pass greater costs on to students in future. The policy does not make economic sense.

Secondly, many Government Members have argued that the policy will have no impact on the poor, but the proposed scheme accepts that it will. Why have a national scholarship scheme or all the other things that have been put into the system if the policy will have no impact on the poor? Of course it will have an impact the poor, as the Government themselves admit.