Higher Education Funding

Lindsay Hoyle Excerpts

Thursday 8th January 2015 Commons Chamber

[Mr Binley]

I am most grateful for the right hon. Gentleman’s remarks, and I add that this situation should cause real alarm to not only every Member of this House, irrespective of their position or party, but to every parent, business man and citizen in the land. At some stage their children and grandchildren will have to meet this charge if we do nothing about it now. I do not take the accounting answer given earlier by a man I respect, my right hon. Friend the Member for Havant, and I welcome the comments made by the right hon. Member for Southampton, Itchen (Mr Denham), a former Labour Minister, who, sadly, is leaving this place, too—that will be a great loss. He made the point that we cannot avoid debt of any kind and we cannot talk it off a balance sheet; it has to be dealt with at some stage. I would rather it be dealt with now than at some point in the future.

Any business would stem the flow of debt immediately, as it would be so damaging—it would threaten the very livelihood and stability of that business. Any business would be looking for ways of tightening up on credit control—it would probably have done that already, because it could never have afforded to have got into this situation. Any business would look for ways of increasing productivity within the system, and you will be pleased to know that I wish to say a few words about that relatively shortly, Mr Deputy Speaker, and then I will sit down. Does that reassure you?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I am sure it reassures the rest of the Chamber.

[Mr Binley]

I fear that they are enjoying my contribution immensely, but your job is another matter.

Any business would be seeking to tighten credit controls and to find ways of increasing productivity in the areas of service provision, and would talk to its bank about contingency arrangements that might be in put in place and how that might be done. We are simply appealing about that aspect, because in this respect our bank is the taxpayer. I wonder what the taxpayer might feel about our not considering those contingencies. I have made that point in a number of ways during these remarks, but it is a vital part of what this place is about.

How must we seek to emulate that good, solid business man who would take those steps? I would seek from the Minister a wish and plans to improve loan contracts, with special emphasis on repayment procedures. We now have the information to prove that the procedures are simply not good enough to reclaim taxpayers’ money, especially from overseas students, and we have to look at that. Secondly, we have to improve collection procedures—again, particularly in respect of overseas students. It is not the job of this House to finance the education of those people, even though doing so creates a better world; I understand that aspect, but it is still not our job to finance their further education for the nations that they come from—I do not believe that our bank of the taxpayer would disagree with that view.

I would also equalise the cost of university education through the nation. My hon. Friend the Member for Beckenham (Bob Stewart), who is no longer in his place, has already talked about the disparity in the fee situation between England and Scotland, which many people find unfair and unacceptable.

We need to increase university productivity. We should also consider compressing the time it takes for a student to complete a course. We could have courses of two years, or even 18 months if we are talking about golf course management. As a businessman, I despair at some of the degrees that come before me when people seek jobs, but that is another matter. We need to think about compressing courses and improving the productivity of a sector of our national life that has had it easy for too long. Members may think that there speaks a secondary modern schoolboy who did not have the opportunity to sit at the high table, but many people in this land believe that our university structure has been too aristocratic and too full of itself and that it needs to recognise that it is a contributor to our national wealth and well-being, and it is from that aspect that I come to this subject. We need to ensure that the Treasury finally improves contingency planning to reduce the impact of the deficit that we say will meet us in ever greater amounts as time goes by.

I have some questions for the Minister. I would welcome his confirmation on some of the details of our assumptions. In particular, what proportion is assumed to be used up by foreign nationals whose offspring would not have legal access to loans? What analysis has there been of the key variables affecting repayment rates, such as the future performance of the economy? A very long telescope is required for such a difficult job. None the less, we must have some contingency plans in place for worst-case scenarios, as they have not been built into the sector.

What work are the Government undertaking to understand more the nature of defaulters and, in the light of other options, the desirability of the continued expansion of higher education, particularly in the context of apprenticeships? We need to put even more effort—I do recognise how much the Government are doing in this regard—into technology apprenticeships and all those practical skills that the target of university entrance has demoted in the minds of many of our young people. I see too many people who think that the only objective in life is to go to uni. What a tragedy that is. We are increasing the number of people who see opportunities in engineering, technology and other such skills, but we are still not putting enough effort into that sector, and we are still not changing the view of young people that university really is the place to be.

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[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I did not expect to have to do this, but may I advise Members that the Front Bench speeches will start at 1.45? Two speakers have taken an hour already, and that cannot continue. I would be grateful if all Members could bear that in mind.

--- Later in debate ---

[Mr Byrne]

I am grateful to the right hon. Gentleman for that contribution, because I think he has given us one of the best arguments that I have heard this afternoon for precisely the review that my right hon. Friend the Member for Southampton, Itchen (Mr Denham) has called for. If the right hon. Gentleman poses significant questions about the right interest rate and the right earnings threshold—which we all know was a compromise with the Liberal Democrats—there are obviously some serious questions that demand a review. That is why the logical conclusion is that the Minister should stand up later today and admit that he has changed his mind. I hope that the right hon. Gentleman will just underline an acceptance that, although we might dispute the right way of calculating a RAB charge, being concerned about the level of debt write-off is none the less very important, because the lower we can keep it, the more money there is for future generations.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The right hon. Gentleman should save some speech for later.

[Mr Willetts]

On write-offs, I hope people can accept that what we are talking about here is a forecast shaped with some rather peculiar assumptions, not an item of public spending today. On a review, a lot depends on what people mean. My view is that the last thing that the higher education sector needs is another equivalent of Robbins, Dearing or Browne. All three political parties represented in the Chamber today, when faced with how to finance higher education when money is tight, have all essentially reached the same decision: to go for a graduate repayment scheme. My right hon. Friend the Minister is entirely correct when he quotes Andreas Schleicher and the OECD in saying that this is the sustainable model.

In my experience as Minister—I am sure that it is my right hon. Friend’s experience as well—there were certain Ministers around the world who looked at us and tried to work out how to get something closer to what we have. The last thing we need is a review that throws all this up into the air, particularly if the anxieties that people are focusing on arise from an unfair comparison. The reason why there are so-called anxieties about the sustainability of this model is the forecasts, which are very peculiar indeed, and the assumption that everything is fixed until 2046.

When the advocates of a graduate tax stand up and say that they want a graduate tax, they do not then say, “It’s going to be 9%, and it’s going to have an earnings threshold of £21,000, and we commit now that that will be the threshold related to earnings for 30 years.” As soon as they did that, exactly the same kind of calculations would be possible and we could calculate the x billion pounds that they expect to collect in the next 30 years, and every six months we could recalculate and announce that they had just lost £3 billion and ask what they were going to do about the fiscal crisis in their scheme. In other words, the advocates of a graduate tax are of course assuming that it is a flexible device to ensure that people continue to pay for higher education, and that is what this graduate repayment scheme is. Although designed by Labour and adjusted by us, it is conceptually the same thing. The last thing we need is to reopen that question.